Office of Local Government v Pauling
[2014] NSWCATAD 121
•26 August 2014
NSW Civil and Administrative Tribunal
New South Wales
Medium Neutral Citation: The Office of Local Government v Councillor Pauling [2014] NSWCATAD 121 Hearing dates: 9 July 2014 Decision date: 26 August 2014 Jurisdiction: Administrative and Equal Opportunity Division Before: Hon W Haylen QC, Deputy President Decision: 1. Councillor Jason Pauling of Lake Macquarie Council is found to be in breach of the pecuniary interest provisions of the Local Government Act 1993.
2. Councillor Jason Pauling of Lake Macquarie Council is found to have breached the requirements of Council's Code of Conduct and thereby his actions constituted misconduct under the Local Government Act 1993.
3. In each matter Councillor Pauling is reprimanded.
Catchwords: Local Government Act 1993 s 440F(1),s 451,s 448-allegations of misconduct and failure to disclose a pecuniary interest at Council meetings. Legislation Cited: Local Government Act 1993 Cases Cited: Re: Councillor Graeme Wilton, Wollongong City Council (PIT No 3/1994), 28 September 1995.
Director-General, Department of Local Government re: Councillor John Miller, Orange City Council (PIT No 2/1997) 20 November 1997
Director-General, Department of Premier and Cabinet re Councillor Maxwell Walker, MidWestern Regional Council (LGPIDT 09/2010) 28 October 2011.Category: Principal judgment Parties: Office of Local Government (Applicant)
Councillor Jason Pauling (Respondent)Representation: P Barley (Applicant)
Councillor Pauling (in person Respondent)
File Number(s): 1420136, 1420127
reasons for decision
The Chief Executive, Office of Local Government has referred two allegations to the Tribunal concerning the alleged conduct of Councillor Jason Pauling of Lake Macquarie City Council. In relation to each matter the Office of Local Government provided a report following its investigation. In each case the Tribunal determined that the matter proceed to hearing.
The first matter raised alleged breaches of Sections 451, sub section 1 and sub section 2 of the Local Government Act 1993 and concerned two meetings the Council's Community Development Committee meeting on the 8 of April 2013 and the ordinary Council Meeting held on 22 April 2013. It was alleged that Councillor Pauling had a pecuniary interest relating to a review of the delivery of economic development activities by the Council, a matter that was considered at the two meetings. Councillor Pauling's alleged pecuniary interest was said to arise because he was both a member and office holder of Business Charlestown Incorporated (BCI) being a Chamber of Commerce in the Lake Macquarie City Council local government area. A pecuniary interest has said to arise in both the meetings, including consideration of whether Council might adopt a proposal to make a $25,000 payment to a number of local Chambers of Commerce in the area including BCI. It was stated the Councillor Pauling was present at the two meetings and had participated in the consideration of the matter and voted on a related motion. While he asserted that he had a non-pecuniary conflict of interest in the matter that was 'less significant' he did not disclose that he had a pecuniary interest. At these meetings he did disclose that he was the President of BCI. Ultimately the Council made a $25,000 payment to BCI on 23 August 2013 pursuant to a resolution adopted at the meeting held on the 22 April 2013. It was alleged that Councillor Pauling had an obligation to declare a pecuniary interest in the matter and therefore should not have been present at or at the site of the meetings on the 8 April and 22 April 2013 when the matter was considered.
The second matter investigated concerned whether Councillor Pauling had complied with conflict of interest disclosure and management requirements of the Council's Code of Conduct. It was alleged that breaches occurred at three meetings held on 8 April 2013, 22 April 2013, and 24 June 2013 where general consideration was given to the Council's review of the delivery of economic development activities. At the three meetings Councillor Pauling disclosed that he had a non-pecuniary conflict of interest in the matter arising primarily from his involvement and affiliation with local Chambers of Commerce and in particular BCI. It was noted that councillor Pauling at the relevant times was the President of BCI and publically involved in its activities. It was alleged that at the three meetings Councillor Pauling asserted that the nature of his conflict of interest was 'insignificant'. He then participated in the debate on issues related to BCI's interest and the determination of motions related to those interests. It was submitted for the Office of Local Government that given the Councillor's admission that he had a non-pecuniary conflict of interests the allegation of misconduct arising from his participation in the determination of the matter rested on whether the nature of his conflict was significant.
