Kelly v Smith

NCAT Administrative and Equal Opportunity|2018-05-04

Solicitors: Colin Biggers & Paisley (Respondent) File Number(s): 2017/00343134

Summary

By amended application filed 26 February 2018, the applicant Mr Peter Kelly seeks orders that the respondent, Councillor Martin Smith, be disqualified from holding civic office in Ku-ring-ai Council, or such other order the Tribunal thinks appropriate.
For the following reasons, the application is dismissed.

Grounds of the Application

The grounds for the application are set out in the Amended Application as follows: In a Candidate Information Sheet (CIS) sworn prior to the commencement of the election campaign associated with the 2017 Local Government elections, Cr Smith swore that he had no close association with a property developer. At an Ordinary Meeting of Council on 10 October 2017, when candidates were sought from councillors for representation at the Sydney North Planning Panel (SNPP), Cr Smith was nominated by his co-councillor, Cr Szatow. Cr Szatow stated, "Yes, the reason I would nominate Cr Smith is that he's had considerable amount of on-the-ground experience in his local area in Gilda Avenue with quite a bit of success in actually dealing with these sorts of issues. I also believe that he has a very strong understanding of development as his - if l may say - his Dad has been a very successful developer, so he has seen both sides of the equation. I know where his support - urn - lies and I think he would do a sterling job; he not only has the experience with on-the-ground work here in Ku-ring-Gai, but he also has grown up with the - urn - sorts of legal issues and development issues that happen - urn - when - urn - with Development Applications." In addition, Cr Smith being a director of a company involved in property development, has a close association with a property developer and has not revealed that in his CIS, thereby creating the irregularity consistent with the legislative condition in s329(2)(a).

Mr Kelly's evidence

Mr Kelly relied on two affidavits, respectively sworn by him on 26 February 2018 and 26 April 2018.

Affidavit of 26 February

This affidavit annexes two Australian Securities and Investments Commission (ASIC) company extracts. The first is an extract of Smith Property One Pty Ltd, which shows Mr Smith and his wife to be directors and shareholders of the company.
The second company extract is for Martin Smith Development Group Pty Ltd, and shows Mr Smith to be a director and secretary of that company.

Affidavit of 26 April

In this affidavit Mr Kelly affirms that he and Mr Smith were elected to Ku-ring-Gai Council on 4 September 2017. Mr Kelly then states: 3. At a council meeting on 10 October 2017, in support of nominations to the Sydney North Planning Panel, a member of council - Ms Cheryl Szatow - stated the following with regard to the Respondent: a. Yes, the reason I would nominate Cr Smith is that he's had considerable amount of on the ground experience in his local area in Gilda Avenue with quite a bit of success in actually dealing with these sorts of issues. b. I also believe that he has a very strong understanding of development as his - if I may say - his Dad has been a very successful developer, so he has seen both sides of the equation. c. I know where his support urn lies and I think he would do a sterling job; he not only has the experience with on the ground work here in Ku-ring-Gai, but he also has grown up with the urn sorts of legal issues and development issues that happen, urn, when um with Development Applications.
Mr Kelly then states that he is able to provide a voice recording of this exchange as all Council meetings, with some exceptions, are open to the public and recorded. That may be so, but Mr Kelly has not provided such a recording.
Mr Kelly then states, in what is a submission rather than evidence, that: 5. It is purported that the reference to "his Dad" submitted in 3b above is a reference to "D. P. Smith" who owns and operates "DP Smith (Homes) Pty Ltd" - annexed hereto and marked "KHMS1" is the search result of DP Smith (Homes) Pty Ltd. Accordingly, the Respondent holds 20% of the issued shares.
The affidavit continues: [6] On or around 15 April 2018, I was notified by the NSW Electoral Commission that; current investigation is on foot in relation to the Respondent's relationship with a developer D. P. Smith (Homes) Pty Ltd. It is expected that the outcome of that investigation would assist in my case against the Respondent.
Mr Kelly explains, in what we consider to be a submission, that: [7] It is understood that investigation in mentioned in par [6] is to determine whether the Respondent is an associate of a property developer as articulated in Regulation 290 of the Local Government (General) Regulations 2005 in that he controls at least 20% shares of DP Smith (Homes) Pty Ltd.
The affidavit concludes with the statement: On or around 17 April 2018, I received an affidavit from the Respondent in which he went to great lengths to reveal the operations of businesses and companies operated by him, but neglects to mention his shareholdings in DP Smith (Homes) Pty Ltd even after being alerted to an Electoral Commission investigation into that shareholding.
That is the totality of the evidence filed by Mr Kelly. He was then cross-examined by Mr Smith's solicitor Mr Skehan. In cross-examination, Mr Kelly:

