Land and Environment Court New South Wales Medium Neutral Citation: Walcha Council v Minister for Local Government [2016] NSWLEC 60 Hearing dates: 24 May 2016 Date of orders: 24 May 2016 Decision date: 24 May 2016 Jurisdiction: Class 4 Before: Preston CJ Decision: Uphold the claim for public interest immunity in respect of the two documents, the long form document and the business case document Catchwords: PRACTICE AND PROCEDURE – notices for production of documents – public interest immunity – whether documents subject to – documents submitted to Cabinet – whether documents of a lower order of public interest – whether public interest immunity impairs implied freedom of political communication Legislation Cited: Evidence Act 1995 ss 130, 131A Local Government Act 1993 s 218E Category: Procedural and other rulings Parties: Walcha Council (First Applicant) Oberon Council (Second Applicant) Cabonne Council (Third Applicant) Mr David Graham and Mr Albert McAlister (Fourth Applicant) Minister for Local Government (First Respondent) Chief Executive of the Office of Local Government (Second Respondent) Ms Amanda Chadwick and Mr Greg Wright; Ms Renata Brooke; Mr Richard Pearson; Mr John Turner (Third Respondent) State of New South Wales (Fourth Respondent) The Administrator, Gundagai Council (Fifth Respondent) Representation: Counsel: Mr P E King with Ms F A Sinclair (Barristers) (Applicants) Mr N J Williams SC with Mr J J Hutton, Dr J Lucy, Mr T E O'Brien and Ms B E M Anniwell (Respondents) Solicitors: Patterson, Byfield & Bryen Solicitors (Applicants) Crown Solicitor's Office (Respondents) File Number(s): 00153893 of 2016 Publication restriction: No Judgment 1. The applicants in these proceedings have issued various notices to produce calling for production of a variety of documents. Amongst the categories of documents that have been sought are two documents described as "Implementation of Local Government Mergers: Business Case" and "Options Analysis Local Government Reform", both prepared by the accounting firm KPMG. The respondents in the proceedings acknowledge that there are documents answering those descriptions but have made a claim for public interest immunity in relation to the two documents. 2. The respondents have relied on evidence of Mr Miller who is the General Counsel of the Department of Premier and Cabinet for the State of New South Wales. He deposes that a document called "Local Government Reform: Merger Impacts and Analysis" was published by the New South Wales Government on 18 December 2015. That document has already been produced to the applicants in these proceedings. An earlier version of this document was annexed to a Cabinet submission that was submitted by the Minister for Local Government to Cabinet. Mr Miller refers to that document as the long form document. The long form document was considered by Cabinet in its decision-making about local government reform and council mergers. It was substantially longer than the document entitled "Local Government Reform: Merger Impacts and Analysis" that was published on 18 December 2015. As a result of the long form document being prepared for and being submitted to Cabinet, and being considered by Cabinet, the respondents claim public interest immunity in relation to the whole of the long form document. 3. It is acknowledged that certain parts of the long form document were included in the shorter form of the document entitled "Local Government Reform: Merger Impacts and Analysis". To that extent, there has already been disclosure of some parts of the long form document. Nevertheless, the public interest immunity claim is maintained over the whole of the document. 4. The second document, "Implementation of Local Government Mergers: Business Case", which Mr Miller refers to, by shorthand, as the business case document, was also prepared by KPMG, and was submitted by the Minister for Local Government to Cabinet. It was brought into existence for the purpose of preparing a submission to Cabinet. It was considered by Cabinet. Public interest immunity is claimed in relation to the whole of the business case document. 5. On the face of this evidence, the two documents are properly subject to public interest immunity. The applicants seek nevertheless to challenge this claim of public interest immunity on two bases. The first is that because the nature of the documents that were prepared for and considered by Cabinet concerned local government reform and council mergers, they were of a lower order of public interest than other documents that may be related to the security of the state, the national interest or the safety of the realm. However, there is no justification for creating a pecking order in claims for public interest immunity. These particular documents were subject to consideration by Cabinet: they are matters that are of importance to the State of New South Wales. The fact that other matters such as security or safety of the realm, which would be of federal concern primarily, are of public importance does not make them more important than the particular matters that are the subject of these documents. 6. The second basis on which the applicants sought to challenge the claim of public interest immunity was that the law that allows that public interest immunity, namely, sections 130 and 131A of the Evidence Act 1995, must give way, insofar as they impair the implied freedom of political communication. I do not see how any implied freedom of political communication is impaired by upholding the claim for public interest immunity. Production of the documents was sought by way of the notices to produce in these proceedings. These proceedings are in the nature of judicial review of certain exercises of government functions under the Local Government Act 1993. The applicants seek production and inspection of the documents in order to assist their claims made in these judicial review proceedings. If the documents are to be withheld by reason of public interest immunity, then the applicants will not be able to inspect those documents or tender them in their case. But this does not impair any freedom of political communication. 7. There are three steps to determining a claim for public interest immunity. The first, of course, is the one I have just embarked upon, and that is to determine whether the documents are properly subject to public interest immunity. I have determined that in the affirmative. The second is to determine whether the documents would be likely to materially assist the party seeking production of the documents in the litigation. To determine that, it is necessary to look at the claims by the applicants. 