Although a large number of documents attached to the report in each case were placed formally before the Tribunal there was ultimately no serious factual issue in contest for the purposes of the proceedings before the Tribunal. Indeed the parties were able to produce agreed statement of facts although Councillor Pauling was concerned to have the Tribunal note that there were many other facts that placed his interests, for the purpose of these proceedings, in a wider context namely, his much more general interest in programs designed to foster economic development within the Council's area. Notwithstanding that concern, Councillor Pauling agreed that for the narrower purposes of the Tribunal's hearing, the agreed statement of facts was sufficient. The agreed statement of facts is set out below:
(1) CIr Pauling was elected to Lake Macquarie City Council (Council) in September 2012.
(2) CIr Pauling was at all material times the President of Business Charlestown Incorporated (BCI). -
(3) Prior to 2013 Council had in place a program known as the Town Centre Program. This was a program designed to foster economic development within the Council area.
(4) The program was delivered through a process of grants being given to local chambers of commerce. BCI was one such chamber. The grants were subject to a number of conditions particularly to do with program delivery.
(5) The grant to BCI in 2012/13 was $81,700 - noting that at the time this was the last grant to be paid as the program at that time was to terminate as at 30 June 2013.
(6) Council decided to review the way in which it fostered economic development and to this end prepared a report entitled 'Review of the delivery of Economic Activities'.
(7) The report canvassed a number of issues including:
(a) The efficiency of the delivery of services
(b) Lack of transparency between Chamber funds and Town Centre funding
(c) Chambers of Commerce see Town Centre funding as 'their money' without an acknowledged need to deliver economic development outcomes outlined in their strategic plan
(d) Town Centre Coordinators found it difficult to distinguish between their priorities in their role as Town Centre Coordinators and general Chamber support. Town Centre Coordinators were carrying out the majority of the administration duties for the Chambers. These observations were not directed at any particular chamber.
(8) The central recommendation of the report was the dismantling of the town centre program and the establishment of an external board to oversee economic development activities in the Council area. The budget for the provision of economic delivery services on a council wide basis was approximately $1.2m.
(9) The report also recommended that an untied grant of $25,000 be made to the chambers of commerce which had hitherto delivered the Town Centre Program. As at 8 October 2012, BCI had a balance of $17,155 in a Chamber account and $56,213 in a Council account. This was not part of the actual recommendation in the agenda but was discussed at the meetings of 8 April and 22 April 2013.
(10) The report's proposals had the potential to significantly affect the scope of operations of the chambers of commerce including BCI. They would no longer be delivering the Town Centre program including certain cultural events. There was no assessment of the nature of the impact on chambers within the report. BCI would receive a financial benefit which was a small component of the overall economic delivery strategy but which represented a significant sum on the context of BCI's finances.
(11) The report was discussed at the Council's Community Development Committee meeting on 8 April 2013, and the council meetings of 22 April and 24 June 2013.
(12) The agenda including business papers was made available to councillors prior to these meetings. CIr Pauling received those agendas and was aware of the proposals within the report prior to the meetings.
(13) CIr Pauling attended all three meetings and participated in discussion about the report.
(14) At each of the three meetings CIr Pauling declared a less than significant non-pecuniary conflict of interest but did not leave the meetings. At the time of the meetings there was no objection taken to CIr Pauling's attendance and participation.
(15) CIr Pauling sought advice as to whether he should remain at the meetings. CIr Pauling asserts that the advice was equivocal.
From the documents before the Tribunal, the agreed statement facts and the uncontested material put forward by the Office of Local Government, the following facts are established.
- Councillor Pauling was elected to the Council in September 2012. He had an involvement with BCI commencing on or about 2006 and joined the executive of that body in approximately 2008. At all relevant times he was the President of the BCI and also the chairperson of a representative group known as the Lake Macquarie Combined Chambers of Commerce. While the President of BCI, that body received Council funding. He was also a member of the Belmont Chamber of Commerce.
