Reported Decision : (2002) 55 NSWLR 381 (2003) 123 LGERA 367 New South Wales Court of Appeal CITATION : MINISTER FOR LOCAL GOVERNMENT & ANOR v SOUTH SYDNEY CITY COUNCIL [2002] NSWCA 288 FILE NUMBER(S) : CA CA 40444/02 HEARING DATE(S) : 18/07/02 19/07/02 JUDGMENT DATE : 30 August 2002 Minister for Local Government (Appellant) PARTIES : Local Government Boundaries Commission (Second Appellant) South Sydney City Council (Respondent) JUDGMENT OF : Spigelman CJ at 1; Mason P at 51; Ipp AJA at 296 LOWER COURT JURISDICTION : Land & Environment Court LOWER COURT 40060/02 FILE NUMBER(S) : LOWER COURT Talbot J JUDICIAL OFFICER : COUNSEL : B Walker SC / N Hutley SC / N Perram (Appellant and Second Appellant) S Rares SC / M B Lee (Respondent) SOLICITORS : I V Knight (Appellant and Second Appellant) Marsdens Law Group (Respondent) CATCHWORDS : JURISDICTION - Land and Environment Court - whether issue of procedural fairness within jurisdiction - whether breach of the Act - s672 Local Government Act 1993 - whether within ancillary jurisdiction - s16(1A) Land and Environment Court Act 1979 - ADMINISTRATIVE LAW - Local Government Boundaries Commission - whether report invalid for consideration of wrong proposal - whether reasons of trial judge adequate - whether critical evidence disregarded - ADMINISTRATIVE LAW - delegation of function- whether consultants could be engaged to deal with submissions - ADMINISTRATIVE LAW - procedural fairnes - Local Government Boundaries Commission - content of obligation where no inquiry held - whether obligation breached - whether obliged to notify affected Council of modifications to proposa - whether obliged to give affected Council access to adverse submissions - ADMINISTRATIVE LAW - relevant considerations - whether statutory factor given "proper, genuine and realistic consideration" - s263(3)(e2) Local Government Act 1993 LEGISLATION CITED : Land and Environment Court Act 1979 Local Government Act 1993 Abebe v The Commonwealth (1999) 197 CLR 510 Advance Bank Australia Ltd v FAI Insurances Ltd (1987) 9 NSWLR 464 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 Annetts v McCann (1990) 170 CLR 596 Attorney-General (NSW) v Quin (1990) 170 CLR 1 Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 Brettingham-Moore v Municipality of St Leonards (1969) 121 CLR 509 Brodie v Singleton Shire Council (2001) 75 ALJR 992 Calvin v Carr [1980] AC 574 Chiropractors Association of Australia (South Australia) Ltd and Naomi Perry v Workcover Corporation Association of South Australia [1997] SASC 120 Cooper v Wandsworth Board of Works (1863) 14 CB(NS) 180, 143 ER 414 Coulton v Holcombe (1986) 162 CLR 1 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 FAI Insurance Ltd v Winneke (1982) 151 CLR 342 Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242 Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 Hill v Green (1999) 48 NSWLR 161 Hill v King (1993) 31 NSWLR 654 Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 Johns v Australian Securities Commission (1993) 178 CLR 408 Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 Kioa v West (1985) 159 CLR 550 Mahon v Air New Zealand [1984] AC 808 Mifsud v Campbell (1991) 21 NSWLR 725 Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 CASES CITED: Minister for Immigration v Bhardwaj (2002) 76 ALJR 598 Muin v Refugee Review Tribunal [2002] HCA 30 National Companies & Securities Commission v News Corporation Limited (1984) 156 CLR 296 North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468 NTL Australia Pty Ltd v Minister for Land and Water Conservation (2001) 112 LGERA 403 R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 R v Panel on Take-overs and Mergers; Ex parte Datafin [1987] QB 815 Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82 Re: Minister for Immigration and Multicultural Affairs; Ex parte "A" [2001] 185 ALR 489 Russell v Duke of Norfolk [1949] 1 All ER 109 Scharer v State of New South Wales (2001) 53 NSWLR 299 South Australia v O'Shea (1987) 163 CLR 378 South Sydney City Council v Minister for Local Government & Anor [2002] NSWLEC 74 South Sydney Council v Local Government Boundaries Commission [2001] NSWLEC 280 State of Victoria v The Master Builders' Association of Victoria [1995] 2 VR 121 Stead v State Government Insurance Commission (1986) 161 CLR 141 Telstra Corporation Ltd v Kendall (1995) 55 FCR 221 Testro Brothers Pty Ltd v Tait (1963) 109 CLR 353 Tickner v Chapman (1995) 57 FCR 451 Transport Action Group Against Motorways Inc v Roads & Traffic Authority (1999) 46 NSWLR 598 Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78 Victims Compensation Fund Corporation v Nguyen (2001) 52 NSWLR 213 Warringah Council v Edmondson [2001] NSWCA 1 Weal v Bathurst City Council (2000) 111 LGERA 181 Zhang v Canterbury City Council (2001) 51 NSWLR 589 DECISION : Appeal allowed IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40444/02 SPIGELMAN CJ MASON P IPP AJA Friday 30 August 2002 MINISTER FOR LOCAL GOVERNMENT& ANOR v SOUTH SYDNEY CITY COUNCIL FACTS On 30 November 2001, the Minister referred a proposal for the alteration of certain local government area boundaries to the Local Government Boundaries Commission pursuant to s218F of the Local Government Act 1993 . The proposal involved the transfer of some of the South Sydney City Council area to the City of Sydney Council. The Boundaries Commission submitted its Report to the Minister on 20 March 2002. The Respondent claimed that the Boundaries Commission Report was invalid by reason of defects in the process leading to its creation. HELD A (per Mason P, Spigelman CJ and Ipp AJA agreeing) The Land and Environment Court has jurisdiction to decide an issue of procedural fairness with regard to a report of the Boundaries Commission because a failure to accord procedural fairness will result in the nullification of the report. As the report is a precondition to the Governor's power to proclaim a boundary alteration pursuant to s218B, implementation of a proposal subsequent to an invalid report would constitute a breach of the Act within the meaning of s672 of the Local Government Act 1993 . The Court's ancillary jurisdiction pursuant to s16(1A) of the Land and Environment Court Act 1979 was also enlivened because the procedural fairness issue was 'incidental, accessory or auxiliary' to the question of the validity of the Report. Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242; Minister for Immigration v Bhardwaj (2002) 76 ALJR 598 applied. Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; South Australia v O'Shea (1987) 163 CLR 378 referred to. Warringah Council v Edmondson [2001] NSWCA 1 distinguished. (per Spigelman CJ, Ipp AJA agreeing) The obligation to afford procedural fairness is a common law duty that attaches to the exercise of a statutory power. A failure to accord procedural fairness may therefore constitute a contravention of, or failure to comply with, an Act. Annetts v McCann (1990) 170 CLR 596 applied. Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78; Abebe v The Commonwealth (1999) 197 CLR 510; Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82; Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; Muin v Refugee Review Tribunal [2002] HCA 30 referred to. Warringah Council v Edmondson [2001] NSWCA 1 doubted. B (per Mason P, Spigelman CJ and Ipp AJA agreeing) The misdescription of the boundary proposal in Chapter 2 of the Commission's report did not suggest consideration of the wrong proposal by the Commission. The weight of evidence suggested that the misdescription was an oversight and that the Minister's proposal was the true object of the Commission's examination and report. The Boundaries Commission did not unlawfully delegate their responsibility for the Report. The SSCC did not discharge its onus of proving that the commissioners had no personal involvement in the preparation of the Report. It was reasonable for the commissioners to engage consultants to deal with the volume of material concerned. Johns v Australian Securities Commission (1993) 178 CLR 408 applied. Tickner v Chapman (1995) 57 FCR 451 referred to. In any event, the decision to the contrary by the trial judge was unsupported by necessary findings of fact. Mifsud v Campbell (1991) 21 NSWLR 725 referred to. C (per Mason P, Spigelman CJ and Ipp AJA agreeing) The obligation on the Boundaries Commission to afford procedural fairness did not extend to providing SSCC with access to any submission adverse to its interests. Such a requirement would be unworkable. None of the findings of the Commission was so 'personally' adverse to SSCC as to create a duty of disclosure. The SSCC received adequate procedural fairness by being given the opportunity to make a submission addressing the factors in s263(3) of the Local Government Act 1993 . Mahon v Air New Zealand [1984] AC 808; Victims Compensation Fund Corporation v Nguyen (2001) 52 NSWLR 213 applied. Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; Kioa v West (1985) 159 CLR 550; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 75 ALJR 889; Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 76 ALJR 598; Muin v Refugee Review Tribunal [2002] HCA 30; North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468; Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78 referred to. (per Spigelman CJ, Ipp AJA agreeing) The decision of the Boundaries Commission to propose modifications to the Minister's proposal in the Report may have given rise to an obligation to give notice to SSCC but this case was not advanced at trial. Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 applied. South Australia v O'Shea (1987) 163 CLR 378; Calvin v Carr [1980] AC 574 discussed. Hill v Green (1999) 48 NSWLR 161 referred to. Brettingham-Moore v Municipality of St Leonards (1969) 121 CLR 509 distinguished. (per Mason P) The modifications of the Boundaries Commission did not give rise to an obligation to notify SSCC because they did not affect SSCC's interests differently from the matters already addressed by SSCC's submission. D (per Mason P, Spigelman CJ and Ipp AJA agreeing) The Boundaries Commission gave genuine consideration to the factor stipulated in s263(3)(e2) of the Local Government Act 1993 . It was appropriate for the Commission to leave the task of identifying staff directly affected by the proposal for the relevant Councils at a later stage. Weal v Bathurst City Council (2000) 111 LGERA 181; Zhang v Canterbury City Council (2001) 51 NSWLR 589 referred to. ORDERS Appeal allowed. Declaration and orders of 31 May 2002 in the Land and Environment Court set aside. In lieu thereof order that the Application Class 4 in that Court be dismissed with costs. Respondent to pay appellant's costs of the appeal. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40444/02 SPIGELMAN CJ MASON P IPP AJA Friday 30 August 2002 MINISTER FOR LOCAL GOVERNMENT& ANOR v SOUTH SYDNEY CITY COUNCIL Judgment 1 SPIGELMAN CJ: I have read the judgment of Mason P in draft. I gratefully adopt his Honour's outline of the facts and the submissions. I agree with the entirety of his Honour's reasoning with respect to the alleged failure on the part of the Local Government Boundaries Commission to consider the proposal referred to it and the alleged wrongful delegation to consultants of its statutory obligation to examine and report. I also adopt his Honour's reasons for rejecting the matter raised by means of the Notice of Contention alleging failure to have regard to the factors stipulated in s263(3)(e2) of the Local Government Act 1993. I wish to state my own reasons on the jurisdictional and procedural fairness issues. Jurisdiction of the Land and Environment Court 2 Section 674(1) of the Local Government Act 1993 provides: "Any person may bring proceedings in the Land and Environment Court for an order to remedy or restrain a breach of this Act." 3 Section 672(a) of the Act provides: " A breach of this Act means: (i) a contravention of or failure to comply with this Act, (ii) a threatened or an apprehended contravention of or a threatened or apprehended failure to comply with this Act ..." 4 One of the issues considered in this Court in Warringah Council v Edmondson [2001] NSWCA 1 was a submission that a council's power, under s45(2) of the Act, to enter into a lease of community land, was subject to an implied requirement that the council, once it had invited tenders, afford procedural fairness in deciding which tender to accept. 5 The Land and Environment Court had found: "A failure to act reasonably and fairly is relevantly a contravention of or failure to comply with the Act." 6 This Court allowed the appeal on the basis that the Land and Environment Court had misconceived the source of the obligation to afford procedural fairness. The judgment of Fitzgerald JA, with whom Meagher and Powell JJA agreed, relied on my own judgment in Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78 at 91-92 where I said: "The obligation to afford procedural fairness is a doctrine of the common law which attaches to the exercise of public power, subject to any statutory modification of the common law in that regard: see Kioa v West (1985) 159 CLR 550 at 576, 581, 632; Annetts v McCann (1990) 170 CLR 596 at 598; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 574-575; Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 57; Victoria v Master Builders Association (Vic) [1995] 2 VR 112 at 138-139, 148, 157-160; Bayne, "The Common Law Basis of Judicial Review" (1993) 87 ALJ 781. The view that the duty to accord procedural fairness is only an issue of statutory interpretation, consistently taken by Sir Gerard Brennan, has not prevailed: see Kioa v West (at 609-616); FAI Insurance Ltd v Winneke (1982) 151 CLR 342 at 407-413; Ainsworth (at 584-585)." 7 I have considered this issue elsewhere. (See Spigelman "Foundations of Administrative Law" (1999) 4 The Judicial Review 69 at 72-79.) In my opinion, the common law basis for the duty to accord procedural fairness is reflected in the cases which extend the duty to the exercise of prerogative powers. (See e.g. Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 at 409; State of Victoria v The Master Builders' Association of Victoria [1995] 2 VR 121 at 133-139, 147-149, 154-159.) It is also the basis for the extension of the principles of judicial review to private bodies which make decisions of a public character. (See e.g. Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242; R v Panel on Take-overs and Mergers; Ex parte Datafin [1987] QB 815.) 8 The origin of the line of authority on which I relied in Vanmeld was the judgment of Mason J in Kioa v West (1985) 159 CLR 550 at 584 where his Honour said: "The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention." 9 This common law basis for the obligation to afford procedural fairness was adopted, in terms, in the majority joint judgment of the High Court in Annetts v McCann (1990) 170 CLR 596 at 598. The Court specifically referred to Mason J's terminology of a "common law duty". As I indicated in Vanmeld at 91-92, the approach consistently taken by Sir Gerard Brennan was to identify the duty to afford procedural fairness as an issue of statutory interpretation and that view had not prevailed. 10 Subsequently to my judgment in Vanmeld, the jurisprudential basis of the duty to afford procedural fairness has been mentioned in a number of judgments in the High Court. Those references have not been such as to overrule the acceptance of the common law basis in the majority joint judgment in Annetts v McCann. This Court should regard itself as still bound by the principle endorsed in that judgment. 11 In some of the recent judgments in the High Court the issue has been treated as open. (See Abebe v The Commonwealth (1999) 197 CLR 510 at [112]-[113] per Gaudron J; Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82 at [38]-[40] per Gaudron and Gummow JJ; Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at [55] per Kirby J; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at [89]-[90] per Gaudron J and [171]-[172] per Kirby J.) 12 Hayne J has referred to the joint judgment in Annetts v McCann as supporting the common law duty. (See Aala at [168].) McHugh J has adopted the reference by Deane J to the "common law requirements of procedural fairness" in Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 at 653 in Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 311. His Honour has also applied the joint judgment in Annetts v McCann. (See Miah at [126].) McHugh J's reasoning in Teoh has been adopted by Callinan J in Aala at [213] and in Muin v Refugee Review Tribunal [2002] HCA 30 at [308]. Gleeson CJ referred to "the common law requirement of procedural fairness" in Muin at [30]. On one occasion Gleeson CJ and Hayne J applied the reasoning of Brennan J in Kioa v West, but not in such a way as is necessarily inconsistent with the acceptance of the common law duty basis for procedural fairness. (See Miah at [29]-[31] and [52]-[53].) 13 On a number of occasions observations have been made to the effect that the competing views would rarely lead to a different result. (See e.g. Aala at [168] per Hayne J, Miah at [89] per Gaudron J.) A specific statutory conferral of jurisdiction limited in terms to a breach of a statute, may be one of the rare circumstances in which the jurisprudential basis makes a difference. It appears to me that this Court in Edmondson decided the matter on that basis. 14 This Court should follow a prior decision unless satisfied that it is wrong. I entertain considerable doubt as to the correctness of the decision in Edmondson. Even though there is a common law foundation for the principle of natural justice that does not, in my opinion, necessarily mean that a failure to observe those principles is not a "contravention of or failure to comply" with an Act, within the meaning of s652 of the Local Government Act 1993. 15 The common law attaches the principles of natural justice to the exercise of public power, relevantly a statutory power. A formulation such as "contravention or failure to comply with" an Act is not equivalent to the proposition that the obligation to afford procedural fairness is an issue of statutory interpretation. As Kioa v West and Annetts v McCann, as well as many other authorities make clear, the determination of the existence, scope and content of the duty to afford procedural fairness requires careful consideration of the statutory power. 16 In the present case the relevant power is s263(1) which imposes a duty on the Boundaries Commission to conduct an "examination" of and to "report" on a matter referred to it. I am inclined to the view that a failure to exercise a statutory power in accordance with an obligation imposed by the common law with respect to that power, is a contravention of, or failure to comply with, an Act. In the present case, the issue that would arise is whether a failure to observe the requirements of procedural fairness resulted in a failure to "examine and report" in accordance with the Act. However, it is not necessary to finally determine this issue in this case and, in deference to the Court's prior decision in Edmondson, the Court should not do so. 17 As Mason P concludes, the Minister was proposing to act on the basis that he had before him a valid report. By s218D such a report is made an essential pre-condition for the exercise by the Minister of his statutory power to recommend under s218F(7). Where a Boundaries Commission report has been prepared in breach of the duty to afford procedural fairness, the Minister could not comply with the Act. The Land and Environment Court had jurisdiction to determine whether the pre-condition had been satisfied. Alternatively, the decision as to the validity of the report was a matter "ancillary" to the determination of the Minister's decision-making process, within the meaning of s16(1A) of the Land and Environment Court Act 1979. Procedural Fairness 18 It is important to recognise that the Appellant did not rely on the nature of the decision, namely the redrawing of local government boundaries, as a basis for a submission that the Boundaries Commission was not subject to any duty to accord procedural fairness. In the varying terminology that has appeared in the authorities, the decision-making process here in question may have been capable of characterisation as 'quasi-legislative' or 'polycentric' or 'multi-factorial' or 'political'. Far from relying on such an approach, the Appellant expressly embraced the proposition that an obligation to afford procedural fairness did exist and it could be given by the Minister. 19 The difficulties that arise in the application of the principles of procedural fairness in the context of a multi-staged decision-making process, are illustrated by the contrast between two decisions in the High Court. In South Australia v O'Shea (1987) 163 CLR 378 the High Court held four to one that a Governor was not required to give a prisoner a further hearing before the Governor rejected a Parole Board recommendation that the prisoner be released on licence. In Haoucher v Minister for Immigration and Ethnic Affairs the High Court held three to two that the Minister had to give the immigrant a hearing before rejecting a recommendation of the Administrative Appeals Tribunal that he not be deported. 20 The present case is, in a sense, the obverse of these cases. The full hearing is said to be available at the level of the ultimate decision-maker, irrespective of any defect in the hearing given at a preliminary stage of decision-making. 21 Situations of this character have arisen in the context of determining what effect an appeal has on a defect in the first instance decision. The authorities are reviewed by Fitzgerald JA in Hill v Green (1999) 48 NSWLR 161 at [155]-[164], see also at [54]-[55]. 22 In Calvin v Carr [1980] AC 574 the Privy Council held at 592-593 that it was not possible to generalise in this regard. In some cases an appeal will cure any defect; in others procedural fairness will be required at both levels. There is an intermediate class of cases where "a fair decision, notwithstanding some initial defect" will be upheld on the basis that "there has been a fair result, reached by fair methods" (at 593) (See generally Aronson and Dyer, Judicial Review of Administrative Action, 2nd ed, at 370-377; Craig, Administrative Law, 3rd ed, p316; De Smith, Woolf and Jowell, Judicial Review of Administrative Action, 5th ed, at 10-020 – 10-024. 23 The present case differs from the domestic tribunal context considered in Calvin v Carr. However, the same approach can be adapted to a statutory context such as the present. The better view is that the effect of an appeal will turn on the ability and obligation of the second-tier decision-maker to provide the appellant with the measure of procedural fairness to which he or she is entitled. 24 The Appellants relied on the judgment of Mason CJ in South Australia v O'Shea where his Honour said at 389: "The scheme for which s77a provides is not unfamiliar. It allows a place for the presentation of the offender's case – before the Board when it is considering whether it should make the recommendation for release. There are many illustrations of this legislative model which entails the holding of an inquiry by a body authorised to make a recommendation to a Board or Minister which may make a decision rejecting the recommendation without conducting any further inquiry … The hearing before the recommending body provides a sufficient opportunity for a party to present his case so that the decision-making process, viewed in its entirety, entails procedural fairness . If the decision-maker intends to take account of some new matter, not appearing in the report of the recommending body, and the party has had no opportunity of dealing with it, the decision-maker should give him that opportunity ..." [Emphasis added] 25 It is not necessary to consider the varying rationales which have been expressed for procedural fairness. (See e.g. Aronson & Dyer, at 305-307.) One rationale which has recently been emphasised is the requirement of fair decision-making procedures. In Aala, Gaudron and Gummow JJ, with whom Gleeson CJ agreed, said at [59]: "However, the conditioning of a statutory power so as to require the provision of procedural fairness has, as its basis, a rationale which differs from that which generally underpins the doctrine of excess of power or jurisdiction. The concern is with observance of fair decision-making procedures rather than with the character of the decision which emerges from the observance of those procedures." 