Posted on April 18, 2016 by Lindsay Taylor

Council Amalgamations – Botany Bay CC Fails in Court of Appeal Challenge

On 15 April 2016, the NSW Court of Appeal dismissed an appeal by Botany Bay City Council about the consideration by the Departmental Chief Executive of an amalgamation proposal with Rockdale City Council as referred by the Minister for Local Government.

The Minister had initiated the proposal in early January 2016. It was referred to the Chief Executive of the Office of Local Government (‘Departmental Chief Executive’) for examination and report. The Departmental Chief Executive appointed a delegate for the purpose of exercising those functions (‘Delegate’).

In March 2016, the Council lodged its own proposal with the Minister and requested that it be urgently referred to the Delegate and that certain specified matters be considered by the Delegate. The Council’s proposal was referred to the Departmental Chief Executive but the consideration of that proposal had not at the time of hearing been further progressed.

The Land and Environment Court proceedings commenced by the Council concerned whether the Departmental Chief Executive and the Delegate were required to have regard to the Council’s proposal in the examination and report of the Minister’s proposal. Pain J dismissed the action.


Divisions 2A and 2B of the Local Government Act 1993 (‘LG Act’) make provision for the amalgamation of Council areas.

Section 218A provides that the Governor may, by proclamation, amalgamate two or more areas into one or more new areas.

Section 218D provides that the function under section 218A may be exercised only after a proposal for the exercise of the function is dealt with under Division 2B, which sets out what must be done before areas can be amalgamated.

Section 218E relevantly provides that an amalgamation proposal may be made by the Minister or it may be made to the Minister by a council affected by the proposal.

Section 218F(1) provides that on making or receiving a proposal, the Minister must refer it for examination and report to the Boundaries Commission or to the Departmental Chief Executive.

Sections 263(1) and 218F(2) operate to require the Departmental Chief Executive to examine and report on any matter with respect to the boundaries of Council areas which may be referred to it by the Minister.

Section 263(3) sets out the factors to which regard must be had when considering any matter referred that relates to the boundaries of council areas.

Section 218F(7) relevantly provides that the Minister may recommend to the Governor that an amalgamation proposal be implemented with modifications arising out of the Departmental Chief Executive’s report and any comments by the Boundaries Commission on that report and with such other modifications as the Minister determines, but the Minister may not do so if of the opinion that the modifications constitute a new proposal.


The Council contended, firstly, that the Council’s proposal was a mandatory relevant consideration in the examination and report of the Minister’s proposal and, secondly, that there was, or would be, a denial of procedural fairness if the Council’s proposal was not so considered.

It was not contentious between the parties that the Council’s proposal had not been incorporated into the Delegate’s examination of the Minister’s proposal.

It was also not contentious that the Council proposal was a new proposal in that it proposed more than a mere modification of the Minister’s proposal and had been referred to the Departmental Chief Executive for separate examination and report.


The Court of Appeal dismissed the Council’s appeal with costs and in so doing generally agreed with the reasoning of Pain J in the Land and Environment Court.

The Court held that the phrase ‘any matter‘ in s263(1) is controlled by the phrase ‘which may be referred to it by the Minister‘, and that the matter must be ‘with respect to the boundaries of [council] areas‘.  Accordingly, that which falls within s 263 for examination and report is any matter with respect to boundaries referred by the Minister. In the present case, this was the Minister’s proposal.  It followed that the factors requiring consideration under s263(3) in relation to ‘any matter referred’ could only be in relation to the Minister’s proposal.

The Court rejected the Council’s contention that the Council’s proposal was encompassed within the terms of the delegation to the Delegate. It held that the functions of the Departmental Chief Executive delegated to the Delegate must be incidental to the examination and reporting function, and the new proposal made by the Council could not be properly considered as an incidental aspect of the Minister’s proposal.  It followed that the Departmental Chief Executive had not made a delegation to the Delegate in relation to the Council’s proposal and that proposal could not be considered by the Delegate.

For this reason also, the Court held that there could be no denial of procedural fairness by the Delegate in relation to the Council’s proposal by the Delegate failing to consider it.