- In relation to personal experience it appears that Councillor Pauling had extensive work experience in a variety of roles besides being a office holder and member of number of organisations: he also had a post graduate qualification in a number of disciplines.
In 2013 the Council resolved to review the manner in which it undertook economic development activities although those activities had been under review for some years. In particular, the Council operated the 'Town Centre Program', a program designed to foster economic development that was delivered by Local Chambers of Commerce. BCI was one of the local chambers involved in the program and received funding from the Council in relation to the program. In April 2013 the Council received a report reviewing the areas economic development activities. The report recommendation was for the creation of another arm's length board to manage and undertake development activity with the consequence of removing funding from chambers of commerce under the Town Centre Program. The review report not only dealt with structural issues (including how the new board was to be constituted and what functions might be undertaken) but also dealt with general funding and the funding of existing Chambers of Commerce. The Chambers generally had an interest in the review of the delivery of the economic development activities in the Council area and the review proposals were considered at three meetings at which it is alleged Councillor Pauling came into breach of the provisions of the Act.
One of the proposals contained in the Council's Community Services Committee meeting business papers, held in April 2013, concerned the proposal to create an external board for the purposes of economic development activities in the city and further that the seven councils currently funded be offered ' a transitional payment of $25000' for the 2013/2014 financial year. The Community Services Committee formulated the recommendation that was reported to the Council meeting held on the 22 April 2013. The Committee recommended that Council provide in principle support for the creation of the external board for the economic development activities in the City and that a workshop be arranged to further discuss proposed activities, responsibilities and structure of the board and why it needed to be outsourced.
At the Council meeting held on 26 April 2013 a resolution was adopted that did provide in principle support for the creation of the external board and for the arrangement of a workshop as proposed by the Community Services Committee. Of particular significance is that part of the resolution that allocated $175,000 to provide each Chamber currently receiving funds with $25,000 for the 2013/2014 financial year. These funds were provided for one year only as 'untied funds'. In addition, $15,000 would be available to each of the funded Chambers for the 2013/2014 financial year with Chambers able to apply for these additional funds once they had fully expended all Town Centre Program funds.
Council met again on 24 June 2013 to further consider future economic development activities in the City.
At this meeting the Council adopted a proposal for an external board to undertake these activities and made provisions for a number of technical aspects and procedural aspects to be addressed to give effect to that decision. It was also resolved that the Chambers of Commerce were to be advised that the funding available for the 2013/2014 financial year would be the last direct funding from the Council to these Chambers. It was noted that step was taken in accordance with Council's resolution of 22 April. This appears to be an acknowledgement that $175,000 would be allocated to permit each Chamber currently receiving funds to be provided with an untied grant of $25,000 for 2013/2014 financial year.
As earlier noted, at these meetings Councillor Pauling disclosed that he had a non pecuniary conflict of interest in the matter said primarily to arise from his affiliation and involvement with local Chambers of Commerce and in particular with BCI. At all three meetings Councillor Pauling asserted that the nature of his conflict was 'insignificant'. He then participated in the debate of issues relating to BCI's interests and the determination of motions related to the allocation of funds to Chambers of Commerce generally including BCI.
Councillor Pauling agreed to be interviewed by investigators and provided a number of justifications for participating in these three meetings. Significant in those justifications was the fact that he had a much wider interest than just the activities of Chambers of Commerce, even in relation to BCI of which he was President: his main interest was much wider and involved economic development activities throughout the Council areas. It was not limited to the conduct of any of those activities by Chambers of Commerce, particularly BCI. It was not in contest that at all relevant times BCI had $17,000 in its ordinary account with $56,000 in the "Council" account representing funding for Town Centre Program Projects.
At the hearing it quickly became evident that a fundamental issue was the extent of the statutory scheme under the Act and whether or not Councillor Pauling, as an office bearer of BCI, had a pecuniary interest in the matters discussed at the nominated Council meetings.
Chapter 14, Part 11 of the Local Government Act deals with honesty and duties of disclosure.
Section 443 deals with those who have a pecuniary interest and in general terms provides that for the purposes of the Chapter a person has a pecuniary interest in the matter if the pecuniary interest of a company or other body which the person, or nominee, partner or employer of the person, is a member. A person is not taken to have a pecuniary interest under this provision just because the person is a member or a delegate of a council to, a company or other body that has a pecuniary interest in the matter so long as the person has no beneficial interest in any shares of the company or body.