26 This approach reinforces the reference in the judgment of Mason CJ in O'Shea to the fairness of "the decision-making process, viewed in its entirety" as quoted above. The observations in Calvin v Carr on the intermediate class of case, referred to above, are to the same effect. In this regard it is necessary to assess what, if any, effect upon the Respondents "rights, interests and legitimate expectations", to use the accepted formula, is occasioned by the process of examination and report by the Boundaries Commission. This assessment requires an analysis of the statute. 27 Similar issues arose in the closely analogous legislative scheme considered in Brettingham-Moore v Municipality of St Leonards (1969) 121 CLR 509. In that case a Municipal Commission created by a Tasmanian statute performed the functions of both the Boundaries Commission and the Minister in the present case. Under s14 of the Act it prepared a report and under s15 of the Act, after representations were made, the Commission, "after taking such evidence and hearing such argument as it thinks proper" produced a further report. Decisions by the Governor to, inter alia, alter municipal boundaries, could only be taken upon and in accordance with a report from the Municipal Commission. 28 The proceedings in Brettingham-Moore were instituted after the s14 Report but before the s15 Report. With respect to the challenge to the s14 Report, Barwick CJ with whom Menzies and Windeyer JJ agreed said at 520-522 (emphasis added): "The consequences of applying this part of the rules as to affording natural justice in this case according to the respondents' submission is that the Commission was bound to inform the respondents of all the factual material which it had in hand and which it might consider when forming its opinions upon which its report to the Governor would or might be founded and, also, to inform the respondents of any tendencies of mind which the Commission had developed in relation to the matters in hand. In short, the submission was that the Commission was bound in hearing the respondents to expose to the respondents all the material available to the Commission and any tentative views as to the matters to be reported upon as and when the Commission formed them … … [I]t seems to me that the first step is to construe the relevant portions of the Act and to educe therefrom the scheme of inquiry, report and subsequent action which it contemplates. I do not regard it as appropriate in this case first to presume that the requirements of natural justice would be applicable to the first stage of the statutory scheme of inquiry and report because the conclusions of the Commission expressed in the report may adversely affect some person or body and then to search for some displacing or contrary provision or indication in the statute. It is in relation to the carrying out of the whole process prescribed by the statute that the question as to the requirements of natural justice is to be considered. Sections 14 and 15 together form the statutory scheme. A report of the Commission is not self-executing nor is it the end of the prescribed process; and it is not permissible, in my opinion, to detach the first part of the process from the entirety. No doubt it affords a basis for action on the part of the Governor in Council who may only implement it in whole, or reject it in whole; also it may be said in general terms that those against whose interests recommendations are made by a report are in a less favourable position if and when they petition under s15 than they would have been if no such recommendation had been made. Further, it may be that such a person may have had an easier task in counselling the Commission not to make a recommendation than he would have in persuading the Commission upon a petition under s15 to change the recommendation once made. But these are not, in my opinion, relevant considerations in relation to the entire scheme of ss14 and 15 … I do not regard the fact that the existence of the recommendation places a person under the necessity to petition the Governor in Council in order to protect himself or itself, and in consequence to expend money by way of legal costs and expenses in the prosecution of the petition as a relevant matter either in considering whether the making of the report is an act which itself causes injury or in considering whether the person or body affected by the recommendation has an interest to sustain a suit in relation to the report. To return to the question under immediate consideration, I may say that if section 15 were not present in the Act there would, in my opinion, be much to be said for the proposition that before reporting to the Governor, the Commission was bound to hear persons in the situation of the respondents, notwithstanding the fact that the report was not self-executing and that the discretion of the Governor in Council stood between it and the carrying out of the recommendation. Such a person, quite apart from the presence of ss15(3) and (8), might well have had sufficient interest to have sought certiorari at common law … [S]o far as my own view is concerned, I would not regard the fact that the report is not self-executing or that the discretion of the Executive is interposed between it and any actual consequence to the person in the situation of the respondent as necessarily preventing the making of the appropriate order at the instance of such a person. The decision in Testro Brothers Pty Ltd v Tait (1963) 109 CLR 353 depends, in my opinion, upon its own particular facts and statutory circumstances. But that matter does not now, in my opinion, fall for decision because s15 is present in the Act and occupies a significant place in the entire statutory scheme." 29 His Honour went on to say at 523-4: "The Commission is to submit a report to the Governor in Council and in doing so to make appropriate recommendations. These of necessity under the scheme of the Act containing s15 must be tentative. s15 requires them and the reasons on which they are founded as expressed in the Commission's report to be available to all who may possibly be concerned to contest them. Such persons are to be alerted by further advertisement to the existence of the recommendations and to the opportunity afforded for the ascertainment of their precise nature by inspection of the report itself. Any person aggrieved by the recommendation is entitled to petition, requesting that the recommendation be not acted upon, giving as required his reasons for so requesting the Governor in Council. The class of persons aggrieved is extremely wide and quite clearly is not limited to municipalities who in this respect cannot, in my opinion, be said to represent their ratepayers. If the Governor in Council is not prepared out of hand to accept the views of the petition and to reject the Commission's recommendations, the petition is to be considered by the Commission and its earlier recommendations reconsidered. Unlike the stage under s14 before the Commission's recommendations are formulated, at the time the opportunity to petition and present the aggrieved persons views is afforded under s15 the actual recommendations are known and their possible disadvantage to the particular citizen or municipality able to be perceived. No action can be taken on them till the views of the aggrieved person have been considered. It is not necessary to decide whether the Commission at this juncture is bound to hear the petitioner or to receive relevant evidentiary material proffered by him. The opportunity to put forward his views and the supporting material in the form of a petition would seem to me in this type of statutory scheme to satisfy the common law requirements of natural justice. But in any case s15 is a clear indication by the legislature of the nature of the opportunity which it will afford the aggrieved persons to make known their views and the material upon and by which they seek to support them. The case is not one in which the legislature is silent as to the right to be heard, so that the common law can fill the void. The legislature has addressed itself to the very question and it is not for the Court to amend the statute by engrafting upon it some provision which the Court might think more consonant with a complete opportunity for an aggrieved person to present his views and to support them by evidentiary material. It is for this reason that I express the view that in any case the provisions of s15 represent the extent of the legislature's provision for the hearing of the aggrieved person's objections to the Commission's recommendations. To require a hearing or an opportunity to participate in the formation of the Commission's recommendations whilst the inquiry under s14 is in progress would in the presence of s15 be to do more than natural justice requires." 30 There are some aspects of this reasoning which may not be entirely consonant with the jurisprudence of the High Court following Kioa v West. However, this case has never been overruled and is binding on this Court. Unless the statutory scheme under the Local Government Act 1993 can be distinguished in material respects, this Court should follow and apply Brettingham-Moore. 31 There are close analogies between the role of the Municipal Commission under s14 of the statute considered in Brettingham-Moore and the role of the Boundaries Commission in the Local Government Act. The role of the Municipal Commission under s15 of the Tasmanian Act has similarities to the role of the Minister under the New South Wales legislation. In Brettingham-Moore the High Court approached the decision-making process in the manner identified by Mason CJ in O'Shea i.e. it was "viewed in its entirety". 32 The express statutory obligation to give a hearing at the second stage was influential in determining that there was no such obligation with respect to the first stage. The functional equivalent in the present proceedings to the hearing obligation under s15 in the Tasmanian Act is the express acknowledgement in these proceedings that the Minister is obliged to afford procedural fairness under the New South Wales Act. This is not, however, a matter that ought be determined by concession. 33 There is a basic distinction between the scheme of the Local Government Act 1993 and the scheme of the Tasmanian Act under consideration in Brettingham-Moore. In the Tasmanian Act the references to a public process, relevantly by means of petition and hearing, are in s15, namely the second stage of the decision-making process. In the scheme of the Local Government Act such references appear in s263 with respect to the first stage of the decision-making process conducted by the Boundaries Commission. 34 All of the relevant statutory provisions are set out in the judgment of Mason P. It is unnecessary to set them out again. Relevantly: (i) The Commission may hold an inquiry if the Minister approves and must if the Minister directs (s263(2)). If an inquiry is held "reasonable public notice must be given" (s263(2B)). At any inquiry the public must be allowed to attend (s263(5)). There is no reference to any process of inquiry or public consultation in s218F with respect to the Minister's power to recommend that a proposal be implemented. (ii) The Boundaries Commission is required to have regard to a range of considerations set out in s263(3). There is no specific list of considerations of this character for the Minister either when making a proposal under s218F(1), or when recommending that a proposal be implemented under s218F(7). (iii) One of the matters required to be taken into account by the Commission is the attitude of residents and ratepayers under s263(3)(d), the Commission is empowered to conduct an opinion survey or poll of residents and ratepayers by s265. No such reference occurs with respect to the exercise of the Minister's power whether when formulating the original proposal or when recommending that a proposal be implemented. 35 In my opinion Brettingham-Moore is distinguishable. The statutory scheme indicates that the most detailed consideration of the relevant issues is to occur at the first stage, namely by the Boundaries Commission. It is the Commission and the Commission alone that is empowered to conduct a public inquiry. It is the Commission and the Commission alone that is obliged to take into account a range of relevant considerations. 36 The Local Government Boundaries Commission consists of four commissioners. One is a person nominated by the Minister and one is an officer of the Department nominated by the Director-General of the Department. The other two persons are to be appointed from a panel of eight persons, four of whom are councillors nominated by the executive of the Local Government Association of New South Wales, and four of whom are councillors nominated by the executive of the Shires Association of New South Wales (see s261 and s262). The Commission, accordingly, consists of persons with relevant expertise and persons drawn from the general body of the relevant community of councillors throughout the State of New South Wales. 37 The opportunity that is lost by a council, like South Sydney City Council in the present case, is an opportunity to make submissions to a body so constituted and to convince that body not to recommend to the Minister the modifications which it has in fact recommended. A Minister is subject to political and other considerations, of a character to which the Boundaries Commission is not subject. The Commission has a degree of independence from the political process which may give its recommendations a particular persuasiveness. The partially representative and expert nature of the Commission may have the effect of operating as a constraint on the Minister. It cannot be said that the Minister's decision is equivalent to the consideration by the Boundary Commission. 38 I agree with the observation of Barwick CJ in Brettingham-Moore, which I have quoted above, to the effect that, with respect to changes in its boundaries, a council cannot be said to represent its ratepayers. This is so for the same reason that a Board of Directors does not generally have an interest in the identity of its directors or shareholders. (See eg Advance Bank Australia Ltd v FAI Insurances Ltd (1987) 9 NSWLR 464.) 39 Nevertheless, a council does have a distinct interest in matters associated with its boundaries. These are expressly acknowledged in the list of relevant considerations which the Commission is obliged to be take into account, specifically: "(e1) the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities, (e2) the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned." 40 These are real interests upon which the report of the Boundaries Commission impinges. That report has an effect on the entire process including upon the distinct second stage in which the Minister's powers become involved. An opportunity to be heard at the second stage is not a substitute for an opportunity to be heard at the first stage. 41 By s218B the Governor may, by proclamation, alter the boundaries of a council area. By s218D that power may only be exercised "after a proposal for the exercise of the function is dealt with under" relevantly s218F i.e. after examination and report by the Boundaries Commission. Accordingly, the process of examination and report by the Boundaries Commission is a condition precedent to the exercise of the power to alter boundaries and that is sufficient to attract relief by a quashing order equivalent to certiorari. (See Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 580; Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 esp at 161, 162.) 42 The Minister may decline to make a recommendation under s218F(8). However, by reason of s218D, the Governor's power to alter the boundaries under s218B cannot be exercised unless the Minister makes a recommendation under s218F(7). By s218F(7) the Minister may recommend a proposal be implemented "with such modifications as arise out of … the Boundaries Commission's report". This provision makes clear what is implicit in the entire scheme: the Minister is obliged to have regard to the Boundaries Commission report. The fact that the Minister is obliged to take into account the Boundaries Commission report also constitutes a sufficient effect on the legal interests of a council for a quashing order in the nature of certiorari to be made. (See Hot Holdings at 165 and 170-171.) 43 In my opinion, a failure to afford procedural fairness on the part of the Boundary Commission cannot be ignored on the basis that the Minister may afford the respondent procedural fairness. Breach 44 Mason P considers the issue of breach in two categories: the "open file" policy and the modification of the Minister's proposal. I agree with his Honour that the broad basis on which the respondent succeeded below should be rejected. Submissions virtually identical to the open file policy were expressly rejected in Brettingham-Moore and I have quoted the relevant passage above. I agree with Mason P. 45 The second alleged breach is the alteration of the original proposal by the reduction of the respondent's area between the yellow and blue lines, which Mason P describes as "the enlarged area notice point". 46 The changes were made at two locations: the University of Sydney was moved so that its area was not divided between two councils and the dividing line down the centre of streets was replaced by the "back lot principle". Mason P holds that the respondent has not established he materiality of these changes. Alternatively, he would refuse relief upon the discretionary basis that no genuine interest of the respondent was prejudiced. 47 It is difficult to see that any disadvantage arose by reason of the loss of the remaining part of the land occupied by the non-rateable University of Sydney. None was suggested in submissions. The other adjustment appears to me to be material. It may be that the "back lot principle" is sensible. That does not explain why the boundaries should be drawn at the rear of the properties on the Respondent's side of the street, rather than at the rear of those on the City of Sydney's side of the street. 48 The proposition that breaches of procedural fairness with "trivial" consequences can be ignored, has been criticised. (See e.g. Aronson and Dyer at 377-380.) The test, whether expressed in terms of breach or the exercise of discretion is a high one. It has been variously expressed: · "compliance with the requirements could have made no difference" Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145 per Mason, Wilson, Brennan, Deane and Dawson JJ. · "the breach had no effect on the decision" (Abebe at [113] per Gaudron J). · "insignificant, purely formal and immaterial mistakes" (Aala at [132] per Kirby J). · "could not have affected the outcome" (Aala [104] per McHugh J; Muin at [140] per McHugh J) Indeed in Aala at [57]-[60] Gaudron and Gummow JJ appear to restrict the proposition to situations of futility, at least for purposes of 75(v) of the Constitution. 49 In my view this case should be decided on a different basis. If the enlarged area notice point was in issue, then the appellants were entitled to adduce the evidence of Ms Carnegie to which the Respondent objected. The evidence is set out by Mason P. That objection indicates clearly that the Respondent did not put a case of this character. That is confirmed by the absence of evidence from the Respondent directed to establishing what, if anything, it may have done if it had had notice of the specific modifications. Counsel for the Respondent could point to no such evidence, even at the level that the Respondent would have wanted to make a submission about the modifications. There was evidence about the loss of an opportunity to make submissions about two letters from the City of Sydney which contained comments critical of the Respondent. However, those communications did not impinge on the modifications proposed by the Boundaries Commission. 50 The case was fought at a higher level of generality. Overwhelmingly, the adverse impact on the Respondent was contained in the Minister's original proposal, not in the change to that proposal put forward by the Boundaries Commission. Perhaps the Respondent regarded the change as trivial or, in the case of the University land, as in its interests. For whatever reason, this Court should conclude that this was not the case advanced at trial. As evidence could have been adduced on these issues, the Respondent should not be permitted to advance a new case on appeal. On this basis I agree with the orders of Mason P. 51 MASON P: Local Government areas may be varied by the Governor under procedures set out in Chapter 9 of the Local Government Act 1993 (the Act). The Minister for Local Government proposed to transfer to the City of Sydney area parts of the South Sydney City area as well as other local government areas. This proposal was referred to the Local Government Boundaries Commission for "examination and report". The Commission recommended that the Minister's boundary alteration should be implemented with certain modifications. 52 The parties accept that the Minister's ensuing power to recommend formal implementation to the Governor depends, in the circumstances, upon the Commission having duly examined and reported. 53 South Sydney City Council (hereafter SSCC) brought proceedings in the Land and Environment Court seeking a declaration that the Commission had not examined and reported on the matter in accordance with the Act; and an order that the Minister be restrained from recommending implementation to the Governor. 54 Five broad issues were tendered in SSCC's submissions at trial: (i) the Commission had failed to examine and report on the proposal referred to it by the Minister, but had instead examined and reported on a significantly different proposal submitted by the Council of the City of Sydney (CSC); (ii) the Commission had in fact not examined and reported at all, because it had allowed a firm of consultants, PKF, to conduct the examination and write its report; (iii) the Commission had denied procedural fairness to the SSCC ; (iv) the Commission had failed to have genuine regard to certain factors stipulated in s263(3) of the Act; and (v) the Minister had denied or was threatening to deny procedural fairness to the Council as regards implementation of the Report. 55 Talbot J accepted arguments (i)-(iii), rejected (iv) and found it unnecessary to deal with (v). He declared that the Commission had not examined and reported on the matter referred to it by the Minister with respect to the boundaries of the SSCC's area in accordance with the provisions of the Act (see South Sydney City Council v Minister for Local Government & Anor [2002] NSWLEC 74). 56 In his reasons given on 14 May 2002 Talbot J reserved the question of costs. Formal orders were made on 31 May 2002 and they include an order "by consent" that the respondents in the Land and Environment Court (ie the appellants in this Court) pay the applicant's costs of the proceedings excluding the costs of its notice of motion returnable on 4 June 2002. I infer that this consent involved no more than recognition of the inevitable in light of his Honour's reasons on the substantive issues. 57 The appellants dispute the conclusions on issues (i)-(iii) as well as raising a challenge based on failure to address arguments and absence of necessary findings of fact. They also challenge the Land and Environment Court's jurisdiction to have addressed the procedural fairness claims. The respondent supports the primary judge's reasoning and raises matters by notice of contention, including an argument based on s263(3)(e2) (part of (iv) above). 58 There is no cross appeal and, for that reason alone, it is unnecessary to consider the claim of procedural unfairness as regards the Minister's dealings with the Commission's Report. Many months have now elapsed since the Report was delivered to the Minister and there is no suggestion that he has refused to entertain representations from SSCC about the subject matter. Of course, there is no threat to recommend implementation to the Governor while Talbot J's declaration stands. 59 The two appellants made common cause. In light of the statement in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 35-6 it is possible that the Commission should have adopted a more passive litigious stance as regards some of the issues ventilated in the appeal. Since, however the matter was not raised by the Court during the hearing I do not wish to be seen as making a criticism. I reiterate that the appellants made common cause and shared common counsel and solicitors. Legislative framework 60 Chapter 9, Part 1 (ss204-218K) deals with local government areas and how they may be constituted, changed and dissolved. The boundaries of one or more areas may be altered by the Governor, by proclamation (s218B). That proclamation may include various provisions (s218C) including those referred to in s213, which relevantly provides: (1) A proclamation of the Governor for the purposes of this Division may include such provisions as are necessary or convenient for giving effect to the proclamation, including provisions for or with respect to: • the transfer or apportionment of assets, rights and liabilities • the transfer of staff • …. • the delivery or retention of records …. 