CHIEF EXECUTIVE OFFICER, DEPARTMENT OF LOCAL GOVERNMENT AND COMMUNITIES and SCAFFIDI
[2017] WASAT 67 (S)
•4 SEPTEMBER 2017
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : LOCAL GOVERNMENT ACT 1995 (WA) CITATION : CHIEF EXECUTIVE OFFICER, DEPARTMENT OF LOCAL GOVERNMENT AND COMMUNITIES and SCAFFIDI [2017] WASAT 67 (S) MEMBER : JUSTICE J C CURTHOYS (PRESIDENT)
MS C WALLACE (SENIOR MEMBER)
MS L EDDY (MEMBER)HEARD : 14 AND 21 JUNE 2017 DELIVERED : 4 SEPTEMBER 2017 FILE NO/S : DR 212 of 2016 BETWEEN : CHIEF EXECUTIVE OFFICER, DEPARTMENT OF
LOCAL GOVERNMENT AND COMMUNITIES
ApplicantAND LISA MICHELLE SCAFFIDI
RespondentCatchwords: Disciplinary penalty - Local Government Act - Serious breaches - Failure to comply with statutory obligations to lodge annual return and disclose relevant gifts and contributions to travel - Purpose of civil penalties - Protection of public and maintenance of standards of conduct - Accountability and transparency by elected councillors - Gross carelessness - Leadership role - Applying the totality principle - Disqualification from holding office for a period
[2017] WASAT 67 (S)
Legislation:
Local Government Act 1993 (WA), s 449, s 449(1A), s 451, s 482(1)
Local Government Act 1995 (WA), s 1.3, s 2.8(1), s 2.27(9), s 4.86, s 4.86,
s 4.87(1), s 4.89(1), s 4.90, s 4.91, s 5.65, s 5.67, s 5.76, s 5.78, s 5.89, s 8.38,
s 8.42(1), s 8.43, s 5.105, s 5.108(3), s 5.109(2), s 5.110, s 5.117, s 5.121, Pt 5,Div 9
Result:
Respondent disqualified from holding office as a member of a council for
18 months
Summary of Tribunal's decision:
These reasons for decision determined the appropriate civil penalty for the Lord Mayor of Perth, who failed to comply with her statutory obligations to lodge an annual return and to disclose relevant gifts and contributions to travel, thereby committing multiple serious breaches of her reporting obligations under the Local Government Act 1995 (WA) (LG Act).
In considering the factors that were relevant to an appropriate penalty for those breaches, the Tribunal determined that the primary purpose of civil penalties in relation to breaches of s 5.76 and s 5.78 of the LG Act is essentially protective; that they are designed to ensure transparency and accountability by councillors so as to protect the public and promote compliance with the statutory obligations imposed on councillors.
The fact that a breach of s 5.76 and s 5.78 of the LG Act may be the subject of a criminal prosecution is indicative of the seriousness with which Parliament regards such breaches. Proceeding by way of a civil penalty does not reduce the seriousness of those breaches.
In determining penalty, the Tribunal also accepted that certain of the factors relevant to professional disciplinary proceedings provided guidance to a proper penalty under the LG Act because both professional disciplinary proceedings and LG Act proceedings against councillors have disciplinary and protective functions.
The breaches occurred over the period from the 2007/2008 annual return to the 2013/2014 annual return. There were a significant number of serious breaches over an extensive period of time. Being first elected to the council in 2000, the Lord Mayor had ample opportunity to make herself aware of the obligations under the LG Act which apply to all councillors, not just to the Lord Mayor.
[2017] WASAT 67 (S)
The evidence before the Tribunal established the fact that gifts and contributions were being provided by third parties and the need to include those gifts and contributions to travel were matters that the Lord Mayor was aware of, even when they were received in her capacity as Lord Mayor. She had completed annual returns consistent with that awareness and had been specifically informed of her obligations by the City of Perth Council's Chief Executive Officer on two occasions. It was plain in the Lord Mayor's oral evidence that she simply forgot her obligations, or didn't turn her mind to them when she was completing her annual returns and therefore undermined one of the fundamental aspects of the LG Act. The Tribunal concluded that this was not a case of intentional wrongdoing but rather that the Lord Mayor breached the LG Act with gross carelessness.
In the context of assessing penalty, the Tribunal also regarded as important, the fact that the Lord Mayor has a leadership role. The need for general deterrence requires that those in leadership roles are penalised so as to ensure that those who occupy leadership positions comply with the LG Act and use their leadership position to encourage and assist others to comply.
The Tribunal was not satisfied that the Lord Mayor had any genuine insight into her conduct or any proper understanding of her statutory obligations, and is not satisfied that it can have any confidence that the Lord Mayor would comply with her obligations in the future. Therefore it determined that a period of suspension was simply inadequate.
In all of the circumstances of this case, the Tribunal had no option but to disqualify the Lord Mayor of Perth from holding office for a period of 12 months in respect of the breaches admitted by the Lord Mayor. A further six month period of disqualification from holding office was imposed in respect of the remaining serious breaches. The period of disqualification was reached by having regard to the number of serious breaches and the other circumstances relevant to penalty as outlined above but the period has been reduced to have regard to what is an appropriate overall penalty in the circumstances.
Lastly, the Tribunal did not impose a penalty publicly censuring the Lord Mayor for her breach of s 5.76 of the LG Act having regard to the totality of the overall penalty being imposed and the inevitable media attention such a penalty will receive. In those circumstances, an additional penalty requiring the Lord Mayor to be publicly censured for that breach was unnecessary.
[2017] WASAT 67 (S)
Category: B
Representation:
Counsel:
Applicant : C. Thatcher & D.E. Leigh Respondent : S. Penglis & M. Tannock Solicitors:
Applicant : State Solicitor's Office Respondent : Squire Patton Boggs Case(s) referred to in decision(s):
A Practitioner v The Medical Board of Western Australia [2005] WASC 198
Australian Communications and Media Authority v Radio 2UE Sydney Pty Ltd
(No 2) 2009 FCA 754
Chief Executive Officer, Department of Local Government and Communities
and Scaffidi [2017] WASAT 67
Commonwealth of Australia v Director, Fair Work Building Industry
Inspectorate [2015] HCA 46
Griekspoor v Scott [2000] WASCA 419
Legal Profession Complaints Committee and Wells [2014] WASAT 112 (S)
Medical Board of Australia and Lal [2017] WASAT 23Mehajer v Chief Executive of the Office of Local Government
[2014] NSWSC 1804
Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd
[2004] FCAFC 72; [2004] ATPR 41-993
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission
[1996] FCA 1134
Office of Local Government v Councillor Campbell of Murray Shire Council
[2015] NSWCATOD 129
Office of Local Government v Councillor Genevieve Campbell of Murray Shire
Council [2016] NSWCATOD 8
Stirling v Legal Services Commissioner [2013] VSCA 374
Tavelli v Johnson (Unreported, WASC, Library No 960693, 25 November
1996)
[2017] WASAT 67 (S)
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
1 On 9 May 2017, in Chief Executive Officer, Department of Local Government and Communities and Scaffidi [2017] WASAT 67 (Scaffidi), the Tribunal found that the Lord Mayor of Perth, Ms Lisa Michelle Scaffidi, failed to comply with her obligation to lodge an annual return and to disclose relevant gifts and contributions to travel and thereby committed 45 serious breaches of her reporting obligations under the Local Government Act 1995 (WA) (LG Act).
The relevant legislation
Primary provisions
Section 5.76 of the LG Act - Annual returns
(1)
Each year, a relevant person other than the CEO must lodge with the CEO an annual return in the prescribed form by 31 August of that year.
(2) Each year, a CEO must lodge with the mayor or president an
annual return in the prescribed form by 31 August of that year.Penalty applicable to subsections (1) and (2): $10 000
or imprisonment for 2 years.
