Snatching defeat from the jaws of victory?

The old, heritage-listed Stella Maris Seamen's Mission in Darwin's CBD

The old, heritage-listed Stella Maris Seamen’s Mission in Darwin’s CBD

Northern Territory Labor Opposition Leader Delia Lawrie is a fearsome political warrior, a divisive figure who seldom compromises or takes a backward step. In many circumstances those are great qualities for a politician, but not always.  For my money the wise politician’s central credo was best summarised by the great Kenny Rogers:

You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run …

Every gambler knows
That the secret to survivin’
Is knowin’ what to throw away
And knowin’ what to keep
‘Cause every hand’s a winner
And every hand’s a loser
And the best that you can hope for is to die
in your sleep

Kenny’s words of wisdom were never so important for Delia Lawrie as now, when she’s contemplating whether to hang in as Labor leader in the face of an adverse Supreme Court decision, and whether to appeal that decision.

Many observers find it quite puzzling as to why Ms Lawrie decided to embark on those Supreme Court judicial review proceedings in the first place. After all, few if any Territorians even registered the fact that the Lawler Commission of Inquiry had even taken place let alone made somewhat adverse findings against Delia Lawrie. Certainly the general media and political view was that the Lawler Report was something of a damp squib that had sunk almost without trace, doing little or no damage either to Ms Lawrie or Labor in general.

The Lawler Report

The Report found:

  • that no-one had acted unlawfully;
  • that no Minister or MLA had sought nor gained any financial or other advantage from the Cabinet decision to offer a 10 year Crown Lease Term over the former Stella Maris Seamen’s Mission to Unions NT at a “peppercorn” rental; and
  • that section 12(3) of the Crown Lands Act gave the Minister express legislative authority to make a direct grant of a lease or even freehold title over Crown land to any particular person or entity (e.g. Unions NT) without calling for expressions of interest from possibly interested parties.

Commissioner Lawler also accepted that “the proposed lease 1 while the second is probably legally erroneous.2

In addition, the Commissioner recommended that the actions of both Ms Lawrie and then Lands Minister Gerry McCarthy should be referred to the Parliamentary Privileges Committee pursuant to the Legislative Assembly (Members’ Code of Conduct and Ethical Standards) Act 2008, even though none of the actions of either of them could even arguably be said to breach any of the provisions of the Members’ Code of Conduct.  Moreover, the suggestion that Ministerial behaviour as a member of the executive government, short of illegality, could constitute a breach of parliamentary privilege tends to indicate a fairly spectacular lack of understanding of the constitutional doctrine of separation of powers on Commissioner Lawler’s part.

Bulldozing heritage – the elephant in the room

But perhaps the most astonishing aspect of the Lawler Report is the Commissioner’s cavalier, almost off-handed dismissal of the actual reason why Cabinet regarded it as vital to secure the Stella Maris property from redevelopment before the possibly imminent return to government of the CLP in 2012:

Minister Lawrie maintained that this intervention was due to her concern that an incoming government could sell the site for commercial or residential high rise development … This concern and preference did not justify the decision that was ultimately made by Minister G McCarthy …

However, anyone who has lived in the Northern Territory for more than about five minutes is well aware of the CLP’s long and dishonourable track record of colluding in the demolition of heritage buildings:

  • In 1985 the CLP government demolished much of the heritage housing on Myilly Point to facilitate a huge proposed tourist development by a consortium headed by Lord McAlpine, although the development never happened and the site remains vacant land to this day.
  • In the 1990s the CLP government attempted to demolish the heritage-listed Old Alice Springs Gaol but was stymied by a last-minute Supreme Court injunction obtained by the National Trust.
  • The CLP then proceeded to amend the Heritage Conservation Act to empower the Minister to authorise demolition of heritage buildings for just about any reason he or she liked (the lack of such a power was what had allowed the National Trust to obtain an injunction).
  • As a result of those amendments, in 1999 the CLP government colluded successfully with the owners of the heritage-listed and much-loved Hotel Darwin (linked video a bit corny but worth watching) to authorise its demolition, again apparently to facilitate a proposed commercial redevelopment project. The National Trust again tried to obtain an injunction to prevent this heritage vandalism but failed because of the CLP’s anti-heritage legislative amendments.
  • In the same year the CLP government demolished the Old Supreme Court building to facilitate the construction of a new Parliamentary Palace, despite protests from its own Heritage Advisory Council.

The Henderson government’s expressed fear to Commissioner Lawler that an incoming CLP government would be likely to ignore and override heritage listing to demolish Stella Maris in favour of high-rise development, unless prevented from doing so, can hardly be regarded as unreasonable or fanciful in view of that inglorious anti-heritage history. Given the imminence of the fixed term 2012 election date, there simply wasn’t time for the normal open “expressions of interest” process to take place. The only way of protecting the property from demolition and redevelopment was to offer some form of reasonably secure title to a body (e.g. Unions NT) which could be trusted not to facilitate CLP heritage vandalism.