61 Division 2B provides: Division 2B What must be done before areas can be amalgamated or their boundaries altered? 218D Exercise of functions under secs 218A and 218B A function under section 218A or 218B may be exercised only after a proposal for the exercise of the function is dealt with under this Division. 218E Who may initiate a proposal? (1) A proposal may be made by the Minister or it may be made to the Minister by a council affected by the proposal or by an appropriate minimum number of electors. …. 218F Referral of proposal for examination and report (1) On making or receiving a proposal, the Minister must refer it for examination and report to the Boundaries Commission or to the Director-General. …. (7) The Minister may recommend to the Governor that the proposal be implemented: (a) with such modifications as arise out of: (i) the Boundaries Commission's report, or (ii) the Director-General's report (and, if applicable, the Boundaries Commission's comments on that report), and (b) with such other modifications as the Minister determines, but may not do so if of the opinion that the modifications constitute a new proposal. (8) The Minister may decline to recommend to the Governor that the proposal be implemented. 62 Part 3 of Chapter 9 deals with the constitution and powers of the Local Government Boundaries Commission, the second appellant. It is a body corporate consisting of four commissioners appointed by the Governor (ss260-262). In the circumstances of this case one of the commissioners did not take part in the examination, presumably because he or she was disqualified by a conflict of interest (see Schedule 2, cl 11). The Commission is not required to follow strict legal procedure or to observe the rules of law governing the admission of evidence when exercising its functions (Schedule 2, cl 13). 63 Various functions and powers are conferred by ss263-265 which provide: 263 Functions of the Boundaries Commission (1) The Boundaries Commission is required to examine and report on any matter with respect to the boundaries of areas and the areas of operation of county councils which may be referred to it by the Minister. (2) For the purpose of exercising its functions, the Boundaries Commission: (a) may hold an inquiry if the Minister so approves, and (b) must hold an inquiry if the Minister so directs, but may not hold an inquiry otherwise than as referred to in paragraph (a) or (b). (2A) Despite subsection (2), the Boundaries Commission must hold an inquiry for the purpose of exercising its functions in relation to a proposal for the amalgamation of two or more areas that has been referred to it in accordance with section 218F. (2B) Reasonable public notice must be given of the holding of an inquiry under this section. (3) When considering any matter referred to it that relates to the boundaries of areas or the areas of operations of county councils, the Boundaries Commission is required to have regard to the following factors: (a) the financial advantages or disadvantages (including the economies or diseconomies of scale) of any relevant proposal to the residents and ratepayers of the areas concerned, (b) the community of interest and geographic cohesion in the existing areas and in any proposed new area, (c) the existing historical and traditional values in the existing areas and the impact of change on them, (d) the attitude of the residents and ratepayers of the areas concerned, (e) the requirements of the area concerned in relation to elected representation for residents and ratepayers at the local level, the desirable and appropriate relationship between elected representatives and ratepayers and residents and such other matters as it considers relevant in relation to the past and future patterns of elected representation for that area, (e1) the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities, (e2) the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned, (e3) the impact of any relevant proposal on rural communities in the areas concerned, (e4) in the case of a proposal for the amalgamation of two or more areas, the desirability (or otherwise) of dividing the resulting area or areas into wards, (e5) in the case of a proposal for the amalgamation of two or more areas, the need to ensure that the opinions of each of the diverse communities of the resulting area or areas are effectively represented, (f) such other factors as it considers relevant to the provision of efficient and effective local government in the existing and proposed new areas. (4) The Boundaries Commission is not entitled to examine or report on any matter relating to the area of operations of a county council constituted or proposed to be constituted for the supply of electricity. (5) The Boundaries Commission must allow members of the public to attend any inquiry held by the Commission under this section. (6) The Boundaries Commission may continue with an examination or inquiry even though a commissioner or acting commissioner replaces another commissioner during the course of the examination or inquiry. (7) The Supreme Court may not make an order in the nature of prohibition in respect of, or an order for removing to the Court or quashing, any decision or proceeding made or conducted by the Boundaries Commission in connection with the exercise of its functions. 264 Can a person be represented in proceedings before the Boundaries Commission? (1) In proceedings before the Boundaries Commission, a person is not entitled to be represented: (a) by a barrister or solicitor or by a person qualified for admission as a barrister or solicitor, or (b) by any person acting for a fee or reward. (2) However, this section does not prevent: (a) an employee of a person from representing the person before the Boundaries Commission if the employee is not a person referred to in subsection (1) (a), or (b) a person who is the Mayor of an area or the chairperson of a county council from appearing in that capacity in proceedings before that Commission, or (c) a person referred to in subsection (1) (a) from preparing any documents or submissions or tendering any legal advice in connection with any proceedings before that Commission. 265 Boundaries Commission may conduct survey or poll (1) To assist it in determining the attitude of the residents and ratepayers of an area or areas for the purposes of section 263 (3) (d), the Boundaries Commission may conduct (in such manner as it thinks appropriate) an opinion survey or poll of the residents and ratepayers. (2) The residents and ratepayers of the area or areas concerned may participate in any such opinion survey or poll but are not required to do so. (3) The Boundaries Commission may request the Electoral Commissioner, a council or any other person or organisation to conduct any such opinion survey or poll. Factual background 64 On 11 October 2000 the Governor appointed Professor Kevin Sproats, by Letters Patent, to conduct an inquiry relating to the structure of local government in the areas of Botany Bay, Leichhardt, Marrickville, Randwick, South Sydney, Sydney, Waverley and Woollahra. 65 SSCC made extensive submissions to that inquiry. 66 Professor Sproats reported on 20 April 2001. He recommended the recasting of local government structures in the area to provide "fewer, better resourced, more strategically focussed councils". Various models were proposed and discussed at length, including a preferred Recommendation 4 that the structure of local government in the region be recast by the creation of four new councils: • Council No 1 - An enhanced City of Sydney • Council No 2 - A mixed residential/industrial city • Council No 3 - A beachside/harbourside residential city • Council No 4 - An Inner West residential gateway city. This recommendation would involve a full recasting of existing councils. 67 Professor Sproats also suggested an alternative boundary adjustment with lesser impact. It involved the cession of all or the greater part of the North Ward of SSCC to CSC. 68 SSCC responded to the Minister's invitation to make submissions on these recommendations. By letter dated 31 May 2001 it announced its opposition to both the greater and lesser recommendations. Without inferring any criticism, the letter is testimony to the political controversy generated by proposals of this nature. 69 On 15 November 2001 the Minister issued a Media Release in the following terms: MAJOR BOUNDARY CHANGES FOR CITY AND EAST Minister for Local Government, Mr Harry Woods, today announced boundary changes in the city and inner east as part of the State Government's response to the independent Sproats inquiry. Mr Woods told State Parliament that Cabinet had accepted key recommendations put forward in the Sproats report and, in addition, a series of regional impact studies on further reform would be carried out. The inquiry, carried out by Professor Kevin Sproats, examined the local government structures of eight inner city and eastern suburbs councils – City of Sydney, South Sydney, Leichhardt, Botany, Marrickville, Randwick, Waverley and Woollahra. The proposed boundaries changes are: • The transfer of Glebe and Forest Lodge from Leichhardt Council to the City of Sydney Council; • The transfer of Woolloomooloo, Kings Cross, Potts Point, Rushcutters Bay, Elizabeth Bay, Darlinghurst, Chippendale, the University of Sydney and the Royal Prince Alfred Hospital from South Sydney to the City of Sydney Council; and • The transfer of Bondi Junction to Waverley Council (currently Bondi Junction is divided between Waverley and Woollahra Councils). Mr Woods said he would not proceed with the Sproats recommendation of re-casting the eight councils into four new entities. The proposed boundary changes will be referred to the Local Government Boundaries Commission shortly. "It is anticipated that following that examination, negotiations of the transfer will take place between the affected councils, guided by a set of principles [summary attached] with the new boundaries scheduled to take effect from early next year. Expanding the boundaries of the City of Sydney is consistent with Prof. Sproats' views that the boundaries of Sydney should reflect the changes which have occurred in recent years. It is also consistent with recommendations from the 1987 Goran Report and the 1998 Fisher Report. In the case of Bondi Junction, the important commercial and social precinct will come under the effective control of one council, ensuring a uniformity of planning and infrastructure plan." 70 Annexed to these reasons is a Map showing the areas covered by various formulations of the proposal to change the local government boundaries. Each formulation involves reduction of the existing South Sydney area. The proposal described in the second dot point of the Minister's Press Release is depicted in purple in the Map. 71 The Minister's formal Orders were made on 20 November 2001 and gazetted on 30 November 2001. Two of the Orders concern SSCC and are of direct relevance to these proceedings. They were as follows: ORDER Referral of Boundary Alteration Proposal to the Local Government Boundaries Commission I, HARRY WOODS, Minister for Local Government, acting under sections 218E(1) and 218F(1) of the Local Government Act 1993, hereby order the referral of my boundary alteration proposal to transfer the suburbs of Woolloomooloo, Potts Point, Rushcutters Bay, Elizabeth Bay and part of Darlinghurst in the South Sydney local government area to the Sydney local government area to the Local Government Boundaries Commission. • The area proposed to be transferred commences at the boundary of the Sydney and South Sydney local government areas at the intersection of Riley Street and Campbell Street, Darlinghurst. • thence prolonging generally north and north-east along the South Sydney local government boundary as last described to the Elizabeth Bay foreshore; • recommencing at the Sydney and Woollahra local government boundary at the Rushcutters Bay Park Canal and generally prolonging along that boundary as last described to the intersection of Barcom Street and Oxford Street; • thence north-west along Oxford Street to the intersection with Flinders Street; • thence generally south on that street to the intersection with Campbell Street; • thence east along Campbell Street to commencement. I request the Local Government Boundaries Commission to examine and report on the proposal in accordance with the Act, having regard to the following factors as required by section 263(3): [the paragraphs of s263(3) are then set out] The Local Government Boundaries Commission may not hold an inquiry on this proposal. Dated: 20 November 2001. HARRY WOODS MP Minister for Local Government ORDER Referral of Boundary Alteration proposal to the Local Government Boundaries Commission I, HARRY WOODS, Minister for Local Government, acting under section 218E(1) and 218F(1) of the Local Government Act 1993, hereby order the referral of my boundary alteration proposal to transfer that portion of the suburbs of Chippendale, Camperdown, Ultimo and the suburbs of Forest Lodge and Glebe currently within Leichhardt local government area and South Sydney local government area to the Local Government Boundaries Commission. • The area proposed to be transferred from Leichhardt and South Sydney local government areas to Sydney local government area commences at the boundary of the Sydney and South Sydney local government areas at the intersection of Cleveland Street and Regent Street; • thence proceeding generally west to the intersection of City Road; • thence proceeding generally south-west along City Road to the intersection with Carillon Avenue; • thence west along Carillon Avenue to the intersection with Mallett Street; • thence generally north-west along Mallett Street to the intersection of Pyrmont Bridge Road, then continuing north-west along Booth Street to the intersection of Wigram Road; • thence north-west along Wigram Road to the commencement of the stormwater channel along Johnstons Creek; • thence following the Johnstons Creek Stormwater Channel north to its crossing with The Crescent; • thence north along The Crescent to the intersection of Chapman Road, then east along Chapman Road to the boundary with Bicentennial Park and Federal Park; • thence north east along that boundary to the foreshore of Rozelle Bay; • recommencing at the boundary of Sydney and Leichhardt local government areas at the foreshore of Blackwattle Bay at the junction of Wattle Street and Pyrmont Bridge Road; • thence proceeding along that boundary as last described to commencement. I request the Local Government Boundaries Commission to examine and report on the proposal in accordance with the Act, having regard to the following factors as required by section 263(3): [the paragraphs of s263(3) are then set out] The Local Government Boundaries Commission may not hold an inquiry on this proposal. Dated: 20 November 2001. HARRY WOODS MP Minister for Local Government 72 The boundary alteration to South Sydney which was proposed by the Orders was not identical to that described in the Minister's Press Release. On the Map it is depicted by the dotted yellow line. The main differences between the proposal referred and the Press Release were that the latter contemplated transfer of Camperdown and Chippendale whereas the former did not. There were also slight differences in the vicinity of Oxford Street. 73 It is to be noted, however, that neither the Press Release nor the proposal referred to the Commission by the Orders ever suggested that the suburbs of Newtown, Surry Hills or Stawberry Hills be transferred. (These were the areas later suggested for inclusion by CSC and they are represented by the broken blue line in the Map.) 74 On 21 November 2001 the Minister notified the affected councils, including SSCC. The description of the Minister's proposal in that letter accords with his Orders. 75 On 26 November 2001 the Chairperson of the Commission wrote to the affected councils. The letter to SSCC said: On 20 November 2001 the Minister for Local Government referred a proposal to the Boundaries Commission for boundary changes to five council areas. I understand details of the changes, which will involve Leichhardt, South Sydney, City of Sydney, Woollahra and Waverley Councils, were conveyed to you on 21 November 2001. As is usual for boundary alterations, the Commission will not be holding a formal inquiry into the changes. Also, the areas involved were the subject of a public inquiry and submissions process as part of the review conducted earlier this year by Professor Kevin Sproats. Section 263(3) of the Local Government Act sets out the matters the Commission has to have regard to in its consideration of the boundary alterations. If additional issues are relevant then obviously the Commission will take these into account as well. While the Commission will not be seeking public submissions, it will review and consider comments made as part of the 'Sproats' review which are relevant to the current proposal. However, as your Council's area is affected by the proposed changes you are invited to make a formal submission to the Commission. I would ask that if you are intending to take this opportunity you do so by Wednesday 5 December 2001 at the latest. Should you have any enquiries in this regard please contact Michelle Carnegie on (02) 9793 0710. 76 Ms Carnegie, who is referred to in the final sentence, is a member of the Commission. She is an officer of the Department of Local Government nominated by the Director-General (see s261(2)(b)). Ms Carnegie gave detailed evidence about the Commission's work in the matter. No other commissioner was called. 77 On 26 November 2001 the Lord Mayor of Sydney made a submission to the Commission on behalf of CSC recommending "some slight modifications" to the proposed new City of Sydney boundary. The Submission attached to the letter suggested a boundary alteration quite different from that which the Minister had referred to the Commission. This alteration is signified on the Map by the broken blue line. The CSC suggested alteration would have seen Newtown, Strawberry Hills and Surry Hills transferred out of South Sydney and into the City of Sydney. It was therefore substantially different to the Minister's proposal. This letter was not sent to SSCC by CSC or made available to it by the Commission. Its non-disclosure lies at the heart of the case on denial of procedural fairness by the Commission. 78 It is SSCC's case, as accepted by Talbot J, that the Commission so redirected the focus of its endeavours that its examination and report dealt only with the CSC suggested alteration as distinct from the Minister's proposal. 79 On 28 November 2001 the Mayor of SSCC wrote to the Chairperson of the Commission (with copies to leading politicians on both sides of politics) a firm, if not pugnacious, objection to the proposal and the Commission's suggested timetable. The letter was critical of the Sproats report. Of some relevance to the procedural fairness issues later to be discussed, the Mayor added: This aside, if the inference by Professor Sproats was that suburbs are not to be split between local governments, then I would submit that the jagged boundary that exists from re-establishment of this Council when it separated from the City of Sydney on the 1st January 1989 is the boundary that needs justifying. This shows a realisation that the Commission would not be pegged to endorsing the precise boundaries of the Minister's proposal. 80 On 30 November 2001 the Commission met between 9.40am and 3.50pm. Two officers from the Department of Local Government were also present. The Minutes record: The Commission viewed submissions received to date on the proposals. …. The Commission noted observations from a 'walking tour' of the proposed boundary. As a general principle it was agreed that it was desirable for boundary lines to run along the rear of building lines rather than cutting through roads, however, this issue may need further research. …… Motions: 1. That in Macdonaldtown (Darlington), the boundary should not run with the road, but rather should run along the rail-line as a more concrete option. Clr Kelly moved this motion, Ms Carnegie seconded it, and the motion was carried unanimously. 2. That the whole of Surry Hills should come within the Sydney local government area. Clr Kelly moved this motion, Clr Hall seconded it and the motion was carried unanimously. ….. 81 The numbered Motions represented a provisional, partial adoption of the CSC suggested alteration as constituted by the dotted blue line. The portion not thus adopted involved that part of Newtown running from King Street to Golden Grove Street. In substance, the motions would have seen Strawberry Hills and Surry Hills transferred into the City of Sydney, but not Newtown. By contrast, the CSC's submission would have seen Newtown transferred as well. None of those suburbs was to be transferred under the Minister's gazetted proposal (the dotted yellow line). 82 It does not appear to have been argued at trial that the resolutions of 30 November 2001 bore directly upon what I have referred to as issue (i). This is understandable, because a (provisional) inclination to adopt part of the CSC suggested alteration is entirely consistent with the Commission doing so in the context of considering the Minister's proposal. If anything, this material supports the appellants on the wrongful delegation issue because it shows the Commissioners exercising their own judgment on matters of substance. 83 At the trial, Ms Carnegie was examined by counsel for the Minister for Local Government in relation to the two motions just referred to. The following exchange took place: Q: Now did the Commission subsequent to this motion consider a proposal amended as provided for in motions 1 and 2? A: No it did not. Q: Why not? A: A few days later legal actions commenced against the Commission and as a result of those it was made clear to the Commission that the proposal at hand from the Minister gazetted on 30 November was the only proposal under consideration. Q: When you say it was made clear to the Commission, how was it made clear to the Commission? A: As a result of those legal proceedings legal advice from the Department was passed to the Commission to that effect. Q: And the substance of that legal advice was? A: That the Commission's role in examining the proposal was limited to the Minister's proposal as gazetted on 30 November. Q. And consequent upon receiving that advice did the Commission take any further consideration of the areas the subject of motions 1 and 2? A. No, it did not. 84 Talbot J referred to the Commission motions of 30 November 2001 and the fact that Ms Carnegie had given evidence that the Commission had received advice that it could only proceed on the Minister's proposal. He also noted her evidence that, consequent upon receiving that advice, the Commission did not take any further consideration of the areas the subject of motions 1 and 2. The latter evidence had been challenged perfunctorily in cross examination, but there is no finding accepting or rejecting Ms Carnegie on this particular matter, or indeed generally. Nor is there any endeavour to reconcile the conclusions on issue (i) with this significant evidence. 85 On 3 December 2001 SSCC commenced proceedings against the Commission in the Land and Environment Court challenging the 5 December 2001 deadline set in the Commission's letter of 26 November. There were various interlocutory steps. Those proceedings were resolved and discontinued on 14 January 2002 subject to undertakings by the Commission and its Chairperson that they would not within the period before 28 February 2002 report on the Minister's proposal. Their undertaking, given by the Crown Solicitor, further stated that during that period the Council would have the opportunity to "make a written submission to the Commission in respect of the Minister's proposal referred to". There could be no doubt that this was a reference to the proposal formally referred to the Commission by the Orders that were gazetted. 