Section 5.78 of the LG Act - Information to be disclosed in returns
(1)
A relevant person must comply with the requirements of sections 5.79, 5.80, 5.81, 5.84, 5.85 and 5.86 in relation to the disclosure of information in a return.
Penalty: $10 000 or imprisonment for 2 years[.]
Section 5.105 of the LG Act - Breaches by council members
2 The distinction between a 'minor' breach and a ‘serious' breach is set
out in s 5.105 of the LG Act.
(1) A council member commits a minor breach if he or she contravenes -
(a) a rule of conduct under section 5.104(1); or (b)
a local law under this Act, contravention of which the regulations specify to be a minor breach.
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(2) A minor breach is a recurrent breach if it occurs after the council member has been found under this Division to have committed 2 or more other minor breaches. (3) A council member who commits any offence under a written law, other than a local law made under this Act, of which it is an element that the offender is a council member or is a person of a description that specifically includes a council member commits a serious breach. 3 The difference between a 'minor' breach and a 'serious' breach is reflected in the range of penalties for those breaches.
4 Subsections 5.110(6)(b) and (c) of the LG Act provide that a minor
breach:
... is to be dealt with by -
(b) ordering that -
(i)
the person against whom the complaint was made be publicly censured as specified in the order; or
(ii)
the person against whom the complaint was made apologise publicly as specified in the order; or
(iii)
the person against whom the complaint was made undertake training as specified in the order;
or
(c) ordering 2 or more of the sanctions described in paragraph (b). 5 Section 5.117 of the LG Act provides
(1) If, on an allegation under section 5.116(2), the State Administrative
Tribunal finds that a person committed a serious breach, it may -
(a) order that -
(i)
the person against whom the allegation was made be publicly censured as specified in the order; or
(ii)
the person against whom the allegation was made apologise publicly as specified in the order; or
(iii)
the person against whom the allegation was made undertake training as specified in the order; or
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(iv) the person against whom the allegation was made is suspended for a period of not more than 6 months specified in the order; or
(v) the person against whom the allegation was made is, for a period of not more than 5 years specified in the order, disqualified from holding office as a member of a council;
or
(b)
order 2 or more of the sanctions described in paragraph (a).
(2) An order described in subsection (1)(a)(iv) or (v) may be expressed
in such a way that the order -
(a)
only takes effect if, on finding that the person subject to the order has not complied with a condition specified in the order, the State Administrative Tribunal directs under subsection (7) that the order take effect; and
(b)
lapses if it has not taken effect within a period specified in the order,
and an order so expressed is called a suspended order. (3) The period referred to in subsection (2)(b) cannot exceed 2 years[.]
Secondary provisions
6 Section 5.65 of the LG Act provides:
(1)
A member who has an interest in any matter to be discussed at a council or committee meeting that will be attended by the member must disclose the nature of the interest -
(a) in a written notice given to the CEO before the meeting; or (b) at the meeting immediately before the matter is discussed. Penalty: $10 000 or imprisonment for 2 years.
(2) It is a defence to a prosecution under this section if the member
proves that he or she did not know -
(a) that he or she had an interest in the matter; or (b)
that the matter in which he or she had an interest would be discussed at the meeting.
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(3) This section does not apply to a person who is a member of a
committee referred to in section 5.9(2)(f).7 Section 8.42(1) of the LG Act provides:
If in any proceedings brought under this Division, the court before which the proceedings are brought is satisfied that the person against whom the proceedings have been brought is personally liable, under section 8.38, to pay an amount misapplied to a local government, that court may order that person to pay an amount of money stated in the order of the court and that order is enforceable in all respects as a final judgment of the court.
8 Section 8.43 of the LG Act provides:
(1)
If an order has been made under section 8.42(1), the person against whom the order is made is disqualified from being a member of a council for a period of 5 years beginning on the date of the order, but the court making that order may, if it is satisfied that in the circumstances of the case it is appropriate to do so
(a)
order that the period of disqualification will be a period of less than 5 years that is specified in the order and begins on a date specified in the order; or
(b) order that the person is not disqualified.
(2) If at any time after a notice is given under section 8.40(1) but before a court makes an order under section 8.42(1), the person to whom the notice is given pays to the local government concerned or an authorised person part or all of the amount stated in the notice, the Departmental CEO may apply to a court before which an action to recover the amount so paid has been or could have been brought for an order that the person be disqualified from being a member of a council. (3) A court to which an application is made under subsection (2) may, if it is satisfied that in the circumstances of the case it is appropriate to do so, order that the person is disqualified from being a member of a council for a period (not exceeding 5 years) that is specified in the order and begins on a date specified in the order. 9 Section 5.89 of the LG Act provides:
A person must not, in relation to a disclosure under section 5.65, 5.70, 5.71, 5.82 or 5.83 or a return lodged under section 5.75 or 5.76, provide information in written or oral form that the person knows to be -
(a) false or misleading in a material particular; or (b) likely to deceive in a material way.
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Penalty: $10 000 or imprisonment for 2 years.
The purpose of penalties imposed under the LG Act
10 In determining the factors that are relevant to an appropriate penalty
for Ms Scaffidi's breaches, it is important to determine the primary
purpose of such penalties.11 In Scaffidi at [76] the Tribunal stated:
The disclosure regime provided by the LG Act in relation to relevant persons minimises the risk of corruption or improper influence by requiring disclosure and thus accountability by relevant persons. It also promotes public confidence in the regime by providing for transparency[.]
12 In Office of Local Government v Councillor Genevieve Campbell of Murray Shire Council [2016] NSWCATOD 8 (Campbell Penalty) at [14(2)] the Tribunal explained that its jurisdiction when considering a breach of the Local Government Act 1993 (NSW) (the LG NSW Act):
... is essentially protective: by denouncing the conduct and imposing appropriate sanctions under the Act, public confidence in the institutions of local government is (at least) maintained, and general deterrence to others who might be considering similar conduct is provided.
13 Contravention of both s 5.76 of the LG Act (failure to lodge an
annual return) and s 5.78 (failure to disclose relevant information in an
annual return) can sound in criminal or civil penalties.14 The purpose of criminal penalties is more obviously punitive.
The purpose of civil penalties is generally the protection of the public and the maintenance of standards of conduct.
15 The intent of the LG Act is specified in s 1.3 to be:
(1) This Act provides for a system of local government by -
(a)
providing for the constitution of elected local governments in the State; and
(b) describing the functions of local governments; and (c) providing for the conduct of elections and other polls; and (d)
providing a framework for the administration and financial management of local governments and for the scrutiny of their affairs.
(2) This Act is intended to result in -
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(a) better decision making by local governments; and (b) greater community participation in the decisions and affairs of local governments; and (c) greater accountability of local governments to their communities; and (d) more efficient and effective local government. (3) In carrying out its functions a local government is to use its best endeavours to meet the needs of current and future generations through an integration of environmental protection, social advancement and economic prosperity.
16 The provisions in the LG Act referred to above in relation to the
determination that a person has committed a breach and the penalties available are contained in Div 9 of Pt 5 the LG Act, which is headed 'Conduct of certain officials'. This division contains provisions relating to the preparation or adoption of a code of conduct to be observed, the prescribing of rules or regulations in relation to conduct of council members, the ability for any person to complain that a breach has occurred, how complaints are to be dealt with and providing punishment options where breaches are found to have occurred. There is a requirement for a register to be kept of certain complaints: s 5.121. Determinations of the standards panel and the Tribunal are public.
17 Their Honours French CJ, Kiefel, Bell, Nettle and Gordon JJ in
Commonwealth of Australia v Director, Fair Work Building Industry
Inspectorate [2015] HCA 46 (Commonwealth of Australia) stated, at [24]:
In essence, civil penalty provisions are included as part of a statutory regime involving a specialist industry or activity regulator or a department or Minister of State of the Commonwealth ('the regulator') with the statutory function of securing compliance with provisions of the regime that have the statutory purpose of protecting or advancing particular aspects of the public interest[.]
