Warringah Council v Edmondson & Ors; Giltinan v Edmondson & Ors [2001] NSWCA 1 (30 January 2001)

Last Updated: 31 January 2001

NEW SOUTH WALES COURT OF APPEAL

CITATION: Warringah Council v Edmondson & Ors; Giltinan v Edmondson & Ors [2001] NSWCA 1

FILE NUMBER(S):

40952/99

40989/99

HEARING DATE(S): 11/12/00

JUDGMENT DATE: 30/01/2001

PARTIES:

Warringah Council (Appellant) 40952/99

Robert Giltinan (Appellant) 40989/99

Mark Ronald Edmondson (First Respondent) 40952/99 & 40989/99

Owen Mark Southwood (Second Respondent) 40952/99 & 40989/99

JUDGMENT OF: Meagher JA Powell JA Fitzgerald JA

LOWER COURT JURISDICTION: Land & Environment Court

LOWER COURT FILE NUMBER(S): 40059/98

LOWER COURT JUDICIAL OFFICER: Talbot J

COUNSEL:

P. McClellan QC / A Galasso (Appellant) 40952/99

D. Wilson (Appellant) 40989/99

B. W. Davison SC / I. Hemmings (Respondents) 40952/99 & 40989/99

SOLICITORS:

Wilshire Webb (Appellant) 40952/99

Terrence W Riley (Appellant) 40989/99

Hones Lawyers (Respondents) 40952/99 & 40989/99

CATCHWORDS:

Local Government Act 1993 - tenders for tennis and squash courts - alleged breaches of s 45(2), 47(1)(c) and 55 - meaning of "adjoining" - operation of s 729 - "requirement as to the giving of notice" a "procedural requirement" - absence of procedural fairness a breach of the general law not the Act - D

LEGISLATION CITED:

Local Government Act 1993

DECISION:

Appeals by the Council and Giltinan allowed with costs. Orders made by the Land and Environment Court set aside.

JUDGMENT:

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40952/99

CA 40989/99

LEC 40059/98

MEAGHER JA

POWELL JA

FITZGERALD JA

TUESDAY 30 JANUARY 2001

WARRINGAH COUNCIL v EDMONDSON & Ors

GILTINAN v EDMONDSON & Ors

JUDGMENT

1   MEAGHER JA: I agree with Fitzgerald JA.

2   POWELL JA: I agree with Fitzgerald JA.

3   FITZGERALD JA: On or about 8 July 1997, one of the appellants, Warringah Council, invited tenders for the operation of its Tennis and Squash Court Facilities at District Park, North Manly. The respondents Mark Ronald Edmondson and Owen Mark Southwood lodged a joint tender. The other appellant Robert Giltinan lodged a competing tender. The Council accepted Giltinan's tender on 18 November 1997. Subsequently, on 5 March 1998, the Council granted Giltinan a lease commencing on 15 November 1997.

4   Edmondson and Southwood sued the Council and Giltinan in the Land and Environment Court. On 23 November 1999, the Land and Environment Court declared that the tender process was conducted by the Council contrary to law and that the lease was void and of no effect. The lease was set aside and the Council was restrained from acting upon or otherwise giving effect to it. On 1 December 1999, the Council was ordered to pay Edmondson and Southwood's costs of the proceedings in the Land and Environment Court but no costs order was made against Giltinan.

5   The Council and Giltinan have appealed. Although the proceedings have generally presented a more complex appearance, it emerged in the course of argument in this Court that the decision appealed from cannot stand unless the Council breached either s 45(2), Reference was also made to s 22 of the LG Act and s 50(1)(d) and (e) and (4) of the Interpretation Act 1987. However, it was not suggested that those provisions add to or derogate from the Council's power under s 45(2) of the LG Act. s 47(1)(c) or s 55 of the Local Government Act 1993 (the "LG Act"). In this Court, Edmondson and Southwood did not attempt to rely upon any breach of a general law of duty by the Council. Nor did they suggest that the Land and Environment Court had jurisdiction to determine such a claim notwithstanding the decision of this Court in Nix v Pittwater Council (1994) 84 LGERA 199.

6   Edmondson and Southwood have given a notice of contention challenging the Land and Environment Court's conclusion that s 55 of the LG Act was inapplicable because of s 55(3). More particularly, it was submitted that the contract for which the Council invited tenders was not a contract for the leasing of land by the Council because the lease to Giltinan includes a provision, as the tender required, requiring the tenant to "... prominently mark or label its personnel, facilities and equipment with the name of its organisation and with information that the facility is provided on behalf of Warringah Council."

7   Submissions made on behalf of Edmondson and Southwood attempted unsuccessfully to explain why such a provision justifies the conclusion for which they contend. In the absence of any plausible explanation, it is not possible to do more than to say that no basis was demonstrated for the notice of contention. The Land and Environment Court's conclusion that s 55 of the LG Act did not apply was correct.

8   Sections 45 and 47 of the LG Act are both contained in Div 2 of Pt 2 of Ch 6 "Use and Management of Community Land". Subsection 45(2) permits a council to grant a lease of community land, but only in accordance with Div 2. Subsection 47(1) provides that if a council proposes to grant a lease in respect of community land for a period exceeding 5 years, it must:

"(a) give public notice of the proposal, and

(b) exhibit notice of the proposal on the land to which the proposal relates, and

(c) give notice of the proposal to such persons as appear to it to own or occupy the land adjoining the community land." At the material time, the LG Act did not include s 47(1)(d).

9   It is common ground that the lease to Giltinan is a lease of community land for a period exceeding 5 years. It is also common ground that the Council complied with s 47(1)(a) and (b) and that it gave notice of the proposal to such persons as appeared to it to own or occupy land adjoining the community land. See s 47(1)(c) of the LG Act. However, it was argued on behalf of Edmondson and Southwood that s 47(1)(c) of the LG Act was not nonetheless complied with.

