PETROVSKI v Pain - [2013] SADC 6

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
PETROVSKI v PAIN
[2013] SADC 6
Reasons for Decision of His Honour Judge Muscat
20 December 2012
LOCAL GOVERNMENT
Local Government Act 1999 s 264 - complaint - failure to disclose interest in matters - disciplinary action.
Local Government Act 1999 (SA) s 73, s 74, s 264, s 265, s 267, referred to.

PETROVSKI v PAIN
[2013] SADC 6
Introduction

Darryl Ian Pain is an elected member of the Wakefield Regional Council and has been so since late 2010.
A complaint has been brought against Councillor Pain (“Cr Pain”) pursuant to s 264 of the Local Government Act 1999 (“the Act”) in which it is alleged that on two occasions he failed to comply with s 74 of the Act.
The complaint relates to matters before the Council in which Cr Pain failed to disclose to the Council his interest in those matters, namely that his father Richard Pain (“Mr Pain Snr”), a local resident of Port Wakefield, was the subject of matters before the Council.
Cr Pain has admitted the complaint brought against him.
The first matter concerns the Council’s meeting of 27 April 2011 when the Council was considering three tenders to purchase Council property. Cr Pain’s father was one of those who submitted a tender for the purchase of the Council’s former works depot at 39 North Street, Port Wakefield.
The second matter relates to a motion at the Council’s meeting of 26 October 2011 that the Council not engage in any further correspondence with Mr Pain Snr involving the Council’s handling of the Port Wakefield Community Wastewater Management Scheme.
Mr Pain Snr was a well known figure in the district. I note that he was an unsuccessful candidate for Mayor of the Council at the 2010 elections.
Mr Pain Snr was very outspoken of the Council’s handling of the Community Wastewater Management Scheme. It is accepted that the scheme attracted a lot of attention in the Port Wakefield community and no doubt was a topic of discussion amongst many of the townsfolk.
Mr Pain Snr acted as a community representative and spokesperson for concerned and dissatisfied residents of Port Wakefield. He and other Port Wakefield residents were dissatisfied with what they considered to be the poor standard of planning and lack of community consultation in relation to the project. Mr Pain Snr expressed his views through the local media, at Council meetings and in written correspondence to the Council. Cr Pain was aware of his father’s strong views on the matter, as indeed were all elected members of the Council.
Relevant Statutory Provisions
Division 3 of Part 4 of the Act deals with Conflict of Interest.
Section 73 states:-
(1)A member of a council has an interest in a matter before the council if-
(a) the member or a person with whom the member is closely associated would, if the matter were decided in a particular manner, receive or have a reasonable expectation of receiving a direct or indirect pecuniary benefit or suffer or have a reasonable expectation of suffering a direct or indirect pecuniary detriment; or
(b) the member or a person with whom the member is closely associated would, if the matter were decided in a particular manner, obtain or have a reasonable expectation of obtaining a non-pecuniary benefit or suffer or have a reasonable expectation of suffering a non-pecuniary detriment,
(not being a benefit or detriment that would be enjoyed or suffered in common with all or a substantial proportion of the ratepayers, electors or residents of the area or a ward or some other substantial class of persons).
Section 73(2)(g) of the Act provides that a person is closely associated with a member of a council if that person is a relative of the member. That is plainly the case here as Mr Pain Snr is the father of Cr Pain.
Under s 74 of the Act a member of a council who has an interest in a matter before the council must disclose that interest to the council. Such disclosure must provide full and accurate details of the relevant interest and it must be recorded in the council’s minutes (including details of the relevant interest).
Section 74(4) of the Act states that a member of council who has an interest in a matter before the council must not:-
(a)propose or second a motion relating to the matter; or
(b)take part in discussion by the council relating to that matter; or
(c)while such discussion is taking place, be in, or in the close vicinity of, the room in which or other place at which that matter is being discussed; or
(d)vote in relation to that matter.
