Blue Mountains Council v Minister for Local Government [2018] NSWSC 183

Supreme Court New South Wales

Medium Neutral Citation: Blue Mountains Council v Minister for Local Government [2018] NSWSC 183 Hearing dates: 22 February 2018 Date of orders: 22 February 2018 Decision date: 22 February 2018 Jurisdiction: Common Law Before: Schmidt J Decision: Orders made in terms of MFI 1. Catchwords: INJUNCTION – ex parte motion – plaintiff sought interlocutory injunction restraining Minister from making decision pursuant to s 438K of Local Government Act 1993 – serious question to be tried – balance of convenience – injunction granted Legislation Cited: Local Government Act 1993 (NSW) Supreme Court Act 1970 (NSW) Land and Environment Court Act 1979 (NSW) Cases Cited: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 Category: Procedural and other rulings Parties: Blue Mountains City Council (Plaintiff) Minister for Local Government (Defendant) Representation: Counsel: P Singleton (Plaintiff)

Solicitors: McPhee Kelshaw (Plaintiff) File Number(s): 2018/60355 Publication restriction: Nil

EX TEMPORE Judgment 1. HER HONOUR: The plaintiff has commenced proceedings by summons filed this evening in Court by leave, seeking an order restraining the Minister for Local Government from making a decision the subject of a notice given to the Council by letter dated 14 February 2018, pursuant to s 438K of the Local Government Act 1993 (NSW). Also filed by leave is a notice of motion seeking relief that includes an interlocutory injunction. 2. The application is supported by an affidavit of Steven James Nicholson and has been advanced by written submissions. Various matters have there been addressed. 3. I am satisfied that the application is urgent, given that steps to appear today before the Land and Environment Court to advance the application before that Court were not successful, for reasons that it is not necessary here to explain. Assurances sought by the solicitor for the Council from the Minister, regarding the making of a decision to suspend the Council, resulted in a refusal to give any assurances. The Council then approached the Land and Environment Court, but it was not available. 4. The question of the Court's jurisdiction to grant the relief sought in these circumstances arises, s 673 of the Local Government Act providing: "673 Remedy or restraint of breaches of this Act—the Minister, the Departmental Chief Executive and councils (1) The Minister, the Departmental Chief Executive or a council may bring proceedings in the Land and Environment Court or such other court as may be specified in this Act for the purpose of the proceedings for an order to remedy or restrain a breach of this Act. (2) Subsection (1) does not apply in relation to an alleged contravention of Part 2 (Duties of disclosure) of Chapter 14 (Honesty and disclosure of interests)." 1. There is no relevant reference to the Supreme Court in this Act and s 20(1)(d) of the Land and Environment Court Act 1979 (NSW) provides that such proceedings are Class 2 proceedings under that Act. Despite this, my view is that this Court has jurisdiction to hear the application in the circumstances in which the application has been made, pursuant to ss 23 and 66(4) of the Supreme Court Act 1970 (NSW). 2. By s 66, the Court has express power to grant interlocutory injunctions "in any case in which it appears to the Court to be just or convenient so to do". Further, s 23 provides: "23 Jurisdiction generally The Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales." 1. The circumstances in which the Court is asked to grant interlocutory relief include not only that the Council gave the usual undertaking as to damages, but it relied on the prospect of a listing of the proceedings tomorrow and they then being referred to the Land and Environment Court pursuant to ss 71-72 of the Land and Environment Court Act. 2. The application was made ex parte. I am satisfied that it had the necessary urgency to proceed on that basis. 3. Furthermore, the evidence has also established that there is a serious question to be tried and that the plaintiff Council has a prima facie case, in the sense that if the evidence remains as it is, there is a probability that the plaintiff will be entitled to relief. On the evidence, the plaintiff has also shown a sufficient likelihood of success to justify the preservation of the status quo. 4. Section 438I of the Local Government Act empowers the Minister, by order, to suspend a council, but only if "the Minister reasonably believes that the appointment of an interim administrator is necessary to restore the proper or effective functioning of the council." 5. The Council has been given a notice under s 438K of the Local Government Act, which is a machinery provision that requires the giving of notice and reasons for a proposed suspension, as well as an invitation to make submissions in a specified consultation period and an obligation to have regard to submissions made by the council. 6. The correspondence in evidence gives rise to the question of whether the Minister, in acting on the notified intention to suspend, has indeed acted in accordance with the s 438I. The reasons in the letter, it must be said, may be read as suggesting that s 438I has not received the attention that it is required to receive. 7. I am also satisfied that the Minister may be proceeding on the basis of factual errors regarding the nature of the employment of a Mr Mulligan, who was understood to have been the Chief Safety Officer of the Council. But he has never held that position. There are also questions as to the Minister's views regarding a conflict of interest on the part of Mr Tooma, who has been engaged to conduct an investigation. I accept that the evidence as to an apprehension of bias on his part, would not satisfy the test in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63, which applies. 8. All that being so, I am satisfied that the Council has established that there is a serious question to be tried. 9. The balance of convenience also lies with the elected Council, given the consequences of a decision to suspend, when weighed with the consequences for the Minister, who may for a short time have to hold back a decision that would result in the appointment of an administrator, when it is not clear at all that the Minister is acting on a reasonable belief "that the appointment of an interim administrator is necessary to restore the proper or effective functioning of the council". 10. I have thus made orders which will bring the matter before this Court at 10am tomorrow. The Court can then consider whether or not to transfer the proceedings to the Land and Environment Court, where the continuation of the interlocutory relief can be considered, if it is not to be considered by this Court.