Judicial review? A silly decision

All in all, it is easy to see why Delia Lawrie was thoroughly unimpressed by the Lawler Report and regarded it as a transparent attempt to undertake a partisan mud-slinging exercise under the guise of an impartial quasi-judicial enquiry. However, the fact remains that it was a failed attempt at mud-slinging and Ms Lawrie would have been best advised to ignore and treat it with the contempt it thoroughly deserved. Her decision instead to institute expensive and inherently uncertain judicial review proceedings can only really be explained by her own single-minded, combative, “take no prisoners” personality.

Nevertheless, we can at least see why a person with Delia’s personal characteristics would have been tempted to sue.  She would certainly have received legal advice that Commissioner Lawler’s failure to honour a promise, to give her an opportunity to make submissions and defend herself if he ever formed a tentative adverse view about her actions, was a clear breach of the common law rules of procedural fairness.  Commissioner Lawler had written to Lawrie’s solicitor on 17 February 2014 in the following terms:

The preliminary evidence gathering stage will be concluded and the relevant materials examined. Then and only then will I be in a position to determine whether there may be grounds to make any adverse findings against any person or organisation. Should that eventuate, I will provide any such person or organisation with notice, all relevant materials, and opportunity to make submissions in relation to the matter.

In light of longstanding High Court and Privy Council precedents about the effect of such promises as a matter of natural justice,3 Ms Lawrie would have been entitled to feel reasonably confident that the judicial review proceedings would succeed.

A fatal three word slogan:  disengage, ignore and discredit

Lawrie could not have foreseen that the situation would soon be changed radically by what appears4 to have been a very significant tactical error by someone on her legal team.  Her lawyers filed the Plaintiff’s Statement of Facts Issues and Contentions on 24 September 2014.5  Among other things, it asserted:

The plaintiff and her legal representatives relied on the defendant’s statements in this letter 6 in determining how the plaintiff ought to participate in and contribute to the Inquiry.

There were three fundamental problems with this assertion:

First, it was completely unnecessary, because the case law7 clearly indicates that actual reliance on a promise of the sort that Commissioner Lawler made is not required.  Indeed natural justice rules are breached by failing to honour such a promise, even if an affected person like Ms Lawrie doesn’t know the promise was ever made!

Secondly, making the assertion allowed the defendant (Commissioner Lawler) to argue successfully before the Supreme Court that this claim of reliance, by both the lawyers and their plaintiff client on the promise in Lawler’s letter, overrode what would otherwise have been a complete immunity from disclosure of Lawrie’s legal advice provided by the doctrine of legal professional privilege.  By pleading reliance in that way, Lawrie and her lawyers had by their own actions put in contention the issue of their state of mind/belief about Lawler’s promise.  By so doing they had impliedly waived legal professional privilege in advice and communications between lawyers and client on that topic at least, and were required to produce all such advice and correspondence for inspection by Lawler’s lawyers.

Thirdly, and most devastatingly, the defendant’s inspection of those documents soon revealed that Lawrie’s assertion of reliance on Lawler’s promise was actually completely false. They had placed no reliance on it at all.  Instead they had concluded very early in the Inquiry that Commissioner Lawler was determined to find against Lawrie whatever they did, and that his Report would inevitably be “ugly”.  At least according to Southwood J’s findings in the Supreme Court, Lawrie therefore accepted legal advice that her best tactic in the circumstances was to abandon meaningful participation in the Inquiry and instead to “disengage, ignore and discredit” its proceedings. Her lawyers from that point onwards pursued precisely that tactic.  The effect of adopting and pursuing it, so Southwood J held, was to waive what may otherwise have been Lawrie’s entitlement as a matter of natural justice to have Lawler honour his promise before publishing an adverse Report against her.  Although Southwood J did not put it in quite these words, natural justice is just “fair play in action”.  If you decide to take your bat and ball home you’re no longer in the game and so questions about fair play become redundant.  Whether Southwood J is right about that will certainly be an issue on appeal should Lawrie decide to pursue one.

Whether she appeals or not, Delia Lawrie also faces a decision on whether to remain as Labor Opposition Leader with such a huge legal cloud hanging over her head. Of course, her own party colleagues may take that choice out of her hands.  Meanwhile, the CLP government (despite its own equally drastic leadership problems) is predictably doing all it can to capitalise on the situation and pile on the pressure.  Today’s NT News reveals that Attorney-General John Elferink has referred the matter to the Director of Public Prosecutions to examine whether Lawrie and her legal team may have engaged in a conspiracy to pervert the course of justice.

Telling the above story leads in my opinion to the conclusion that Delia Lawrie doesn’t deserve this fate, at least in a moral sense. Still, if she’d only listened to Kenny she would have known that the best that you can hope for is to die in your sleep.