18 Division 9 of Pt 5 of the LG Act could equally be described in such
a way.
19 Given that the relevant provisions in the LG Act provide for a
criminal penalty and a civil penalty, the primary purpose of the civil penalties in relation to breaches of s 5.76 and s 5.78 of the LG Act is essentially protective. '[W]hereas criminal penalties import notions of
retribution and rehabilitation, the purpose of a civil penalty, … is
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primarily if not wholly protective in promoting the public interest in
compliance[.]': Commonwealth of Australia at [55].20 Accordingly, the appropriate civil penalties are to be determined on the basis that the primary purpose of such penalties is protective.
The seriousness of a breach of s 5.76 and s 5.78 of the LG Act
21 In determining an appropriate civil penalty, the first matter that
requires consideration is the seriousness of the penalties available for a breach of s 5.76 and s 5.78 in terms of the range of penalties available under the LG Act.
22 The hierarchy of civil penalties is:
a) public censure (s 5.110(6)(b)(i), s 5.117(1)(a)(i)) b) public apology (s 5.110(6)(b)(ii), s 5.117(1)a)(ii)) c) training (s 5.110(6)(b)(iii), s 5.117(1)(a)(iii)) d) a suspended order in relation to a period of suspension (s 5.117(2)) e) a suspension for a period of not more than six months (s 5.117(1)(a)(iv)) f) a suspended order in relation to a discretionary disqualification (s 5.117(2)) g) discretionary disqualification for a period not exceeding five years (s 5.117(1)(a)(v)) 23 A disqualification under s 5.117(1)(a)(v) is not the most serious
penalty under the LG Act when compared to a disqualification under
s 8.43 for which the starting point is a disqualification of five years.24 A range of criminal penalties are available for a breach of the LG Act. For example s 4.91 of the LG Act provides:
(1) A person who -
(a)
forges or fraudulently defaces or destroys a ballot paper or nomination paper; or
(b) fraudulently puts a ballot paper into a ballot box; or
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(c)
wilfully destroys, takes, opens or otherwise interferes with any ballot box or ballot papers without authority; or
(d) personates any elector, commits an offence.
Penalty: $10 000 or imprisonment for 2 years.
(2) A person who -
(a) supplies a ballot paper without authority; or (b) is in possession of an unauthorised ballot paper; or (c) votes more than once in an election; or (d) marks a ballot paper without authority, commits an offence. Penalty: $5 000 or imprisonment for one year. (3) A person who fraudulently leaves a polling place with a ballot
paper commits an offence.Penalty: $2 000. 25 The maximum criminal penalty for a breach of s 5.76 is $10,000 or
imprisonment for two years. This is a fairly common penalty under the LG Act, for example, s 4.85, s 4.86, s 5.65 and s 5.67. This is the maximum penalty that can be imposed under the LG Act.
26 Other maximum criminal penalties under the LG Act include:
$5,000 or imprisonment for one year for a breach of s 2.27(9) for acting as a member of council while disqualified and under s 4.90 for making a false statement relating to an election; a $2,000 fine for canvassing in or near polling places under s 4.89(1) or for publishing unauthorised electoral material under s 4.87(1).
27 A limitation period is imposed for complaints of minor breaches (see s 5.108(3) and s 5.109(2)) but not for a serious breach.
28 The maximum available penalties, both civil and criminal, for a
breach of s 5.76 and s 5.78 and the absence of a limitation provision indicate that the Parliament regards breaches of these sections as at the higher end of seriousness in considering breaches of the LG Act.
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29 The fact that a breach of s 5.76 and s 5.78 of the LG Act may be the
subject of a criminal prosecution is indicative of the seriousness with which Parliament regards such breaches. Proceeding by way of a civil penalty does not reduce the seriousness of those breaches.
Penalties under other Acts
30 The Tribunal does not accept that it is appropriate to have regard to
other possible offences under other Acts, for example the Criminal Code. It is appropriate to consider the penalties within the four corners of the LG Act in considering the relative statutory seriousness of the offences.
31 Ms Scaffidi makes much of the fact that her conduct was not corrupt
(Scaffidi penalty submissions paragraph 2) and that it is not suggested that any gift or contribution to travel was corrupt or an improper attempt to exact influence (Scaffidi penalty submissions paragraph 3). However, those submissions are irrelevant. Had Ms Scaffidi's conduct been corrupt or had there been corruption or an attempt to exert improper influence, then Ms Scaffidi could have faced charges under Chapter XIII of the Criminal Code and faced penalties of up to seven years imprisonment (s 83). Similarly, if there had been a deliberate falsification of records, the penalty could also have been up to seven years imprisonment (s 85).
32 The purpose of s 5.76 and s 5.78 of the LG Act is to reduce the
possibility of corruption by ensuring accountability and transparency; it is
not to punish corruption or attempts to exert improper influence.
The relevant principles in determining an appropriate penalty
33 The CEO submitted that the following principles are applicable to the determination of an appropriate penalty:
...
4. The Tribunal has the power to deal with certain decisions of 'vocational regulatory bodies'. As implied by s 11(4) of the State Administrative Tribunal Act 2004 (WA) (SAT Act). The Tribunal's jurisdiction in this regard is conferred by other enabling Acts. For example, see s 40(2) of the Architects Act 2004 (WA). A vocational regulatory body is (SAT Act, s 3(1)):
a body or person which or who, under an enabling Act prescribed by regulations for the purposes of this definition (a vocational Act), exercises control over a person's capacity to lawfully pursue a vocation, but does not include the Tribunal.
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5. Schedule 1 of the State Administrative Tribunal Regulations 2004 (WA) provides a list of enabling Acts for the purposes of the definition of 'vocational regulatory body' in s 3(1) of the SAT Act. (Schedule 1 takes effect pursuant to r 4).
6. The Act is not one of the enabling Acts listed in Schedule 1, and the proceedings presently before the Tribunal are not strictly disciplinary proceedings in the context of the regulation of a profession. Notably, council members do not require qualifications (other than being elected) to assume their position.
7. Nevertheless, the [CEO] contends the principles governing the imposition of penalty in disciplinary proceedings should be applied in this case on the basis that these proceedings share a number of similarities with disciplinary proceedings. Those similarities include that:
a. the Act refers disciplinary matters arising out of serious breaches by council members to the Tribunal to be determined (Section 5.116(3) in this instance) in a manner similar to referrals by vocational regulatory bodies (For example, s 57 of the Architects Act 2004 (WA) and s 25 of the Employment Agents Act 1976 (WA)); b. the jurisdiction conferred on the Tribunal allows for imposition of various civil penalties, with the most serious penalty being the disqualification of the relevant council member from holding office (being analogous to the cancellation of the registration of a person in vocational proceedings); c. the matter pertains to the conduct of a member of a body (in the narrow sense, the City of Perth (City), in the broader sense, the mayor and councillor of a local government), who has the benefit of significant privileges as a result of her membership of that body; and d. the public has an interest in ensuring that members of that body act in a manner which is transparent, accountable and in accordance with the public interest. 8. The principles relevant to the imposition of penalty in disciplinary proceedings are well known. Fundamentally, the object of disciplinary proceedings is the protection of the public and the maintenance of proper professional standards. The maintenance of those standards is in and of itself conducive to the protection of the public (Paridis v Settlement Agents Supervisory Board [2007] WASCA 97, [25] (Buss JA)).Thus the impact of a penalty imposed on a person subject to disciplinary proceedings is necessarily a secondary consideration (Legal Profession
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Complaints Committee v Wells [2014] WASAT 112(S), [22] (Tribunal)). For the same reasons, punishment of a person is not an object of disciplinary proceedings (Craig v Medical Board of South Australia (2001) 79 SASR 545, [43] (Doyle CJ), cited in Medical Board of Australia v Woollard [2012] WASAT 209 (S), [9] (Tribunal)) and such penalties are necessary to 'maintain the high standards and good reputation of the profession generally and in the eyes of the community' and to satisfy the 'need to deter others who may be like minded to transgress in the future' (Jemielita v Medical Board of Western Australia, unreported, WASC Library No 920584, 13 November 1992), cited in Medical Board of Australia v Woollard [2012] WASAT 209 (S), [8] (Tribunal)).