agreed that the ASIC searches were dated 25 February 2018, and that he had not conducted any earlier searches, or searches before he lodged the initial application to the Tribunal on 25 October 2017;
said that despite talking to third parties and "scouring" the internet, had not obtained any information that he wanted to rely on to support this application;
accepted that Mr Smith had affirmed an affidavit of 17 April 2018 (in which Mr Smith stated that he was not a property developer and was not a close associate of a corporation that was a property developer) and that he had no evidence to the contrary; and
said that he had no other evidence he wished to rely on.

Mr Smith's evidence
As noted above, Mr Smith filed an affidavit affirmed 17 April 2018. That affidavit relevantly states that Mr Smith: 1. is not a property developer within the meaning of reg 290 of the Local Government (General) Regulations 2005 (NSW).; 2. is not a close associate of a corporation that is a property developer within the meaning of reg 290 of the Local Government (General) Regulations 2005 (NSW).
These are statements of law or submissions rather than matters of evidence. However, they were not objected to. And, for the reasons appearing below, as there is no onus on a respondent to disprove the applicant's case, only an onus on the applicant to prove theirs, the admissibility of otherwise of these statements made no difference to the outcome of the application. In any event, the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: Civil and Administrative Tribunal Act 2013 (NCAT Act), s 38(2).
Mr Smith then states that he and his wife are directors and shareholders of Smith Property One Pty Ltd, and that the company: 1. is the corporate trustee of Mr Smith's family's self-managed superannuation fund; 2. has never lodged any relevant planning applications within the meaning of reg 290; 3. is not in the business of property development; and 4. is not a close associate of a company that is a property developer within the meaning of reg 290.
Mr Smith then gives evidence about Martin Smith Development Group Pty Ltd, namely that: 1. it is the company through which Mr Smith operates a national security business involved in designing and installing alarm, CCTV and various other security systems. The company operates under a number of trading names including Securetek Security Group. Mr Smith says that he has operated this business for over 20 years; 2. it has never lodged any relevant planning applications within the meaning of reg 290; 3. it is not in the business of property development; and 4. it is not a close associate of a company that is a property developer within the meaning of reg 290.

