Kelsey v Logan City Council & Ors

INDUSTRIAL LAW - WORKPLACE RIGHT - whether applicant has exercised a workplace right - whether conduct breach of adverse action provisions - where applicant seeking declarations that the councillors had taken adverse action against her by voting to terminate her employment - where applicant seeking damages and penalties.

INDUSTRIAL LAW - APPLICATION FOR REINSTATEMENT - where applicant seeking injunctive relief - where applicant must establish accessorial liability in respect of the vote to terminate her employment - where applicant must establish actual knowledge on behalf of the alleged accessory of each of the essential elements of the offence - where applicant must show that the third to ninth respondents knew of the proscribed intention in not only their own votes but in the votes of others - whether contravention of civil penalty provision.

Industrial Relations Act 2016 (Qld), s 284, s 285, s 306, s 314, s 539, s 580

Public Interest Disclosure Act 2010, s 3, 13, 17, 40, 48

Local Government Act 2009, s 11, s 12, s 13, s 162, s 170

Crime and Corruption Act 2001 (Qld), s 38

Corporations Act 2001 (Cth), Part 9.4AAA

Civil Aviation Act 1988

Privacy Act 1988

Constitution of Queensland 2001 (Qld), s 70

Fair Work Act 2009 (Cth)

Civil Aviation Regulations 1988, r 51, r 215(9)

Local Government Regulation 2012, r 254E

Austin v Honeywell Ltd [2013] FCCA 662; (2013) 277 FLR 372

Australian Building and Construction Commissioner v Parker [2017] FCA 564; (2017) 266 IR 340; FCA 564

Australian Licenced Aircraft Engineers Association v Sunstate Airlines (Qld) Pty Ltd [2012] FCA 1222; (2012) 208 FCR 386

Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 86 ALJR 1044; 220 IR 445; 290 ALR 647; [2012] HCA 32

Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336

Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd [2015] FCAFC 157; (2015) 238 FCR 273

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; (2014) 253 CLR 243

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50

Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd (No.2) [2017] FCA 1046

Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd [2015] FCAFC 76; (2015) 231 FCR 150

Curwen & Ors v Vanbreck Pty Ltd [2009] VSCA 284; (2009) 26 VR 335

Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833

Federal Commissioner of Taxation v Whitfords Beach Pty Ltd [1982] HCA 8; (1982) 150 CLR 355

General Motors-Holden's Pty Ltd v Bowling (1976) 12 ALR 605; 51 ALJR 235

Hanley v AMWU [2000] FCA 1188; (2000) 100 FCR 530

Kelsey v Logan City Council and Another [2018] QIRC 009

Kelsey v Logan City Council & Ors (No 7) [2019] QIRC 085.

Loft v Minister for Local Government, Minister for Racing and Minister for Multicultural Affairs [2018] QSC 96

_Masters Home Improvement Australia Pty Ltd v North East Solutions Pty Lt_d [2017] VSCA 88

Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and others [1962] HCA 60; [1992] 110 CLR 445; HCA 66

Smith v Kelsey & Ors; Dalley & Ors v Kelsey & Ors [2020] QCA 55

Tattsbet v Morrow [2015] FCAFC 62; (2015) 233 FCR 46

Tesco Ltd v Nattrass [1971] UKHL 1; [1972] AC 153

The Environmental Group v Bowd [2019] FCA 951; (2019) 288 IR 396

Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278

Unsworth v Tristar Steering and Suspension Australia Limited [2008] FCA 1224

Mr C. Murdoch QC with Ms H Stephanos of Counsel, instructed by MinterEllison Lawyers for the Applicant.

Mr A. Herbert of Counsel, instructed by King & Company Solicitors for the First Respondent.

Mr M Trim of Counsel, instructed by Gadens Lawyers for the Second Respondent.

Mr W. Friend QC with Mr C. Massy of Counsel, instructed by McInnes Wilson Lawyers for the Third to Ninth Respondents.

• [1] Ms Sharon Rae Marie Kelsey (the Applicant) was appointed as Chief Executive Officer (CEO) of the Logan City Council (the First Respondent/the Council) on 2 June 2017. At that time, the Second Respondent was the Mayor.

• [2] The Applicant was CEO of the First Respondent. The Third to the Ninth Respondents were Councillors of the First Respondent.

• [3] Ms Kelsey's contract of employment contained a six-month probation period during which her employment could be ended on two weeks' notice. The contract had a nominal expiry date of 25 June 2021.

• [4] On 10 October 2017, Cr Dalley, Cr Schwarz and Mayor Smith (the Second Respondent) conducted a performance review meeting with Ms Kelsey. During this meeting the Councillors present told Ms Kelsey there were concerns with her performance.

• [5] On 12 October 2017 Ms Kelsey made a Public Interest Disclosure (the PID) to the Council, Minister for Local Government and to the Crime and Corruption Commission (the CCC) alleging possible misconduct on behalf of Mayor Smith.

• [6] After the PID was made the Councillors received legal advice that they could not take the PID into account when considering Ms Kelsey's employment.

• [7] On 1 December 2017, Ms Kelsey commenced proceedings against the Council and the Second Respondent, alleging contraventions of s 285 of the Industrial Relations Act 2016 (Qld) (the IR Act) and s 48 of the Public Interest Disclosure Act 2010 (Qld) (the PID Act).

• [8] On 1 February 2018 the Applicant was successful in obtaining injunctive orders from the Queensland Industrial Relations Commission (the Commission) that the Second Respondent was prohibited in taking part in any resolution by the Council in respect of the Applicant's employment.[1]
• [9] On 5 February 2018 the CCC wrote to each of the Councillors informing them of the penalties involved in taking action against a person because they had made a PID and advising that they would be investigating any action taken in respect of the Applicant's employment.

• [10] On 6 February 2018 the Applicant's solicitors wrote to the First Respondent asserting that if a Councillor voted for her termination then they would have to individually justify the reason for that decision.

• [11] On 7 February 2018 the Applicant's employment at the Council was terminated as a consequence of a vote of the Council. Councillors Dalley, Lutton, Swenson, L.W. Smith, Pidgeon, Schwarz, and Breene all voted in favour of the termination of her employment. Her employment was brought to an end by the giving of two weeks' notice.

• [12] The Applicant subsequently amended her application to include the named Councillors as Respondents. The relief sought included orders for reinstatement as CEO, injunctive relief preventing the Councillors from voting on her employment until the completion of the contract term on 25 June 2021, declarations that the Councillors had taken adverse action against her by voting to terminate her employment and damages.

• [13] On 10 July and 18 November 2018, the CCC informed the Councillors and Mayor Smith that it was investigating the Mayor's conduct.

• [14] On 17 December 2018 the substantive hearing commenced, and the evidence was heard over 15 days concluding on 15 February 2019. The parties were due to give their closing submissions on 2 and 3 May 2019.

• [15] On Friday 26 April 2019 the Second to the Ninth Respondents were each arrested by officers of the CCC and charged with fraud under s 408C of the Criminal Code 1899, on the basis that they dishonestly caused a detriment to Ms Kelsey by terminating her employment.

• [16] The Appellants applied to the Commission for a stay of the proceedings on the basis that the Commission proceedings would require the Commission to determine the same factual matters that would need to be determined by the jury in the criminal trial, and that the likely publicity associated with that determination would prejudice the fair trial of the criminal charges.

• [17] The Commission refused to grant the stay.[2]

• [18] That decision was then appealed to the Industrial Court of Queensland (ICQ). The appeal was dismissed.[3]

• [19] The decision of the ICQ was appealed to the Queensland Court of Appeal and dismissed.[4]

• [20] The relevant legislation is set out hereunder.

Public Interest Disclosure Act 2010 (Qld)

(a) to promote the public interest by facilitating public interest disclosures of wrongdoing in the public sector; and

(b) to ensure that public interest disclosures are properly assessed and, when appropriate, properly investigated and dealt with; and

(c) to ensure that appropriate consideration is given to the interests of persons who are the subject of a public interest disclosure; and

(d) to afford protection from reprisals to persons making public interest disclosures.

(1) This section applies if a person who is a public officer has information about -

(a) the conduct of another person that could, if proved, be -

(ii) maladministration that adversely affects a person's interests in a substantial and specific way; or

(b) a substantial misuse of public resources (other than an alleged misuse based on mere disagreement over policy that may properly be adopted about amounts, purposes or priorities of expenditure); or

(c) a substantial and specific danger to public health or safety; or

(d) a substantial and specific danger to the environment.

(2) The person may make a disclosure under section 17 in relation to the information to a proper authority.

(3) For subsection (1), a person has information about the conduct of another person or another matter if -

(a) the person honestly believes on reasonable grounds that the information tends to show the conduct or other matter; or

(b) the information tends to show the conduct or other matter, regardless of whether the person honestly believes the information tends to show the conduct or other matter

(1) A person may make a disclosure to a proper authority in any way, including anonymously.

(2) However, if a proper authority has a reasonable procedure for making a public interest disclosure to the proper authority, the person must use the procedure.

(3) Despite subsection (2), if the proper authority is a public sector entity, the person may make the disclosure to -

(b) for a public sector entity that is a department -the Minister responsible for its administration; or

(c) if the proper authority that is a public sector entity has a governing body -a member of its governing body; or

(d) if the person is an officer of the entity - another person who, directly or indirectly, supervises or manages the person; or

(e) an officer of the entity who has the function of receiving or taking action on the type of information being disclosed.