8. I have regard to the further amended statements of claim by the applicants in these proceedings. There are various exercises of statutory power that are challenged. Of relevance, in relation to this question of production of the documents, is the exercise by the Minister for Local Government of the power to make a proposal for the amalgamation of local government areas under s 218E of the Local Government Act. The challenge to that exercise of power is set out at paragraphs 43 and 44 of the further amended statement of claim of Oberon Council. I note that similar claims are made in the statements of claim of the other applicants. 9. The decisions by the Minister to propose amalgamations of areas were said to be void on a number of bases. One was that there were no proposals, within the meaning of that expression in section 218E, but rather the decisions to amalgamate had already been made, and were simply to be endorsed by the process of examination and report under the relevant statutory provisions. Similarly, it is alleged that there could be no decision other than to amalgamate, having regard to certain matters, including media statements that had been made by the Minister for Local Government and the Premier, an earlier decision that the New South Wales Government had made (presumably in Cabinet meetings), the fact that there had been limited, disclosure of various documents produced by KPMG (which presumably included the two documents in respect of which public interest immunity is claimed), the perfunctory meetings or inquiries that were held, and correspondence from the Minister for Local Government and the Department of Premier and Cabinet to staff of councils that were the subject of proposals for amalgamation inviting them to apply for new positions in any merged council. 10. These matters were alleged to support the contention that a decision had already been made that the local government areas should be amalgamated at the time the Minister purported to exercise the power under s 218E to make a proposal and refer the proposal for examination and report. 11. The applicants also referred to material produced by KPMG that was published and made publicly available. The applicants alleged that that KPMG published material did not justify a decision to amalgamate the local government areas and contained unwarranted and indefensible assumptions with no empirical basis, and was too flawed to employ in decision making about local government mergers. 12. It can be seen that none of these allegations about the exercise by the Minister of the power under s 218E to make proposals for amalgamations depend upon the two documents, the long form document or the business case document, that were produced for and considered by Cabinet. Disclosure of those documents would not be likely to materially assist the applicants in making their case that the Minister's decisions under s 218E were flawed or legally erroneous in the ways in which they have pleaded and that I have summarised above. 13. The applicants also contended that the decisions by the Minister under s 218E proposing amalgamation were manifestly unreasonable in that no reasonable minister in the position of the Minister for Local Government, on the material that was before him, would have made the referral decisions. 14. That challenge was particularised by reference to the KMPG published material. That KMPG published material was said to suffer from the defects that I have summarised above. It is true that, in the particulars, the applicants do refer to other KPMG documents, which presumably would include the long form document and the business case document that went to Cabinet. However, that is only in the context that the applicants say that, if the documents are produced and they are able to inspect them, they will tender them in court. That is not to put a case as to how those documents show that it is manifestly unreasonable for the Minister to have made the decisions that he did under s 218E. 15. The applicants also challenge the examination, inquiry, and report process made by the delegates of the Departmental Chief Executive, to whom the Minister referred the various proposals for amalgamations of local government areas. Amongst the grounds of challenge to the delegates' conduct is that the delegates were unable to examine the proposals that were informed or based upon KPMG material that was not published or publicly available, and presumably included the long form document and business case document that was produced for and considered by Cabinet. 16. That claim also can be made without having access to the long form document or the business case document. The claim is that the delegates did not have access to and were unable to have access to those documents. All that needs to be proven is that the delegates did not have access to and were unable to gain access to those documents. This can be proved by, for example, reading parts of the affidavit of Mr Miller, as well as establishing the documents that were made available to the delegates and thereby proving the negative, that is, that the long form document and the business case document were not made available to the delegates. 17. Of course, it is a separate matter to proof of a fact to show what the legal consequence is of not being able to have access to those documents, but establishing that legal consequence does not depend upon having access to the two documents that are subject to the public interest immunity claim. In the circumstances, I am not satisfied that the disclosure of the two documents would be likely to materially assist the applicants' case as pleaded. 18. Hence, it is not necessary to embark upon the third step of weighing the conflicting aspects of the public interest, that is to say, the public interest in maintaining confidentiality of the Cabinet documents against the public interest in ensuring that the applicants are able to properly make their case and that the Court is able to perform its function of delivering justice. 19. In those circumstances, I uphold the claim for public interest immunity in respect of the two documents, the long form document and the business case document. ********** 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. Decision last updated: 27 May 2016