Section 74(4a)(b) qualifies the general rule and states that where a member of council has disclosed an interest he or she may, with the permission of the council, attend during proceedings of the council on the relevant matter in order to ask or answer questions, provided:-
(i)that the meeting is open to the public;
(ii)the member withdraws from the room after asking or answering questions; and
(iii)the member does not, in any other way, take part in any debate or vote on the matter.
Thus the duties of councillors in relation to their responsibilities to disclose conflicts of interest are clearly set out in the Act.
I observe that under s 60 of the Act, a councillor is required, before the first meeting to be attended by that councillor, to make an undertaking to discharge his or her duties conscientiously and to the best of their ability.
The First Contravention
At the meeting on 27 April 2011, in which Council was considering the tenders for the purchase of the Council’s former works depot, the following motion was proposed:-
That Council in considering the three tenders received for the purchase of Council’s former works depot at 39 North Street, Port Wakefield selects the tender from [not being Mr Pain Snr] ... for reason of being the highest tender, and authorises the Mayor and the Chief Executive Officer to sign documentation and affix the common seal in order for the sale of the property to be finalised.
A summary of the tenders was provided to the Council before the meeting. Cr Pain spoke against the motion to accept the preferred tender, which was not the one submitted by his father. He was fully aware of each of the tenders submitted, including that of his father. After discussion on the motion Cr Pain called for a division but the motion was passed by a majority of six votes to three.
Analysis
The Complainant has submitted that Cr Pain was closely associated with his father, who would have received a direct pecuniary benefit if he was successful in his tender. At the very least, Cr Pain’s father would have received an indirect pecuniary benefit if the motion was not passed, in that he would not have been precluded from purchasing the property, either through submitting another tender or otherwise.
As the Complainant has also pointed out, the motion to accept a tender, other than that of Mr Pain Snr, meant that he suffered a pecuniary detriment.
Cr Pain has submitted that he voted against the motion on the ground of his unease in relation to the Council’s failure to engage in consultation with the Environmental Protection Authority over concerns surrounding possible contamination of the land and not so that his father would be awarded the tender.
He also submitted that two of the tenders, which included that of his father, did not comply with all of the conditions set by the Council.
As a result he claimed that his father’s tender was invalid and so he was never going to receive a pecuniary benefit. Cr Pain further claimed that his state of mind was that his father’s tender was effectively removed from consideration and so did not consider that he was required to disclose his interest. All that his participation in the motion would lead to was the rejection of the preferred tender, thereby providing his father with the prospect of being able to re-tender for the purchase of the property. He suggested that in these circumstances his vote would only have resulted in a non-pecuniary benefit to his father, who would have been able to resubmit a tender in the event the Council went to open tender again.
In the end little turns on the subtle distinction between whether one classifies it as an indirect pecuniary benefit or a non-pecuniary benefit. Either way Mr Pain Snr would not have been precluded from purchasing the property again if the tenders were rejected by the Council.
The responsibility was clearly upon Cr Pain to disclose his conflict of interest in the matter before Council. The matter of the sale of the property plainly involved his father and he failed to disclose his interest. This is the gravamen of the complaint.
In any event, the Council took the view that notwithstanding non-compliance with all of the conditions in two of the three tenders, all tenders were open for consideration by Council. Therefore, it was possible that Mr Pain’s Snr tender could have been accepted by the Council, although I accept this was unlikely to occur.
Cr Pain has also submitted that at the time of this meeting he had not received any training on issues of conflict of interest and that this should be taken into consideration in assessing the seriousness of his contravention.
In my view, training is hardly necessary for a councillor to understand that he or she should not be involved in council business concerning that councillor’s own father. Cr Pain should have disclosed his obvious conflict of interest to the Council. His failure to do so demonstrated a serious lack of judgment on his part.
Surprisingly, none of the other Council members thought to raise with Cr Pain his obvious conflict of interest. All Council members would have known that Mr Pain Snr was the father of Cr Pain, yet no one said anything at the meeting. It seems they were not only prepared to permit Cr Pain to remain within the meeting room but to take part in discussion relating to the matter, call for a division and then vote on the motion. I will have more to say about this omission on the part of the Council later in these reasons.