In relation to Councillor Pauling's connection with BCI although he is a member of that body but there is no evidence that he has a beneficial interest in any shares in that body.
Section 448 deals with interests that do not have to be disclosed and identifies a variety of circumstances where a duty of disclosure will not apply. Sub section (e) provides that one of those interests that do not have to be disclosed is an interest as a member of a club or other organisation or association, 'unless the interest is as the holder of an office in the club or organisation, whether remunerated or not'.
Clearly BCI is an 'organisation' or an 'association'. Equally clearly Councillor Pauling, as President, is the holder of an office in that organisation or association. On its face Section 448 (e) operates such as where a councillor holds an office in a organisation or association, that councillor is not exempt from disclosing an interest when a matter affecting that organisation or association comes before council.
Councillor Pauling's written submission made the point that there had never been a benefit for him personally in relation to the activities of BCI, the Belmont Chamber of Commerce or the council subcommittees dealing with the Lake Macquarie Chamber of Commerce. He relied specifically on the provision of Section 443(3) (c), that as a member of BCI that had a pecuniary interest in the matter before the Council, he had no beneficial interest in any shares in that body. So much can be accepted.
Councillor Pauling then dealt with the operation of Section 448, and pointed to the fact that Section 443 deals with pecuniary interest while Section 448 deals with 'interest' and not a pecuniary interest. He submitted that there was a distinction between his interest and those of the organisation of which he was a member where he had no beneficial interests as dealt with in Section 443 (3) (c). Under Section 448, he did not have to declare that level of interest. He said he complied with that requirement by, on all occasions, declaring an insignificant, non -pecuniary interest in relation to the matters being discussed. He submitted that his actions would have been different but for the distinction made in Section 443 (3) (c) and the absence of the word 'pecuniary' from Section 448.
These provisions or the equivalent of them have been the subject of a ruling by the previous Local Government Pecuniary Interest Tribunal. One such decision is the Director-General Department of Local Government re: Councillor John Fredrick Miller Orange City Council (PIT/ No2/1997) a decision of K J Holland QC.
Councillor Miller had remained in a Council meeting during a vote concerning a payment of $10,000 to a Local Chamber of Commerce. Councillor Miller was an office holder in that body but argued that his office as Secretary was a mere 'empty title'. That submission was rejected by the Tribunal. Significantly the Tribunal stated: ' It appears to the Tribunal that the legislation is concerned to distinguish between members of a body such as a club or other organisation and those appointed to an office because an appointment as an office holder imports a status involving a duty in the office holder actively to promote the interests of the body and also an interest of the office holder in the affairs and welfare of the body beyond that of a mere member and such that an office holder should be prohibited from participation in a matter under consideration by council if the body itself has a pecuniary interest in the matter. Furthermore public perception is not to be overlooked. The public may be expected to regard the holder of an office as liable to have his or her judgement in a matter affected by the fact that the organisation in which the office is held has a financial interest in the outcome of the issue before the Council. The office holder can also be expected by the public to be under the influence of the body's directors or committee and the desire to maintain his or her office, either of which might compromise a proper exercise of the public responsibilities involved in the decision making on the Council......Even if the Office of Secretary of the OCCI was an empty title it could not assist Councillor Miller on the question of whether he was obliged to conform to the requirement of Section 451of the Act'.
An earlier decision of the Pecuniary Interest Tribunal dealt with a similar situation. In re Councillor Graeme Wilton, Wollongong City Council ( PIT No3/1994) KJ Holland QC dealt with an alleged contravention of the Act by the Councillor debating and voting on a proposal before the Council in which he had a pecuniary interest. The proposal was an application by a body known as Kembla Grange Recreation Trust for approval for the conduct of weekly markets at the Kembla Grange Racecourse. The pecuniary interest of Councillor Wilton was alleged to arise out of the fact that he was a member of the Trust and a Director of the Illawarra Turf Club.