1. an officer of an entity's ethical standards unit, if the disclosure is made under section 13(1)(a)(i)
2. a health officer or environmental officer of a department having a statutory or administrative responsibility to investigate something mentioned in section 12(1)(a), (b) or (c) or section 13(1)(c) or (d)
3. the officer of an entity in charge of its human resource management if the public interest disclosure is made under section 12(1)(d) and is about detriment to the career of an employee of the entity

(4) This Act does not affect a procedure required under another Act for disclosing the type of information being disclosed.

(5) If a public interest disclosure is properly made to a proper authority, the proper authority is taken to have received the disclosure for the purposes of this Act.

(1) A person must not cause, or attempt or conspire to cause, detriment to another person because, or in the belief that -

(a) the other person or someone else has made, or intends to make, a public interest disclosure; or

(b) the other person or someone else is, has been, or intends to be, involved in a proceeding under the Act against any person.

(2) An attempt to cause detriment includes an attempt to induce a person to cause detriment.

(3) A contravention of subsection (1) is a reprisal or the taking of a reprisal.

(4) A ground mentioned in subsection (1) as the ground for a reprisal is the unlawful ground for the reprisal.

(5) For the contravention mentioned in subsection (3) to happen, it is sufficient if the unlawful ground is a substantial ground for the act or omission that is the reprisal, even if there is another ground for the act or omission

(1) An application for an injunction about a reprisal may be made to the industrial commission if the reprisal -

(a) has caused or may cause detriment to an employee; and

(b) involves or may involve a breach of the Industrial Relations Act 2016 or an industrial instrument under that Act.

(i) whose rules entitle it to represent the industrial interests of the employee; and

(ii) acting in the employee's interests with the employee's consent; or

(c) the Crime and Corruption Commission acting in the employee's interests with the employee's consent if -

(ii) the reprisal involves or may involve an act or omission that the Crime and Corruption Commission may investigate.

(3) The Industrial Relations Act 2016, section 473 applies to the application, but this part prevails if it is inconsistent with that section.

(4) If the industrial commission has jurisdiction to grant an injunction on an application under subsection (1), the jurisdiction is exclusive of the jurisdiction of any other court or tribunal other than the Industrial Court.

(5) Without limiting this section, the application is an industrial cause within the meaning of the Industrial Relations Act 2016.

Industrial Relations Act 2016

(1) A person has a workplace right if the person -

(a) has a right to the benefit of, or has a role or responsibility under, an industrial law, industrial instrument or order made by an industrial body; or

(b) is able to start, or participate in, a process or proceedings under an industrial law or industrial instrument; or

(i) to an entity having the capacity under an industrial law to seek compliance with that law or an industrial instrument; or

(ii) if the person is an employee - in relation to his or her employment.

(b) the court, or another court or commission (however called), exercising industrial law functions and powers corresponding to the commission's functions and powers.

(1) A person must not take adverse action against another person -

(ii) has, or has not, exercised a workplace right; or

(iii) proposes to or proposes not to, or has at any time proposed to or proposed not to, exercise a workplace right; or

(b) to prevent the exercise of a workplace right by the other person.

(2) A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes to or has at any time proposed to exercise, a workplace right for the second person's benefit or for the benefit of a class of persons to which the second person belongs.

Local Government Act 2009

13 Responsibilities of local government employees

(1) All employees of a local government have the same responsibilities, but the chief executive officer has some extra responsibilities.

(2) All employees have the following responsibilities -

(a) implementing the policies and priorities of the local government in a way that promotes -

(i) the effective, efficient and economical management of public resources; and

(b) carrying out their duties in a way that ensures the local government -

(i) discharges its responsibilities under this Act; and

(ii) complies with all laws that apply to local governments; and

(c) providing sound and impartial advice to the local government;

(d) carrying out their duties impartially and with integrity;

(e) ensuring the employee's personal conduct does not reflect adversely on the reputation of the local government;

(f) improving all aspects of the employee's work performance;

(g) observing all laws relating to their employment;

(h) observing the ethics principles under the Public Sector Ethics Act 1994, section 4;

(i) complying with a code of conduct under the Public Sector Ethics Act 1994.

(3) The chief executive officer has the following extra responsibilities -

(a) managing the local government in a way that promotes -

(i) the effective, efficient and economical management of public resources; and

(b) managing the other local government employees through management practices that -

(ii) are responsive to the local government's policies and priorities;

(c) establishing and implementing goals and practices in accordance with the policies and priorities of the local government;

(d) establishing and implementing practices about access and equity to ensure that members of the community have access to -

(ii) appropriate avenues for reviewing local government decisions;

(i) all records about the proceedings, accounts or transactions of the local government or its committees; and

(ii) all documents owned or held by the local government;

(f) complying with requests from councillors under section 170A -

(i) for advice to assist the councillor carry out his or her role as a councillor; or

(ii) for information, that the local government has access to, relating to the local government.

Crime and Corruption Act 2001 (Qld)

38 Duty to notify commission of corrupt conduct

(1) This section applies if a public official reasonably suspect that a complaint, or information or matter (also a complaint), involves, or may involve, corrupt conduct.

(2) The public official must notify the commission of the complaint, subject to section 40.

• [21] The general protections scheme under the IR Act protects employees from adverse action taken against them by their employer because they have exercised or not exercised a workplace right or proposes to exercise or not exercise a workplace right. Under s 282(1) of the IR Act:

(1) Adverse action is taken by an employer against an employee if the employer -

(b) injures the employee in his or her employment; or

(c) alters the position of the employee to the employee's prejudice; or

(d) discriminates between the employee and other employees of the employer.

• [22] To constitute adverse action, relevantly the incident or event must constitute something that injured Ms Kelsey or altered her position to her detriment.

• [23] It is not contentious that termination of employment is sufficient to amount to adverse action.[5]

• [24] The Third to Ninth Respondents concede that the following was the exercise of a workplace right for the purposes of s 285 of the IR Act:

1. conduct described at [2.65] (a) to (c) of the applicant's submissions;
2. correspondence of 12 October 2017 to the Council, so far as it complained about the applicant's probation process; and
3. commencement of this proceeding.[6]

• [25] In the Further Amended Application,[7] the Applicant alleges that she has exercised a variety of workplace rights from August 2017 until the filing of this proceeding in December 2017.

• [26] The definition of "industrial law" in the IR Act is in materially the same terms as the definition of the phrase "workplace law" contained in s 12 of the Fair Work Act 2009 (Cth) (FW Act) and the cases decided under the FW Act provide guidance in respect to how that phrase ought to be interpreted.

• [27] In Australian Licenced Aircraft Engineers Association v Sunstate Airlines (Qld) Pty Ltd (ALAEA)[8] Logan J considered the definition of "workplace law" in s 12 of the FW Act. That case involved the question whether regulations 51 and 215(9) of the Civil Aviation Regulations 1988 (CA Regulations) made under the Civil Aviation Act 1988, were workplace laws. Those regulations relevantly provided:

51 Reporting of defects in Australian aircraft - general

(1) Where a person who, in the course of his or her employment with an employer, is engaged in the maintenance of an Australian aircraft becomes aware of the existence of a defect in the aircraft, the person shall report the defect to his or her employer.

(4) If the holder of the certificate of registration for an Australian aircraft becomes aware of the existence of a defect in the aircraft, he or she must:

(9) Each member of the operations personnel of an operator shall comply with all instructions contained in the operations manual in so far as they relate to his or her duties or activities.

... it is not fatal to the case which the ALAEA seeks to make against Sunstate that the sources of what it particularises as a workplace right are regulations, not provisions in an enactment.

It does not follow from this conclusion that the two particularised CA Regs are a law of the Commonwealth "that regulates the relationships between employers and employees". It is trite that this descriptive clause must be construed as a whole. Not only must the law "regulate" but there must be an object of regulation of a particular specified kind - "relationships between employers and employees".

A regulation which, like reg 51 or reg 215(9) of the CA Regs, imposes a duty on a person as an incident of undertaking a particular task in the course of employment - "engaged in the maintenance of an Australian aircraft" (reg 51) or as an incident of a particular type of employment - operations personnel of an operator (reg 215(9)) does not regulate the relationship between that person and his employer. Having regard to the dictionary definitions cited by Barker J in ALAEA v International Aviation Service, each of these provisions in the CA Regs might readily be characterised as a provision which "regulates" the conduct of a person to whom it applies but the object of that regulation is not the relationship between that person as an employee and his employer but rather that of air safety by the imposition of particular reporting obligations. Common to the definitions of "workplace instrument" and "workplace law" in s 12 of the Fair Work Act is the object of the relationship between employer and employee. Provisions which do no more than use the status of employer or employee as an incidental touchstone for the imposition of duties serving other ends do not fall within the terms of these definitions. (Emphasis added)

Insofar as there may, because of this feature of the definitions, otherwise be room for debate as to whether provisions in statutes or regulations dealing with occupational health and safety matters had as their object the relationship between employer and employee, that debate is quelled by the express inclusion of such provisions in the definition of "workplace law". That express inclusion also sets the limit of the additional reach of the definition.[9]

• [29] The Third to the Ninth Respondents referred the Commission to the decision of the Federal Court in The Environmental Group v Bowd.[10] In that case the applicant was the CEO of a publicly listed company who was subject to adverse action by the employer and its managing director in the form of an investigation into the CEO's conduct, suspension and dismissal because he exercised "workplace rights" under s 341 of the FW Act.