86 Early in 2002 the Commission retained two consultants. PKF Utility and Government Services (PKF) was retained on 30 January 2002 to undertake a boundaries impact assessment of the proposal having regard to the factors outlined in s263(3) and to produce a "final confidential Draft" report. A formal Agreement dated 1 March 2002 defined the services to be performed by PKF as to "advise and assist the [Commission] in the process of analysing information available to and received by [it] and preparing draft reports … as directed from time to time by the [Commission]. Geac Enterprise Solutions (GEAC) was retained to analyse the information technology impacts of the proposed boundary alterations being considered by the Commission. 87 Attached to the PKF Project Brief was a document entitled "Details of the Proposed Boundary Alteration". The description of the proposed boundary alteration in that document (which unarguably emanated from the Commission) was identical to the Minister's proposal (that is the dotted yellow line). The brief delivered by the Commission to GEAC on 6 February 2002 was similar in this regard. 88 SSCC was informed about the appointment of these consultants and invited to cooperate with them. For a period it declined to do so on various grounds. I find it unnecessary to determine where "fault" lies in this matter. 89 On 28 February 2002 SSCC delivered extensive written submissions to the Commission, critically addressing the Minister's proposal and its impact on SSCC. The covering letter from the Mayor of SSCC informed the Chair of the Commission: South Sydney City Council (SSCC) strongly objects to the proposal and asks the Boundaries Commission to reject it in favour of either an amended proposal designed to enhance services to the South Sydney community or a fresh proposal that is consistent with the Sproats Inquiry vision and recommendations. 90 There is no doubt that SSCC was addressing the Minister's proposal as gazetted. 91 The submission outlined SSCC's objections at length. The paragraphs of s263(3) are addressed in turn. Concerns were expressed about the splitting of communities, the transactional costs of complex change, SSCC income reduction not being met by cost reduction and impact upon staff morale (95% of SSCC staff voted to stay with SSCC). The submission is supported by financial and other expert reports addressing the (negative) impact of the proposal upon SSCC, its ratepayers and staff, and the community generally. 92 As indicated in the passage from the Mayor's letter set out above, SSCC proposed some boundary changes of its own. This included a suggested amendment of "irregular boundaries" in the Chippendale area. 93 It was never explored with Ms Carnegie in cross examination or by Talbot J in his reasons how the Commission's analysis of the submissions made by SSCC made any sense if the Commission was addressing the CSC proposal (that is the dotted blue line). 94 On 25 February 2002 the commissioners spent the entire day considering a preliminary draft of the report prepared by PKF. Three days later PKF sent its first draft report to the Commission. 95 It will be seen that an error in Chapter 2 of the First Draft, which continued until the final signed Report, lies at the heart of the respondent's case that the Commission failed to examine and report on the Minister's proposal. It is the express basis of his Honour's conclusion on issue (i). SSCC submits that this material provides evidence supporting its case that the wrong proposal was considered by the Commission. It certainly does, but there was a huge amount of evidence to the contrary which is not analysed in the judgment under appeal. 96 From earliest draft to final product the Report had a similar structure, as follows: First Draft Final Report Chapter 1 Introduction Introduction 2 The Proposal The Nature of the Proposal 3 Consultation Submissions 4 Examination of Proposal Examination of the Proposal 5 The New Boundary The New Boundary 6 Recommendations Recommendation Each version of the Report provided for Attachments , although in the final Report this appears as a seventh chapter. In some drafts, The Proposal appears in Chapter 3. 97 The approximate dates of the successive drafts were 28 February 2002 (First Draft), 5 March 2002 (Second Draft), 13 March 2002 (Third Draft), 16 March 2002 (Fourth Draft). 98 Chapter 2 of the First Draft was headed "The Proposal" and contained a purported description of the proposed boundary alteration. It was as follows, underlining the portions which would have involved significant reductions in the South Sydney area beyond those proposed by the Minister's Orders: CHAPTER 2 - THE PROPOSAL The proposal involves the transfer of what can be regarded as two distinct areas of South Sydney and Leichhardt to the City of Sydney. One area commences at the boundary of the Sydney and South Sydney local government areas at the intersection of Cleveland Street and Chalmers Street, Surry Hills; - then prolonging generally north and north-east along the South Sydney local government boundary as last described to the Elizabeth Bay foreshore; - recommencing at the northernmost point of Yarranabe Park on the Woollahra foreshore and heading south along the park edge to the commencement of New Beach Road; - then south along New Beach Road to Kings Cross Road; - then west along Kings Cross Road until it connects with the existing South Sydney-Woollahra boundary, which is to be followed until the southern end of Barcom Avenue; - then south along South Dowling Street to Cleveland Street ; - then west along Cleveland Street to commencement. A second, but related area proposed to be transferred from Leichhardt and South Sydney local government areas to the City of Sydney commences at the boundary of the Sydney and South Sydney local government areas at the intersection of Cleveland Street and Regent Street: - then proceeding south along Regent Street to the intersection with Gibbons Street, and continuing south down Gibbons Street to Lawson Street ; - then west along Lawson Street to Little Eveleigh Street and along Little Eveleigh Street to Wilson Street ; - then south-west along Wilson Street to King Street ; - then north-east along King Street to Church Street; - then north along Church Street to Carillon Avenue; - then west along Carillon Avenue to the intersection with Mallett Street; - then north along Mallett Street to Parramatta Road; - then west along Parramatta Road to the Johnstons Creek stormwater channel; - then north along the stormwater channel to Booth Street and continuing along Booth Street to the intersection of Nelson Street; - then north along The Crescent to the intersection of Chapman Road, east along Chapman Road to the boundary with Bicentennial Park and Federal Park; - then north-east along that boundary to the foreshore of Rozelle Bay; - recommencing at the boundary of Sydney and Leichhardt local government areas at the foreshore of Blackwattle Bay at the junction of Wattle Street and Pyrmont Bridge Road; - then proceeding along that boundary as last described to commencement. A detailed legal an technical description has been provided to the consultants and this will be appended to the Final Report. The Commission will prepare detailed maps. 99 By the Fourth Draft this final paragraph had been amended to read: A detailed technical description of the proposed boundary is contained in Chapter 5 of this Report along with a map of the existing and proposed local government area boundaries. 100 The area described (which was unaccompanied by a map or plan) did not accord with the Minister's proposal, but rather with the CSC suggested alteration thereof (ie the area shown within the dotted blue line). It should, however be noted that the concluding three lines of Chapter 2 always foreshadowed that a detailed technical description of the proposed boundary would appear in the Final Report. When Chapter 5 was first inserted, at the Fourth Draft stage, its metes and bounds description of the "NEW BOUNDARY" never included the land reaching to the blue line in the Map. 101 How the partially erroneous description of the proposal got into the first PKF draft remains a mystery. It was not the proposal sent to PKF in their brief, because that proposal was the same as the Minister's. 102 Chapters 5 and 6 are not written (even in draft) in the First Draft. The copy of that draft in evidence is covered in handwritten annotations, but they are limited to Chapters 1, 3 and 4. I accept the appellants' submission that this suggests that those perusing the First Draft simply did not turn their minds to the boundary description in Chapter 2, assuming that it had been correctly transcribed from the project brief. 103 Ms Carnegie gave evidence about the belated discovery of the erroneous description in Chapter 2. She said (of the same material in the final version): [On 5 April 2002] I noticed there was in fact an error on page 8 of the report in that the description was inconsistent with the Minister's order of 20 November 2001. At all times the Commission based its examination report on the Minister's orders and that description was part of the contract with PKF and the only description provided by the Commission to PKF. Accordingly, I inferred that the erroneous text must have been included by PKF from another source and the error was corrected by the Commission. I did not pursue the cause any further but sent an amended page 8 to the relevant councils. Annexed hereto and marked "A" is a file note I prepared in relation to the error and the correction." That file note said (in part): Page 8 A check of page 8 of the Commission's report identified that there was incorrect text in this chapter of the report, which indicated a larger proposed transfer area. A check of records held by the Commission indicated that all text copies of the Minister's proposal which were forwarded to the consultants has been accurate. Specifically, the following documents were analysed and found to be accurate: * The Ministerial Order which appeared in the Gazette * The Project Brief for the consultancy * The Commission's contract with the consultants From the check of the Commission's records, it would appear that the consultants may have mistakenly inserted text from an Attachment to the City of Sydney Council's submission to the Commission onto page 8 of the report." 104 Ms Carnegie was never cross-examined to suggest that her evidence about this was untrue or that she was mistaken. Nor did Talbot J refer to her evidence on this matter or seek to explain or reconcile it with his ultimate conclusion. This in itself is a reason why his Honour's conclusion on issue (i) must be set aside. 105 The Second Draft was considered at an all day meeting in Melbourne on 5 March 2002 attended by Ms Carnegie, a departmental officer and PKF representatives. A white board record of the discussion shows, under the heading "The Proposal", the words "'as is' plus Map". This suggests lack of detailed consideration and explains why what everything else points to as an unseen error in Chapter 2 was not picked up. The white board print out also shows no discussion of the impact of including Strawberry Hills, Surry Hills or Newtown, something which would be striking if in truth the Commission had been considering the CSC suggested alteration at this stage, in the sense of regarding that alteration as the ultimate focus of its statutory obligation. 106 The erroneous description of the proposal in Chapter 2 continued into the Third Draft which was received by the Commission from PKF on 13 March 2002. There are no handwritten notes on that page, further suggesting that it was not considered in any substantial way. The remainder of the Report contains many notes and many alterations. 107 Within the Third Draft there is explicit mention of SSCC's submissions that "[t]he proposed boundary alteration would reduce its income by $41 million". If the Commission had in fact been considering CSC's proposal, that statement would have been quite erroneous. The final version of the Report (to which detailed reference shall be made) also contains much analysis of SSCC's submissions on the Minister's proposal all of which make no sense if the Commission was looking at a different proposal altogether. As with the first two drafts, the Third Draft contains no reference to the excision of Newtown, Surry Hills or Strawberry Hills. 108 On 15 March 2002 Ms Carnegie provided PKF with the detailed "metes and bounds" description of the boundary alteration which the Commission was intending to endorse in Chapters 5 and 6 of the Report. The material emanated from the Land Information Centre which acted on the Commission's instructions. The metes and bounds description substantially followed the Minister's proposal (represented by the dotted yellow line in the Map). 109 This description was inserted into Chapter 5 of the Report and it is depicted by the red line on the Map. s218F(7)(a) empowered the Commission to recommend modifications to the Minister's proposal. I shall discuss the nature and extent of the Commission modifications when dealing with the case on procedural fairness. It will be seen that the case at trial was largely fought by SSCC on the basis that the reasons for those modifications were of no consequence to the legal issues. It has never been suggested that the Commission's suggested modifications fell outside its power in that regard (see s218F(7)). Indeed, on appeal, SSCC argued that the Commission was not even to be read as endorsing any modification of its own, a submission directed primarily to the wrong proposal issue. This submission draws some support from Ms Carnegie's evidence that the Commission did not view the Chapter 5 area as a different proposal. However, to those who read Chapter 5 closely it is clear that the Commission was suggesting minor adjustments to the Minister's proposed area. 110 It is unfortunate that the Report does not explain clearly the principles adopted in implicitly suggesting these adjustments to the Minister's proposal. But this departure from what I would have thought to be good practice was not the subject of formal complaint. 111 For the present, it is sufficient to observe that a recommendation embodied in Chapters 5 and 6 and depicted by the red line departs radically from the CSC suggested alteration. If that alteration had been the primary focus of the Commission's examination and reporting, one would have expected some explanation as to why the transfer of Strawberry Hills, Surry Hills and Newtown had not been recommended. 112 Furthermore, the difference between the area described in Chapter 2 and that depicted in detail in Chapter 5 is unexplained in the Report. It follows that the Report bears on its face an internal inconsistency having regard to the last three lines of Chapter 2. 113 On 14 March 2002 the Mayor and General Manager of SSCC addressed the Commissioners for approximately 1-2 hours. SSCC's written and oral submission dealt with the Minister's proposal, not the CSC suggested alteration. 114 The erroneous description in Chapter 2 persisted into the final Fourth Draft that was provided by PKF to the Commission on 16 March 2002. 115 Between 16 and 19 March 2002 Ms Carnegie worked on the Report in conjunction with members of the Department of Local Government and in consultation with her fellow commissioners. 116 On 20 March 2002 the Commissioners met and passed the following resolution: RESOLUTION The Local Government Boundaries Commission ("the Commission") has now completed its examinations of two boundary alteration proposals in accordance with the Local Government Act 1993 ("the Act"), specifically: 1. Examination of the Proposed Boundary Alteration to the City of Sydney, Leichhardt and South Sydney Local Government Areas. 2. Examination of the Proposed Boundary Alteration to the Waverley and Woollahra Local Government Areas. These proposals were referred to the Commission on 20 November 2001 and published in Government Gazette No 184 pp 9558-9559. The Commission hereby formally and unanimously resolves to: 1. Endorse the contents of its two reports on its examination of these proposals, made pursuant to section 263 of the Act to the Minister for Local Government. And 2. Note the contents of the report prepared by Mr Anthony Lernish of Geac. Enterprise Solutions, titled, 'Report of Data Migration Analysis of Proposed Council Boundary Alterations', to the Minister for Local Government. And 3. Submit the three aforementioned reports to the Minister for Local Government for his consideration on this day, 20 March 2002. ______________ (signed)_______ ___________ Ms Edith M Hall AM Clr Leo Kelly Ms Michelle Carnegie Chairperson Commissioner Commissioner 117 A copy of the Report was delivered to the Minister that day. 118 The Report discloses detailed familiarity with the submissions from SSCC and Leichhardt Council, being the two Councils opposed to the Minister's proposal. Those submissions are addressed in detail in Chapter 4, which examines the Minister's proposal by reference to the individual paragraphs of s263(3). 119 The merits of the Commission's analysis and conclusions are not the proper subject of legal complaint in proceedings of this nature. The Report is testimony to the controversy generated by the proposal and to the considerable levels of support and opposition to it at every conceivable level. 120 The formal recommendation is to be found in Chapter 6 which concludes with the typed signature of the three members who constituted the Commission. It is convenient to set out that Chapter in full. CHAPTER 6 RECOMMENDATION The Commission has examined the boundary alteration proposal announced by the Minister for Local Government on 15 November 2001 to transfer the suburbs of Glebe/Forest Lodge from the area of Leichhardt Municipal Council to the area of the City of Sydney Council, and areas in East Sydney from the area of South Sydney City Council to the area of the City of Sydney Council. Having considered the boundary alteration proposal, the support for reform arising out of the Sproats Inquiry, the submissions presented to the Commission by the three affected councils, the unsolicited submissions received by the Commission and other material, and having regard to the factors set out in section 263(3) of the Act, the Commission has reached its recommendation that the boundary alteration proposal should proceed. Key benefits of the boundary alteration proposal noted by the Commission are: 1. The proposal represents an important step in a wider local government reform process articulated by Professor Sproats and the NSW Government. 2. The proposal will mean that residents and ratepayers in the proposed transfer area will benefit from rates which will be generally lower than at present while ensuring they have access to high quality services. 3. The proposal will overcome impediments to the provision of infrastructure and services to the proposed transfer areas stemming from the nature of the relationship that currently exists between the three councils. 4. The proposal will enhance the City of Sydney Council with a large resident population and the incorporation of significant and strategically important gateway access points. 5. The proposal will enable the City of Sydney Council to form strategic alliances with other significant institutions in Sydney, such as Sydney University and the Royal Prince Alfred Hospital, in representing Sydney to the world and in attracting international interest and investment. 6. The proposal will align the boundaries of the City of Sydney with the community of interest profile of the inner Sydney area. (Signature) (Signature) (Signature) MS EDITH HALL AM CLR LEO KELLY MS MICHELLE CARNEGIE CHAIRPERSON COMMISSIONER COMMISSIONER 121 Chapter 5 THE NEW BOUNDARY consists of a metes and bounds description in five schedules, accompanied by a map. The five schedules are: A – Land transferred from Leichhardt to Sydney. B – Land transferred from South Sydney to Sydney. C – Area of Leichhardt (as altered). D – Area of South Sydney (as altered). E – Area of Sydney (as altered). The area transferred from South Sydney to Sydney (schedule B) is in two parts, Area 1 and Area 2. Area 1 (about 1.71 square kilometres) is the land from Camperdown, Darlington and Chippendale which has been the primary focus of this litigation. Area 2 (about 1.79 square kilometres) is in the Darlinghurst, Potts Point, Elizabeth Bay area. In each case the boundary of the land proposed to be transferred from South Sydney to Sydney is that depicted in the red line on the Map. 122 I have already indicated that there was no submission that the Commission's fine-tuning of the Minister's proposal, as depicted in the differences between the dotted yellow line and the unbroken red line on the Map was outside the Commission's powers implicit under s218F(7)(a). 123 On 20 March 2002 the Minister sent a copy of the Report to the Mayor of SSCC. He invited any comments the Council might wish to make by 12 April 2002. 124 On 28 March 2002 the Minister wrote again to the Council inviting comments by close of business on 12 April 2002. He undertook to give them "every consideration". He drew attention to aspects of the metes and bounds description of the proposal in the Report and sought specific comments on the boundary as described therein. This is a reference to Chapter 5. 125 On about 8 April 2002 the Commission discovered the error in Chapter 2. Ms Carnegie's evidence on this topic is referred to above. A corrected replacement page was sent out to the affected councils by Ms Carnegie acting on the instructions of the Chairperson. 126 The covering letter from the Chairperson to the Mayor of SSCC said: Chapter Five of the Commission's Report, "Examination of the Proposed Boundary Alteration to the Sydney City, Leichhardt and South Sydney Local Government Areas" titled "The New Boundary", contains a precise and detailed metes and bounds description prepared by the Land Information Centre (pages 55-64) which the Commission has recommended to the Minister for implementation. This technical description of the proposed boundary was referred to at page 9 of the Report. I understand the metes and bounds description was also referred to in a letter from the Minister to you of 28 March 2002. For clarity I am providing a revised page 8 which is attached. You might note that while it does not affect the metes and bounds (as outlined in Chapter Five), the narrative involving a smaller transfer area now parallels the technical description. 127 On 9 April 2002 the SSCC sought a further 40 days to make submissions. When the Minister declined this request these proceedings were commenced on 11 April 2002. As indicated, one of its formal complaints was the threatened denial of procedural fairness by the Minister stemming from the limited time allowed for submissions to the Minister (issue (v)). 128 On 15 April 2002 the Minister undertook not to make any recommendation to the Governor in connection with the proposal until 24 April 2002. This undertaking was subsequently extended up to the determination of the proceedings. The declaration that ensued has meant that the Minister has been unable to take the matter any further pending the resolution of this appeal. 129 I have passed over matters of detail and some events of relevance to particular issues raised in the appeal. To these I shall return when addressing those issues. Conspectus of issues fought and determined below and challenged in the appeal 130 Talbot J outlined the statutory framework and the formal steps taken in relation to the proposal. 131 The Land and Environment Court's jurisdiction had been invoked on the basis of s673 of the Act which empowers a Council inter alia to bring proceedings in the Court to remedy a breach of the Act as defined in s672. Talbot J held that this jurisdiction had been duly invoked. This decision is challenged by the appellants. 132 His Honour dealt with the five broad issues already identified, as follows. (i) Commission's failure to consider the proposal referred by the Minister's Orders of 20 November 2001 133 SSCC had submitted that the Commission considered a boundary alteration proposal other than that referred to it by the Minister's Orders of 20 November 2001 published in the Gazette on 30 November 2001. 134 Talbot J held that the Commission had failed to examine the Minister's proposal and that it had merely examined and reported upon an alternative proposal submitted by the CSC. (SSCC's suggestion in its written submissions that there was no finding on this issue must be rejected.) 