10   District Park, of which the land leased by the Council to Giltinan forms a small part, occupies a large area. The parties' arguments raised three issues.

11   The first question is whether the lease to Giltinan is "in respect of" District Park or the part of District Park which the Council leased to Giltinan. Despite the potential width of the words "in respect of", I consider it clear that the community land in respect of which the lease was granted to Giltinan is the land which is the subject of the lease.

12   The second argument for Edmondson and Southwood on this part of their case was that s 47(1)(c) of the LG Act was not complied with because s 3 of the LG Act provides that expressions used in the Act which are defined in the dictionary at the end of the Act have the meanings set out in the dictionary and the dictionary provides that:

"Adjoining, in relation to an area, means abutting or separated only by a public reserve, road, river, water course, or tidal or non-tidal water, or other like division."

13   Attempts were made to persuade the Court that there would be a legitimate purpose in requiring specific notification to every owner or occupier of property which adjoined any part of District Park even if it was more than a kilometre from the portion of the Park leased by the Council to Giltinan. I am unable to agree. I consider that the incorporation of the meaning of "adjoining" The word "adjoining" is capable of more than one meaning: see Parkes v Rastogi [1992] NSWLEC 108; (1992) 78 LGERA 71. However, it was not disputed that the Council had complied with s 47(1)(c) of the LG Act unless the dictionary meaning of "adjoining" was used in that subsection. from the dictionary into s 47(1)(c) would impose impractical requirements which could not have been intended. Accordingly, the dictionary meaning of "adjoining" does not apply. Hall v Jones (1942) 42 SR (NSW) 203; Transport Accident Commission v Treloar (1992) 1 VR 447, 449; DCT v Mutton (1988) 79 ALR 508, 512-513.

14   The Council also relied on s 729 of the LG Act in answer to Edmondson and Southwood's case based on s 47(1)(c). Section 729 provides that the validity or effectiveness of a decision of a council may not be questioned in any legal proceedings on the ground that, in making or purporting to make the decision, the Council failed to comply with a procedural requirement of the LG Act or the Regulations "(including a requirement as to the giving of notice)" unless the proceedings are commenced within 3 months after the date of the Council's decision.

15   It is common ground that Edmondson and Southwood's proceedings were not commenced within 3 months after the Council's decision to grant the lease to Giltinan. However, Edmondson and Southwood argued that, notwithstanding the words in parenthesis in s 729, the "requirement as to the giving of notice" in s 47(1)(c) was not a procedural requirement. The substance of the submission was that only a "procedural" requirement as to the giving of notice is a "procedural requirement" for the purpose of s 729 and that the requirement as to the giving of notice in s 47(1)(c) is a substantive, not a procedural, "requirement as to the giving of notice." Presumably, that is the argument which attracted the Land and Environment Court, which held without explanation that s 729 did not apply.

16   The purpose of s 729 of the LG Act is obviously to limit the time within which proceedings may be commenced against a council for non-compliance with procedural requirements. Read literally, the section requires a "requirement as to the giving of notice" to be treated as a procedural requirement. There is no reason why s 729 should not be given effect according to its terms.

17   It remains to consider the final argument for Edmondson and Southwood, which is based on s 45(2) of the LG Act.

18   Once again, the argument can be briefly summarised. Subsection 45(2) permits a council to grant a lease of community land in accordance with Div 2 of Pt 2 of Ch 6. It was submitted that a Council's power under s 45(2) is subject to an implied requirement that the Council exercise procedural fairness. While it was conceded that there was no obligation upon the Council to invite tenders, it was submitted that since it had done so it was required to exercise procedural fairness in deciding which tender to accept and that it had not done so. Essentially, the basis for that assertion was that the reasons given by the Council for accepting Giltinan's tender involved factors which were extraneous to the tender process which other tenderers were not given an opportunity to address.

19   The Land and Environment Court found for Edmondson and Southwood on this aspect of the matter on the basis that the Council breached a duty to act fairly, apparently based upon ".. principles of equity and good conscience", and ".. operated to the detriment of other tenderers..." Paragraph 49 of that Court's reasons for judgment was as follows:

"49. The council, when giving consideration to the tenders, was acting pursuant to its statutory power to grant a lease of the land. It is an incident of that power that it be exercised in accordance with its duty as a statutory corporation. A failure to act reasonably and fairly is relevantly a contravention of or failure to comply with the Act. The applicants are therefore entitled to bring proceedings in this Court for an order to remedy or restrain such a breach pursuant to s 674 of the LG Act."

20   A fundamental difficulty with this approach is that it misconceives the source of an obligation to afford procedural fairness. In Vanmeld Pty Ltd v Fairfield City Council, [1999] NSWCA 6; (1999) 46 NSWLR 78. it was unnecessary for Meagher and Powell JJA to discuss this issue. However, their judgments contain no indication that they disagreed with the Chief Justice on this point. His Honour said: 46 NSWLR 78, 91-92.

"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] HCA 81; (1985) 159 CLR 550, 576, 581, 632; Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596, 598; Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, 574-575; Attorney General (NSW) v Quin (1989-90) 170 CLR 1, 57; Victoria v Master Builders Association of Victoria (1995) 2 VR 112, 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 supra 609-616; FAI Insurance Ltd v Winneke [1982] HCA 26; (1982) 151 CLR 342, 407-413; Ainsworth supra 584-585)."

21   In my opinion, Edmondson and Southwood's claims all failed and their proceeding in the Land and Environment Court should have been dismissed with costs.

22   The appeals by the Council and Giltinan should accordingly be allowed with costs and the orders made by the Land and Environment Court set aside.

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LAST UPDATED: 31/01/2001