• [30] Whilst the CEO relied on numerous workplace rights, the two main issues were whether a CEO report issued to the Board about the CEO's concerns with the governance of the company generally, were a complaint or inquiry in respect of his employment. Steward J concluded that it was not. His Honour found that the CEO Report was not, as a matter of substance, about Mr Bowd's employment as CEO. It was not directed at his relationship of employment. Rather, it was directed at or concerned with, the state of The Environmental Group of companies as at January 2017. It was made as part of The Environmental Group's processes of corporate governance.[11]

• [31] The second issue was whether the making of a whistle-blower complaint to the Australian Securities and Investments Commission (ASIC) was engaging in a process under a workplace law.

• [32] The relevant provisions of Part 9.4AAA of the Corporations Act 2001 (Cth) adopt materially the same structure as the PID Act and provide for a discretionary disclosure to be made by a category of persons, including employees. The discloser is then protected from any adverse treatment as a consequence of making those disclosures.[12]

• [33] Steward J recited the argument made by the CEO to the effect that he could initiate a process pursuant to Part 9.4AAA which was a process under a workplace law. That is, the making of a disclosure was the exercise of a workplace right. His Honour said:

It was also submitted that s 341(1)(b) was satisfied because, at the very least, Mr Bowd could 'initiate' pursuant to these rules a process 'under a workplace law'. For the moment, I am prepared to accept that a complaint made to ASIC could initiate a process, namely an investigation. However, I do not think that Pt 9.4AAA is a law that regulates, or comprises rules that regulate, relationships between employees and employers. In my view, no relevant provision of Pt 9.4AAA is a workplace law.[13]

• [34] After citing ALAEA[14] with approval, Steward J held:

To secure the benefit of the protections afforded by Pt 9.4AAA, the disclosure must qualify for protection by satisfying the requirements of s 1317AA of the CA. I consider these in more detail below. For the moment, it may be noted that the provisions of Pt 9.4AAA are not only concerned with employees. They extend to disclosures made by suppliers of goods and services to a company, and to employees of such suppliers, which have been made to ASIC, to the company's auditor, to a person authorised to receive such disclosures or to certain senior identified executives. Their object is not the regulation of relations between employees and employers. Rather, their object is to encourage compliance with the terms of the CA by giving statutory protection to "whistleblowers". It may be accepted that the provision recognises that employees of a company are likely to be such "whistleblowers", and thus expressly refers to employees and provides for a right of reinstatement. But what is being regulated is not that employee's relationship with the company, but rather, and ultimately, that company's potential contravention of provisions of the CA. The relevance of an employee to the provisions contained in Pt 9.4AAA is to that person in his or her capacity as a whistleblower, who perhaps also happens to be an employee, rather than as someone employed by a company. As was the case in Australian Licenced Aircraft Engineers Association, s 1317AA and Pt 9.4AAA more generally, deploy "the status of an employer or employee" for the "imposition of duties serving other ends", namely the regulation of corporate behaviour. If it matters, the same conclusion should also apply to ss 182 and 183 of the CA. Each provision is directed at the regulation of corporate governance.

Did s 341(1)(c) of the definition of "workplace right" apply?

For the foregoing reasons, I am also not satisfied that the making of the complaint to ASIC was a complaint "to a person or body having the capacity under a workplace law to seek compliance with that law" for the purposes of s 341(1)(c)(i). That is because, for the reasons given, Pt 9.4AAA of the CA is not a "workplace law".[15]

• [35] For the following reasons, I accept that s 13(2) of the LG Act is an industrial law. However, the PID and CC Act are not industrial laws for the purposes of the IR Act. Whilst each piece of legislation imposes obligations upon either an employee or an employer, neither Act seeks to regulate the relationship between employees and employers.

Local Government Act

• [36] The Applicant submits that the LG Act is an industrial law due to the nature of the Act and particularly s 13 which regulates the relationship between the Local Government and its employees, including the Applicant. The Applicant had a workplace right under s 284(1)(a) of the IR Act due to her responsibilities under s 13 of the LG Act.

• [37] As to whether the matter is an "industrial cause" and an "industrial matter", the Applicant referred to the various non-publication orders which have been made under ss 539(c) and 580(5) of the IR Act. It is submitted that the Respondents did not oppose such orders and on that basis, it is argued that the Respondents accept the matter involves an "industrial cause" as set out in Schedule 5 and s 9 of the IR Act. Schedule 1 of the IR Act sets out a list of industrial matters referred to in s 9(3) including Items 16, 17 and 21.

• [38] The Applicant submits that she exercised a workplace right under the LG Act. Insofar as the LG Act is concerned, it is contended that the right derives from s 13(2)(b) and (g). It is argued by the Applicant that s 13 of the LG Act prescribes responsibilities of all local government employees, including additional responsibilities on the CEO.

• [39] Contrary to the Applicant's submissions, the question is not whether the statute as a whole can be described as an "industrial law", but rather whether the specific provision being relied upon can be characterised in that way.

• [40] After considering the reasoning of Logan J in ALAEA,[16] the First Respondent submits that in respect of those parts of the LG Act which make specific prescription for the exercise of control by the employer and the Chief Executive Officer over local government authorities, then s 13 of the LG Act "... appears to be a workplace law."[17]

• [41] Equally, the Third to Ninth Respondents accept that s 13 of the LG Act is an industrial law.

• [42] However, the Second Respondent takes a different position arguing that the Applicant did not exercise a workplace right under the LG Act as it is not an industrial law for the purposes of the IR Act.[18]

• [43] I accept that s 13(2) of the LG Act is a law which regulates the relationship between employers and employees and is accordingly an industrial law within the meaning of the IR Act.

Public Interest Disclosure Act

• [44] The Applicant submits that s 48 of the PID Act is an industrial law as the provision allows an 'employee' to make an application for an injunction about a reprisal where the reprisal has caused or may cause detriment to an employee and involves or may involve a breach of the IR Act or an industrial instrument under that Act.

• [45] Further, given the wording and requirements of the provision, the provision regulates the relationship of the employee and the employer as it relates to a reprisal. The section itself states that such applications are industrial causes.

• [46] The Applicant argues that the effect of s 48 of the PID Act is to protect employees from detriment arising as a result of them making a PID. A finding that s 48 of the PID Act is not an industrial law for the purposes of s 284(1)(b) of the IR Act would be inconsistent with that protection and the sole application of the section to an employee.

• [47] It is contended that this construction is confirmed by s 48(5) of the IR Act which deems any application to be an industrial cause for the purposes of the IR Act. The identification of the proceeding as an industrial cause enlivens the range of procedural and substantive powers conferred in the IR Act on the Commission when dealing with an industrial cause.[19] If s 48 of the PID Act was an industrial law, being a law that regulated the relationship between an employer and an employee, there would be no need to deem such proceedings as an industrial cause. They would by their very nature fall within that definition.

• [48] Moreover, given the width of s 9 and Schedule 1 even without the express statement of s 48 of the PID Act, the Applicant submits that the definition is so broad that the subject matter of this application ought to be considered an "industrial matter" and thus an "industrial cause".

• [49] The Applicant in the Further Amended Application makes it clear that the Council Complaint and CCC Referral under ss 13 and 17 of the PID Act was the exercise of a workplace right for the purposes of the s 284 of the IR Act. However, the Applicant exercised no workplace right under s 48 of the PID Act.

• [50] Section 48(1)(a) of the PID Act gives the Applicant the capacity to apply to the Commission for an injunction about a reprisal if the reprisal has caused or may cause detriment to an employee. It does not seek to regulate the relationship between an employer and an employee. All that is necessary is that the person who is suffering a detriment by virtue of the reprisal be an employee and that there may be a contravention of the IR Act.

• [51] The First Respondent argues that if the PID Act is not an "industrial law" as defined, then the making of a PID cannot amount to the exercise of a workplace right as asserted, as such activity cannot be the commencement of, or participation in, a process under an industrial law.

• [52] The First Respondent submits that the standing of the PID Act as an "industrial law" is not directly pleaded. Rather the Applicant's further amended application alleges the workplace rights relied upon in accordance with the definition in s 284(1)(b) of the IR Act was (in part) the ability to start or participate in a process or proceeding under the PID Act.[20] In addition, the Applicant's submissions suggest the exercise of a workplace right for the purposes of these proceedings by making various complaints. Part of the correspondence has been characterised as a PID under the PID Act.

• [53] As submitted in the First Respondent's written submissions, ss 13 and 17 of the PID Act do not, and do not purport in any way to, regulate the employment relationship between the Applicant and the First Respondent.[21]

• [54] There is nothing within the Objectives of the PID Act[22] or in ss 13 or 17 which suggests that the conferral of entitlements and obligations is referrable to the regulation of employment. By designating a public officer as being a person who has a right to act against any other person pursuant to ss 13 and 17 of the PID Act cannot constitute those sections as being an "industrial law" as defined, nor can action taken in reliance upon those sections properly be construed as being a role or responsibility, or the commencement of a proceeding, under an "industrial law".

• [55] In order for a law to answer the description as an industrial law, it must have as its object the regulation of the relationship between employers and employees. That focuses attention on the purpose of the regulation contained within the relevant statute.