The Second Contravention
At the Council meeting on 26 October 2011 a motion was before it relating specifically to Mr Pain Snr. As earlier observed he was a long standing critic of the Council’s handling of the Port Wakefield Community Wastewater Management Scheme (“the CWMS”). Most of the residents of Port Wakefield, the Council and especially Cr Pain were aware of Mr Pain’s Snr views.
The motion before the Council was a direct result of a recommendation to the Council in a report to it from the Chief Executive Officer dated 13 October 2011. The report specifically addressed Mr Pain’s Snr lengthy battle with the Council involving the CWMS over the previous 18 months. The report included a number of attachments involving correspondence with Mr Pain Snr, a letter from the Ombudsman concerning complaints relating to the Council’s handling of the CWMS and a copy of the definition of what constitutes “unreasonable complaint conduct”, as defined in the Commonwealth and NSW Ombudsman’s publications.
The recommendation, which formed the motion, was that Council:-
1. advise Mr R I Pain that the correspondence is at an end and as such Council does not intend to engage further in correspondence dealing with the Port Wakefield CWMS;
2. and further, advise the SA Ombudsman, Minister of Local Government and the Local Government Association of SA of Council’s decision.
Cr Pain spoke against the motion and called for a division. The motion was passed seven votes to two.
Analysis
It was submitted on Cr Pain’s behalf that he did not fully appreciate the nature of the motion. It was submitted that he misapprehended the situation and considered that the motion was one to “cease correspondence with anyone about the CWMS”. It was further submitted that as the CWMS was a community based issue no relevant interest under s 73 of the Act would have arisen. As I indicated during the hearing, I do not accept these submissions.
It beggars belief how Cr Pain could ever have formed such a view, given the plain words of the motion which accompanied the detailed report from the Chief Executive Officer. The very purpose of the motion clearly concerned Mr Pain Snr and no other. I find that Cr Pain knew exactly what he was voting for in relation to the motion before the Council.
Plainly, Mr Pain Snr stood to receive a non-pecuniary benefit if the motion was not passed, in that it would have allowed him to continue his campaign against the Council’s handling of the CWMS, through further correspondence with the Council on the issue.
This contravention is aggravated because it occurred only a month after Cr Pain attended at and participated in a training workshop on 28 September 2011, in which his obligations as a member of Council in disclosing conflicts of interest under s 74 of the Act was a focus.
Once again, I observe that none of the Council members at the meeting raised with Cr Pain his obvious conflict of interest and not only permitted him to take part in discussion on the matter but allowed him to vote on it.
I accept that on this occasion Cr Pain did not fully appreciate the extent of his conflict as the Minutes of the Council meeting of 26 October 2011 reveal that he had disclosed his interest in another motion relating to a review of a Council decision requested by his father. In that instance, Cr Pain appropriately absented himself whilst the matter was considered by the Council.
However, it is concerning that even after receiving training Cr Pain did not have a satisfactory understanding of his duties of disclosure. As I observed earlier, even if he had not received any training at all, it is basic knowledge that one should not participate in matters involving a close family member.
If Cr Pain had not received further training subsequent to this contravention, I would have ordered he undertake another course of training so as to ensure he has a thorough understanding of his responsibilities concerning conflicts of interest.
I return to my earlier observation that the other elected members of the Council would have known of Cr Pain’s conflict of interest, even if Cr Pain did not disclose it as required. I was informed on the hearing of the complaint, that councillors are trained not to speak against another councillor, who they consider has a conflict of interest, as this would be inappropriate and would amount to “passing judgment” against that councillor. If that is so, then it defies logic and commonsense and should not be a practice adopted by Council when a matter arising for business is as notorious or obvious as the case here. Good judgment and basic commonsense are not abandoned simply because one walks into Council Chambers. No one should be prevented from raising a matter of such obvious importance to the business of Council, lest it be viewed as speaking out against another councillor.
