Just give me one good reason - Victorian Government Solicitor's Office

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Administrative Law;. Planning and Environment Law. Client Newsletter. Just give me one good reason … December 2008. Administrative law issues.
Administrative Law; Planning and Environment Law

Client Newsletter

Just give me one good reason … December 2008

Summary The Court of Appeal, in East Melbourne Group Inc v Minister for Planning1 (the Hilton Hotel case), recently invalidated a decision made on 14 December 2004 by the then Minister for Planning (the Hon Mary Delahunty MP) under the Planning and Environment Act 1987 because the reasons for it were so unreasonable that it constituted an error of law. The Minister was not required to give reasons but voluntarily published reasons at the time of the decision. The majority judgment of the Court held that additional evidence may not be adduced to prove the true reasons are different from the official reasons (and hence reasonable) if the official reasons are clearly and carefully expressed. Therefore internal Departmental documents (eg: briefing memoranda) could not be admitted in the Hilton Hotel case to prove the true reasons were different from the official reasons. The decision underlines the need for care in preparing reasons.

Administrative law issues Introduction In Victoria, reasons must be given by Government decision makers if there is a specific statutory requirement to do so, if the decision is subject to VCAT review, or if required under s 8 of the Administrative Law Act 1978.

If reasons are not required to be given for a decision, why give reasons? As well as helping those affected by a decision to understand the decision, reasons can improve the quality (including the consistency) of decisions, promote public confidence in decision making, guard against arbitrariness, and help courts and tribunals to better perform merits review or judicial review of the decision.2

Judicial review If reasons are not required to be given, a court will in a judicial review proceeding, consider informal reasons given at the time the decision is made (and other relevant material) to assist the Court to determine whether the decision ought to be set aside on grounds it was unreasonable in the requisite Wednesbury sense,3 that relevant considerations were not taken into account, that irrelevant considerations were taken into account, or that it was made for an improper purpose. In the Hilton Hotel case, the East Melbourne Group Inc successfully sought judicial review of the Minister’s decision and the Minister’s reasons were central to the decision to uphold the appeal.

What was the decision the Minister originally made? On 14 December 2004, the Minister decided to exempt herself from what may be described as the public notice requirements under the Planning and Environment Act 1987 (PE Act) in respect of an amendment to a planning scheme.4 The Minister had exempted herself from all public notice requirements for an amendment to the Melbourne Planning Scheme to facilitate the refurbishment of the Hilton Hotel, a multi-storey extension to the Hilton Hotel, the refurbishment of the adjoining MCG Hotel, the refurbishment of an adjoining heritage dwelling, and a new apartment block on adjoining land. The effect of the decision was to enable the amendment to be approved without further delay after it had been prepared.

What reasons were given and why were they given? The Minister’s published reasons referred to the economic benefits of the project. She also referred to the (then) forthcoming 2006 Commonwealth Games. In one passage, she stated ‘[t]he proposed expansion of the [Hilton Hotel] and the refurbishment will also ensure the quality accommodation is provided in a timely manner to accommodate the demands anticipated for the Commonwealth Games’.5 In another passage, she stated delays needed to be avoided so the ‘redevelopment project’ could contribute ‘to the accommodation offer available … for the [Games] in a timely manner’.6 The reasons were given in accordance with an informal, non-statutory practice note that applied to a wide range of decisions by the Minister, of which the exemption decision was one specified type.7

Trial judgment The challenge to the Minister’s decision was dismissed at trial.8 One ground of challenge was the decision was so unreasonable it should be voided because no rational Minister could have believed that the project could be completed in the approximately 15 months before the Games.

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The trial judge stated the decision would be void if based on this belief. The judge held that the public documents9 put a gloss or ‘spin’ on the real basis for the decision, possibly to avoid or minimise public criticism.10 The judge went on to consider internal Departmental documents and found that the true reasons were to avoid the uncertainty and delay of a normal planning appeal and to facilitate only the Hilton Hotel refurbishment for the Games.11 These true reasons did not void the decision.

Appeal judgment The Court stated ‘a decision may be unreasonable in the Wednesbury sense because it is manifestly unreasonable, that is, it simply defies comprehension, or because it is obvious that the decision-maker consciously or unconsciously acted perversely … [Unreasonableness] will also be made out where there was manifest illogicality in arriving at the decision – there being illogical findings, or inferences of fact unsupported by probative material or logical grounds’.12 The Court confirmed that it may act on the decision maker’s stated reasons if they demonstrate errors of law, even if there is no statutory duty to give reasons.13 The Court relied on the official reasons and the public documents to find that the true reasons for the decision were ‘to avoid the delay to the provision of accommodation which would result from a combination of expansion and refurbishment by the time of the [Games].’14 The Court confirmed the general principle that a court ‘may admit evidence in quite limited circumstances so as to elucidate, but not fundamentally collide with, the reasons stated by the decision-maker.’15 It held the trial judge fell into error by considering the departmental documents after ‘plainly concluding the identified circumstance was the publicly stated reason’ because ‘it failed to assign to the Minister’s stated reason the preeminence which it required’.16 The error the trial judge fell into was that ‘a review as to whether the decision was reasonable by reference to all

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the material before [the Minister] constituted an irrelevant merits inquiry’.17

What does this mean for decision making? First, if a decision maker gives informal or nonstatutory reasons at the time of a decision, the reasons can and will be subject to scrutiny in judicial review proceedings. Second, care needs to be taken in preparing any official reasons to ensure they accurately reflect the process of decision making and are not unreasonable in the Wednesbury sense. In particular, they should be not be prepared to suit the views of ‘spin doctors’. Third, although the law in relation to the admissibility of additional evidence to determine reasons for decision may not be settled, decision makers should proceed on the basis that internal departmental documents are unlikely to be considered to prove the reasonableness of a decision if the official reasons are clear. Such documents should nevertheless be prepared to ensure consistency with the official reasons to minimise the risk of challenge.