• [56] It will be recalled that Logan J found in ALAEA that provisions which do no more than use the status of an employer or an employee as an incidental touchstone for the imposition of regulation or other duties serving other ends, do not fall within the definition of a workplace law. That was because those provisions did not have the object of regulating the relationship between employers and employees.[23]

• [57] Sections 13 and 17 of the PID Act are not directed towards regulating the relationship between the public official and their employer, but are provisions which are directed towards the control and investigation of corrupt behaviour, and which designates certain persons as having particular entitlements (in the context of reporting corrupt behaviour) in the broadest possible sense, rather than merely being the actions of the specific employer of the disclosing person.

• [58] The First Respondent submits that this is an insufficient connection. The fact that legislation of this kind may contain particular remedies that will be available, under limited circumstances, for disclosers who happen to be employees, does not change the character of the provisions under which the initial disclosure was made.

• [59] In ALAEA, Logan J rejected a submission that in order for an Act to fall within the definition, the entire Act had to be a law which regulated the relationship between employers and employees.[24]
• [60] This approach is consistent with the Full Court's conclusion in Tattsbet v Morrow.[25] It is not necessary for the entire PID Act to be described as an industrial law. It is only necessary that the sections under which the Applicant made the alleged PID, being ss 13 and 17 of the PID Act, be industrial laws.

• [61] There is no basis to construe ss 13 and 17 of the PID Act as laws which have the purpose of regulating the relationship between employers and employees. The purpose of those provisions is to facilitate the ability of persons (regardless of whether they are employees) to report concerns about corruption and not in any way to regulate the employment relationship.

• [62] For the reasons set out above, ss 13 and 17 of the PID Act are not industrial laws and accordingly, the correspondence of 12 October 2017, so far as it constituted a PID, did not constitute the exercise of a workplace right.

• [63] Further, the First Respondent submits that any claim under the IR Act based upon the assertion that adverse action was taken because of the making of a PID, pursuant to ss 13 and 17 of the PID Act, by way of the letter of 12 October 2017, must also fail.

Crime and Corruption Act

• [64] As Chief Executive of the First Respondent, the Applicant was, for the purposes of the CC Act, a public official of a unit of public administration.

• [65] Section 38 of the CC Act places a requirement on the Applicant to notify the CCC in circumstances where she reasonably suspects that she has information involving corrupt conduct. It is contended that the duty imposed on the Applicant arises as a direct result of the Applicant's employment with the First Respondent. Accordingly, the Applicant submits that the CC Act regulates the relationship between her and her employer due to the duties it places on the Applicant in her role as a public official within a unit of public administration.

• [66] The Respondents argue that the CC Act is not an industrial law for the purposes of the IR Act. Whilst the CC Act imposes an obligation on the Applicant to report corrupt conduct, it does not seek to regulate the relationship between an employee or employer.

• [67] In Austin v Honeywell Ltd,[26] the applicant claimed that, during a pre-employment screening process, the respondent required her to provide, amongst other things, an electronic copy of her signature and a digital copy of her passport. The applicant declined to provide those things because she was concerned about identity theft and the bona fides of the agent who was engaged by the respondent to conduct the pre-employment screening.

• [68] The respondent withdrew the offer of employment it had made to the applicant. The applicant claimed that this constituted adverse action because the applicant had exercised a workplace right that arose under a workplace law, namely, the Privacy Act 1988.

• [69] After considering the reasoning of Logan J in ALAEA, Riley FCCJ concluded that the Privacy Act 1988 was not a workplace law. It was held that at most, the Privacy Act 1988 incidentally imposes duties on prospective employers to achieve ends that do not primarily concern the regulation of the relationship between employers and employees.[27]

• [70] As s 4(1)(b) of the CC Act makes clear, one of the purposes of the Act is to continuously improve the integrity of, and to reduce the incidence of corruption, in the public sector. The CC Act serves the function of guarding against corrupt practices of various kinds and is not of itself concerned with the regulation of the employment relationship.

• [71] As Logan J found in ALAEA the CA Regulations were directed to the object of air safety and that the reporting of defects in aircraft was a part of that objective.[28] The fact that the aircraft engineer who discovers the irregularity is an employee of the airline operator who owns and maintains the aircraft, and therefore the person to whom they must report it, does not render the CA Regulations as an industrial law. It is a provision in which that relationship is used as a mere touchstone by which duties which serve another purpose are imposed, namely the duty to ensure air safety.

• [72] By analogy, the CC Act nominates a particular type of person by reference to the office that they hold, and requires them to report certain types of conduct which may or may not have anything to do with their employer, and forms no part of the employment relationship or the regulation thereof.

• [73] For this reason, the CC Act is not an industrial law for the purposes of the IR Act.

• [74] As a matter of general principle, in proceedings before the Commission the legal onus of proof lies with the person who alleges the thing that must be proved. The Applicant accepts that, subject to the application of the reverse onus of proof, she bears the onus of proving the facts alleged in her claim.[29]

• [75] The Applicant also recognises that in order to succeed in her claim against the Respondents she needs to prove these matters subject to the degree of proof as recognised in Briginshaw v Briginshaw (Briginshaw).[30]

• [76] The Briginshaw principle, at its simplest, is understood as requiring the exercise of care when making findings of fact in determining serious civil matters. The principle was explained by Dixon J where his Honour wrote:

...when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence ... It cannot be found as a result of a mere mechanical comparison of probabilities.[31]

• [77] His Honour went on to express the standard as one of "reasonable satisfaction". He observed:

... reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer ... In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences.[32]

• [78] In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and others,[33] Mason CJ, Brennan, Deane and Gaudron JJ stated as follows:

The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary "where so serious a matter as fraud is to be found". Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct ...[34] (citations omitted)

• [79] Let me now turn to the "reverse onus" provisions in s 306 of the IR Act. Section 306 of the IR Act provides:

306 Reason for action to be presumed unless proved otherwise

(a) in an application in relation to a contravention of a provision of this part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

(b) taking that action for that reason or with that intent would be a contravention of the provision.

(2) It is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

(3) Subsection (2) does not apply in relation to orders for an interim injunction.

• [80] The equivalent provision in the FW Act is s 361.

• [81] The High Court considered the effect of s 361 of the Act in Board of Bendigo Regional Institute of Technical and Further Education v Barclay (Barclay).[35] In that case, the alleged reason for the adverse action was that the employee was an officer or member of an industrial association or engaged or proposed to engage in particular kinds of industrial activity. French CJ and Crennan J said:

There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression "because" in s 346, or the statutory presumption in s 361, as requiring only an objective inquiry into a defendant employer's reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains "why was the adverse action taken?".

This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker's evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.[36] (citations omitted)

• [82] French CJ and Crennan J adopted the reasons of Mason J (with whom Stephen and Jacobs JJ also agreed) in General Motors-Holden's Pty Ltd v Bowling[37] where their Honours said:

The protection of trade unions and their representatives from discrimination and victimization by employers does not require an interpretation as extreme as that favoured by Isaacs J. It would unduly and unfairly inhibit the dismissal of a union representative in circumstances where other employees would be dismissed and thereby confer on the union representative an advantage not enjoyed by other workers, to penalize a dismissal merely because the prohibited factor entered into the employer's reasons for dismissal though it was not a substantial and operative factor in those reasons.[38]

• [83] Gummow and Hayne JJ adopted a similar position in Barclay observing:

In determining an application under s 346 the Federal Court was to assess whether the engagement of an employee in an industrial activity was a "substantial and operative factor" as to constitute a "reason", potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence [said] to discharge the onus upon the employer under s 361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the inquiry.[39]

To search for the "reason" for a voluntary action is to search for the reasoning actually employed by the person who acted. Nothing in the Act expressly suggests that the courts are to search for "unconscious" elements in the impugned reasoning of persons in Dr Harvey's position. No requirement for such search can be implied. This is so if only because it would create an impossible burden on employers accused of contravening s 346 of the Act to search the minds of the employees whose conduct is said to have caused the contravention. How could an employer ever prove that there was no unconscious reason of a prohibited kind? An employer's inquiries of the relevant employees would provoke, at best, nothing but hilarity. The employees might retort that while they could say what reasons they were conscious of, they could say nothing about those they were not conscious of.[40]

• [84] For the Applicant to succeed, the reason for the adverse action must be "a substantial and operative factor" in the reasons for the adverse action. The Commission must consider the conscious reasons of the Third to Ninth Respondents and does not require analysis of unconscious or subconscious reasons.

• [85] The Applicant was appointed the Chief Executive of the First Respondent following a competitive recruitment process undertaken by Davidson Recruitment.

• [86] Preceding the Applicant's appointment, the Council experienced a period of significant instability. Prior to Ms Kelsey commencing as CEO, the Council had four permanent and interim CEOs in a 14-month period - Mr Chris Rose, Mr John Oberhardt, Mr Andrew Milner and Mr Todd Roh1.[41] Many Councillors gave evidence of their dissatisfaction with the performance of certain of these CEOs.[42]
• [87] The appointment of Ms Kelsey brought with it a degree of optimism that her engagement would usher in a new era of stability for Logan City. However, as the evidence demonstrates, that was not to be.