135 The appellants challenge this finding. (ii) Wrongful delegation by Commission 136 Quite apart from issue (ii), the Points of Claim contended that the Commission had failed to examine and report on the Minister's proposal because the Commission had in effect delegated that task to the consultant PKF. 137 Talbot J held that, although it physically adopted the Report as its own, the Commission had assigned the real tasks of examination and preparation to the consultant with the result that there had been a failure to perform the statutory function. 138 The appellants challenge this finding. (iii) Denial of procedural fairness by Commission 139 The Points of Claim had complained that SSCC was not afforded the opportunity to make any submissions to the Commission "with respect to any proposal affecting part of its areas lying between the boundary described in Chapter 2 of the Report" and the boundary proposed by the Minister. It was also alleged that the Commission "adopted unfair procedures" that were particularised in various ways. 140 Talbot J described the issue as: … relatively narrow and depends, to a large extent, upon whether the Court accepts that the BC was bound in the circumstances to give the council an opportunity to address material that was adverse to its interests. 141 His Honour returned to the topic at pars [70]ff of the judgment. He first addressed and rejected the Minister's submission (repeated in the appeal) that any antecedent breach by the Commission had no legal effect because of the Minister's expressed willingness to entertain submissions from SSCC in relation to the Report itself. 142 Talbot J's findings in relation to denial of procedural fairness by the Commission appear at pars [81]-[89]. As I shall indicate, they are ambiguous in some respects. 143 What is clear is that the Commission's breach found by the trial judge centred on its failure to afford SSCC access to and the opportunity "to review and make submissions in respect of" a broad and indeterminate range of submissions and material taken into account, including submissions from CSC. 144 What is not clear, yet now is important, is to know whether there is also a finding that procedural fairness was denied simply because SSCC was not given the opportunity to debate the Commission's own suggested modifications to the Minister's proposed area. 145 The appellants submit that his Honour held no more than that the dictates of procedural fairness meant that SSCC was entitled to be shown submissions and reports, regardless of content, provided they were "adverse" in the sense that they were directed to supporting a ministerial proposal which, from its inception, involved the reduction of the South Sydney City area. On this basis, the decision below is challenged. The respondent does not accept this interpretation as a complete summary of the judgment. 146 The notice of contention does not propound any alternative basis for upholding the primary judge's conclusion on natural justice. (iv) Failure to have real regard to relevant s263(3) factors 147 SSCC argued that the Commission had also failed to have regard to the factors stipulated in s263(3)(a), (d) and (e2). 148 Subject to his conclusions on (i)-(iii), Talbot J held that the Commission had given "proper, genuine and realistic consideration" to these matters: [68]. 149 The respondent contends that his Honour erred with respect to s263(3)(e2) (impact on staff) and it seeks to uphold the declaration on this additional ground. (v) Denial of procedural fairness by Minister 150 Talbot J found it unnecessary to deal with this claim. As indicated already, the respondent has taken this matter no further in this Court. Did the Land and Environment Court have jurisdiction? 151 The appellants challenge Talbot J's decision upholding the Land and Environment Court's jurisdiction to deal with the whole of the dispute presented at first instance. I am, however, satisfied that his Honour was duly seized of the whole matter tendered in the Points of Claim. 152 The appellants point to authorities supporting the view that the obligation to afford procedural fairness is a doctrine of the common law which attaches to the exercise of public power, subject to any statutory modification in that regard (see Kioa v West (1985) 159 CLR 550 at 576, 581, 632 and other authorities cited in Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78 at 91-2 per Spigelman CJ). 153 Talbot J held that this principle did not apply to deprive the Land and Environment Court of jurisdiction in the present matter. There were two reasons. First, denial of procedural fairness by the Commission would nullify the validity of the Report, thereby precluding the Minister from recommending its implementation in accordance with s218F(7). Second, the Court's ancillary jurisdiction conferred by s16(1A) of the Land And Environment Court Act 1979 was engaged having regard to the other related issues which undoubtedly involved breaches of the Act. 154 In my view, Talbot J was correct on both bases of jurisdiction. 155 As to the nullity point, s218D is explicit that a function under s218B (altering area boundaries by proclamation of the Governor): "… may be exercised only after a proposal for the exercise of the function is dealt with under this Division." If the Commission owed and breached a duty of procedural fairness in relation to its function of examination and report and if such a challenge is launched and established, the common law principles relating to procedural fairness as regards administrative bodies (not necessarily courts) remove the statutory validity of the Report ( Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242 at 277, Minister for Immigration v Bhardwaj (2002) 76 ALJR 598 at [45]-[46], [58], [103]-[104], [151]-[152]). This does not depend upon finding a jurisdictional error. 156 Other decisions are to like effect as regards the nullifying impact upon a statutory entitlement of an established antecedent breach of the duty of procedural fairness. The fons et origo of the modern law of procedural fairness is such a case (Cooper v Wandsworth Board of Works (1863) 14 CB(NS) 180, 143 ER 414). It is no longer the law that characterisation of a report as a mere recommendation will necessarily preclude appropriate relief where there has been a denial of procedural fairness (Ainsworth v Criminal Justice Commission (1992) 175 CLR 564). The appellants point to authorities involving two-stage inquiries in which the requirements of natural justice may be satisfied so long as the process, viewed in its entirety, entails procedural fairness (South Australia v O'Shea (1987) 163 CLR 378 at 389, Ainsworth at 578). But it is fallacious to invert this proposition and hold that breach at an antecedent stage can never be a matter of complaint in its own right, or that such breach may not (when established) trigger a finding of breach of a statutory requirement at some later stage in the investigative process. It all depends on the statute in question. 157 This is the reason why I cannot accept the appellants' submission (sometimes pressed, sometimes not) that it is not possible for the Commission to deny procedural fairness at the Report stage. I prefer the alternative submission that recognises that sometimes the Commission's Report could in itself involve a breach of its own duty to accord procedural fairness, with the consequence that there would be a breach of its own statutory duty to examine and report. 158 The appellants' proper concession that a valid Report is the prelude to the relevant power under the Act means that the threatened implementation of a proposal subjected to invalid examination by virtue of breach of an obligation of procedural fairness is a threatened breach of the Act. 159 Warringah Council v Edmondson [2001] NSWCA 1, upon which the appellants rely, does not stand in the way of this conclusion. It was there held that a power to grant a lease of community land (Local Government Act 1993, s45(2)) was not conditional upon acting "reasonably and fairly" to tenderers, as the Land and Environment Court had concluded. The Court in Warringah endorsed the remarks of Spigelman CJ in Vanmeld (at 91-2) to the effect that the obligation to accord procedural fairness stems from the common law, and used this as a basis for concluding that the Land and Environment Court had erred. This does not represent a conclusion that a threat to implement a Report under the Act in circumstances which (ex hypothesi) invoke a lack of procedural fairness does not involve a threatened "breach" of the Act as defined in s672. See also South Sydney Council v Local Government Boundaries Commission [2001] NSWLEC 280. 160 The Court's ancillary jurisdiction was also engaged. Section 16(1A) of the Land and Environment Court Act 1979 provides: The Court also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act. The meaning and scope of this provision are discussed by Pearlman J in NTL Australia Pty Ltd v Minister for Land and Water Conservation (2001) 112 LGERA 403 and by this Court in Scharer v State of New South Wales (2001) 53 NSWLR 299. The focus of enquiry is whether the disputed matter is incidental, accessory or auxiliary to a matter otherwise falling within the Court's jurisdiction. One arm of the case was the claim that the legal defects in the Report precluded the Minister and the Governor from implementing the proposal which the Report endorsed. On this approach, the natural justice issue became incidental, accessory or auxiliary to that issue. The matters I have adverted to on the nullity issue also demonstrate a sufficient linkage, because the declaration is sought to be based upon relevant antecedent breaches of the Act. Did the boundaries commission consider a proposal other than that referred by the Minister's Orders of 20 October 2001? and did it wrongfully delegate its statutory functions? 161 These questions summarise the two primary attacks launched by SSCC against the manner in which the Commission addressed its statutory function (ie issues (i) and (ii)). They are conceptually distinct although evidence touching one issue may enlighten the other. The former concerns the subject matter of the Commission's examination and report, the latter concerns the role of the Commission (ie the commissioners) in addressing the statutory function. 162 Talbot J upheld SSCC on both bases, intermingling his reasoning on each. He said: Whether the Boundaries Commission performed its statutory function 53. Irrespective of whether the BC failed to consider and examine the proposal itself by leaving those tasks to PKF and Ms Carnegie with three departmental officers or whether it examined the proposal submitted by the CSC rather than the Minister's proposal, the legal result will be the same. In either case, the BC would not have performed the statutory task assigned to it. 54. It defies credulity to ask the Court to believe that what survived four drafts by PKF, the so-called examination by members of the BC and, finally, three departmental officers, with Ms Carnegie, was not what it purported to be, namely the Nature of the Proposal considered. Alternatively, if there was a mistake, as the respondents submit, then in the circumstances the Court holds grave doubts that the authors, whoever they were, applied themselves to the task of examination and report with sufficient diligence to justify a finding that the document reflects a proper fulfilment of the statutory obligation assigned to the BC under Div 2B of the LGA. Moreover, the report upon which the Minister now proposes to rely (containing the substituted page 8) has never been adopted by the BC. The re-wording of that part of the report is the unilateral act of Ms Carnegie. 55. Furthermore, the evidence shows that to a significant extent the BC deferred its obligations to PKF and others without having its own regard directly to all of the matters referred to in s263(3) of the LGA. Even if the BC did understand its obligations to consider the matters specifically identified in s263, it did little more than embrace the conclusions of others. The LGA provisions make it clear that the tasks of examination and report is assigned to the BC on the basis that it carries out the task directly. 56. The omissions to call a public enquiry or to conduct a survey or poll are not individually determinative of this issue but they are corroborative of the fact that, overall, the BC did not investigate the proposal to the fullest extent available to it. There is no resolution or minute as to why a request by the council to conduct a plebiscite of affected areas was declined. The approval of the Minister to a public enquiry was not pursued as, according to Ms Carnegie, it was unlikely to be granted. There is no formal record of that decision. 57. By dint of s218F(1), s263, s264 and s265 of the LGA, it is tolerantly clear that Parliament intended the BC to personally examine and report on the proposal referred to it. There is no express power of delegation. The function of the BC is a central feature of the statutory scheme. There is no evidence that administrative necessity indicated the BC could not perform the task, albeit with the advice of others. 58. Although Ms Carnegie told the Court about several meetings of the BC, when the consultants were in attendance and where the time spent was extensive, her evidence is replete with instructions to PKF such as "providing guidance and feedback", "suggesting major and minor changes" and "likely recommendations in the light of PKF's findings" and explaining "the need to specifically address each of the factors in s263(3) of the Act" , that infer the real carriage of the examination of the proposal and content of the report was left to PKF. 59. The brief to PKF refers to "seeking the services of consultants to prepare a detailed report assessing the impacts of boundary alteration proposals" . 60. The confusing result arising from the conflicting references in the report and the crucial error in Chapter 2 supports a finding that the BC failed either to adequately understand and appreciate or to properly perform its function. 61. Taking into account all of the circumstances, the Court finds that neither the examination concluded on 19 March 2002, nor the report submitted to the Minister on 20 March 2002, dealt with the Minister's proposal pursuant to Div 2B of Pt 1 in Ch 9 of the LGA. Furthermore, although it physically adopted the report as its own, the BC assigned the real tasks of examination and preparation of the report to consultants. 62. Accordingly, it is determined that the BC has not performed its function in accordance with Div 2B of Pt 1 in Ch 9 of the LGA. 163 The appellants challenge these findings on three broad grounds: (a) Failure to make material findings on the wrong proposal issue; (b) Error in conclusion on the wrong proposal issue; (c) Error in conclusion on the wrongful delegation issue. In my view, each ground is established. (a) Failure to make material findings on the wrong proposal issue 164 SSCC was the applicant for relief and it bore the onus of establishing error on administrative law grounds (Hill v King (1993) 31 NSWLR 654 at 661). 165 If one reads pars [54], [60] and [61] of Talbot J's judgment it is impossible to discern any clearly expressed finding referable to the alleged failure to consider the Minister's proposal. Paragraph [54] is couched as two alternatives, namely: (1) The Commission did not examine the correct proposal; or (2) There are grave doubts that the authors of the Report applied themselves with sufficient diligence. 166 The judgment does not explain why alternative (2) is or could be a basis for the declaration, especially since it is couched in terms that hold back from a finding in favour of the party bearing the onus (SSCC). But in any event, a finding of "(1) or (2)" is not a finding of either fact (1) or fact (2). No clarity is added when par [60] is brought into account, although there is at least confirmation that Talbot J's conclusions stem from what appears on the face of the Report (Chapter 2 in particular) as distinct from any adverse conclusion touching the extrinsic evidence. 167 As I shall further demonstrate, the extrinsic evidence supports validity overwhelmingly. At the very least it had to be grappled with and the failure to have done so represents appealable error in its own right. 168 To label the misdescription in Chapter 2 as "the crucial error" was both ambiguous and inadequate in light of the totality of the evidence. The great mass of the evidence pointed to that misdescription being an oversight in the sense that it misdescribed what the Commission had been looking at. It was, of course, some evidence favouring the respondent's case. But there was so much the other way, including the sworn evidence of Ms Carnegie. It was essential that this material be addressed. 169 Paragraph [61] of his Honour's judgment states the ultimate conclusion, but its basis is shrouded, indeed eclipsed, in the opening words: "Taking into account all of the circumstances". 170 If this error stood alone it might be necessary to remit. Since, however there is compelling evidence in favour of validity on issues (i) and (ii) this will not be necessary. (b) Error in conclusion on wrong proposal issue 171 His Honour's reasoning on issue (i) does not indicate that the conclusion rested upon any adverse reaction to Ms Carnegie's evidence. Rather, it rests upon an inference drawn from the erroneous material in Chapter 2 from its earliest draft to its signed form. 172 In my view, the evidence convincingly supports the opposite conclusion. I accept the appellant's submission that there was a very substantial body of evidence which pointed in one direction only, namely that the erroneous portion of Chapter 2 was a drafting error which did not reflect any underlying reality in which the Commission examined the wrong proposal (Grounds 6-9). 173 The high point of the respondent's case on this issue was the erroneous description in Chapter 2. The appellants submit that though that description remained until the final report it was a mere falsa demonstratio in light of the totality of the material in the Report, most notably the key Chapters 5 and 6. I also accept that submission. 174 The appellants further submit that it was not open to the learned primary judge to base a conclusion adverse to the appellants upon the contents of Chapter 2 without considering and (if justified in doing so) rejecting the sworn evidence of Ms Carnegie and giving sufficient reasons for doing so. This submission should also be accepted. 175 My reasons for these conclusions follow. (I note that SSCC did not file written submissions supporting the trial judge's conclusions on this matter, although oral submissions addressed this point somewhat peripherally.) 176 The key items of evidence relied upon have been highlighted in the detailed factual analysis set out above. In my view, the evidence pointed overwhelmingly in the appellants' favour. In the circumstances, Talbot J was bound to accept it, a fortiori where most of it was unchallenged at trial and none of it rejected by the primary judge. I refer in particular to the following: • Ms Carnegie's evidence that the Commission proceeded only on the Minister's proposal, after receiving legal advice that it was bound to do so; • Ms Carnegie's evidence about the discovery and correction of the mistake in Chapter 2; • Consideration of the CSC proposal as the primary focus would have been in breach of the Crown Solicitor's undertaking given on behalf of the Commission; • PKF and GEAC were sent copies of the Minister's proposal and acted upon it; • SSCC was invited to address the Minister's proposal, it did so and its submissions were considered and reported upon; • Chapter 5 (to which Chapter 2 cross-refers) deals with the Minister's proposal as modified in a relatively minor way by the Commission; • The Report contains no discussion about the transfer of large areas of Newtown, Strawberry Hills and Surry Hills. 177 Even if one proceeded, as his Honour did, by looking only at the Report, there were clear indications that something was wrong either with Chapter 2 or with Chapters 5 and 6. There was also considerable additional evidence within the four corners of the Report that the Minister's proposal had been addressed and that part of Chapter 2 was a falsa demonstratio. Several aspects of the Report in final form demonstrate the proposition that the misdescription of the "proposal" in Chapter 2 was always a mistaken reference to the proposal examined by the Commission and reported on (with modifications) by the Commission. It is convenient to set out a portion of the appellants' submissions: A number of features of the Report deserve attention. (a) Chapter One "Introduction" refers to the Minister's proposal in broad terms which are correct. Specifically, no mention is made of any suggestion that Strawberry Hills, Surry Hills or Newtown be transferred. (b) The same chapter refers in terms to the Boundaries Commission accepting submissions from Councils "affected by the Minister's proposal" – not some other proposal. (c) Chapter Two "The Nature of the Proposal" contained an erroneous description of the proposal which had its origins in a mistranscription at PKF (for the reasons already given). It was not put to Ms Carnegie that this was wrong. (d) Chapter Three "Submissions" proceeded upon submissions being made to the Boundaries Commission by all parties, including South Sydney Council, on the basis of the Minister's proposal. … the report said (and this was not challenged during the hearing) "All of these submissions were carefully considered in the course of the Commission's deliberations". The idea that the councils were making submissions on one proposal whilst the Boundaries Commission, "carefully consider[ing]" those submissions, was proceeding on another is fanciful. More is this so when the difference between the proposals took in Newtown, Strawberry Hills and Surry Hills. (e) Chapter Four "Examination" contained detailed analysis of, inter alia, South Sydney Council's submissions on the Minister's proposal. Parts of this chapter are simply incoherent if it truly be the case that the Boundaries Commission was examining the dotted blue line rather than the Minister's proposal. Thus i "Should the boundary alteration proceed, submissions from South Sydney City Council and Leichardt Municipal Council have estimated the impact on rates as follows……" - it is not possible that "boundary alteration proposal" here can mean anything but the boundary alteration proposal referred to by South Sydney Council. Yet it is clear from its written submission that it was proceeding on the Minister's proposal. ii ."South Sydney Council has submitted that: - The Boundary Alteration proposal would reduce its income by $41M (42%)….." But the Boundary Alteration proposal can only be the Minister's proposal for that is what South Sydney Council's submission was made on. iii. The same difficulty is exhibited throughout chapter four, that is references to South Sydney Council's submissions where those submissions could only have been based on the Minister's proposal: … ; iv. "The University of Sydney submission supports the boundary alteration proposal and requests that the transfer area be extended further into South Sydney local government area, in order to incorporate property holdings in Darlington and Newtown." … - This passage was inserted by Ms Carnegie between 16 and 19 March 2002. … If the City of Sydney proposal was being examined then Darlington was already within the transfer zone as was Newtown. The suggestion in the report that the transfer zone be extended to include those two areas cannot logically be reconciled with the proposition that the transfer zone was the dotted blue line proposal. By contrast, this part of the report makes perfect sense if the proposal being considered by the Boundaries Commission was the Minister's proposal (i.e., the dotted yellow line). v. The discussion of "Historical and Traditional Values" in relation to South Sydney Council proceeds entirely without any reference to the excision of Strawberry Hills, Surry Hills and Newtown. Given the size of those areas that absence is a strong indication that the dotted blue line was not the proposal being considered. I accept these submissions. 178 A conclusion that the Commission turned its back on the Minister's proposal, consciously or unconsciously, could only be reached if Ms Carnegie's evidence was rejected and a finding made that the undertakings referred to in the Crown Solicitor's letter of 14 January 2002 about the "Minister's proposal" were somehow mistaken or worse. No such allegation was ever made by SSCC during the hearing, beyond the most perfunctory and formalistic challenge to Ms Carnegie's evidence about the abandonment of the resolutions of 30 November 2001. Those resolutions did not even embrace the totality of the CSC proposal. The judgment contains no finding rejecting Ms Carnegie's evidence, yet this was critical (see Mifsud v Campbell (1991) 21 NSWLR 725 at 728). 