At [6] the Tribunal stated:
"The agreed facts establish that the Club is a company of which Councillor Wilton was a member at the relevant time and that the club had a pecuniary interest in the matter before the Council. By virtue of Section 443 (1) and (2) of the Act, these facts gave Councillor Wilton a pecuniary interest in the matter and made him subject to the requirements of Section 451 of the Act unless he was exonerated from those requirements by sub section (3) (a) (c) of Section 443 or Section 448. He was not exonerated by Section 443 (3) (a) because he was aware of the club's pecuniary interest in the matter or by Section 443 (3) (c) because he was not just a member of the Club but also a director.'
In relation to the operation of Section 448, later [6] the Tribunal stated:
'However, Councillor Wilton was not exonerated by that Section, because, as a Director, he was holder of an office in the Club. Having regard to the agreed facts, it follows that Councillor Wilton's position as a Director of the Club made him subject to the requirements of Section 451 of the Act. His admitted failures to comply with those requirements constituted a contravention of the Act and made him subject to the powers of the Tribunal under Section 482'.
More recently the Pecuniary Interest and Disciplinary Tribunal has construed these provisions in the Director General Department of Premier and Cabinet re Councillor Maxwell Walker, Mid- Western Regional Council (LGPIDT09/ 2010).
In this case, the Council was considering an issue relating to the cost of water to be supplied by the Council to the Mudgee Racecourse Club Inc. At the time of this discussion Councillor Walker was the Chairman of the Mudgee Race Club and declared an interest in the matter. He proceeded to make a statement to the Councillors at the meeting and left the meeting before the debate. The Tribunal came to consider the interaction between Section 443 and Section 448 of the Act, as follows:
'[36] that leaves the operation Section 443 ( 3), .... In its operation Section 443 (3) excludes the deeming effect of Section 443 (1) in certain circumstances. In the case of being a member of a company or other body the exclusion operates 'so long as the person has no beneficial interest in any shares of the company or body'.
[37] the Mudgee Race Club Inc. is an incorporated association and Councillor's Walker was a member of that incorporated association. ...
[38] There appeared to be no issue but that Councillor Walker's involvement with the Mudgee Race Club was on a voluntary basis and there was no evidence that he held any beneficial interest in any shares of the Mudgee Race Club Inc.....Accordingly, the submission that the effect of Section 443 (3) is to exclude Councillor Walker from being taken to have a pecuniary interest in the matter relating to the Race Club is at least prima facie available.
[39] However, Section 443(3) (c) does not operate in a absolute way. The relevant phrase in Section 443(3) (c ) is the phrase "just because".....That same phrase is used in Section 443 (3) (b), but not in (a). The effect of the use of the phrase is that the deeming effect of Section 443 (1) cannot be taken to exist simply because of membership of an entity provided there is no beneficial interest in the shares of that entity; and so it would be said that Councillor Walker was a member of the entity and held no beneficial interest in any shares of the entity.
[40] However, it is not simply the case that Councillor Walker is said to have had a pecuniary interest in the matter before the council as a mere member of the Mudgee Race Club. Councillor Walker was and had been for many years the Chairman of the Mudgee Race Club. On that basis it is not said that Councillor Walker is taken to have a pecuniary interest just because of his membership with the Mudgee Race Club; but rather it is because of his holding of the position of Chairman of the Race Club that he may be said to have a more relevant relationship with the Race Club. Such a construction is consistent with the Tribunal's in decision Councillor Wilton (Wollongong City Council) PIT3/1994 (28 September 1995) at [5] page 12.
[41] such a construction is also consistent with the other provisions of Chapter 14, in particular s.448 ....a Section specifically dealing with interests which do not need to be disclosed.
.....
...[43] because of Councillor Walker's holding of the position of the Chairman of the Mudgee Race Club accordingly it cannot be said, for the purpose of Section of 443 (3), that he has taken to have a pecuniary interest just because he is a member of a company or a body, but rather because he is not only a member but also Chairman (an office holder) of that company or other body. Accordingly, for the purpose of Section 443 (1) (c ) Councillor Walker is a person who has a pecuniary interest in the matter before the Council being the interest of a company or other body of which he is a member, but not just because he is a member (Section 443 (3) (c ) ).