• [88] As the evidence unfolded, it became apparent that the Council was divided. Councillors were divided broadly between those who supported Ms Kelsey and those who did not. The depressing saga that this matter became was set against a background of pettiness, distrust and vitriol; a factionalised Council consumed by self-interest and point-scoring.

• [89] Ms Kelsey holds the degrees of Bachelor of Laws and Master of Laws and is admitted as a Barrister and Solicitor. She has a history of work in senior local government positions in South Australia and Victoria, in the legal profession and with an anti-corruption body.[43]

• [90] Ms Kelsey was appointed following a long selection process. One part of this process was an interview with Councillors. All Councillors present at Ms Kelsey's interview were entitled to ask Ms Kelsey questions including about her experience, and the difference between Council and local government across jurisdictions. Some took the opportunity to do so.

• [91] At a Special Council meeting on 2 June 2017, Cr Schwarz moved to appoint Ms Kelsey as the Council CEO. This was seconded by Cr Laurie Smith and was resolved unanimously.[44]

• [92] Ms Kelsey commenced at the Council on 27 June 2017.

• [93] Prior to her making various complaints during her employment, the Mayor and others had provided Ms Kelsey with positive feedback about her performance including, that she was 'doing a tremendous job understanding this complex organisation and as I've said before a level of calm we haven't seen in some time'.[45]

• [94] To the extent that various Councillors raise in their affidavits, concerns in relation to Ms Kelsey's appointment as CEO, the recruitment process in which Ms Kelsey was engaged or her performance at interview were matters never raised with Ms Kelsey or with Cr Power.

• [95] Councillors had not raised concerns about Ms Kelsey's performance with her or with Cr Power from June 2017 when she commenced until after her PID was made.[46]
• [96] The five non-Respondent Councillors' views in relation to Ms Kelsey's performance were positive.

• [97] Council staff were said to be supportive of the Applicant, being impressed with her commitment to her role and her performance. This is apparent from the feedback given to other Councillors, the feedback given to Ms Rachel Hunter and detailed in Ms Hunter's Probation Report, their reaction to her termination and the numerous cards, letters and other well wishes Ms Kelsey received following her termination.[47]

• [98] Within the first month of Ms Kelsey's employment, Mayor Smith indicated to Ms Kelsey that:

(b) he wanted to be called 'Mayor' or 'Mr Mayor' and councillors to be referred to as 'Councillor'; and

(c) he had raised this issue with councillors.[48]

• [99] As a result, when sending out her introductory letter to staff, Ms Kelsey included phrasing to the effect that staff should treat Councillors on a professional basis and use proper titles.[49] This letter was also sent to all Councillors. Cr Laurie Smith responded to the letter with praise. Only Councillors Lutton and Laurie Smith raised the issue of formal titles with Ms Kelsey. This occurred sometime after the Applicant's letter was sent. They indicated to the effect they would ignore the direction.[50]

• [100] When the issue was raised, Cr Power approached Ms Kelsey who advised him that it was a direction of the Mayor.[51] On or around January 2018, Ms Kelsey advised Councillors that the direction came from the Mayor.

• [101] Despite their alleged concerns, no Councillors ever asked Ms Kelsey, or took other steps to formally rescind the direction in Ms Kelsey's letter nor have they instructed Mr Trinca to do so. The Councillors also agreed that when they were referred to by their formal title, they could (and do) simply request that they are called by their first name.[52]

• [102] During her employment Ms Kelsey said she became concerned about the actions of the Mayor in relation to Ms Jane Frawley, the acting Director - Innovation and City Transformation. These concerns included:

(a) the recruitment process followed in relation to the permanent Director - Innovation and City Transformation role;

(b) Ms Frawley's appointment to the Director - Innovation and City Transformation role;

(c) the remuneration for the Director - Innovation and City Transformation role;

(d) the information shared between Ms Frawley and the Mayor;

(e) the intervention by the Mayor into Ms Frawley's performance review/probation process; and

(f) inappropriate joint travel involving Ms Frawley and the Mayor.[53]

• [103] Of particular concern for Ms Kelsey was the nature of the Mayor's relationship with a subordinate executive who reported to her. Ms Kelsey had been involved in Ms Frawley's recruitment into her Director role and had noted an unusual and interventionist approach by the Mayor in support of her candidacy.

• [104] Later, it became apparent to Ms Kelsey that the Mayor and Ms Frawley had, what has been described as an unusually close relationship with a considerable amount of direct communication. She observed the Mayor continuing to intervene in support of Ms Frawley, including specifically in connection with Ms Frawley's probationary review, which was Ms Kelsey's responsibility to conduct.

• [105] Although some Councillors now purport to allege concerns about Ms Kelsey's relationships with employees including Ms Frawley, no Councillor raised such issues with Ms Kelsey.

• [106] Ms Kelsey's concerns in relation to the Mayor and his relationship with Ms Frawley were shared by other Councillors.[54]

• [107] From approximately 1 September 2017, Ms Kelsey was involved in Council considerations regarding the refurbishment and/or relocation of the Mayor's office. On that date, the Second Respondent emailed Council and advised them about options for the accommodation, relocation and refurbishment of the Mayor's Office:

(i) Kirby Orr, Chief of Staff to the Mayor, and Narelle Cowan, Senior Adviser, Office of the Mayor, would speak to Ms Kelsey in relation to the matter;

(iii) Ms Kelsey should treat Kirby as a Director; and

(iv) his expectation was that when Kirby communicated with Ms Kelsey, Ms Kelsey was to take that as if the communications were coming from the Mayor.[55]

• [108] On or about 5 September 2017 the Applicant met with the Second Respondent at which time she was advised that:

(a) the Second Respondent indicated to the effect that he wanted a report to Council about the relocation or refurbishment of his office stopped; and

(b) the Second Respondent advised the Applicant that Ms Orr and Ms Cowan had strong views about the matter.

• [109] Shortly after meeting with the Second Respondent, the Applicant met with Ms Orr and Ms Cowan in her office. They discussed whether a report regarding the funds to be utilised for the refurbishment/relocation needed to be provided to Council; queried why the Applicant could not approve the trust funds without a report to Council; and queried what triggered the need for the report to Council.[56]

• [110] The Second Respondent communicated with Mr R. Strachan and the Applicant on a number of occasions between 11 and 17 September 2017 querying whether existing money allocated to accommodation matters in the budget could be utilised for the refurbishment/relocation.

• [111] Mr Strachan indicated to the effect that the funds could be used through a resolution and could not be reallocated without a report.

• [112] On 18 September 2017, the Mayor said to Ms Kelsey that he was not happy about a report going to Council because that would be politically difficult, he would not want a report to go up because of politics and questioned using the trust funds without a report. Ms Kelsey indicated to the effect that if you draw down trust reserves you need to have a report to Council. Legal advice was obtained by Mr Strachan. The Second Respondent did not respond but had what the Applicant described as, "... an unhappy and unimpressed expression".[57]

• [113] On around 26 September 2017, Ms Kelsey spoke with the Council media team about a request from Ms Kirby Orr that the Council release a press release suggested by Gadens and the Mayor regarding a 7:30 Report on the Operation Belcarra Report, a CCC investigation relating to local government elections which specifically involved the Mayor.[58]

• [114] On 28 September 2017, Ms Kelsey had a number of interactions with the Mayor and Ms Orr in which the Mayor and Ms Orr sought that Ms Kelsey issue, on behalf of Council, a media release drafted by his lawyers in relation to the Belcarra Report.

• [115] Ms Kelsey declined to provide a media release without consideration of Council's position, including consultation with the media team.[59]

• [116] Ultimately, Council issued its own media release separate from what had been sought by the Mayor. Despite this, the local media received two media releases which purported to be from Council. In fact, only one had been released by the media team and the contents of the second release reflected the contents requested by Ms Orr on behalf of the Mayor.

• [117] The Relay for Life was an event that, in 2017, was held on the divisional boundary of Councillors Schwarz and Koranski's respective divisions.

• [118] Cr Koranski invited Ms Kelsey to attend and Ms Kelsey agreed to be part of Cr Koranski's team which also included Councillors Power and McIntosh. Ms Kelsey considered the event, which raised money for charity and celebrated cancer survivors, to be a great cause.[60] No such invitation was provided by Cr Schwarz.[61]

• [119] Prior to attending the event, Ms Kelsey said she advised the Mayor of her invitation to the event, her intention of attending with other Councillors as part of Cr Koranski's team and that she would attend in a co-ordinated costume with Cr Power. The Mayor, being the person directly responsible for managing Ms Kelsey, did not raise any issues with Ms Kelsey about her attendance at the event prior to her going. No challenge was made to Ms Kelsey's evidence on these points.[62]

(a) interacted with Councillor Schwarz and her husband;

(b) walked a number of laps with the community and approximately two laps with Councillor Power and many other members of Councillor Koranski's team;

(c) purchased drinks from Councillor Schwarz's tent; and

(d) interacted with the Mayor including serving tea with him to attendees.[63]

• [121] Ms Kelsey received a thank you card for attending. She also received positive and appreciative feedback from the community.[64]

• [122] As confirmed by Cr Power, the event was not a political rally and was instead held to support charity. He noted Ms Kelsey interacting with Cr Schwarz and the Mayor and other residents. He also confirmed that the attendance of Ms Kelsey was not raised with him by Cr Schwarz. As with Ms Kelsey, he had only received positive feedback and had not received any negative feedback for his attendance. Similarly, concerns about Ms Kelsey's attendance at the event were not raised with Cr Bradley, Cr Koranski or Cr -McIntosh from either members of the community or other Councillors.