179 Merely because the Commission received and considered submissions from persons unhappy with the Minister's proposal does not establish that the Commission was departing from its statutory function of examining the Minister's proposal referred to it. After all, the whole purpose of the consultation with the affected Councils and the public generally was to gauge reactions to the Minister's proposal and to consider those reactions or any suggested modifications. From the outset SSCC made it plain that it supported a substantial alteration to the Minister's proposal, effectively maintenance of the status quo, but not necessarily exclusively so. Merely because the Commission took account of these submissions does not establish that it was failing in its duty of "examination and report" on the referred Minister's proposal. 180 SSCC does not suggest that the Commission's consideration of SSCC's suggested boundaries, which was tantamount to rejection of the Minister's proposal, was evidence of a failure to comply with s218F. 181 The finding at par [54] of Talbot J's judgment that the re-wording of page 8 of the Report was "the unilateral act of Ms Carnegie" was contrary to the unchallenged evidence that she acted with the concurrence of the Chairperson. (In its submissions on appeal SSCC point out that a phone discussion between a Commissioner and the Chairperson did not constitute a meeting of the Commission. Let this be granted (although cf Schedule 2, cl 9). But the implicit suggestion that the Report is formally defective because only two commissioners approved the substitute of the corrected page 8 cannot now be run as an independent attack on the validity of the Report. For one thing, Talbot J did not deal with any such issue and no such contention point is raised. For another, one would be amazed if ratification by the whole Commission did not occur and this issue would have been raised if the formal point had been taken at trial. In any event, an uncorrected page 8 would not vitiate the Report or establish SSCC's case on issue (i).) 182 One variant of the respondent's case on this point was described as the shambles point. It was but faintly submitted that the Commission's error lay in its own confusion as to whether it was considering the proposal as outlined in the Minister's press release as distinct from that emanating from CSC. I am unpersuaded that any such case was run at trial. It does not figure explicitly in Talbot J's reasons. And there is no evidence to support it. The highest it was put was by reference to the announcement in Chapter 6. In my view this takes the respondent no further because, when one turns to the press release, the Minister made it very clear that he was foreshadowing a formal proposal yet to be gazetted. (c) Wrongful delegation to PKF 183 SSCC had pleaded that one basis or reason why the Commission had not examined and reported on the Minister's proposal in conformity with s263(3) of the Act was that the Report was a consultant's report and not a report on the examination by the Commission. 184 As recorded at par [44] of Talbot J's reasons, SSCC contended at trial that the Commission had failed itself to examine and report on the proposal in conformity with s263(3). The case was that the Report was "a consultant's report as edited by departmental officers and … therefore is not a report by" the Commission. Particular reliance was placed on a statement in a Commission letter dated 5 April 2002 in which the Chairperson said that "PKF prepared the Commission's Report". 185 As indicated already, Talbot J's findings on this matter were intermingled with his conclusions on the first point, namely the contention that the Commission had examined the CSC proposal rather than the Minister's proposal. There is much to be said for the appellants' submission that the errors in relation to issue (i) are sufficient in their own right to taint the conclusion on issue (ii). 186 The appellants also challenge the reasoning on the wrongful delegation point on three broad bases. It is submitted that Talbot J: • posed an incorrect legal test; • failed to find any facts at all; and • did not disclose any real reasoning. The three grounds tend to overlap and merge. 187 His Honour's treatment of this topic is set out in pars [55]-[62] of his Honour's reasons, being the passage set out above which deals compendiously with the issue whether the Commission "performed its statutory function". 188 The appellants correctly submit that Talbot J's reasoning does not disclose a clear statement as to what the Commission was obliged to do in performance of its duty to examine and report. Paragraph [57] suggests a test of "to personally examine and report on the proposal referred to it"; par [55] suggests a test of "having its own regard directly to all of the matters referred to in s263(3) of the LGA" and also "carry[ing] out the task directly". Paragraph [56] suggests a test of "investigat[ing] the proposal to the fullest extent available to it"; and par [58] suggests a test of whether the Commission had "real carriage of the examination". 189 The tests implicit in these formulations are not the same. At the very least there is a degree of ambiguity which supports the appellants' complaints about absence of necessary fact-finding and sufficient exposure of reasoning process. "Personal examination" is not the same as having (own) regard to the s263 matters. The judgment properly accepts that some tasks may be delegated but does not enunciate the criteria for determining when delegation became abdication. 190 Of course, there can be situations which clearly transgress a line of legal demarcation even though it may be difficult to describe that line other than in terms of broad generality. It would appear that his Honour regarded the present case as falling within such category, in that the key finding appears to be that in par [61]: Furthermore, although it physically adopted the report as its own, the BC assigned the real tasks of examination and preparation of the report to consultants. 191 The reasoning at pars [58] and [59] identifies the consultant as PKF. The role played by GEAC does not appear to have been the basis of SSCC's wrongful delegation case, as pressed or established at trial. I also observe that the Commission Resolution of 20 March 2002 merely "note[d]" the GEAC report and sent it on to the Minister for his consideration. 192 In my view, it is necessary to approach this issue by reference to the Act. It is inappropriate to start with some overarching theory about the impropriety of delegation. The onus lies on SSCC to make out its case, and this behoves it to establish both the legal and factual basis for it. 193 It is pertinent to observe, first that the relevant function vested in "the Boundaries Commission" is exercisable by all the members of the four person Commission, save those who are disqualified from voting by virtue of Schedule 2, cl 11. The quorum for a meeting is two Commissioners (including the chairperson) (cl 9). Obviously some level of personal involvement is required of each Commissioner. Second, there is no requirement that Commissioners accept office as a full time appointment. On the contrary, Schedule 2, cl 4(2) expressly contemplates what is effectively a part-time appointment as a Commissioner. Third, the tasks involved in any single "examination and report" are capable of being extensive and technical, as evidenced by s263(3) and the mass of work involved in the present reference. Fourth, there is no reason why the Commission could not be required to address several proposals concurrently. The Commission also has functions under Division 2 of Chapter 9, Part 1 of the Act. Fifth, the range of tasks necessarily involved in examination and report would include many of a menial, repetitive nature as well as tasks requiring peculiar specialisation such as data analysis, surveying and publishing. 194 As Brennan J said in Johns v Australian Securities Commission (1993) 178 CLR 408 at 428-9: An authority conferred by statute is construed as authorising everything which can fairly be regarded as incidental to or consequential upon the authority itself. 195 SSCC has always accepted that the Commission was entitled to obtain and examine a consultant's report, while contending that it could not abrogate its statutory duty to perform the task for which it was created. 196 Accepting all these matters, it remains the fact that certain tasks are explicitly or implicitly imposed upon the Commission (ie the relevant commissioners). These include the ultimate role of examination and report as well as intermediate functions such as holding an inquiry (if the Commission is directed to hold one or determines, with ministerial approval, to do so: see s263(2)). The appellants accept this. 197 To the uncertain extent that the findings at pars [53]-[62] of his Honour's reasons found this defect established it was on the basis that the Commission had left the function of examination and report to PKF. The conclusion was that "although it physically adopted the report as its own, the BC assigned the real tasks of examination and preparation of the report to consultants". 198 The specific findings of primary fact upon which this conclusion rests are not so easy to discern and are in any event so intermingled with the flawed reasoning on the Minister's proposal issue that the conclusion cannot stand. It is undermined fundamentally by both (a) the absence of necessary fact-finding and (b) the errors in the conclusion on that issue which I have addressed elsewhere. 199 I would in any event reject his Honour's conclusion that the Report was legally vitiated because the commissioners "assigned the real tasks of examination and preparation of the report to consultants". 200 The evidence does not sustain a finding that the Commission abdicated its statutory functions to PKF. On the contrary, it demonstrates that this basis for the declaration must be set aside. 201 This was a matter on which SSCC bore the onus. There is in fact ample evidence of the commissioners' personal involvement, to a level that satisfies the legal requirements that the commissioners examine and report. I refer to it below. 202 Ms Carnegie is the acting manager of the Executive Support Branch of the Department of Local Government and as such she was the Departmental member of the Commission. She gave detailed written and oral evidence about the work done by and for the Commission in relation to the Minister's proposal, including the earlier litigation in the Land and Environment Court culminating in the letter from the Crown Solicitor's office of 14 January 2002. None of it was challenged in any detail. Nor is it addressed in the judgment. 203 Ms Carnegie explained the project briefs delivered to PKF and GEAC. The former stipulated that the Commission was: … seeking the services of consultant/s to prepare a detailed report assessing the impacts of boundary alteration proposals, specifically with regard to the range of factors outlined in section 263(3) of the Local Government Act 1993 . 204 The stipulated "Required Outcomes" were: A confidential initial draft of this report is required by the Boundaries Commission by 28 February 2002, in word format (in electronic form plus 4 hardcopies). The Boundaries Commission will then require a detailed analysis of all issues raised in the written submissions from the affected councils and other interested parties, and incorporation of detailed responses to these issues within the report. A final confidential draft of the report is required by the Boundaries Commission by 15 March 2002 in word format (in electronic form plus 4 hardcopies). Once endorsed by the Boundaries Commission, word and pdf format copies will be required in electronic form plus 50 hardcopies. The endorsed report will be distributed publicly as the Boundaries Commission's formal report on its examination of the proposals and the Commission will retain ownership of the intellectual property accordingly. 205 The Agreement entered into by PKF (to which reference has already been made) also emphasised the auxiliary nature of PKF's role. 206 The Project Brief that became the basis of GEAC's retainer dealt with data migration analysis. Its "Required Outcomes" were: A confidential initial draft report is required by the Boundaries Commission by 28 February 2002, in word format (in electronic form plus 6 hardcopies). The draft report will then be issued to the relevant councils and other interested parties for their consideration. Issues raised from this review will require further analysis and incorporation within a final report. The final confidential report is required by the Boundaries Commission by 15 March 2002 in word format (in electronic form plus 6 hardcopies). The Boundaries Commission will retain ownership of the intellectual property. 207 In late February 2002 there was something of a contretemps between SSCC and the Commission about the role of the two principal consultants. The Commission and its consultants were pressing on with full steam ahead. SSCC did not want to cooperate with the consultants, at least on certain bases and for a period. One of SSCC's difficulties lay in its unwillingness to be diverted from the preparation of its submission to the Commission in what it regarded as an unduly short time frame, but this may not be the full explanation for its refusal to cooperate. 208 As indicated earlier, I find it unnecessary to determine where the 'fault' (if any) lies. The final Report reveals that the Commission, through its consultants, was slightly impeded but ultimately did the best it could in the circumstances. Any deficiencies in this regard are not the subject of continuing complaint. Eventually some accommodation was reached. SSCC provided its detailed Submission on 28 February 2002 and arrangements were made for its Mayor and General Manager to make an oral presentation to the members of the Commission on 14 March 2002. 209 There is no doubt that the consultants did what they were retained to do in their respective Project Briefs, albeit that their efforts to deal directly with SSCC were frustrated for a time in mid to late February 2002. 210 PKF prepared successive drafts of the report, as required of it. That work included the preparation and redrafting of Chapter 3, in accordance with the requirement that PKF prepare "a detailed analysis of all issues raised in the written submissions from the affected councils and other interested parties, and incorporation of detailed responses to these issues within the report". 211 I see nothing wrong in principle with an examiner and reporter, or even a decision-maker, assigning to an agent the task of recording, collating, organising and summarising a mass of submissions covering a range of discordant issues (see Tickner v Chapman (1995) 57 FCR 451 at 464, 476-7) . Anyone familiar with controversial environmental impact studies would recognise this as a common method of handling material that would be lost or overlooked because of its sheer mass and complexity. Naturally there are submissions and submissions, and some will call for additional attention. But it is unrealistic and unhelpful to expect a single decision-maker or a small panel of decision-makers to wade through every submission in the first instance. It will always be open to those mounting administrative law challenges to argue that the substance or detail of particular submissions have not been considered or taken into account, but the onus of establishing such allegations will rest upon them. Proof that assistance from a consultant such as PKF was engaged will not in itself establish abdication of function or denial of procedural fairness. SSCC did not establish that the commissioners failed to read or consider all submissions. 212 Ms Carnegie did the lion's share of the work in managing the reference on behalf of the Commission and liaising with its principal consultants. She in turn referred to the Commission chairperson Ms Hall from time to time. 213 Much work was also done by staff of or assigned to the Commission, including officers from the Department. This reflects the links between the Department and the Commission spelt out in the Act (see s261(2)(b)). 214 There were at least three formal, minuted meetings of the commissioners: on 30 November 2001, 7 January 2002 and 19 January 2002. The evidence is unclear as to whether there were more. Certainly there is evidence of additional meetings involving the commissioners. 215 The minutes of the meeting of 30 November 2001 relate to a Commission meeting lasting from 9.40am to 3.50pm. Present were the three commissioners and two officers from the Department of Local Government. The minutes disclose that the Commission viewed submissions received to date, noted correspondence, discussed matters referrable to the Minister's proposal and made decisions about aspects of it. 216 There is unchallenged evidence from Ms Carnegie about later activities of "the second respondent" which, in their context, must be viewed as referable to the commissioners themselves. These include the evidence about the whole day meeting on 25 February 2002 which preceded PKF sending the first draft report. 217 There was also a meeting of commissioners on 14 March 2002 at which the Mayor and General Manager of SSCC gave an oral presentation of that council's submissions. 218 The commissioners also discussed and rejected the possibility of conducting an inquiry or conducting a survey or poll (see ss263(2), 265). 219 Ms Carnegie specifically addressed the delegation issue in paragraphs 58-67 of her affidavit of 18 April 2002 and paragraphs 5-7, 11 and 15 of her affidavit of 23 April 2002. At the risk of slight duplication, the paragraphs identified have been spliced together to give an unbroken narrative: At all times the second respondent retained control and direction of PKF who was the successful contractor for the boundaries impact assessment. From the time of PKF's appointment on 30 January 2002 until the second respondent signed off on its report on 20 March 2002, the second respondent was in constant communication with PKF providing guidance and feedback. The second respondent received four drafts from PKF on 28 February 2002, 5 March 2002, 13 March 2002 and 16 March 2002. On 25 February 2002 the members of the second respondent spent the whole day giving PKF guidance as to what was expected and providing PKF with the opportunity to ask questions such as how to deal with hostility from some councils. On 25 February 2002 with other members of the second respondent I attended a meeting with PKF at which a preliminary draft report was provided to us. The other members of the second respondent and I spent the whole day instructing PKF as to what was to be included in the report and responding to questions by PKF as to how to proceed. On 28 February 2002 the members of the second respondent received PKF's first report. The report was in the nature of a hybrid draft and progress report. On 28 February 2002 I received on behalf of the second respondent the first draft of the PKF report and read it. On 1 March 2002 members of the second respondent spent the day conferring with PKF in relation to its draft suggesting major and minor changes and likely recommendations in the light of PKF's findings. The second respondent explained the need to specifically address each of the factors in s263(3) of the Act. At about 9.00am on 1 March 2002 I handed copies of that draft report to the other members of the second respondent. Between about 9.00am and 10.00am I discussed this draft report with the other members of the second respondent. Shortly thereafter a meeting took place between the members of the second respondent and PKF which I attended. The meeting concluded at about 5.00pm that day. During this time the members of the second respondent and PKF discussed the report. PKF was instructed by the members of the second respondent as to what matters were to be included in the second respondent's report. At the end of that meeting arrangements were made for an officer of the Department and myself to attend a further meeting with PKF in Melbourne for the purposes of providing further instruction to PKF before the next scheduled meeting on 13 March, 2002. Although the second respondent had only scheduled two meetings with PKF, on 5 March, I attended on behalf of the second respondent a further meeting with PKF in Melbourne for a day to provide further guidance and, in particular, guidance in relation to the structure of the report. On or about 13 March 2002 the third draft was received and reviewed by each member of the second respondent and comment from each member provided to PKF. On 14 March 2002, the day before PKF's final draft report was due under the contract between PKF and the second respondent, an oral presentation lasting between 1-2 hours was made by the Mayor and General Manager of the applicant directly to the members of the second respondent including myself. PKF was not present at this presentation. Between 16 and 19 March 2002 I coordinated further work necessary to finalise the second respondent's report in liaison with the other members of the second respondent. In particular, I instructed and supervised 3 Departmental officers with respect to matters to be included in the report and the editing of matters already within the report, specifically: reference to the submissions of Sydney University was included in the report; the executive summary of the Geac report was included in the report; the section of the report entitled Local Government Reform was drafted and inserted into the report; pages 46-54 of the report were drafted and inserted; pages 4-5, 10, 37-39, 44-45, 55-64 and 66 of the report were re-worked; and the second respondent's consideration of the oral presentation by the applicant on 14 March 2002 was incorporated into the report. Further, I arranged for a graphic artist to prepare the map on page 65 of the report. On 16 March 2002 the members of the second respondent received the fourth draft. Soon thereafter telephone feedback was provided by each member and it was agreed that further input was necessary to finalise the reports. To that end, the second respondent engaged the services of three Departmental staff and a graphic designer for three days. Between 16 and 19 March 2002 I liaised with the other members of the second respondent via the telephone, e-mail and fax with respect to the finalisation of the second respondent's report. On 19 March 2002 all the members of the second respondent resolved to adopt the final report. On 19 March 2002 members of the second respondent considered the report and finally agreed with its contents and resolved to send it to the Minister. Annexed hereto and marked MC41 is a copy of the second respondent's resolution. 220 The resolution referred to in the final paragraph has already been set out. 221 Ms Carnegie also gave evidence that the final editing work done by herself and departmental officers on the final PKF draft was done "[i]n consultation with the other commissioners". 222 The stream of communication between the Commission and PKF representatives is also testimony to the involvement of the commissioners or Commission staff in the preparation of the Report. As the appellants point out, the topics touched upon included: - the provision of ABS statistics for the relevant areas - the drafting of letters to various councils - dealings with the MEU [ie the Municipal Employees Union] - points relating to Leichhardt Council - the legal consequences of some of PKF's correspondence - the way in which the Boundaries Commission proposed to receive oral submissions from the Council - how the Boundaries Commission was going to deal with the submissions it received from interested parties - whether PKF should be involved with open or closed council meetings - consideration of PKF's correspondence with Leichhardt Council. 