34 The CEO further submitted:
10.
In determining an appropriate sanction in disciplinary proceedings, the following matters (taken from a case involving legal practitioners, although applicable mutatis mutandis) may require consideration (Legal Profession Complaints Committee v Wells [2014] WASAT 112(S), [20] (Citations omitted)):
a.
any need to protect the public against further misconduct by the person;
b.
the need to protect the public through general deterrence of other persons from similar conduct;
c.
the need to protect the public and maintain public confidence in the profession by reinforcing high professional standards and denouncing transgressions and thereby articulating the high standards expected of the profession, such that even where there may be no need to deter a person from repeating the conduct, the conduct is of such a nature that the Tribunal should give an emphatic indication of its disapproval;
d.
in the case of conduct involving misleading conduct, including dishonesty, whether the public can place reliance on the word of the person;
e.
whether the person has breached any Act; Regulations; Guidelines or Codes of Conduct, issued by the relevant professional body; and whether the person has done so knowingly
f.
whether the person's conduct demonstrated incompetence, and if so, to what level;
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g. whether or not the incident was isolated such that the Tribunal can be satisfied of the person's worthiness or reliability for the future; h. the person's disciplinary history; i. whether or not the person understands the error of his or her ways, including an assessment of any remorse and insight (or a lack thereof) shown by the person, since a person who fails to understand the significance and consequences of misconduct is a risk to the community;
j. the desirability of making available to the public any special skills possessed by the person; k. the person's personal circumstances at the time of the conduct, and of imposing sanction. However, the weight given to personal circumstances cannot override the Tribunal's obligation to provide appropriate protection of the public interest in the honesty and integrity of relevant persons and in the maintenance of proper standards of the office; and l. the Tribunal may consider any other matters relevant to the person's fitness to continue to 'practise' and other matters which may be regarded as aggravating the conduct or mitigating its seriousness. However, mitigating factors such as no previous misconduct or service in the office are of considerably less significance than in the criminal process because the jurisdiction is protective, not punitive. 35 In summary, counsel for Ms Scaffidi submitted at the penalty hearing (T:117-128; 21.06.17) that:
1) This matter is not a professional disciplinary matter.
Under the legislation, the CEO did not choose to seek punishment for the conduct (to deter others of replicating conduct that has been the subject of proceedings in another court) but rather sought to have the Tribunal impose a penalty upon Ms Scaffidi.
2) The authorities dealing with the regulation of professions provide no more than general guidance in this matter, because of the different nature of the legislation under which those cases operate. Therefore they should not be applied in this case for the following reasons:
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a) Cases dealing with the conduct of councillors concern individuals who have been elected to office by the constituents. Cases dealing with the regulation of professions do not. b) Unlike a profession, there are no qualifications required in order to hold office as a councillor. The absence of the requirement of any qualifications means the absence of any requirement of any education or practical training. This is relevant when determining the culpability in a penalty context of Ms Scaffidi's case where, as the Tribunal has noted, these provisions have never been considered before.
c) The Tribunal needs to determine an appropriate penalty of someone 'who hasn't had the benefit, simply because it doesn't exist, of formal education in regard to qualifications to become a councillor. There's no practical training or continuing practical education requirements'.
Therefore it would be fundamentally wrong in principle for the Tribunal to consider Ms Scaffidi's conduct in the same way and at the same standard and adopting the same approach and applying all the principles that the Tribunal would if disciplining a professional.
36 Ms Scaffidi's submission at paragraph 32 in relation to what was the correct approach to determining the appropriate penalty in this case was:
[T]he sole basis upon which an appropriate penalty in this matter should be determined is by reference to the need to publicly demonstrate that those who do not properly comply with 'the disclosure regime mandated by the LG Act' which exists for 'the prevention of corruption or improper influence by a councillor' [75] will be penalised in a proportionate manner (ie, general deterrence).
37 In Office of Local Government v Councillor Campbell of Murray Shire Council [2015] NSWCATOD 129 (Campbell Breach) at [4], the Tribunal stated:
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This Tribunal derives jurisdiction from s 482 of the Act. The jurisdiction is disciplinary and protective in nature, in a similar fashion to the discipline of professionals such as lawyers and medical practitioners: compare Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 680 at 637-8; NSW Bar Association v Meakes [2008] NSWCA 340 at [114].
38 The Tribunal accepts that the principles referred to in paragraph 8 of
the CEO's submissions are broadly analogous because they share a common protective function with breaches of the LG Act. The major difference between the two is that, rather than maintaining the high standards and good reputation of the profession generally and in the eyes of the community, penalties under s 5.76 and s 5.78 of the LG Act are designed to ensure transparency and accountability by councillors so as to protect the public and promote compliance with the statutory obligations imposed on councillors.
39 Those factors relevant to professional disciplinary proceedings
identified in Legal Profession Complaints Committee and Wells [2014] WASAT 112(S) (Wells) that are not relevant to LG Act proceedings are those which relate only to a profession, for example, making a person's skills available - see for example Wells (j).
The relevance of a councillor's election
40 Paragraph 11 of the CEO's submissions stated that:
Notwithstanding the above, [CEO] accepts that unique considerations arise in relation to disciplinary proceedings concerning members of local government, because of the fact that such members are elected to office in order to represent their constituents.
41 While Ms Scaffidi disagreed that the principles applicable to
determining a disciplinary penalty in relation to a professional were applicable in this situation, she agreed with this aspect of the CEO's submissions.
42 The relevance of the fact that councillors are elected representatives
was considered in Mehajer v Chief Executive of the Office of Local
Government [2014] NSWSC 1804 (Mehajer).43 Section 449 of the Local Government Act 1993 (NSW) (LG Act NSW) provided:
Returns disclosing interests of councillors and designated persons
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(1) A councillor or designated person must complete and lodge with the general manager, within 3 months after becoming a councillor or designated person, a return in the form prescribed by the regulations. (1A) A person must not lodge a return that the person knows or ought
reasonably to know is false or misleading in a material particular.(2) A person need not lodge a return within the 3-month period after becoming a councillor or designated person if the person lodged a return in that year or the previous year or if the person ceases to be a councillor or designated person within the 3-month period. (3) A councillor or designated person holding that position at 30 June in any year must complete and lodge with the general manager within 3 months after that date a return in the form prescribed by the regulations. (4) A person need not lodge a return within the 3-month period after 30 June in a year if the person lodged a return under subsection (1) within 3 months of 30 June in that year. (5) Nothing in this section prevents a councillor or designated person
from lodging more than one return in any year.(6) Nothing in this section or the regulations requires a person to disclose in a return lodged under this section an interest of the person's spouse or de facto partner or a relative of the person. 44 Mr Mehajer was elected as a councillor to Auburn City Council in September 2012.
45 Mr Mehajer's conduct leading to a breach of s 449 of the
LG NSW Act was set out in Adam J's reasons at [8] where he recited the
Tribunal's reasons:The Tribunal accepted the submission by the Chief Executive as to the defects -
'[24] ... [The 2012 return was] deficient in a number of significant areas. The particulars omitted were matters that Clr Mehajer was aware of: he had numerous real estate interests that were not disclosed; he knew he had income from rental properties that were not disclosed; he knew he was likely to receive income from his employment that was not disclosed; he knew he was likely to receive consultancy fees that were not disclosed; he knew he was a potential beneficiary of a family trust but this was not disclosed; he knew that he was likely to receive income by way of dividends but this was not disclosed; he knew he held shares in corporations but
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this was not disclosed; and he knew that he held positions in
corporations but they were not disclosed.[25] The complaints about the 2013 return were more limited: there was a failure to disclose a Castle Hill property, positions in a number of corporations, the correct address for corporations in which the councillor held a position, and the failure to provide an address for one of the corporations.'