Principles

The relief sought by Mr Kelly is sought pursuant to s 329 of the Local Government Act 1997. That section relevantly provides: 329 Can the holder of a civic office be dismissed? (1) Any person may apply to the Civil and Administrative Tribunal for an order that a person be dismissed from civic office. (2) On any such application, the Tribunal may order the dismissal of a person from civic office: (a) if there has been any irregularity in the manner in which the person has been elected or appointed to that office, or (b) if the person is disqualified from holding civic office.
Mr Kelly relies only s 329(2)(a), that is he claims that there has been an "irregularity" in the manner in which Mr Smith was elected. The alleged irregularity claimed is the inaccurate or incorrect information in Mr Smith's Candidate Information Sheet, "thereby creating the irregularity consistent with the legislative condition in s 329(2)(a)".
As was recently stated in Briscoe-Hough v Tegg [2018] NSWCATAD 108 at [47] and following, a relevant "irregularity" for the purposes of s 329 of the Local Government Act 1993 may arise at any point during the electoral process. For instance, see Bourne v Murphy [1996] NSWCA 59, in which the alleged irregularity was the decision of the returning officer to declare certain votes to be invalid and therefore not count them.
However, the authorities establish that there must be a nexus between the alleged irregularity and the election of the official in relation to whom the Tribunal has received an application for removal under s 329. The need for this nexus is clear from the words of s 329(2)(a), which provide that the Tribunal may order the dismissal of a person from civic office "if there has been any irregularity in the manner in which the person has been elected or appointed to that office". As Beazley JA stated in Bourne v Murphy at [358]: "... it is not any irregularity which suffices for the purpose of s 329. Rather, it must be an irregularity such that the result of the election is thereby uncertain: see Bridge v Bowen [1916] HCA 38; (1916) 21 CLR 582 (my emphasis)."
We note that the onus of proof in these matters lies on an applicant. As the Appeal Panel stated recently in Alliance Motor Auctions Pty Ltd v Saman [2018] NSWCATOD 137 at [18]: A court or tribunal is informed and persuaded only by the presentation of evidence. Evidence is material which tends to persuade the court or tribunal of the truth or probability of the facts being alleged. Evidence may be photography, documentary or testimonial. But it will only succeed in persuading the tribunal if it appears as being truthful, reliable and cogent. In civil cases the standard or proof depends on the balance (or preponderance) of probabilities. This simply means that a party must prove that their case is more likely than not to be true. If the scales tip in favour of the party, however slight, they have proved their case. But if the probabilities are equal, they have failed to prove their case. In criminal cases the law imposes a higher standard of proof - and that is proof beyond reasonable doubt.
In this respect, we also bear in mind the guidance of the High Court of Australia in Rejfek v McElroy [1965] HCA 46; (1965) 112 CLR 517 which stated: 10. …The "clarity" of the proof required, where so serious a matter as fraud is to be found, is an acknowledgment that the degree of satisfaction for which the civil standard of proof calls may vary according to the gravity of the fact to be proved: see Briginshaw v. Briginshaw [1938] HCA 34; (1938) 60 CLR 336 , per Dixon J. (1938) 60 CLR, at p 362 … 11. But the standard of proof to be applied in a case and the relationship between the degree of persuasion of the mind according to the balance of probabilities and the gravity or otherwise of the fact of whose existence the mind is to be persuaded are not to be confused. The difference between the criminal standard of proof and the civil standard of proof is no mere matter of words: it is a matter of critical substance. No matter how grave the fact which is to be found in a civil case, the mind has only to be reasonably satisfied and has not with respect to any matter in issue in such a proceeding to attain that degree of certainty which is indispensable to the support of a conviction upon a criminal charge: see Helton v. Allen [1940] HCA 20; (1940) 63 CLR 691 per Dixon, Evatt and McTiernan JJ. (1940) 63 CLR, at p 714.
There is no evidence before the Tribunal on which it could find that the information in the Candidate Information Sheet was incorrect. On the contrary, the evidence before the Tribunal, being the affidavit evidence of Mr Smith, positively establishes that the information in the Candidate Information Sheet was correct.
However, even if we had found (which we do not) that the information in the Candidate Information Sheet was not correct, this application would have failed, as there was no evidence to show that the irregularity would have resulted in a different outcome to the election. In relation to this aspect of the application, it would have been necessary for Mr Kelly to demonstrate that the result of any irregularity would have rendered the results of the election uncertain. However, there was no evidentiary material about this at all.
For these reasons, the application must fail, and the application for relief refused.

Other

In these matters the usual rule is that each party bears its own costs: NCAT Act, s 60. However, costs may be awarded if there are special circumstances warranting an award of costs: s 60(3).
The applicant has been unsuccessful. If the respondent seeks an order as to costs, it should file submissions 7 days after receiving these reasons. The applicant may respond in a further 7 days.
The Tribunal's preliminary view is that the issue of costs should be determined on the papers and a hearing dispensed with pursuant to s 50(2) of the NCAT Act. If either party thinks otherwise, it should also address that matter in their submissions.

Orders 1. The application is dismissed. 2. The respondent to file and serve any submissions as to costs by 9 June 2018. 3. The applicant may respond by 19 June 2018

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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 June 2018

Local Government (General) Regulations 2005(NSW)

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