• [123] Despite not saying so to Ms Kelsey when she advised him of her intention to attend the event prior, after she had attended the event, the Mayor indicated to Ms Kelsey that this was 'not a good look'. However, he told Ms Kelsey that it would be highly inappropriate for her to address this with Councillors. Cr Dalley was copied into that email so she knew the Mayor had directed Ms Kelsey not to address her attendance with the Councillors at the CLC.[65]

• [124] Pursuant to s 12 of the LG Act, Mayor Smith had a statutory obligation to undertake a probation review of the CEO.

• [125] On 10 October 2017, the Mayor in association with Councillors Dalley and Schwarz initiated a probationary process in relation to the Applicant.[66]

• [126] When the Applicant arrived at the meeting, she was handed a near complete Probationary Conversation Report form only at the commencement of their meeting, which the Applicant believed made unfair and unsubstantiated comments about her and her performance, including providing her with a number of unsatisfactory ratings, with no prior notice or opportunity to review the form.[67]

• [127] The Mayor then indicated that the Mayoral Cabinet wished to discuss the report with the Applicant and that she would be given an opportunity to respond to it both in that meeting and at a later date.
• [128] Ms Kelsey said she was surprised when she entered the room and was presented with the probation report. She said she was disappointed and was at a disadvantage as she was not in a position to respond to the report.

• [129] Both prior to, and during the early days of her employment, Ms Kelsey agreed with the Mayor, Cr Dalley, Mr Rohl and Mark Goldsworthy, Manager of People and Culture, at various times that a 100 Day Report would be prepared for her probationary review.[68] Despite this, shortly after Ms Kelsey commenced a probationary review for Ms Frawley, the Mayor commenced a purported probationary process with Ms Kelsey.

• [130] During the meeting Mayor Smith advised Ms Kelsey that Council wanted to extend her probation until 2 January 2018, though it was later agreed between Ms Kelsey and the Council on 1 December 2017 that the probation would be extended until 30 January 2018.

• [131] Ms Kelsey expressed her concerns that she was at a disadvantage on several occasions and expressed her view that the 100 Day Report would form the basis for her probation review.

• [132] It was contended that only after Ms Kelsey raised concerns, was she given the opportunity to take the form away to prepare her response. As set out in her affidavit materials, Ms Kelsey said she had a response to each of these matters which she compiled when she had the time to do so.

• [133] The Applicant submits that the statements made in the probation conversation report were not consistent with and were contradicted by the Hunter Report.

• [134] The Mayor also raised issues in the Probation Conversation Report which Ms Kelsey had raised with Ms Frawley, including whether she was 'apolitical' and suggesting a 360 review process after Ms Kelsey had suggested this for Ms Frawley.

• [135] Whilst the Applicant claims that she had an agreement with the Second Respondent that her probation review would be satisfied by the giving of a 100 Day Report, the draft probation report provides the following:

The first review, in conjunction with the Deputy Mayor and City Treasurer, will be held on 10 October 2017. The 2nd and 3rd reviews will be taken within appropriate timeframes. We will engage an independent resource to undertake a 360 degree assessment to gather balanced feedback on your performance and achievements in readiness for the finalisation of your probation.[69]

• [136] The Applicant appears to recognise the fact that the probation conversation was only a part of the probationary process.

• [137] On 25 September 2017, Mayor Smith sent an email to Ms Kelsey seeking a response in respect of a number of issues. Relevantly, the Mayor wrote:

1. We need to schedule a three month probation meeting at some point within the next two weeks - I will do this in conjunction with the Deputy Mayor and City Treasurer so we will have to wait for Trevina to get back from leave.[70]

• [138] Ms Kelsey responded to Mayor Smith on 27 September 2017 as follows:

Noted - I have prepared a 100 Day Report to be discussed as part of my probation meeting. I look forward to your invitation.[71]

• [139] The Respondent argued that the contemporaneous language used by Ms Kelsey in the email is inconsistent with the position she now asserts was agreed.

• [140] On 10 October 2017 at 3.07 pm, an hour or so after the probationary conversation, the Second Respondent sent an email which relevantly said:

Good afternoon, Sharon. Following our brief conversation at your first probation with the Mayoral Cabinet, I would like to close out a number of matters given your request not to participate further at this time.[72]

I would first like to ensure that you understand this meeting was to be a constructive conversation about your performance.

At page 10 of the probation conversation report it states:

If the timeframe for addressing the Mayoral Cabinet expectations and deliverables does not suit, please let us know.[73]

To be fair to the process, it is important we regroup as soon as possible to continue this conversation in a professional constructive and supportive manner. As mentioned, to allow the Deputy Mayor to be part of the process, we will need the meeting to be rescheduled and your comments made available by Friday.[74]

• [141] The Applicant did not respond to the email of Mayor Smith dated 10 October 2017.

• [142] The next day, Mayor Smith emailed the Applicant in the following terms:

I hope you are well - quick email to check on how you are ... and also to follow up on the below. Can you please come back to us regarding this - happy to discuss if needed.[75]

Thank you, Mr Mayor. I will be back in touch in due course.[76]

• [144] In cross-examination by Counsel for the First Respondent, the following exchange took place:

MR HERBERT: ...do anything such thing, did you? You had already unleashed the MinterEllison letter on the mayor at that point, hadn't you?

MS KELSEY: I can't - I - again, I'm not absolutely sure what time that - that letter went out.

MR HERBERT: But you said you were going to get in touch?

MR HERBERT: This was 48 hours after the meeting, 36 hours after the emails, or 24 hours after the emails - - -?

MR HERBERT: ...the last email had come to you. You say there and said absolutely nothing to your mayor after he had behaved - - -?

MR HERBERT: ...so appropriately in relation to the matter. You just said you were going to get in touch, and you didn't mean that, did you? Your idea of getting in touch was the MinterEllison letter?

• [145] In her oral evidence, the Applicant accepted that not all of the entries contained in the probation conversation report were negative;[78] the report indicated that there would be a further conversation at four months, five months and a 360 degree review prior to Council reaching a decision in respect of the applicant's employment;[79] that she was told that she could respond to the document later;[80] that many of the passages of the report spoke in terms of the future of the Applicant's employment and did not reference any intention to bring her employment to an end.[81]

• [146] The Applicant was invited by Mayor Smith to the probation meeting and was aware of the purpose of the meeting.[82] The meeting was set down for 1 hour between 1:30 pm and 2:30 pm in the Mayor's office.[83]

• [147] The Applicant contended that her probationary process was different to that of Mr Andrew Milner, the previous CEO. The differences are set out in full in the Affidavit of the Applicant of 12 March 2018.[84] The Applicant's submissions summarised them as follows:

(a) only the Mayor being involved in the review process for Mr Milner;

(b) no reference to comments from the Mayoral Cabinet Team, Deputy Mayor or Treasurer in Mr Miler's document;

(c) no comments on Mr Milner's performance in relation to any of the areas of 'Part 1 - Assessment against the Leadership and Performance Capability Framework' or 'Part 2 - Assessment against the position description'. Very detailed comments were made in Ms Kelsey's report in the September/October Review;

(c) despite the lack of comments (and also the fact that, as many Councillors agreed, Mr Miler's performance was far from satisfactory), Mr Milner received all 5s in Part 1;

(d) no reference to 'MAYORAL CABINET TEAM EXPECTATIONS AND DELIVERABLES FOR CEO' which was detailed in Ms Kelsey's report; and

(f) no reference to 'PROBATION REVIEW AND PROCESS' which was detailed in Ms Kelsey's report.[85]

• [148] There is a lack of evidence before the Commission to determine the exact nature and extent of the probationary exercise undertaken by Mr Milner. What is before the Commission is a single form signed by Mr Milner apparently at the end of the process. The Applicant accepts that she did not have firsthand knowledge of the process undertaken by Mr Milner[86] and she could not say whether the document annexed to her affidavit is the full extent of the probationary process for him.[87] In cross-examination, the Applicant was asked:

All you can do is point to the differences between one document you found and another document; is that right? --- Yes.[88]

• [149] Secondly, whilst the evidence is less than clear, it is apparent that after Mr Milner successfully completed his probationary period, the Council was required to pay him a significant amount of money when he left the organisation. It is obvious that this experience might make the Council and many of the Councillors desirous of having a more robust assessment of the next CEO's performance prior to signing off on their continuing employment.

• [150] Subsequent to the meeting on 10 October 2017, a different probationary process was agreed and undertaken at the instigation of the Applicant's solicitors.

• [151] The First Respondent contends that there are at least two substantial problems with Ms Kelsey's contentions in this regard. First, there is no legal basis to assert that she should be treated exactly the same as a previous CEO. An employer is permitted to change its approach to matters prior to the employment of new staff. Moreover, the process adopted in respect of the Applicant was not inconsistent with the approach adopted in respect of other Directors employed by the First Respondent.[89]

• [152] Ms Kelsey spent time documenting her concerns in relation to the Mayor. By late September 2017 she says she had formed a reasonable suspicion of the Second Respondent and his conduct.[90]

• [153] Through her lawyers, MinterEllison, Ms Kelsey lodged a PID with the Mayor and all Councillors (in their role of Councillors for the First Respondent) on 12 October 2017.