46 Mr Mehajer admitted that he had breached s 449(1A) of the LG Act
NSW. On 29 May 2014, the Occupational Division of the Civil and Administrative Tribunal of New South Wales suspended Mr Mehajer from office for one month because of his breach.
47 Section 482(1) of the LG Act NSW provided:
(1) The Civil and Administrative Tribunal may, if it finds a complaint
against a councillor is proved:
(a) counsel the councillor, or (b) reprimand the councillor, or (c) suspend the councillor from civic office for a period not exceeding 6 months, or (d) disqualify the councillor from holding civic office for a period not exceeding 5 years, or (e) suspend the councillor's right to be paid any fee or other remuneration, to which the councillor would otherwise be entitled as the holder of the civic office, in respect of a period not exceeding 6 months (without suspending the councillor from civic office for that period).
48 The Tribunal's findings were set out at [9] and [10] of Mehajer:
[9] The Tribunal noted a number of matters in mitigation - '[28] There are a number of factors that should be taken into account in favour of the Councillor. He was newly elected and apparently unfamiliar with the statutory scheme of disclosure. He consented to being interviewed by Divisional Investigators when not compelled to attend and otherwise co-operated with the investigation. The Chief Executive accepted that he had taken responsibility for his actions by acknowledging the breaches of s449(1A). In addition, a number of character references were presented to the Tribunal: they spoke of considerable work within his community and for
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charitable causes and the high esteem in which he was
held within the community generally.'[10] The Tribunal decided -
'[29] Giving full weight to these favourable factors the Tribunal is, nevertheless, unable to conclude that a mere reprimand is an appropriate outcome. Notwithstanding his newness to the office of councillor, his duty was to familiarise himself with his various obligations. None could be more fundamental than his obligation to make a full and accurate disclosure of his pecuniary interests. There were numerous avenues available to him in completing this task besides the text of the Act and the Regulations. He had the use of the councillor's Handbook, the on line self help guide and access to the General Manager as well as other councillors. This level of assistance was ignored and he was content to undertake this important task on the basis of an assumption about the width of the interests to be disclosed. His carelessness in this regards borders on the reckless. He was a builder and a developer on a significant scale and had to understand that there was a real possibility that he could be placed in a conflict of interest when dealing with council business. He was a man educated to tertiary level and still undergoing higher level education. Thus he was aware of many research tools available to him, not only in his education but also in his business and civic roles. He was also the director of a number of companies and the company secretary in some of them: he was therefore well aware of regulatory regimes and the requirement to make himself aware of the extent of his obligations. In his interview with the Investigators he agreed that he could have asked his accountant about possible sources of income for the purpose of completing the disclosure form. Undoubtedly, having regard to the of his business interests, he could have sought legal advice regarding the requirements of the disclosure return.
[30] In concluding that a suspension is the appropriate outcome in this case, the Tribunal accepts the submission that the 2012 breach is more serious that the 2013 breach for many of the reasons put forward. It is still surprising that Clr Mehajer did not pay much closer attention to this return, having faced the Investigators and having accepted that the first return was totally inadequate. Again, a continuing lack of care and attention to the required detail does not reflect well on him and his acceptance of his obligations under the Act. In all the circumstances, it is
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appropriate that Clr Mehajer be suspended from civic off
office for a period of one month.'49 Adams J's judgment at [11] stated:
The plaintiff's attack on the judgment of the Tribunal commenced with a submission pointing to the terms of s 482(1) providing for a cascade of
punishments for failing to disclose a pecuniary interest –
...
It is submitted that it is important to bear in mind the distinction between those penalties that do not involve preventing a councillor from carrying out his or her civic duties on the one hand and those that do. This is an important distinction: amongst other considerations, the imposition of the latter involves, of necessity, depriving the councillor's constituents of the input into the deliberations of the Council, for which he or she was elected.
50 Adams J's judgment at [13]-[17] stated:
Broadly speaking, the availability of a range of punishment options implies the necessity to consider whether those short of depriving the constituents of their representative can adequately punish the councillor's failure to comply with the statutory obligations and vindicate the public interest in maintaining the honesty of municipal administration. Although the Tribunal's language suggests that the only alternatives were reprimand or suspension, it is obvious that it was also open to the Tribunal to suspend his remuneration as a Councillor for up to six months, a substantial financial imposition.
There was no suggested dishonesty or concealment (for example, his company involvements were recorded with ASIC in the conventional way), nor was there any prospect - as distinct from hypothetical potential - suggested of any actual conflict of interest likely to arise in respect of his undisclosed interests (even though the two Lidcombe properties that he initially failed to disclose were within the Auburn Municipality). In truth, if I may respectfully say so, the Tribunal accurately described his actions as 'carelessness ... [bordering] on the reckless'.
It is submitted for the plaintiff, as I apprehend it, that the Tribunal did not refer to, and failed to engage with, the critical difference between those punishments which did not prevent him from exercising his functions as a Councillor and those that did. It is contended, in substance, that suspension should be reserved for cases involving intentional concealment of material information or repeat offences or other similar serious cases. Here, the plaintiff was, in substance, a first offender of good character who had just been elected, with no other fault than, in substance, an act of gross carelessness for reasons which, though entirely wrong, were not inexcusable and involved no dishonesty. Accordingly, suspension was too extreme a step and lesser punishments were available and appropriate.
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In the end, it is submitted that a disproportionate penalty was imposed because the Tribunal failed to take account of the fundamental distinction between penalties that enabled the plaintiff to continue to exercise his duties as a Councillor and those that did not, as though they were merely punishments of an increasing order of severity.
The defendant's response was, essentially, to submit that the penalty imposed on the plaintiff was not so severe as to suggest latent error in the exercise of the Tribunal's discretion. In substance, it is contended that, even granted the validity of the distinction sought to be relied on (which was not conceded), the penalty was appropriate given the egregious indifference exhibited by the plaintiff in his purported compliance with the disclosure obligations imposed on him by virtue of his office.
Conclusion
It seems to me that the difference between the punishments involving suspension of a councillor's service and those which do not is of considerable significance, for the reasons already mentioned. It should also be borne in mind that suspension from civic office involves far more than not being able to attend meetings or be otherwise able to contribute to the work of the Council but also the inability to assist constituents as a Councillor. I am uncertain whether the distinction now sought to be made was brought to the attention of the Tribunal, since I have only the written submissions. However, I do not think that this is decisive.
51 His Honour at [23(2)] ordered that:
in lieu thereof, Councillor Mehajer is reprimanded and his right to be paid any fee or other remuneration to which he would otherwise be entitled as the holder of civic office is suspended for the period of three months dating from, and including, the date of the next payment due (without suspending him from civic office for that period).
52 Although Adam J referred to a 'punishment', the Tribunal regards the
principles referred to in His Honour's judgment as in fact applying equally
to civil penalties in the context of the judgment as a whole.53 The Tribunal accepts that a relevant factor is whether the conduct is
such that a suitable penalty can be imposed, short of depriving the constituents of their representative, that adequately penalises a councillor's failure to comply with the statutory obligations and to vindicate the public interest in maintaining the transparency and integrity of municipal administrators.
54 Paragraph 13 of the CEO's submissions stated that:
However the ultimate outcome in that case (if not the reasoning) cannot be easily adapted to the instant case because the range of sanctions under the
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NSW legislation differs markedly from that available under the Act. Significantly, the Court in Mehajer noted at [13] that 'it was also open to the Tribunal to suspend his remuneration as a Councillor for up to six months, a substantial financial imposition'. The penalty ultimately imposed by the Court when resentencing the appellant was the suspension of his remuneration as a councillor for 3 months.