223 As the appellants note: During the February-March 2002 period … no fewer than 33 substantive documents dealing with technical and broader matters passed between PKF and the Commission. There is also the correspondence emanating from the chairperson Ms Hall and what that discloses about things she and other commissioners did. 224 None of this evidence was challenged in any detail, nor addressed and evaluated in the judgment. It demonstrates conclusively that the commissioners did what the Act required of them. 225 In its submissions on appeal, SSCC points to the finding that there are no formal minutes or resolutions about a range of matters including: • the selection of consultants • the fixing of the 15 March deadline • the substitution of page 8 of the final Report • the refusal to hold an opinion survey or poll • the refusal to make available CSC submissions • the authority of Ms Carnegie and other departmental officers to edit the Report. These matters do not take SSCC's case very far, especially since Ms Carnegie's evidence about them was unchallenged. None are matters requiring formal approval. 226 The Report (as formally adopted by the commissioners) itself offers evidence of the personal deliberative processes by the commissioners. There was never any suggestion at trial that these statements of deliberation, consideration, assessment and adoption should be disbelieved or treated as shams. It was open to SSCC to put these matters to Ms Carnegie. It was not open to the primary judge to reach the conclusions he did in light of the evidence as a whole and these matters not being put. Denial of procedural fairness by commission 227 Resolution of this issue in the appeal is hindered by uncertainty as to the precise issues fought and decided at trial. 228 The Points of Claim pleaded: 13. The Applicant was not afforded an opportunity to make any submissions to the Second Respondent with respect to any proposal affecting part of its areas lying between the boundary described in Chapter 2 of the Report and the said boundary referred by the First Respondent. 14. The Second Respondent had a duty to adopt fair procedures. 15. The Second Respondent adopted unfair procedures. Particulars (a) The Second Respondent refused to give the Applicant access to, or the opportunity to make submissions on, material prejudicial or likely to be prejudicial to the interests of the Applicant, particularly material contained in: (i) the submissions of City of Sydney Council; (ii) the reports of consultants; and (iii) other submissions. (b) The Second Respondent unreasonably confined the range of material for its examination of the proposal and refused or was disinclined or unable to have regard to relevant matters. (c) The Second Respondent did not give adequate notice of the proposal to the public or persons or bodies likely to be adversely affected. (d) The Second Respondent did not seek or receive submissions from persons or bodies likely to be adversely affected. (e) The Second Respondent did not seek consent to hold a public inquiry. (f) There has not been a public inquiry. (g) The Inquiry into the Structure of Local Government in Eight Council Areas in the Inner city and Eastern Suburbs of Sydney by Professor Kevin Sproats was inadequate or inappropriate for the discharge of the obligations under s263. (h) The Second Respondent denied the Applicant the ability to submit to the Second Respondent all accurate and most recent material with respect to relevant factors in s263(3). 229 These allegations were denied in the Amended Points of Defence. 230 The Points of Claim raise two broad but distinct strands of the case based on denial of procedural fairness. I shall deal with them in reverse order. 231 The first strand of the natural justice case is pleaded in §§14-15 and it may be termed the 'access to submissions' point. It appears to have raised a spectrum of claims. At its broadest, SSCC asserted an entitlement to see and comment upon all submissions "adverse" to SSCC's interests, including all submissions in support of the Minister's proposal. The appellants described this as the "open file" submission. At the narrower end, the claim was for access to submissions that were actually treated as credible by the Commission or adopted in the Report. At this narrower end of the spectrum the complaint overlapped the second strand of the procedural fairness claim. 232 The second strand (§13) was a claim that SSCC was entitled to notice before an area additional to that indicated in the Minister's proposal was to be suggested by the Commission for inclusion in the area to be transferred to CSC. I shall term this the 'enlarged area notice' point. 233 On this second strand there is ambiguity as to the precise area involved in SSCC's complaint. The pleading (§13) links the point to the case erected upon the mistake in Chapter 2 of the Report, ie the contention that the Commission considered the CSC suggested alteration in lieu of the Minister's proposal. Most of the case at trial appears to have been erected upon this (false) basis. But not all, I would conclude. The opening submissions at trial and final written submissions appear to have embraced a procedural unfairness case which included complaint about the Commission reporting about any unnotified advance (into SSCC territory) on the Minister's proposal. 234 It is, however, unclear whether Talbot J found in SSCC's favour on this alternative, lesser version of the 'enlarged area notice' point. The appellants submit that he did not. There is also a problem of materiality in view of an objection to evidence taken by SSCC and upheld at trial. I shall return to these matters when I address the issues. 235 Talbot J held, in effect, that failure by the Commission to accord procedural fairness to SSCC could not be cured merely by the Minister inviting and receiving submissions responsive to the Commission's final Report. This approach to the procedural fairness issue is challenged by the appellants on appeal – at least in the sense that they contend that nothing raised by the Commission in the Report called for advance notice to SSCC by the Commission. 236 His Honour held that the Commission itself failed to accord procedural fairness to SSCC. Some, but not all, of his reasoning stems from his conclusion (which I have rejected) that the Commission took the CSC proposed alteration as its primary focus. His Honour said this on the present issues: 79. Irrespective of whether the adverse submissions are before the Minister, it is appropriate for the council to have an opportunity to address them before a final decision is made. The purported report by the BC takes account of the CSC submission, at least, and thus it is fair that the council be given the chance to make an alternative submission, either to the BC or the Minister. 80. The passage relied upon by Mr Hutley at p 578 of the judgment by Mason CJ, Dawson, Toohey and Gaudron JJ in Ainsworth and Another v Criminal Justice Commission [1991 - 1992] 175 CLR 564 referring to The State of South Australia v O'Shea [1987] 163 CLR 378 at 389 per Mason J, only shows that where a decision-making process involves different steps before a final decision is made the requirements of natural justice are satisfied if "the decision-making process, viewed in its entirety, entails procedural fairness". In the present case, both steps or stages are in contention. The first step is challenged on the basis that the BC did not provide the council with the submissions made by third parties, in particular the submission by the CSC, and other adverse material. Nor did it provide an opportunity to rebut any contrary allegations contained therein. The second complaint is that the Minister has not allowed a reasonable time to make submissions before he takes the next step to refer the proposal to the Governor. Unless the Minister has a report, made pursuant to the statutory requirement, the second step is not a relevant consideration. The primary attack, therefore, is against the BC for failing to observe procedural fairness before making its report. Any prospect that the Minister will allow the council to make further submissions after viewing the material it seeks to inspect is not, in the Court's view, relevant to the issue raised against the BC. Even so, the material has not been produced except in answer to a notice to produce. 81. The council was clearly entitled to be heard at least in respect of the adverse material submitted by the CSC. Furthermore, the council has not been given an opportunity to review and make submissions in respect of the following:- (1) submissions by consultants; (2) other submissions; and (3) any other material taken into account. 82. The council is entitled to that opportunity if the material affects its interest in the manner explained by Brennan J in Kioa at p 616 – 617. 83. The council identifies the prejudicial or adverse material that remains undisclosed as follows:- (1) CSC or other submissions; (2) Six (6) documents withheld by the CSC in response to a Freedom of Information Act application; (3) Detailed reports provided and other information collected and sent to PKF for analysis after a meeting with representatives of the CSC; (4) Information from an independently conducted survey about residents' and ratepayers' attitudes referred to at p 33 of the BC report; and (5) Unsolicited submissions received by the BC from individuals, community groups and other interested parties. 84. The Court is satisfied that the BC took into account material submitted by the CSC. That material contained adverse information in circumstances where the interest of the council may be seriously affected by the exercise of the statutory power to make the report ( Re Minister for Immigration and Multicultural Affairs and Another: Ex parte Miah (2001) 179 ALR 238). The evidence also shows that Ms Carnegie and at least three departmental officers deleted or edited material in the final draft of the report to the possible detriment of the interests of the applicant. There is no formal confirmatory record of these actions by the BC. Nevertheless the council was not consulted. The council has not, at any time, been given the opportunity to address any of this material as it was entitled to in accordance with the principles of procedural fairness. In the circumstances the BC failed to observe the common law obligation of procedural fairness. 85. The Court relies particularly on the explanation by Kirby J in Re: Minister for Immigration and Multicultural Affairs; Ex parte "A" [2001] 185 ALR 489 at 498 as follows:- In Australia, it is a basic principle of the common law rules of natural justice that a person whose interests are likely to be affected by an exercise of power will be afforded a fair opportunity to respond to information or relevant material adverse to that person's interests which the repository of the power proposes to take into account in deciding upon its exercise. In short, a person should ordinarily be afforded the opportunity to provide evidence or material to rebut information or material tendered against that person's interests. As well, the person should be afforded the opportunity of persuading the decision-maker, by oral or written submissions, as to the significance of the adverse evidence or material and the way in which it might be reconciled with the person's claim. 86. The effect of the BC's failure is explained by Aicken J in Forbes v New South Wales Trotting Club Limited [1978 - 1979] 143 CLR 242 at 277 as follows:- That which is done without compliance with applicable principles of natural justice, in circumstances where the relevant authority is obliged to comply with such principles, is not to be regarded as void ab initio so that what purports to be an act done is totally ineffective for all purposes. Such an act is valid and operative unless and until duly challenged but upon such challenge being upheld it is void, not merely from the time of a decision to that effect by a court, but from its inception. Thus, though it is merely voidable, when it is declared to be contrary to natural justice the consequence is that it is deemed to have been void ab initio. 87. The applicant also refers to the following passage at par 43 of the judgment by Gaudron and Gummow JJ in Minister for Immigration and Multicultural Affairs v Bhardwaj [2001] HCA 11, unreported, for confirmatory authority that a decision arrived at contrary to the common law obligation to provide procedural fairness is to be regarded as a nullity:- The failure of the Tribunal to give Mr Bhardwaj a reasonable opportunity to present evidence and argument had the consequence that it did not reach a decision after considering evidence and argument against the cancellation of his visa. That being so, it follows that the Tribunal did not conduct a review as required by the Act and the September decision was, thus, not a "decision on review" for the purposes of ss 367 and 368 of the Act. 88. In Miah , the High Court held that a failure to exercise statutory power in accordance with the rules of natural justice involves a jurisdictional error of law (see also McHugh J in Bhardwaj at par 63). 89. The Court agrees with the applicant that as the adverse material remains undisclosed to the council and the time for the making of submissions to the Minister has expired, the breach of the common law obligation has not been cured. Accordingly, the Court has jurisdiction under s 673 of the LGA to make a declaration in respect of the validity of the threatened act of the Minister to exercise power under s 281F(7) in the absence of a valid report (cf South Sydney Council v Local Government Boundaries Commission ). For the Minister to make a recommendation to the Governor pursuant to s218F(7) in the circumstances will be a breach of the LGA. 237 The CSC submission referred to several times in this passage had earlier been identified as the letter of 26 November 2001 from the Lord Mayor of Sydney, with its accompanying submission. The appellants accept that the CSC letter of 26 November 2001 was not disclosed to SSCC prior to the trial before Talbot J. It is also common ground that SSCC had no notice of any proposal for the transfer of land additional to that proposed by the Minister until it received the Commission's Report. 238 SSCC did not see the CSC submission until it was produced in the proceedings in answer to a notice to produce. This was because the two "rival" councils adopted an adversary stance inter se and declined to copy their submissions to each other. This of course could not affect the ultimate content of the Commission's duty. 239 The appellants do not suggest that the obligation to accord procedural fairness can never be engaged in relation to the process culminating in the Governor proclaiming the alteration of a local government area. That process may, they accept, "destroy, defeat or prejudice a person's rights, interests or legitimate expectations" (Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 576), depending on the particular facts. 240 SSCC has not sought to make a case based upon legitimate expectations, so that can be put to one side. So too, can any case stemming from procedural unfairness in the conduct of an inquiry (see s263(2)), because none was held in relation to this proposal. (An application by SSCC to enlarge the issues by challenging the Report because of the absence of an inquiry, or failure to consider holding one, was refused on the first day of the hearing of the appeal.) 241 During argument, the appellants gave examples of situations that might call forth some aspect of the audi alteram partem component of the obligation to accord procedural fairness: these included, for example, a material finding of misconduct against a Council influencing an adverse recommendation. However, the appellants firmly contend that no such case was run at trial and that the appellants would have conducted themselves differently had such case been pleaded or advanced. 242 The appellants also accept that good administration, if not the dictates of natural justice, called forth a duty in the Commission to consult with affected councils about the detailed issues required to be taken into account by s263(3). Once again, this can be put aside, because the Commission undoubtedly gave SSCC a reasonable opportunity in that regard. SSCC's detailed submission to the Commission addressed the paragraphs of s263(3) in great detail. There was also the opportunity for the Mayor and General Manager to address the commissioners on 14 March 2002. What is more, the issues raised by SSCC are addressed in detail in Chapter 4 as the Commission worked its way through s263(3) paragraph by paragraph. 243 I am inclined to the view that the Commission was bound to give directly affected councils a reasonable opportunity to address these statutory issues. But, whether that was so or not, I agree with the appellants that no breach of any such possible duty resting on the Commission was established in the present case. Indeed, no such case was raised, because (as indicated) SSCC advanced its attack upon the Commission's conduct along different lines. These I have labelled the 'access to submissions' point and the (ambiguous) 'enlarged area notice' point. 244 The appellants joined issue on these two fronts. 245 As to the access to submissions point, the appellants submitted that the content of any duty to accord procedural fairness falling upon the Commission could not possibly go so far as to impose an "open file" policy. To conclude, as Talbot J appears to have done on one reading of his judgment, that an affected council is entitled to see and respond to any and every "adverse" submission sent to the Commission is unsupported by principle or precedent and unworkable in practice. For reasons given below I accept these submissions. 246 As to the enlarged area point, the appellants submitted that the Commission's decision to recommend implementation of the Minister's proposal with an enlarged area did not, in the particular circumstances, call forth an obligation upon the Commission to consult with SSCC about that modification, albeit that the Minister accepted in effect that he had such an obligation when considering whether or not to recommend an alteration as per Chapter 5 of the Report to the Governor. 247 I also accept these submissions, although not some of the detailed grounds upon which they were advanced. Thus, I cannot accept that the limited privative clause in s263(7) modifies the content of the Commission's duty. And, as I shall demonstrate, the conclusion is rooted in the particular facts of the case and the way it was run at trial. 248 On appeal, SSCC said nothing in support of an "open file" obligation. However, it pointed to three categories of particular information about which it should have been given reasonable opportunity to comment to the Commission before it reported: (i) the unfavourable things said about it by CSC or others; (ii) the arguments advanced by CSC and others in support of the Minister's proposal; (iii) the alteration of the Minister's proposed boundary by the addition of the area between the yellow and blue lines in the Map. It is most unclear whether the case below was run on any such basis. 249 His Honour's remarks at pars [81] and [83] show that he regarded SSCC as entitled to more than notice of the physical parameters of the CSC proposed alteration. He found that SSCC was also entitled to prior access to any CSC submission advanced in support of the Minister's proposal, including, in particular, CSC submissions supporting that proposal or contending for a large transfer of land to the City of Sydney area. By "prior access" (my words) his Honour was referring to a right of access to, and opportunity to respond to, this material before the Commission reached its concluded position as recommended in the final Report. 250 Paragraph [83] of his Honour's reasons expresses itself as a summary of the SSCC submission. But read with the surrounding paragraphs one infers that it was intended to add certain specificity to the broad generality of par [81]. Nothing really turns on this uncertainty, because pars [84], [85] and [89] are quite explicit in stating SSCC's entitlement to a reasonable opportunity prior to the final Report to see and comment upon "adverse material" that included submissions by third parties (not just CSC). "Adverse material" is not defined, and this in itself is a real difficulty with the primary judge's reasons. Because of the generality with which the conclusions are stated it is not possible to discern or accept the principle applied in concluding that the Report was invalid on procedural fairness grounds. I hope I do no injustice to the learned judge when I conclude that my reading of pars [81], [83]-[84] and [89] indicates that he regarded any submission supportive of the Minister's proposal as "adverse" to SSCC's root and branch opposition to it, with the consequence that SSCC was entitled to have a reasonable opportunity to see and respond to it before the Report could be finalised. 251 An obligation with such content cannot be accepted. It effectively converts the examination and report stage of the process into a full-blown adversarial trial (see Kioa v West (1985) 159 CLR 550 at 628-9). 252 The difficulty for this Court is compounded by the lack of clarity as to SSCC's fall back positions advanced at trial and by its failure to propound an alternative defence of the judgment by way of notice of contention. This said, it is incumbent upon this Court to try to get to the substance of the issues. This can best be done by endeavouring to point to the guiding principles, by disposing of the clearly untenable ambit claims and then concentrating upon some particular issues arising out of the leading "adverse or prejudicial" aspects of the CSC submission of 26 November 2001. 253 The process of examination and report may or may not involve an inquiry (see s263(2)) with attendant statutory formalities (see s263(2B) (reasonable notice of holding of inquiry); (5) (members of public entitled to attend inquiry)). The power to hold a formal inquiry was not engaged in the present case. Beyond this, the statute is silent as to direct guidance. 254 Some general propositions are relevant, accepting (as I do) that the obligation to afford procedural fairness is not a priori excluded at the examination and report stage: 1) The content of the obligation depends on the circumstances of the case, the nature of the inquiry and the subject-matter being dealt with (adopting the passage from Russell v Duke of Norfolk [1949] 1 All ER 109 at 118 that has been frequently cited by the High Court, for example, National Companies & Securities Commission v News Corporation Limited (1984) 156 CLR 296 at 319-320). 2) The present focus is upon whether SSCC was given a reasonable opportunity to address issues relevant to its interests ( Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 75 ALJR 889 at 906 [99], Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 76 ALJR 598 at 604-5 [40]). 255 These uncontroversial propositions do little more than set the scene for examining the particular issues presented in this appeal. 256 In an article called "Fairness and the Adversarial Paradigm: An Australian Perspective" [1996] PL 508 M C Harris suggested (at pp522-3, footnotes omitted): The true rule, it is therefore submitted, is that generally it will be inappropriate to require an investigative tribunal to inform the subject of the way in which its mind is working or to put to or to inform them of any tentative views it has formed. Provided they have been properly informed as to the nature and subject matter of the investigation or inquiry and have been afforded a proper opportunity to be heard in respect of the main issues forming the focus of the tribunal's concern (the "critical issues or factors" requirement) then natural justice ought, as a general proposition, to be taken as satisfied. Any other general rule along the lines earlier discussed would make the work of investigative tribunals at least as "intolerably protracted" as it would if applied to the working of adjudicative bodies. I respectfully agree. That article cites a number of Australian authorities supporting the conclusion that fairness in administrative processes is not grafted to " the prism of adversarialism " (p527). 