In any event, I cannot see how simply raising the matter amounts to “passing judgement”, whatever that expression was meant to convey. I do not understand why a possible conflict of interest, if known to another councillor, cannot be pointed out to the councillor concerned. That councillor might just be grateful for the reminder. I observe that members of parliament do not appear as reticent in raising their concerns over another member’s apparent conflict of interest in matters before the parliament.
If someone at the Council meetings had the commonsense to point out the obvious to Cr Pain, even accepting that it was his responsibility to have disclosed his interest, this whole issue could have been avoided.
Whether Proper Cause Exists to Take Disciplinary Action
I was informed that Cr Pain was investigated by the Ombudsman who made certain findings critical of him. It was submitted that this was a relevant consideration in determining whether proper cause exists to take disciplinary action against Cr Pain, given he has already endured the ignominy of the investigation and subsequent media scrutiny. The Ombudsman’s report was tendered because it was thought it might be necessary for me to have regard to its content when considering this submission.
Having given the matter further consideration, I indicate that I have decided not to read the Ombudsman’s report so as not to be influenced by any adverse criticisms of Cr Pain that I was told exist in it.
Usually, when one considers what disciplinary action to take following an investigation, the nature of the investigation cannot determine whether discipline is warranted or the appropriate discipline to impose.
However, in this instance, I accept that Cr Pain would have endured public opprobrium as a result of the release of the Ombudsman’s report. I have had regard to that in determining his submission as to whether proper cause exists to take disciplinary action, and if so, to what extent.
Cr Pain submitted that I should exercise my discretion under s 265(3)(d) of the Act to dismiss the complaint. The basis for this submission was that given Cr Pain’s motivation and particular state of mind in relation to matters before the Council, in which he failed to disclose his interest, as well as the subsequent investigation by the Ombudsman and public report, when taken in combination, amount to good reason to dismiss the complaint.
I am not prepared to do so as I consider the complaint brought against Cr Pain was both necessary and well founded. The matters referred to by him do not, in my view, amount to good reason to dismiss the complaint. I am not dealing with an isolated instance of a failure to comply with the duty of disclosure by a newly elected councillor of matters that may be difficult to recognise. Cr Pain failed, on two occasions, to disclose his obvious interest in the matters before the Council concerning his father.
He has further submitted, for the same reasons, that there is proper cause under s 267(1) of the Act for not taking any action against him.
The business of local council is an important one. Those who are elected to council must take their responsibilities and obligations seriously so as to reassure the public, who elected them that they are acting in a proper manner in the discharge of their public duties. This is particularly relevant in relation to any conflict of interest which may arise.
I am satisfied proper cause exists for taking disciplinary action against Cr Pain.
Despite the clear contraventions of s 74 of the Act, the Complainant is only seeking a reprimand against Cr Pain.
In my view, these are serious contraventions, as Cr Pain’s interest in the matters should have been obvious to him. He failed in his duty to disclose his interest to the Council, even after he had received training on the topic. His explanations for the contraventions, as put during submissions, were disingenuous. They demonstrate a reluctance to acknowledge full responsibility for his contraventions, which were described during submissions as technical and a result of a misapprehension on his part. I am not prepared to accept this as an accurate description of the admitted complaint. They had the flavour of rationalizing the contraventions after the event to minimize their seriousness.
Nevertheless, I take into account that Cr Pain has admitted the complaint brought against him and not sought to defend it. It has now been over a year since the last indiscretion and he has conducted himself appropriately. He has recently attended another training course on this issue of conflict of interest and I was assured there would not be a repeat of this omission.

Further, these disciplinary proceedings and the earlier investigation by the Ombudsman have certainly had a salutary effect upon Cr Pain and reinforced the need for him to be extra vigilant in complying with the Act at all times.
Reprimand
I have given serious consideration whether to discipline Cr Pain more severely than sought by the Complainant. However, in all the circumstances outlined above, I consider it sufficient, on this occasion, to reprimand Cr Pain and I do so pursuant to s 267(1) of the Act.