55 The Tribunal does not accept the CEO's submission that the range of
sanctions available under the LG Act NSW differs markedly from the LG Act. There is of course an obvious difference between the legislation in that the LG Act does not contain a provision for suspension of remuneration. Nevertheless, the availability of a suspended order, if appropriate, would have a similar effect in that it would not remove a councillor's ability to contribute to the work of the council and to assist constituents.
56 Ms Scaffidi's counsel made submissions in relation to Mehajer
which can be summarised as follows (T:126-127; 21.06.17):
1) The matters for consideration that the NSW court had regard to include, as in the Scaffidi case, was that there was no suggestion of dishonesty or concealment.
2) Although the conduct in Mehajer was considered to be 'egregious conduct' it did not warrant suspension from office.
3) Contrary to the CEO's assertions that the outcome in Mehajer cannot be easily adapted to the present case because the range of sanctions under the NSW legislations differs markedly from those available under the LG Act, both statutes:
a) enable the making of sanctions harsher than counselling, reprimands and apologies without preventing the person from actually carrying out his or her civic duties; and b) provide a range of penalties, none of which include fines, some of which involve preventing a councillor from carrying out his or her civic duties and others which do not. 4) There is nothing in the LG Act which warrants as inapplicable the views expressed by his Adam J in
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Mehajer that suspension should be reserved for cases involving intentional concealment of material information or repeat offences or other similar cases. The view expressed with respect to depriving the constituents of the work of the elected councillor applies with even greater force where the position involved is that of the Lord Mayor. The Court's description of the conduct in Mehajer could similarly be adopted to Ms Scaffidi's conduct, although it is conceded that there are a larger number of breaches involved in this matter.
and further at T:146-148; 21.01.17:
5) The relevant obligations that are under consideration are those imposed on all councillors, not simply a Lord Mayor or a mayor, and there is nothing in Mehajer that would lend any basis for any distinction.
6) The obligations are on all councillors, no matter where they located or their position within the council.
7) Mr Mehajer accepted responsibility for and acknowledged his breaches. In this case, Ms Scaffidi has acknowledged responsibility and did not put in issue those breaches which she accepted that she knew ought to have been disclosed and the balance of it turned on the question of statutory construction.
8) The fact that the provision in the New South Wales legislation allows for suspension of payment is not an option under the LG Act.
57 In Mehajer at [12] Adam J stated:
It should also be noted that the sanctions also apply to contraventions of s 451(1), where a councillor fails to disclose that he or she has a pecuniary interest in a matter in which the Council or a Council committee is concerned and is present at a meeting at which the matter is being considered. Given the direct connexion between the interest and the matter, on the face of it, this seems to be a more serious transgression than an omission to make a full pecuniary interest disclosure.
58 The Tribunal accepts that a single breach of s 5.89 of the LG Act
compared to a single breach of s 5.78 on similar facts, except as to knowledge, would generally be a more serious transgression. As noted in
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this case, there is no allegation of knowledge on Ms Scaffidi's part. Nevertheless, a penalty must be determined on the particular facts of each case.
59 Section 451 of the LG Act NSW relevantly provides:
(1)
A councillor or a member of a council committee who has a pecuniary interest in any matter with which the council is concerned and who is present at a meeting of the council or committee at which the matter is being considered must disclose the nature of the interest to the meeting as soon as practicable.
(2) The councillor or member must not be present at, or in sight of, the
meeting of the council or committee:
(a)
at any time during which the matter is being considered or discussed by the council or committee, or
(b)
at any time during which the council or committee is voting on any question in relation to the matter.
(3) For the removal of doubt, a councillor or a member of a council committee is not prevented by this section from being present at and taking part in a meeting at which a matter is being considered, or from voting on the matter, merely because the councillor or member has an interest in the matter of a kind referred to in section 448. (4) Subsections (1) and (2) do not apply to a councillor who has a pecuniary interest in a matter that is being considered at a meeting, if:
(a) the matter is a proposal relating to: (i) the making of a principal environmental planning instrument applying to the whole or a significant part of the council's area, or
(ii) the amendment, alteration or repeal of an environmental planning instrument where the amendment, alteration or repeal applies to the whole or a significant part of the council's area, and
(a1)
the pecuniary interest arises only because of an interest of the councillor in the councillor's principal place of residence or an interest of another person (whose interests are relevant under section 443) in that person's principal place of residence, and
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(b)
the councillor made a special disclosure under this section in relation to the interest before the commencement of the meeting.
(5) The special disclosure of the pecuniary interest must, as soon as practicable after the disclosure is made, be laid on the table at a meeting of the council and must:
(a) be in the form prescribed by the regulations, and (b) contain the information required by the regulations. 60 In Campbell Breach, the Tribunal found that:
...
18.
The 29 November letter makes it clear that the proposed residence, in the view of the Council, was within 100 m of the top of the bank, but that the clause 7.4(2) definition was shortly to be considered for amendment by the Council.
19.
That is indeed what came about on 10 December 2013, when the Council resolved that the 'river front area' definition concerning the 'E3 Environmental Management' zone should be amended from
'100 m' to ‘60 m', and that this resolution be incorporated in a
planning proposal to be submitted to the Department of Planning and Infrastructure with a request to amend the Murray LEP in that way.
20. Councillor Campbell could have chosen to make a declaration of her interest and to absent herself from the meeting. Instead, she made no declaration and was present and voted in favour of the amendment. The question for the Tribunal is whether that resulted in a contravention of the Act. I now turn to the relevant provisions.
... 26.
The evidence in this Tribunal included a valuation report dated 5 August 2014. There was no forensic challenge to its conclusion that the market value of the land without a dwelling permit, that is to say, without a residence, was $150,000, and the value of the land with a dwelling permit was $450,000. I find that a potential gain in market value of $300,000 would be an 'appreciable financial gain' which was not 'so remote or insignificant' that it could not reasonably be regarded as likely to influence any decision she might make in relation to the matter. That is a significant amount of money: objectively, it might be thought likely to influence a decision by a Councillor.
...
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33. Although, as explained below, the answer to the first question is 'yes' and the second is 'no' the Tribunal does not consider that this ultimately matters in determining whether there was a pecuniary interest which transgressed the provisions of the Act. The reason for that is that:
(1) A particular DA had been lodged; (2) The Councillor had been told that the 100 metre rule precluded approval of that DA as lodged but that if the Councillor wished; (3) Consideration of the DA could be deferred pending consideration by Council of what emerged as the 60 metre proposal; and (4) The lodged DA specifically noted that the residence was
more than 60 metres from the top of the river bank.... 34 It was in those circumstances that Councillor Campbell voted for introduction of a 60 metre rule. (There was no evidence an amended DA was ever lodged seeking to comply with the two restrictions referred to in the last paragraph.) Those circumstances amount to voting on a matter giving rise to a reasonable likelihood or expectation of appreciable financial gain[.]
61 In Campbell Penalty at [14], the Tribunal set out the following principles as relevant to an assessment of penalty:
(1)
The pecuniary interest provisions in the Act impose obligations upon elected Councillors which are designed to avoid conflicts between their personal interests and their public duties. When breach of those provisions is proved, the range of sanctions in s 482 is enlivened.
(2)
Although the sanctions in s 482(1) have been described as 'punishments' (eg Mehajer at [17]), and the imposition of sanctions involves specific deterrence of the Councillor in question from such conduct in the future, the purpose of the pecuniary interest provisions in the Act, and the nature of the Tribunal's jurisdiction, is essentially protective: by denouncing the conduct and imposing appropriate sanctions under the Act, public confidence in the institutions of local government is (at least) maintained, and general deterrence to others who might be considering similar conduct is provided.
(3)
Within the hierarchy of pecuniary interest provisions, a breach of s 451 of the Act, which concerns 'Disclosure and presence in
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meetings', will generally be more serious transgression than a breach of s 449, which concerns 'Returns disclosing interests of councillors'. This is because of the 'direct connexion between the [undisclosed] interest and the matter [before the Council]': Mehajer at [12];
... 23.