These cases were relied upon by the Office of Local Government in submissions as providing a complete answer to Councillor Pauling's submissions. With respect, the present Tribunal concurs with the reasoning in these decisions regarding the operation of the Act and the construction of the provisions dealing with pecuniary interest. The distinction sought to be raised by Councillor Pauling giving a separate operation to Section 443 and Section 448 is not a construct supported by long standing principles of statutory constructions. Both Section 443 and 448 occur in Chapter 14 and deal with a variety of circumstances where pecuniary interest is to be disclosed at Council Meetings. Having regard to the structure of the Act as a whole and the particular operation of Chapter 14 Part 2, the construction advanced by Councillor Pauling is unsupportable.
It follows from these findings as to the proper construction and operation of the Act and on the facts as disclosed in the material (as agreed facts) that in the 8th and 22nd of April 2013 meetings Councillor Pauling breached Section 451 of Act in that as a Councillor he had a interest in motions being discussed by Council regarding the rationalisation of economic development activities within the Council area and the payment of compensation to Chambers of Commerce including the BCI of which the Councillor was the President at all relevant times. Because of that interest Councillor Pauling should not have been present at or in sight of the meetings of Council during the time when the matters were discussed.
The Tribunal accepts the submissions of the Office of Local Government on the operation of the scheme of the Act and in particular Councillor Pauling's interest as a holder of an office in the BCI that, at least, was the proposed recipient of a $25,000 ex gratia compensation payment for the cancellation of the Town Centre Programs. For the purposes of Section 442 the proposed payment of $25,000 was an 'appreciable sum' having regard to the finances of BCI and the fact that it had approximately $17,000 in its general account with the bulk of the remaining finances tied to the operation of the Town Centres Program. In summary the Tribunal accepts the submission for the Office of Local Government that Mr Pauling's interest was pecuniary in nature having regard to Section 442 of the Act as it was an interest he had in a matter before Council where there was a reasonable likelihood or expectation of appreciable financial gain or loss to BCI and he was therefore a person having an interest due to his relationship with that organisation, and being an office holder in that organisation.
It is then necessary to consider the misconduct allegation arising from breaches of the Council Code of Conduct. These allegations rely upon Councillor Pauling's attendance at the 2 April meeting as considered in the pecuniary interest allegation and a further meeting held on the 24 June 2013.
Section 440 of the Act provides that regulations may prescribe the model Code of Conduct applicable to, amongst others, Councillors. Section 440 F of the Act defines misconduct to include a failure by a Councillor to comply with an applicable requirement of the Code of Conduct.
No issue arose in the proceedings as to the applicable provisions of the Code of Conduct. Those provisions were as follows:
- Clause 4.1 stated that conflicts of interest existed where a reasonable and informed person would perceive that the Councillor could be influenced by a private interest when carrying out his public duty.
- Clause 4.2 required a councillor with a conflict of interest to identify the interest and either avoid the circumstances giving rise to the conflict or properly manage the conflict. Appropriate management of non- pecuniary conflicts of interest was dealt with in Clauses 4.12 and 4.19.
- Clause 4.12 stated full disclosure of the interest was required either in writing or could be made orally and recorded in the minutes of the meeting.
- Clause 4.14 qualified the management obligations as being dependent on whether or not the nature of the conflict was significant.
- Clause 4.14 outlined circumstances that would come within the term a significant pecuniary conflict of interest. It provided: 'as a general rule a non-pecuniary conflict of interest will be significant when the matter does not raise a pecuniary interest but it involves.....an affiliation between the Council official and an organisation, sporting body, club, corporation or association that is particularly strong '
- Clause 4.6 provided two options for managing significant non-pecuniary conflicts, namely removal of the source of the conflict or having no involvement in the matter by being absent from and not taking part in any debate or voting in the issue.
Submissions for the Office of Local Government noted that at these meetings Councillor Pauling admitted that he had a non-pecuniary conflict of interest. It was accepted that the allegation of misconducted rested on whether the nature of the conflict was significant. Councillor Pauling had told council on these occasions that his conflict of interest was less then significant.
In written submissions Councillor Pauling accepted that BCI had an interest because there was a potential source of funding arising from the discussion about the cessation of the previous program and the introduction of the new independent board.