8 The administrative law bias principles apply when the conduct or private interests of a government decision-maker might give rise to a reasonable apprehension of bias on the part of a person potentially adversely affected by that decision. The principles have no application in relation to bias in favour of a party where no other parties are involved (i.e. the Stella Maris situation).

2 The administrative law judicial review ground of unreasonableness only applies where a court can be satisfied that the decision was “so unreasonable that no reasonable decision-maker could possibly have reached it”. It is difficult to see how that state of satisfaction could be reached when proceeding by way of direct grant without expressions of interest was one of the four available options canvassed by the Department of Lands Cabinet Submission (albeit not the recommended option), nor where section 12 (3) of the Crown Lands Act gives the Minister express authority to make a direct grant in that way. This is clearly a question on which “reasonable minds might differ”, a situation in which an unreasonableness argument would be most unlikely to succeed.

3 Minister for Immigration & Ethnic Affairs v Teoh (1995) 183 CLR 273; Haoucher v Minister for Immigration & Ethnic Affairs (1990) 169 CLR 648; Kioa v West (1985) 159 CLR 550; Cole v Cunningham (1982) 151 CLR 342; Attorney General of Hong Kong v Ng Yuen Shiu 9 2 AC 629; Council of Civil Service Unions v Minister for the Civil Service 10 1 AC 374.

4 Although this is an observation unavoidably based on incomplete knowledge of what actually occurred.

5 See judgment of Southwood J at 11.

7 Especially Minister for Immigration & Ethnic Affairs v Teoh (1995) 183 CLR 273 and Haoucher v Minister for Immigration & Ethnic Affairs (1990) 169 CLR 648.

  1. of Stella Maris to Unions NT) did not have any value as a saleable interest in real property and could not have been sold to generate any funds”, not least because it is an old heritage building with a heavy annual maintenance cost, severe restrictions on convenient public access (it is on the side of a very steep hill), and even more severe restrictions on permitted renovations given its heritage listing. For example, one suspects that it would be quite difficult to effectively air-condition the premises without breaching heritage covenants.

    How much is Stella Maris worth?

    Nevertheless, the Report sought to create a public impression that Unions NT had somehow obtained some special and unfair advantage through the direct lease grant, by citing an Australian Valuation Office assessment which estimated that the property might conceivably be leased to a commercial tenant for $60,000 per year.  However, the Commissioner failed to take into account the other side of the ledger, namely the likely annual cost of maintaining the property in accordance with its heritage status. Unlike a normal commercial lease (where the landlord bears maintenance costs), the lease offered to Unions NT required it as tenant to meet maintenance costs.  Despite submissions by Ms Lawrie, the Commissioner uncritically accepted an assertion by the CEO of the Department of Lands and Planning that any further inquiries on likely maintenance and capital costs on the site were “not possible”.  Commissioner Lawler chose not to undertake any further enquiries on this seemingly vital aspect of the true commercial value of the Stella Maris property, despite the fact that real estate agents and property managers compile assessments of the future maintenance costs of commercial and residential apartment buildings on an almost daily basis. Why wasn’t it “possible” for Lands and Planning to do so?

    The Myilly Point precedent ignored

    However, even without undertaking such an exercise it wouldn’t have been difficult for Commissioner Lawler to reach a realistic conclusion about the net commercial value of  the Stella Maris property.  After all, in the same year (2012) as the Henderson government decided to grant a lease to Unions NT at a “peppercorn” rental, the federal government decided to make a direct grant of freehold title of the two Myilly Point heritage houses it owned to the National Trust NT at a zero sale price.  The Howard government had previously contemplated doing likewise in 2002 but hadn’t reached any conclusion.  As with the Stella Maris lease offered to Unions NT, the Myilly Point houses had previously been leased to the National Trust for many years at a ”peppercorn” rental in recognition of the high annual maintenance cost involved with preserving heritage buildings in the extreme climate of the monsoonal tropics.

    It is noteworthy (although not even mentioned by Commissioner Lawler) that as far as can be ascertained there was no process of calling for public expressions of interest either before the decision to make a direct grant of a 25 year lease or ultimately to transfer freehold title to the National Trust, even though the Myilly Point houses are clearly much more valuable than Stella Maris. Apparently in Commissioner Lawler’s mind there is no problem at all with direct (and free) land grants to a body like the National Trust, but something inherently dodgy about a similar grant to Unions NT.  The reality was that there was nothing even slightly unusual or improper about the lease deal offered to Unions NT.

    Bias? Unreasonableness? Breach of privilege?

    Commissioner Lawler also found that Ms Lawrie had been guilty of “bias” and that Cabinet’s decision to offer a direct lease grant to Unions NT would be likely to be set aside by a court as “unreasonable”.  The first of those propositions is legally meaningless[1[]

  2. 2[][]
  3. 3[][]
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  5. 5[][]
  6. that is, Commissioner Lawler’s letter of 17 February 2014[]
  7. 6[][]
  8. 1[]
  9. 1983[]
  10. 1985[]
  11. 222[]

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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