Notwithstanding, some guidance can be obtained from cases which explain the rationale of a suspended sentence in the criminal context.
24.
In this regard, reference is made to the decision of the High Court of Australia in Dinsdale v R [2000] HCA 54; (2000) 202 CLR 321 as explained and applied by Roberts-Smith J of the Supreme Court of Western Australia in Griekspoor v Scott [2000] WASCA 419 at [82], [89] and [90] [Griekspoor].
25.
Assistance can also be found from the decisions of the Queensland Civil and Administrative Tribunal and its application of a similar power that was contained in the Health Practitioner Regulations National Law (Qld) see, for example, Pharmacy Board of Australia and Fitzpatrick [2012] QCAT 552; Pharmacy Board of Australia and Kent [2012] QCAT 329; Pharmacy Board of Australia and Smith (2012) QCAT 186; Pharmacy Board of Australia and Donnelly [2011] QCAT 584; Pharmacy Board of Australia and Booy [2011] QCAT 522 and Pharmacy Board of Australia and Heron [2011] QCAT 424. Smith and Donnelly involved suspensions of 6 months which were made the subject of suspension orders for a period of 12 months, with the other cases concerning 3 month suspensions being the subject of suspension orders for 12 to 18 months.
26.
Those orders were made the subject of a suspension order by reason of such matters as recognition that the person has insight into his responsibilities, demonstration of an intention not to repeat the matters the subject of the adverse finding, the derivation of no personal benefit and the fact that the person is otherwise of good character.
27.
Two recent decisions of Appeal Courts also assist: one of the Court of Appeal of Victoria and the other a decision of the Court of Appeal of Queensland.
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28. In the former, Stirling v Legal Services Commissioner [2013] VSCA 374, the Court of Appeal of Victoria was concerned with a barrister who had been found guilty of one charge of professional misconduct and one charge of unsatisfactory professional conduct, which resulted in the Victorian Civil and Administrative Tribunal suspending him from practice for 3 years. The Court of Appeal reduced the period of suspension for a period of thirty months, 24 months of which (ie, four fifths) of which was 'wholly suspended for a period of five years' [Stirling].
29. In Flegg v Crime and Misconduct Commission [2014] QCA 42, Gotterson JA, with whom Wilson J agreed, said (at [26] and [27]):
'[26] The discretionary power to suspend a disciplinary sanction is a broad one … There is no requirement that special or
exceptional circumstances be demonstrated before a
suspension may be ordered.
[27] A suspended sanction is a sanction. A comparison may be made with a suspended sentence of imprisonment as to which this Court has reminded that 'of course, (it) is not a mere formality and may be regarded as 'significant punishment' and of which Fitzgerald JA said that it 'is punishment'.
170 In Griekspoor v Scott [2000] WASCA 419, Roberts-Smith J A stated
at [89]-[90]:
On the issue of a suspended sentence McKechnie J referred to Liddington,
GP, Krakouer v Durka and Calway v Wiebe and concluded (at 7):'Distilling all the judgments it seems to me that there are no prescriptive rules as to when a sentence may or may not be suspended and that although there is a bias towards rehabilitation or reaffirmation, other factors singly or in combination may, in particular circumstances, render the suspension of a sentence appropriate. In the case of persistent conduct there is more likelihood that the offender will have to demonstrate some special circumstances which would justify the suspension of a sentence of imprisonment.'
With respect I agree entirely with that observation: it is consistent with the approach explained by the High Court in Dinsdale.
171 In Stirling v Legal Services Commissioner [2013] VSCA 374, the Victorian Court stated:
63. The principles that apply in criminal sentencing were aptly encapsulated by the majority (Winneke P, Brooking and Hayne JJA, and Southwell AJA) in R v Storey:
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Sentencing is not a mechanical process. It requires the exercise of a discretion. There is no single 'right' answer which can be determined by the application of principle. Different minds will attribute different weight to various facts in arriving at the 'instinctive synthesis' which takes account of the various purposes for which sentences are imposed - just punishment, deterrence, rehabilitation, denunciation, protection of the community - and which pays due regard to principles of totality, parity, parsimony and the like.
64. We will not set out each principle one by one, but suffice to say it is clear that there is a link between the principles that apply to criminal sentencing and disciplinary tribunals. In Quinn, Maxwell P said as much:
The issue of mental illness gives rise to a second and separate ground of appellate intervention. Because the Tribunal's
disciplinary jurisdiction is inescapably – indeed, intentionally –
punitive, in the service of protecting the public, it is appropriate that the principles applicable in this Court to sentencing appeals should apply by analogy to appeals from disciplinary decisions of the Tribunal. The most obvious example is the approach to a submission that the penalty is manifestly excessive.
65. Further, in Burgess v McGarvie (Legal Services Commissioner), the Court of Appeal made another link between the role of a sentencing judge and the role of a judge in disciplinary proceedings:
W]hen the Tribunal formulates a sanction, it must take into account all relevant matters, in much the same way that a sentencing judge is required to take into account all relevant matters when synthesizing a sentence.
66. Courts often use criminal language and authorities when imposing penalties in disciplinary proceedings. In Burgess, Nettle and Neave JJA noted the importance of denunciation, specific deterrence and community protection in assessing the severity of a 12 month suspension of a solicitor for failing to use his best endeavours to complete work and communicate effectively. The Court even used the principles in R v Verdins when analysing the mental impairment issues relating to the appellant.
67. However, this analogy is not perfect. As urged by the respondent, these proceedings are sui generis, and are within the inherent jurisdiction of the Court. While there are common elements, as noted in Hanneberry, it is clear that these types of proceedings are not criminal:
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The first is that disciplinary proceedings under the Act are not
criminal proceedings but are proceedings sui generis … This
proposition is reflected in the circumstance that unfitness to practise based on misconduct need be proved only according to the civil standard, subject of course to the necessity to bear in mind the seriousness of the conduct charged.
(Citations omitted)
172 The Tribunal accepts that a suspension is a significant penalty.
173 The Tribunal is satisfied that Ms Scaffidi lacks any insight into her
conduct and it is not satisfied that she has taken any personal responsibility to ensure that a breach does not occur again. Bearing in mind all of the other factors, a suspension is not appropriate in a case such as this where the Tribunal is not satisfied that there is no risk that Ms Scaffidi will offend again.
Is the Tribunal bound by the penalty sought in the application?
174 The CEO submitted:
...
14. It is well recognised that where the parties to disciplinary proceedings agree on a penalty to be imposed then the Tribunal will have regard to, but not be bound by, that agreement (Legal Profession Complaints Committee v Leask [2011] WASC 310, [2]). That approach is reflective of the general requirement for the Tribunal to be satisfied that any order it makes by consent is an order that it would have otherwise had the power to make (Erujin Pty Ltd v Western Australian Planning Commission [2010] WASC 326, [37][.] 175 Ms Scaffidi submitted that it would be a breach of procedural
fairness to impose a penalty which was not sought in the application
(T:118; 26.06.17).176 The Tribunal does not accept Ms Scaffidi's proposition. The range of
possible penalties is set out in the LG Act. Although proceedings before the Tribunal are civil, rather than criminal, the Tribunal is not bound by the orders sought in the application. The jurisdiction which the Tribunal exercises in respect of the supervision of local councillors is exercised primarily in the public interest. The Tribunal must form its own view as to the appropriate penalty and is not bound by the orders sought in the application.
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177 In the analogous position in relation to the effect of an agreed civil
penalty, it is clear that the parties' agreement does not displace the responsibility of the Court or Tribunal that is given the statutory responsibility to determine penalty: see NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134;
Minister for Industry, Tourism & Resources v Mobil Oil Australia
Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993; Commonwealth of Australia at [25]-[48]. The reasoning behind this position would seem equally applicable to a statement by the regulator, in its application, as to the civil penalty sought. While the majority in Commonwealth of Australia did comment, at [53], that '[c]ivil penalty proceedings are civil proceedings and therefore an adversarial contest in which the issues and scope of possible relief are largely framed and limited as the parties may
choose …', the Tribunal does not understand this to mean that their
Honours took the view that the decision maker is bound by the regulator's decision in relation to what penalty to seek in its application. Similarly to the situation that applies in relation to an agreed penalty submission, the seeking of a particular penalty as a maximum appropriate penalty by a regulator would be accepted so long as that, or any lesser penalty was, an appropriate remedy in all the circumstances.