The evidence before the Tribunal provides considerable detail of the three meetings and Councillor Pauling's participation in Council's consideration regarding a new approach to the development of economic activities in the Council area. It appears from this material that the Chambers generally, including BCI had a number of interests in the review of the delivery of economic development activities. There was no issue as to Councillor Pauling's affiliation with the Local Chambers of Commerce, in particular the BCI. He was also a member of the Belmont Chamber of Commerce and chairperson of the Lake Macquarie Combined Chambers of Commerce. During the investigation, Councillor Pauling acknowledged that he was one of the public faces of BCI and in the many ways outlined in the investigation, was extensively and independently linked with the aims objects and activities of BCI as well as other Chambers. On the evidence provided to the Tribunal it is accepted that a strong affiliation existed between Councillor Pauling and BCI. In that context Councillor Pauling had a significant non-pecuniary conflict of interest in the discussion of the economic development matters dealt by Council. The factual basis of these allegations relied upon by the Office of Local Government was not questioned by Councillor Pauling. In essence his defence was that he made several enquiries as to whether it was a conflict of interest and finding no persuasive advice, he considered the matter for himself and concluded that he had no more than a non- substantial conflict and acted accordingly.
The Tribunal accepts the thrust of the submissions for the Office of Local Government in relation to the allegation of the misconduct.
The Tribunal concludes that the two breaches alleged by the Office of Local Government have been established on the evidence.
Having regard to these findings it is necessary to consider appropriate disciplinary action that should be taken in relation to Councillor Pauling's two breaches.
The Office of Local Government readily accepted that there was a very significant overlap between the two breaches and a approach similar to the principle of totality in the Criminal Law would be justified in a case such as this. In essence this is a principle that requires a consideration of multiple offences so that the totality of the behaviour is considered and then an appropriate penalty is then imposed for all of the offences. The total penalty imposed must be just and appropriate and must avoid a mechanical or arithmetical approach where imposing separate sentences would result in an unjust or crushing penalty. Those considerations derived from Criminal Law, in a general sense, are appropriate to consider in civil disciplinary proceedings such as the present. In this case there is a very significant overlap in the conduct constituting both breaches.
In oral submissions the Office of Local Government acknowledge that similar proceedings had not yet resulted in the Tribunal ordering the suspension of a councillor. Having regarded the facts in this case the Tribunal is persuaded that a penalty less than a suspension is warranted.
Councillor Pauling relied on a range of mitigating factors including:
- On all occasions he declared a non-pecuniary interest and had always identified his role of President of BCI.
- He had considered the various provisions of the legislation and had not acted rashly or carelessly. He had sought advice from a number of sources but found them far from definitive and being unable to afford his own legal advice made his best effort to come to a conclusion as to what course he should take at these meetings. He regarded this as 'grey area' although advised by some that if there was doubt he should 'get out'. It was a genuine error and there was no suggestion of personal gain being involved.
- The record indicated that he regularly declared an interest in Council debates and that conduct was indicative of his honesty and recognition of his obligations.
- There was no public complaint by any person in relation these breaches.
- He was otherwise diligent in his conduct as a councillor and he was also forthcoming in all his interviews with the Office of Local Government. He freely participated in interviews and openly engaged with the investigating officer.
- None of these matters were disputed by the Office of Local Government.
Tribunal accepts that while Councillor Pauling is a relatively new Councillor he has been a very experienced player in the policies and objectives of the Chambers of Commerce and in particular BCI. He was well educated and experienced in a number of fields. None the less the circumstances of these breaches are such that he should have been aware that if there was any doubt (and he considered there was such a doubt), the appropriate action to take was to absent himself from the meetings of Council when these matters were discussed. Having regard to all these matters the appropriate penalty is that in each matter is that Councillor Pauling should be reprimanded.
Orders
(1) Councillor Jason Pauling of Lake Macquarie Council is found to be in breach of the pecuniary interest provisions of the Local Government Act 1993.
(2) Councillor Jason Pauling of Lake Macquarie Council is found to have breached the requirements of Council's Code of Conduct and thereby his actions constituted misconduct under the Local Government Act 1993.
(3) In each matter Councillor Pauling is reprimanded.
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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
Decision last updated: 26 August 2014
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