• [154] The PID was sent to all Councillors via their individual Councillor email address. The attached letter was marked 'Private and Confidential'. However, the email was not so marked.

• [155] Ms Kelsey also sent correspondence about her concerns to the CCC and to the Director‑General of the Department of Infrastructure, Local Government and Planning.[91]

Impact of the Council Complaint and the CCC Referral

• [156] After the Council Complaint and the CCC Referral was sent, the Applicant says that the behaviour of the Second to Ninth Respondents towards her changed. Meetings were cancelled, or invitations were withdrawn.[92] In particular:

(a) The Mayor cancelled the one on one catch up meeting he held with Ms Kelsey each week (One on One Meeting Cancellation);

(b) the Mayor did not include Ms Kelsey in budget meetings she ordinarily would have been involved in until Ms Kelsey requested that she be invited (Budget Meeting Failure);

(c) the First Respondent, through the Mayor, staff reporting to the Mayor, including Maureen Logan and other employees in his office, and acting at his direction and councillors, reduced, cancelled entirely, cancelled Ms Kelsey's invitation to or required Ms Kelsey to leave prior to the meetings being finalised at the Civic Leadership, Mayoral Cabinet and Portfolio Cabinet meetings (Reduction and Cancellation of Meetings); and

(d) a number of Civic Leadership Committee and Executive meetings were also cancelled.[93]

• [157] Mayor Smith also limited the Applicant's opportunities to communicate with Councillors by requiring her to run information through him.[94] The Applicant said that in addition:

(a) Councillors Dalley, Swenson, Laurie Smith, Schwarz and Breene and the Mayor reduced their calls to Ms Kelsey;

(b) the Mayor went from sending Ms Kelsey very regular emails to only sending emails sporadically;

(c) Councillors Dalley, Swenson, Laurie Smith, Schwarz and Breene had fewer ad hoc friendly conversations with Ms Kelsey;

(d) Councillor Breene cancelled her divisional tour; and

(e) even where meetings did occur, Councillors including Councillors Dalley, Pidgeon, Laurie Smith, Schwarz and the Mayor, directed comments and questions to others in meetings where they should have directed these to Ms Kelsey.[95]

• [158] Cr Power and the other four non-Respondent Councillors also observed that the Mayor's conduct toward Ms Kelsey changed.[96]

• [159] When acting as Mayor, Cr Dalley's interactions over the December 2017 to January 2018 period were very different from the interactions she had with Ms Kelsey when she was acting Mayor in September 2017.

• [160] The Second to Ninth Respondents are said to have taken a coordinated approach in matters relating to Ms Kelsey, and other Councillors, including the Mayor and Councillors Dalley and Schwarz expressing views that the CEO not receive delegated responsibility for reports that she would usually hold as a matter of standard practice.

• [161] Councillors also made comments in meetings between Councillors which indicated the impact the Council Complaint and the CCC Referral had on them and their behaviour towards the Applicant, including comments to the following effect:[97]

(a) The Mayor made comments at a meeting of Councillors on 13 October 2017 to the effect that his view of Ms Kelsey changed because Ms Kelsey had made the Council Complaint or the CCC Referral, including to the effect:

(i) he did not have a conflict of interest in relation to Ms Kelsey; and

'it's probably the worst I've ever seen, urn, particularly in reference to me'; and

'We are obviously now in a situation where we have a mayor and CEO in conflict and it's going to be hard to move forward from here'.

• [162] Cr Dalley made comments to the effect that her view of Ms Kelsey changed because Ms Kelsey had made the Council Complaint or the CCC Referral, including:

(i) at a meeting of Councillors on 13 October 2017:

(ii) referring to Local Government matters and confidential matters about another Councillor etc:

'I tell you now, I will not speak about those things with the CEO, from this point on. Ever;

'She'll [Ms Kelsey] get nothing out of me ... I am really disappointed';

(iii) at a meeting of Councillors and Gadens on 13 October 2017:

(v) in response to a statement to the effect that Ms Kelsey had a duty to carry out her job: 'That doesn't mean I have to have a conversation with her [Ms Kelsey]'; and

(vi) on around 29 November 2017 in relation to Ms Kelsey referred to the 'litigious nature we are facing'.

• [163] Following receipt of the PID, King and Company Solicitors, acting on behalf of the First Respondent, wrote to Ms Kelsey and proposed that the original Probation Process would cease and a new probationary process, facilitated by Ms Rachel Hunter (Hunter Process) would replace the original probationary process.

• [164] The correspondence exchange between the solicitors for Ms Kelsey and the First Respondent contained the following:[98]

(a) The First Respondent set out the 360 process which would be followed in the Hunter Process, including that the process had been approved by Council. With the exception of correspondence sent by MinterEllison on her behalf, Ms Kelsey was not involved in the selection of individuals to be interviewed.

(b) The First Respondent indicated that Mr Strachan had been removed from the process and Troy Wild of the Local Government Association of Queensland (LGAQ) would facilitate the process;

(c) The First Respondent represented that Mayor Smith would have no role to play in the Hunter Process except to be interviewed by Ms Hunter;

(d) Ms Kelsey and the First Respondent agreed to an extension of her probationary period until 30 January 2018 to allow the completion of the Hunter Process and to accommodate the leave of various Councillors.

• [165] The Applicant asserts that Mayor Smith acted in a number of ways which negatively impacted the processes followed in relation to Ms Kelsey and her probationary process:[99]

(a) The Mayor made representations about statements made by Robert Strachan about his involvement in the process and ultimately took steps to remove Mr Strachan from the process including:

(i) during a meeting on 1 November 2017, the Mayor proposed the removal of the Council's Director of Organisational Service, Mr Robert Strachan, as the interface between the Council and Ms Kelsey;

(ii) when the matter was not agreed at the meeting on 1 November 2017, in advance of the next Council meeting the Mayor arranged for a 'Mayoralty' or a 'Mayoral Executive Order' which was signed by (and only by) the Third to Ninth Respondents agreeing with the removal and appointing Peak Services in his place; and

(iii) the Mayoralty appointing Peak Services was not tabled at the next Council meeting on 8 November 2017 and was instead tabled at the Council meeting of 30 January 2018;

(b) The Mayor met with Troy Wild (including with Councillors Dalley and Schwarz) about the Hunter Process;

(c) The Mayor provided input as to the managers who would be in the Hunter Process;

(d) Being involved in discussions and voting on motions in respect of the management of the Hunter Process on 17 October 2017, 1 November 2017, 8 November 2017 and 1 December 2017 including:

(i) on 17 October 2017, being involved in discussions regarding the qualifications of and potential appointment of Ms Hunter;

(ii) on 1 November 2017, facilitating the appointment of the LGAQ in Ms Kelsey's review and the Hunter Process purporting to use the executive powers of the Mayor;

(a) During a meeting on 8 November 2017, the defeat of a motion (with the Second to Ninth Respondents voting against the motion), to the effect that the Mayor shall not; be involved in the probationary review of Ms Kelsey; participate in any meeting where the matter is discussed; discuss the Hunter Process with members of staff or other councillors; or vote in relation to Ms Kelsey's employment contract.

(b) Mayor Smith wrote to Ms Kelsey on 28 November 2017, seeking to raise matters outside of the Hunter Process about legal advice alleged to have been received by the First Respondent in relation to the Acceptable Request Guidelines, but which Ms Kelsey had never seen, and seeking her response by 29 November 2017 (in advance of the scheduled conclusion of the Hunter Process).

(c) A copy of the draft Probation Review Report prepared by Ms Hunter was provided to the Applicant on 29 November 2017. Ms Kelsey also provided feedback on the Hunter Report.

(d) Following receipt of the draft Hunter Report, Councillors met to discuss the report on 29 November 2017. During that meeting:[100]

(b) Troy Wild, of the LGAQ, was involved in the discussion;

(c) Prior to speaking with Ms Hunter, the Mayor made comments which were critical of the Hunter Process report including to the effect:

(ii) commenting on the process followed including in relation to the questions Ms Hunter asked individuals and gathered information;

Ms Hunter was available on the phone to discuss the Hunter Process report, listen to feedback and answer questions from individual councillors;

(h) During the discussion with Ms Hunter the Mayor made comments that were negative about the report and Ms Kelsey including:

(i) questioning Ms Hunter about her method in creating the report;

(ii) going through particular aspects of the report (including in relation to statements about the Acceptable Request Guidelines, the knowledge of councillors regarding Ms Kelsey's strategic ability etc), summarising the evidence and asking how summaries had been formed and findings had been made; and,

(iii) directed at seeking to achieve a less favourable report and challenging the report in that he stated when referring to aspects of the Hunter Process report words to the effect 'has that been substantiated?', 'You may wish to change that' etc.

• [166] Ultimately, Councillors received a copy of the draft Hunter Report on around 28 November 2017.

• [167] The final report was provided to Council on 4 December 2017.

• [168] Cr Power considered the draft report was largely positive and he considered that, based on the report, a failure to employ Ms Kelsey could cause damage to the Council.[101] The report confirmed his view that Ms Kelsey's employment should be confirmed for reasons including that it reflected the positive feedback he had received from Council employees.[102]

• [169] On 8 December 2017, the Applicant requested a copy of the final report from Cr Dalley, who was acting mayor at the time. The report was not provided.[103]

• [170] On 8 January 2018, the Applicant followed up her request for a copy of the final report from Cr Dalley.[104]
• [171] On 10 January 2018 the Applicant instructed MinterEllison to request a copy through King and Company. The Applicant received a final copy of the Hunter Report on 15 January 2018.