178 The LG Act allows the respondent to make a complaint to the
Tribunal that a council member has committed a serious breach. There is nothing in s 5.116 of the LG Act that provides that the respondent may specify to the Tribunal what punishment should be imposed if the complaint is made out. Rather, s 5.117 of the LG Act provides that if the Tribunal finds a person has committed a serious breach it may do any of the things specified in that section. In that context, a statement by the respondent, whether in the application under s 5.116 of the LG Act, or in any later submission, can only be just that, a submission. As a matter of procedural fairness, where the respondent makes such a submission in the application it may not be allowed to depart from that submission without sufficient notice if that would cause prejudice to the applicant's opportunity for a fair hearing. However, the Tribunal does not accept that the submission of the respondent as to the appropriate penalty can displace the Tribunal's statutory obligation to make that determination.
179 In this case the Tribunal is not satisfied that the indication of the
penalty sought in the application gave rise to any prejudice to Ms Scaffidi.
180 In regards to the evidence set out earlier, the Tribunal has concluded
that Ms Scaffidi does not understand the error of her ways and that despite her expressions of remorse and insight, she has failed to understand the
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significance of the breaches and to take any meaningful steps to remedy those breaches. The Tribunal has concluded that Ms Scaffidi, having failed to understand the significant consequences of misconduct, remains a risk to the community in terms of her obligations under s 5. 78 of the LG Act.
The totality principle
181 In this case, as there are multiple contraventions, the question arises
as to whether the totality principle, or something akin to it, applies. In the context of determining the appropriate civil penalty for breaches of the Broadcasting Services Act 1992 (Cth), his Honour Rares J stated (Australian Communications and Media Authority v Radio 2UE Sydney Pty Ltd (No 2) 2009 FCA 754 at [170]-[171]):
In arriving at the appropriate pecuniary penalties to be imposed for multiple contraventions, a court must first assess individual penalties for each contravention. But, before finalising the civil penalty orders the Court must look at and, if need be, adjust the resulting total effect of the individual orders it is considering, so as to produce an overall set of civil penalty orders appropriate to deal with all the contraventions. In other words, the totality principle applicable in passing criminal sentences should be adapted to apply to the overall civil penalty orders imposed on a contravenor: Mill v The Queen (1988) 166 CLR 59 at 62-63 per Wilson, Deane, Dawson, Toohey and Gaudron JJ, applied in a civil penalty context by Stone and Buchanan JJ in Mornington Inn (2008) 168 FCR at 408 [91]; see too at 397-398 [42]-[45]; see also per Gyles J who dissented in the
result but not on the principle’s applicability at 386-387 [5]-[9]. Where
contraventions are separate offences in law but are substantially contemporaneous and connected, the Court must have regard to the totality principle in fixing the individual penalties: L Vogel & Sons Pty Ltd v Anderson (1968) 120 CLR 158 at 168 per Taylor, Menzies and Owen JJ. The Court must also have regard to the relative closeness of the relationship in time and character of the offences (or contraventions): Mill 166 CLR at 64.
Some aspects of the totality principle are not as easily applied to pecuniary penalties as to sentences of imprisonment using the method preferred in Mill 166 CLR at 63. The High Court suggested its preference for making sentences wholly or partially concurrent, where practicable, to reflect the appropriate overall punishment in the ultimate total result rather than lowering individual sentences below what would otherwise be appropriate to reflect the fact that a number of sentences were being imposed: Mill 166 CLR at 63; RH McL v The Queen (2000) 203 CLR 452 at 457 [15]-[16], 462-464 [32]-[34] per Gleeson CJ, Gaudron and Callinan JJ, 476 [75] per McHugh, Gummow and Hayne JJ; see too Lukatela 223 FLR at 15-16 [75]-[77] where I discussed the principle. Concurrent pecuniary penalties cannot be imposed. So the Court must consider the overall
[2017] WASAT 67 (S)
burden imposed by the set of pecuniary penalties to assess whether, in totality, the burden is greater that is warranted by the contraventions in all of the circumstances[.]:
182 In the circumstances of this case, the Tribunal is satisfied that application of the totality principle is appropriate.
183 If the Tribunal had been satisfied that Ms Scaffidi was truly
remorseful, had insight into her conduct and was unlikely to breach her statutory obligations in the future, it would have been satisfied that a suspension of one month in relation to each breach would have been an appropriate starting point. The overall result, however, of the cumulative effect of that, if one were to apply that period of suspension to each offence and make all periods of suspension cumulative would, in those circumstances, have been inappropriate and some adjustment would have needed to occur.
184 However, because the Tribunal is not satisfied that Ms Scaffidi has
any genuine insight into her conduct or any proper understanding of her obligations, and is not satisfied that it can have any confidence that Ms Scaffidi would not in the future fail to comply with her obligations, in addition to the significant number of serious breaches over an extensive period of time, a period of suspension is simply inadequate. Similarly, it is inappropriate to impose a suspended order. The Tribunal therefore considers in all of the circumstances of this case that it has no option but to disqualify Ms Scaffidi from holding office.
185 Having regard to all the factors set out above, the Tribunal has determined that the following penalties are therefore appropriate.
186 The admitted breaches of s 5.78 of the LG Act, that is, breaches 5
and 34, 6 and 10 (in date order) should be dealt with as one group. They all took place in 2008/2009 and were all gifts or contributions to Ms Scaffidi in her personal capacity. Ms Scaffidi is disqualified for a period of 12 months for these breaches.
187 The breaches in date order, relating to the APC, that is, breaches 30, 31, 2, 4, 7, 8, 9, 11, 13, 14, 41, 17, 19 and 21, all relate to the same entity. Despite entering a contribution to travel from APC in the 2009/2010 annual return following a discussion with the Council CEO, Ms Scaffidi failed to disclose these gifts or contributions to travel thereafter. Ms Scaffidi is disqualified for a period of six months for these breaches.
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188 The contributions to travel from WECP, that is, in date order,
breaches 36, 37 and 28, were all from the same entity. Ms Scaffidi is
disqualified for a period of three months for these breaches.189 The following breaches, in date order, relate to the same trip: breaches 3 and 33, 12 and 35, 15 and 38, 16 and 39, 20 and 43, 24 and 44 and 27 and 45. Ms Scaffidi should be disqualified for a period of one month for each of these gifts and contributions to travel - a further period of seven months.
190 The remaining breaches, breaches 32, 22, 23, 25, 26 and 29 relate to
single breaches. Ms Scaffidi should be disqualified for a period of
six weeks for each breach - a total of three months.191 Applying totality principles, the Tribunal has determined that Ms Scaffidi should be disqualified for a period of 18 months.
192 Lastly the Tribunal declines to impose a penalty publicly censuring
Ms Scaffidi in respect of her breach of s 5.76 of the LG Act having regard to the totality of the overall penalty being imposed and the inevitable media attention such a penalty will receive. In those circumstances an additional penalty requiring Ms Scaffidi to be publicly censured for that breach is unnecessary.
Orders The Tribunal, having found Ms Lisa Michelle Scaffidi committed 45 serious breaches, orders pursuant to s 5.117(1)(a)(v) of the Local Government Act 1995 (WA) that:
1. Ms Lisa Michelle Scaffidi is disqualified from holding office as a member of a council for 18 months commencing at midnight on Thursday 7 September 2017.
2. The parties have liberty to apply as to costs.
I certify that this and the preceding [192] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUSTICE J C CURTHOYS, PRESIDENT
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