Planning law issues The Hilton Hotel case has useful dicta on issues regarding s 20(4) of the PE Act. A decision to grant an exemption is a significant one. It removes the opportunity for public participation in the process of amending a scheme. Before the Hilton Hotel case, a majority of three cases involving these decisions held that a Minister is not required to comply with the rules of procedural fairness.18 The trial judge, in the Hilton Hotel case, followed the approach in the majority of these cases. However, procedural fairness was not a ground of appeal so the matter was not re-argued. The Hilton Hotel case also confirms that the privative provision in s 39(7) of the PE Act does not oust judicial review.19

The Court held that the practice note is not a restriction on the use of the power and the only limitations on the power are those in the subsection itself.20 The main division in the Court was on how the decision to exempt sat with the related decisions to prepare, adopt and approve an amendment. The majority stated the decision is conceptually separate and doubted that an opinion that an amendment was in the interests of Victoria ‘could alone constitute a sufficient basis upon which to exercise the discretion to exempt’.21 Consequently the reasons given to exempt need to be separate from the reasons to prepare, adopt and approve an amendment. The Court rejected the view that a reason for an exemption must necessarily be confined to the interests of Victoria in the land the subject of the proposed amendment.22 A final prescient comment was that the Charter

of Human Rights and Responsibilities Act 2006 may be a factor in future cases on the exercise of the power.23

For further information For further information or legal advice on any issues raised in this newsletter contact: James Ruddle on 8684 0470 Deputy Victorian Government Solicitor Jonathan Smithers on 8684 0411 Assistant Victorian Government Solicitor Geoff Code on 8684 0412 Principal Solicitor The VGSO is the primary source of legal services to the Victorian State Government and its statutory authorities, providing strategic advice and practical legal solutions.

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[2008] VSCA 217 (31 October 2008) (Ashley and Redlich JJA; Warren CJ dissenting). Re Minister for Immigration and Multicultural and Indigenous Affairs, ex parte Palme (2003) 216 CLR 212 [105] (Kirby P), cited in Hilton Hotel case [225]. Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. PE Act s 20(4). Official reasons, paragraph 8, cited in Hilton Hotel case [238]. Official reasons, paragraph 19, cited in Hilton Hotel case [241]. Minister for Planning, Ministerial Powers of Intervention in Planning and Heritage Matters (Practice Note, November 2004). This practice note was first published in December 1999 to implement an ALP Election commitment to publish reasons for Ministerial interventions. East Melbourne Group Inc v Minister for Planning (2005) 12 VR 448; [2005] VSC 242 (Morris J) (‘East Melbourne’). The judge defined the ‘public documents’ as the official reasons, the amendment itself, the document outlining the project incorporated into the scheme by the amendment, and the explanatory report for the amendment prepared in accordance with the PE Act: East Melbourne (2005) 12 VR 448; [2005] VSC 242 [51]. East Melbourne (2005) 12 VR 448; [2005] VSC 242 [62]; Hilton Hotel case [82]. East Melbourne (2005) 12 VR 448; [2005] VSC 242 [63]; Hilton Hotel case [82]. Hilton Hotel case [183]. Hilton Hotel case [228]. Hilton Hotel case [252]. Hilton Hotel case [309]. In dissent, Warren CJ stated there is no absolute prohibition on the admissibility of additional evidence and that the reasons in the departmental documents were consistent with the official reasons. See Hilton Hotel case [73] – [84] and [109]. Hilton Hotel case [313]. Holding rules of procedural fairness are not ousted: Antoniou v Roper (1990) 70 LGRA 351. Holding that rules of procedural fairness are ousted: Grollo Australia Pty Ltd v Minister for Planning and Urban Growth and Development [1993] 1 VR 627 (‘Grollo’); Mietta’s Melbourne Hotels Pty Ltd v Roper (1988) 1 AATR 354. Hilton Hotel case [188], [361] - [370]. Hilton Hotel case [135], following Grollo [1993] 1 VR 627, 637. Section 20(4) of the PE Act requires the Minister to be satisfied that ‘compliance with any of [the notice requirements] is not warranted or that the interests of Victoria or a part of Victoria make such an exemption appropriate’. Hilton Hotel case [190], [191]. Warren CJ took a different view in dissent at [144], [148]: a decision within those limitations must be made within the ‘planning framework’ of the PE Act and ‘the various planning instruments and policies emanating from it’ and the Minister must ‘strike a balance between competing factors’.

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‘We think a benefit accruing in the interests of Victoria – not being a benefit which will accrue from the subject land itself – might in some cases legitimately be relied upon by the Minister in making a decision to exempt. Whether reliance will be legitimate in a particular case, in our opinion, will be a matter of fact and degree’: Hilton Hotel case [357]. Hilton Hotel case [163].