257 Harris acknowledges, however, that Mahon v Air New Zealand [1984] AC 808, and cases which follow it, have recognised that sometimes an investigative tribunal will come to a point of decision or recommendation which is so critical or crucial that it enlivens a duty to notify an affected person before reporting. The author writes (at pp516-7, footnotes omitted): The duty to afford natural justice in the process of investigative tribunals is, at one level, no more than the general duty to provide an opportunity to be heard on the matters which pose a potential risk of adverse findings. However, satisfying this duty may be rendered more complex in the investigative context because of the absence of any general duty to provide particularised allegations of wrongdoing or other comparable behaviour. The question, therefore, can be expressed generally as follows: what is required of an investigative tribunal in terms of providing a person or body potentially affected by its finding with an adequate or appropriate opportunity to address the issues upon which those findings will be based? In Mahon v Air New Zealand Lord Diplock suggested that the proper way of resolving that question is to ask whether the person or body being investigated has: … been left in the dark as to the risk of [adverse] finding[s] being made and thus deprived of any opportunity to adduce additional material of probative value which, had it been placed before the decision-maker, might have deterred him from making [those] finding[s] even though it cannot be predicted that it would inevitably have had that result. 258 The passage quoted is from Mahon at 821. See also National Companies and Securities Commission v News Corporation Ltd at 315. 259 It may not be possible to describe or define with precision the type of conclusion about which a particularly affected party should not be "left in the dark". Obviously much depends on the nature of investigation, the specificity and importance of the "adverse" recommendation, the nature of the interest affected and the likelihood of it being anticipated as a matter to be addressed. 260 Very recently justices of the High Court have endorsed Brennan J's statement that "in the ordinary case … an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made" (Kioa at 629. See Muin v Refugee Review Tribunal [2002] HCA 30 at [123] (McHugh J), [227] (Kirby J).). The facts of Muin were, however, far removed from the present case, having regard to the specific interest of the applicant, the direct impact of the adverse material and the way in which he was misled by a positive misrepresentation about the true position. 261 In Victims Compensation Fund Corporation v Nguyen (2001) 52 NSWLR 213, I said (at 220 [40]): Procedural fairness does not normally require the decision-maker to disclose his or her thinking processes or proposed conclusions: see Telstra Corporation Ltd v Kendall (1995) 55 FCR 221 at 230 and other authorities cited in M Aronson & B Dyer, Judicial Review of Administrative Action , 2nd ed (1996) Sydney, LBC Information Services, at 420-421. However, "it may be that an adverse conclusion of a type that could not reasonably be expected by an applicant might have to be brought to an applicant's attention, as a matter of fairness": per Doyle CJ in Chiropractors Association of Australia (South Australia) Ltd and Naomi Perry v Workcover Corporation Association of South Australia [1997] SASC 120 at [87], citing Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 590-591. Handley and Powell JJA agreed. 262 Nguyen (like Muin) was a case involving a single applicant for a statutory entitlement. 263 The present case involves examination of a proposal which (even in its unamended form) was capable of affecting a very broad number of persons and institutions in what may broadly be termed a matter of town planning overlaid with political issues. Such tasks do not usually attract the principles of procedural fairness at all, although they may do so as regards particular interests of particularly affected and identifiable persons (see generally Vanmeld at 94-99, Transport Action Group Against Motorways Inc v Roads & Traffic Authority (1999) 46 NSWLR 598 at 622-5, 648). In Vanmeld, the Chief Justice said (at 96): The fact that the exercise of a particular statutory power has effect on a wide range of persons, even in circumstances where the identity of all such persons is difficult to establish, will often impinge, not on the obligation to accord procedural fairness, but on the content of that obligation. I agree. 264 The subject-matter of the statutory duty was the examination of the Minister's proposal. The range of potentially affected persons and interests is illustrated by the factors to which particular attention is drawn by s263(3). Obviously they include consideration of the impact of the proposal on affected councils, but additional interest groups are also specifically identified. Why is the interest of a council relevantly different from that of landowners or employees? If it is not, presumably the content of any duty of procedural fairness must accommodate all three potentially affected groups. 265 The Act addresses "notification" issues in a number of ways. To be "made", (s218E), the Minister's proposal must, by implication, be announced. The Commission must attend to the s263(3) matters and this will necessarily involve giving genuine regard to submissions from stakeholders, including councils, on a range of specific matters. I have already indicated my tentative view that consultation with the directly affected councils on the s263(3) factors is obligatory. A formal inquiry may be instigated in appropriate cases. 266 The Minister's proposal will remain the proper focus of the examination and report from start to finish. And the Commission's power to propose its own modifications thereof is limited (see s218F(7)). As to "modifications", see North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468 at 474, Transport Action Group at 618, 647.) 267 What more could reasonably be expected within the confines of a workable statutory scheme? The task will inevitably attract a wide range of support and opposition from the proposal, accompanied by proposed modifications of the Minister's proposed modification (as occurred here, including modifications suggested by SSCC). To posit a right for all "affected" parties to see all of the "adverse" submissions of all other persons putting in submissions would be unworkable, because it would lead to an infinite regression of counter-disputation. This is particularly so in a context where (on one branch of its case) SSCC claims entitlement to see all CSC submissions supporting CSC's "case" in favour of the Minister's proposed boundary. 268 The outcome of the Commission's work is the production of a report which the Minister is free to reject or to recommend for implementation to the Governor with modifications that do not in the Minister's opinion constitute a new proposal (s218F(7)). No one suggests that the Minister would act without further consultation. These matters are the basis for the appellants' submission that the Commission has no duty ever to signal its position on the Minister's proposal in advance of its Report. There is much to be said for that proposition, although I find it unnecessary to rule on the matter. What is clear, however, is that these factors severely qualify or attenuate the content of any pre-reporting notification duty falling upon the Commission. 269 At par [83] (point 2) Talbot J records that SSCC identified the prejudicial or adverse material that remained undisclosed included six documents withheld by the CSC in response to a Freedom of Information Act application. This was an application made by SSCC to CSC on 11 January 2002, described in the affidavit of the Mayor of SSCC as an application "for documents concerning the proposal". CSC responded in a detailed letter of 28 March 2002. That letter identifies 17 documents: "concerning Minister's Proposal to the Local Government Boundaries Commission". The letter continues: There are 6 other documents which fall within this description. Access to those documents is refused on the grounds that the documents are exempt documents, under Schedule 1, Part 1 to the FOI Act, clause 7 (documents affecting business affairs) – 3 documents; clause 9 (internal working documents) – 3 documents; and clause 10 (legal professional privilege) – 3 documents. 270 These six documents could not by any stretch of the imagination represent material withheld by the Commission in breach of its duty of procedural fairness because there is no evidence to suggest that the six documents were ever sent by CSC to the Commission. 271 Beyond this category, there are the other identified and unidentified classes of "submissions", "reports" and "information" referred to in pars [81], [83] and [84] of Talbot J's reasons. The content and level of "adverseness" is not identified in the judgment. 272 Absent any findings to the effect that some particular issue was so damaging and so unforeseeable that SSCC should not have been "left in the dark" about it until publication of the Report, the conclusions about denial of natural justice as regards the access to submissions point cannot stand. A fortiori since they were reached after a trial at which SSCC did not point to any particular part of the Report (leaving aside its case based on the Chapter 2 error), and in which the appellants charted their course accordingly (Coulton v Holcombe (1986) 162 CLR 1). 273 In submissions – but not by notice of contention - SSCC pointed to particular parts of the CSC submission of 26 November 2001 that made specific criticisms of SSCC. One SSCC argument was that certain allegations by Lord Mayor Sartor in a letter of 21 February 2002 about the conduct of Leichhardt and South Sydney Councils acting in such a way as to frustrate the examination process were the source of a mild observation in Chapter 3 of the Commission's Report. That submission is noted but rejected on the basis that (1) I would not draw that inference and (2) the comment is so mild that it does not attract any Mahon-type obligation. The same can be said about the material in the Part 4.1.7 of the Report concerning financial issues. 274 The gazettal and notification to SSCC of the Minister's proposal and the invitation to make submissions, including submissions addressing the s263(3) factors gave SSCC an adequate opportunity to address the adverse consequences of the Minister's proposal. 275 I now address the 'enlarged area notice' point. As indicated, its main thrust at trial was the proposition that the Commission had danced to CSC's tune in considering as its prime focus the large additional area sought by CSC over and above that proposed by the Minister. That case founders with the case based upon issue (i). 276 There was, however, an alternative version of the enlarged area notice point. SSCC argued, in effect, that the content of the Commission's duty to accord procedural fairness was such that SSCC was entitled to advance notice from the Commission if the Commission was about to endorse any advance on the Minister's proposed area. I have emphasised the word "any", because I conclude that this was the only way that SSCC pressed its fall-back argument on the 'enlarged area notice' point. 277 In her principal affidavit, Ms Carnegie explained the reasons why the Commission proposed its own modifications to the Minister's proposal, ie the difference between the dotted yellow line and the red line on the Map. When senior counsel representing the appellants at trial sought to read this evidence, objection was taken by senior counsel for SSCC on the basis that the material did not go to any relevant issue. Senior counsel reiterated that SSCC's submission was that the Commission had failed to examine the Minister's proposal and that, in those circumstances, any explanation from the Commission about what was described as the "back lot" principle (see below) was not relevant. 278 There was no detailed exploration at trial, nor findings made, about the true impact on identified interests of SSCC of the Commission's suggested modifications (ie the difference between the blue and yellow lines). SSCC argues that it was entitled to a reasonable opportunity to respond to such a proposal, but the objection discloses it taking something of an all or nothing approach to the question, ie asserting that merely because the Commission was moving towards some adjustment of the Minister's proposed boundary therefore SSCC was entitled to an opportunity to respond to it. 279 It would appear to have been common ground at trial that there were two reasons why the Commission suggested modification of the Minister's proposal as indicated in the Map by the difference between the yellow dotted line and the red line. Ms Carnegie had sought to explain these matters in pars 54-57 of her principal affidavit, but objection was taken by SSCC on the ground of relevance and these paragraphs were not pressed. Nevertheless, senior counsel for the Commission at trial informed his Honour about the reasons, by reference to exhibit 1 (a map prepared by the Land Information Centre to depict the area described by metes and bounds in Chapter 5). 280 The first reason related to those parts of Darlington included in the University of Sydney to the south of Carillon Avenue and the south east of City Road. The Minister's proposal would have divided the University between two council areas because it only left this portion of land with SSCC. The University's suggestion that its land should remain within a single local government area is specifically mentioned in the Report which states: The University of Sydney's submission supports the boundary alteration proposal and requests that the transfer area be extended further into South Sydney local government area, in order to incorporate property holdings in Darlington and Newtown. The Commission notes the logic of the University's submission and considers an extension of the proposed boundary to take in those properties appropriate for future consideration by the Minister. There is no evidence that this had a negative impact upon SSCC's general rate income (see s556(1)(l)). Indeed there is evidence to the contrary. Certainly no such case was run at trial. 281 The second reason was the "back lot principle". The Minister's proposal involved lines being drawn down the centre of streets. This would have left two adjoining councils sharing duties with respect to a single street, by some application of the medium filum principle. In the era post-Brodie v Singleton Shire Council (2001) 75 ALJR 992 the consequences are almost too painful to contemplate. Following departmental practice, the Commission redrew the boundary between areas to the "title line" of adjacent properties. This was in accordance with the Commission resolution of 30 November 2001 that: As a general principle it was agreed that it was desirable for boundary lines to run along the rear of building lines rather than cutting through roads, however, this issue may need further research. 282 These two adjustments suggested by the Commission are not said to have gone beyond its powers under s218F(7). There was some debate before us about the extent of the Minister's power to recommend to the Governor otherwise than in accordance with the (modified) proposal endorsed by the Commission. I find it unnecessary to address this in circumstances where there is no evidence that the Minister intends to do so, or that he is unwilling to listen to any objections of SSCC about them and act lawfully in light of them. 283 At the end of the day, I conclude that to the uncertain extent that the judgment below is to be construed as holding that the Report is invalid because of want of procedural fairness by the Commission on this account, that conclusion cannot stand. I do not consider SSCC's interest in relation to each square metre of land in its area is of such a nature as to enliven a duty of prior consultation by the Commission in relation to any advance on the Minister's proposal. The possibility of minor adjustments was always on the cards. There are adjustments and adjustments. SSCC has not shown that the materiality of these two types of adjustment was of such an order as to call forth a duty of prior disclosure by the Commission. 284 It is impossible to see anything that SSCC would have put before the Commission in relation to the loss of an additional part of the non-rateable University land that it did not put in relation to the much larger portion to the north east of City Road that it was going to lose under the Minister's proposal. The "back lot" adjustment appears too sensible to require debate. It is hardly surprising that senior counsel for SSCC at trial considered these matters as having no relevance to the matters genuinely at issue. 285 If I were wrong about this I would in any event decline relief on this basis on discretionary grounds. I cannot see any genuine interest of SSCC as having been prejudiced in this matter, a fortiori having regard to the non-prescriptive nature of the Report. In his letter of 28 March 2002 the Minister specifically invited SSCC's comments in relation to the modifications proposed by the Commission. Did the Commission fail to have real regard to the section 263(3)(e2) factor? 286 By notice of contention SSCC challenges Talbot J's dismissal of its claim that the Commission failed to have regard to s263(3)(e2) which stipulates that it was required to have regard to: the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned. 287 Chapter 4.7 of the Report addressed this in the following terms EMPLOYMENT IMPACTS Section 263 (3) (e2) of the Act requires the Commission to have regard to "the impact of any relevant proposal on the employment of the staff by the councils of the areas concerned." Material presented to the Commission from all three councils as well as the Federated Municipal and Shire Council Employees Union of Australia New South Wales Division ("the MEU"), discussed this factor at some length. There are several ways in which the boundary alteration proposal may impact on employment. Firstly, the current employment practices of the three councils differ. The MEU is particularly concerned about the impact of the City of Sydney Council's competitive tendering practices on council employees and wishes to enter into an agreement with the City about the extent to which these practices would be used, particularly during the transitional period of change introduced by boundary alterations. Secondly, the profile and character of services provided by each council is different. This means that employees transferred as a result of the implementation of the boundary alteration proposal may need to be retrained, especially where the services those employees provided have been outsourced at the City of Sydney Council. Thirdly, there are significant costs associated with the transfer of a workforce for the councils involved. Not the least of these are leave entitlement costs, including superannuation. The General Manager of the City of Sydney Council, Mr Domm, has pointed out that the City would accept all of its responsibilities for the transfer of relevant staff from Leichhardt Municipal Council and South Sydney City Council. However, he indicated that it would take up to 12 months for the City of Sydney to absorb the impact of the transfers. There are some cultural differences between attitudes of staff in the City of Sydney Council and in South Sydney City Council and Leichhardt Municipal Council noted in the submissions, although these have not been so great as to prevent staff from migrating from one council to another. The boundary alteration proposal is not expected to impact on the industrial relations mechanisms and arrangements that apply to the affected councils. CONCLUSION The boundary alteration proposal, if implemented, may impact on the employment of staff by councils in the affected areas. In considering this the Commission recommends the development of transitional arrangements consistent with the Principles on Transfer of Staff, Assets and Liabilities" outlined by the Minister when announcing the boundary alteration proposal on 15 November 2001. These are: · The transfer of boundary areas should not have any adverse impact on transferred staff. That is, forced redundancy or loss of award rights, contributions or entitlements should not arise as a result of a boundary change. · The proclamation of a major boundary change will include such a provision, usually with a sunset period, to enable new employment conditions to be negotiated (eg: three years). · Councils should identify staff directly affected by a transfer. · The next group are those whose employment involves a significant proportion of their activity in the affected area such as those in waste collection, building management and environmental health. · Once staff for transfer have been identified, appropriate transfer of balance sheet items will be required, such as provision for entitlements and matching assets. Annexed to the Report was a copy of the Minister's Media Release of 15 November 2001 which spelt out various principles on transfer of staff, assets and liabilities. 288 Talbot J held (at pars [26], [67]): 26. Clause 3(e2) refers to the "impact of any relevant proposal on the employment of the staff by the councils of the areas concerned". Relying on a submission made by the CSC (not disclosed to the council) that it would accept all responsibilities for the transfer of relevant staff, the BC recommended that although the boundary alteration proposal may impact on the employment of staff, transitional arrangements should be developed. According to the council the BC appears to have done no more than adopt principles announced by the Minister for implementing transfer of staff assets and liabilities, without identifying the impact on any particular individuals. … 67. By referring to transitional arrangements in regard to the employment of staff, the BC highlighted its apparent understanding of the effect of the interaction between s 218C and s213 of the LGA which recognise the prospect of provision for or with respect to transfer of staff. Although the council may not have been privy to the propositions advanced by the CSC in this regard, which is a separate head of complaint, nevertheless the report of the BC shows that it gave consideration to these matters. 289 Read with s218C, s213 of the Act provides that a proclamation of the Governor may include such provisions as are necessary or convenient for giving effect to the proclamation, including provisions for a written report with respect to the transfer of staff. 290 SSCC cites recent decisions of this Court discussing the nature of a statutory obligation to "have regard to" specified matters. These indicate the need for "proper, genuine and realistic consideration" (Weal v Bathurst City Council (2000) 111 LGERA 181 at 185, Zhang v Canterbury City Council (2001) 51 NSWLR 589 at 601-2 citing inter alia Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 at 292 per Gummow J). 291 SSCC submits that the Report does not address impact, but its principal reason is the non-disclosure of the previously undisclosed CSC submission that is referred to in Chapter 4.7. This, of course, is a non sequitur. 292 More to the point is the submission that the Report does not identify the directly affected staff. This, however is more a quibble about the merits of the process, rather than a demonstration that the Commission failed to have regard to the issue. The Report concentrates upon a suggested process, indicating that "Councils should identify staff directly affected". To me this is understandable, given the time likely to elapse between the Report and implementation of the proposal, and the propriety of giving the existing employer a primary role in what is likely to be a sensitive issue. It is of some relevance to look at SSCC's submission on this issue. It placed understandable emphasis upon the negative impact on existing SSCC staff, 95% of whom had indicated opposition to the proposed changes. Little or nothing is advanced on the "what if" proposition. 293 SSCC further submits that the recommendation in 4.7.1 of the Report ignores or defers the Commission's duty by substituting a recommendation of transitional arrangements to examine and deal with future impacts after the boundary change has been made. It cites Weal at 203. This too is a debate about the merits, not the process. The submission also fails to give due weight to ss213 and 218C. 294 The contention point fails. 295 For these reasons I propose the following orders: 1. Appeal allowed. 2. Set aside the declaration and orders made on 31 May 2002 in the Land and Environment Court. 3. In lieu thereof order that the Application Class 4 be dismissed with costs. 4. Respondent to pay appellants' costs of the appeal. 296 IPP AJA: As regards the procedural fairness issue described as "the enlarged area point", I agree with Spigelman CJ that this should be approached on the basis that it was not a case advanced by the Respondent at trial. In any event, I agree with the reasons expressed by Mason P on this issue. 297 Otherwise I agree with the reasons of Mason P as well as those of Spigelman CJ in regard to the jurisdictional and remaining procedural fairness issues. ********** 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.