• [172] On 1 December 2017, Ms Kelsey filed her Application commencing these proceedings. It is asserted that this impacted the Second to Ninth Respondents. It is clear from their comments, including those references to Ms Kelsey as litigious as set out above, that Councillors' views had been further changed by the commencement of litigation.

• [173] At the meeting on 5 January 2018, Cr Laurie Smith stated to the effect that he would not being intimidated, coerced or forced by someone who does have a litigious nature and who has done this to other Councillors. He referred other Councillors to a search he had made on the internet locating 'Sharon Kelsey conflict' where it was recorded that Ms Kelsey had made complaints in relation to Councillors at Mitcham Council.

• [174] It is submitted by the Applicant it is clear that the reasons of Councillors were impacted by Ms Kelsey's right to make, and ultimate decision to make, an application to the Commission.

• [175] On around 11 November 2017, a United States delegation was submitted to the Applicant for approval.

• [176] Some Councillors raise, as a reason for their alleged concerns, the discussions between Ms Kelsey and the Council regarding who was to attend the international delegation to the United States with the Mayor.

• [177] These councillors each insinuate that, effectively, Ms Kelsey:[105]

(a) would not elaborate on why, on balance, she did not consider that Ms Frawley should attend; and

(b) suggested inappropriate delegates and had to be told that she would attend as the delegate.

• [178] The recollections of the Councillors are inconsistent with the recording of the meeting and Ms Kelsey's evidence.[106] It is clear that Ms Kelsey was the first person to suggest that she attend as delegate. Further, she explained to the satisfaction of those present why Ms Frawley should not attend. Ultimately, she was told the decision regarding the delegate was up to her.[107]

• [179] By resolution of the Council, it was the responsibility of the CEO to determine who will attend as delegate to an international trip.

• [180] Ultimately, Mr Ricardo Martello, City Futures Manager for the First Respondent, attended the delegation. While in the USA, Mayor Smith spoke to Mr Martello and asked him what he thought of Ms Kelsey and whether Ms Kelsey was litigious.

• [181] In or around March 2017, the First Respondent determined to undertake a review of the Acceptable Request Guidelines (ARGs). The ARGs is a policy required by the LG Act in respect of the types of requests which may be made by Councillors for assistance from staff. Failure to comply with the ARGs by a Councillor means that the Council staff do not have to comply with the request. However, the ARGs do not apply to requests made by the Mayor or by Council Chairs.

• [182] On 24 August 2017, a draft set of revised ARGs was presented to the City Treasury Committee meeting. The draft ARGs provided to the Treasury Committee did not contain tracked changes. The Councillors at the meeting were unable to determine the extent of any changes. Councillors enquired with the Applicant as to what changes had been made and the Applicant informed the Councillors that the only change that had been made was to remove the Mayoral Request Register which was no longer required by the legislation.

• [183] After some discussion at the meeting on 24 August 2017, it was agreed to table the draft ARGs for the next meeting.

• [184] On 7 September 2017, Mr Strachan and Mr W van Wyk decided to seek legal advice from Holding Redlich in respect of the draft ARGs.[108] This advice was provided on 8 September 2017. The advice from Holding Redlich suggested a number of cosmetic changes. Further, the advice suggested that the phrase "broad policy direction" should be defined. Most importantly, the advice stated that the ARGs were required to be made by a resolution of Council. Council could not delegate the power to amend those ARGs to anybody other than a full meeting of Council. The suggestion that the ARGs could be amended by the CEO was inconsistent with the legislation. Holding Redlich recommended that the provision be deleted.

• [185] On 9 September 2017, the draft ARGs were again submitted to the City Treasury Committee meeting. The draft ARGs were again not tracked so the committee members could not ascertain what changes had been made. The draft ARGs had been changed from those submitted on 24 August 2017. The draft ARGs were not amended in light of the Holding Redlich advice that the power to amend could not be delegated to the CEO.[109] However, the draft ARGs had a revised definition of "council's broad policy position". The words "resolution and policy" were added in brackets.

• [186] Cr Schwarz asked the Applicant to confirm whether the effect of the changes were only changes related to the removal of the Mayoral Request Register and tidying up the language. The Applicant did not disagree with this summary.

• [187] After a discussion about the appropriateness of removing the Mayoral Request Register, Cr Schwarz asked whether legal advice had been sought in respect of the draft ARGs. Cr Schwarz was advised that legal advice had not been sought.[110] This statement was made in the presence of Mr Strachan and Mr van Wyk who knew that legal advice had been received the day before. Despite this, Mr van Wyk and Mr Strachan did not make any correction to the Applicant's statement.[111]

• [188] Notwithstanding what the Applicant had advised on 24 August and 9 September 2017 and the passages in the report of 14 September 2017 under the heading "Discussion" which purported to summarise the changes, the draft ARGs provided on 7 September 2017 contained three major changes. Those changes were that:

1. the definition of directions made by the Mayor which did not need to be acted upon had been greatly expanded to include any directions which were inconsistent with council's 'broad policy position';
2. the Mayoral Request Register had been removed; and

c. the ARGs could be amended by way of decision by the CEO.[112]

• [189] The draft ARGs were accepted by the City Treasury Committee on 14 September 2017. Subsequently, on 19 September 2017, the ARGs were accepted by a full Council meeting upon ratification of the City Treasury Committee report.

• [190] Upon his return to work on 19 September 2017, Mayor Smith requested legal advice from Gadens Solicitors in respect of the ARGs. The Mayor also sought advice from the Applicant as to whether legal advice had been received. At first, the Applicant advised that she was awaiting "final advice". However, after a further enquiry from Mayor Smith, the Applicant advised that there was no existing legal advice.[113]

• [191] On 28 September 2017, Gadens provided written advice about the ARGs. Importantly, the advice from Gadens was to the effect that s 12(4) of the LG Act, which provides that mayoral directions contrary to Council policy do not need to be followed, should be understood as being contrary to a resolution of Council. In this case, the ARGs which had been adopted, extended the scope of directions which did not need to be complied with to those which were inconsistent with the broad policy position. This was a diminution of the Mayor's authority and contrary to the LG Act.

• [192] At a subsequent meeting with the Applicant, the Second Respondent, Mr Strachan, Ms Cowan and Cr Schwarz, the Applicant repeatedly told Cr Schwarz that the changes to the ARGs had been formed through the Applicant's interpretation of the relevant legislation.[114]

• [193] In late November 2017, the Mayor requested that his staff start preparing a rescission motion for ARGs because of the Gadens' advice. During that process, Ms Cowan found the Holding Redlich advice.[115]

• [194] On 27 November 2017, a "Councillor only" meeting was convened where Mayor Smith informed the meeting of the fact that Council had previously received legal advice which expressed the opinion that the ARGs which had been adopted were inconsistent with the LG Act.[116] The existence of this advice created some significant disquiet amongst the Councillors.

• [195] This was specifically because a direct question about whether legal advice had been obtained was asked of the CEO for which she had indicated that it had not. It was determined at the meeting of Councillors that the Mayor should write to the Applicant seeking an explanation for what had transpired.[117]

• [196] Shortly after the meeting of all Councillors concluded, but before the Second Respondent had issued the correspondence to the Applicant seeking an explanation, the Applicant sent an email to Mr Strachan from her mobile phone requesting that he please provide advice about the ARGs because she thought it might come up in her probation review.[118]

• [197] On 28 November 2017, the Mayor issued correspondence to the Applicant seeking certain answers in respect of what had transpired with the ARGs. The Applicant's answer to that request was to forward a memorandum prepared by Mr Strachan addressing those issues to the Mayor. Ms Kelsey did not draft her own response or explain her own actions but rather chose only to forward Mr Strachan's response.

• [198] On 30 May 2017, Council resolved, in part, that the Corporate Governance Manager undertake a review of the committee structure and terms of reference for local government committee meetings at the end of July 2017.

• [199] In July 2017, Mr Strachan commenced the review of the committee structures, as explained by the Mayor in an email to all Councillors. Mr Strachan and Mr van Wyk were the officers responsible for considering the proposed changes. They individually met with all of the Councillors.

• [200] On 9 November 2017, all Councillors met to discuss the proposed changes to Committee Structures. The discussion was organised by the Mayor. In order to facilitate the discussions, the Mayor prepared a briefing note for Councillors, "... based on your feedback gathered by the Director of Organisational Services".[119] The Mayor's briefing note:

(i) identified that the first key outcome of the consultation phase reflected an intention to reduce the number of committees and to align the Directorates with the agreed Corporate Plan Priorities; and

(ii) identified that the Mayor did not envisage the need to reprosecute the names (an outcome which clearly changed based on the consistent evidence from the Councillors that the proposed names for the committees were then agreed at the 9 November meeting).[120]

• [201] The Mayor briefed only Mr van Wyk on the outcome of the Councillor meeting on 9 November 2017. Ms Kelsey was concerned that the report prepared by Mr van Wyk following his briefing with the Mayor was not compliant with local government law and determined that she would speak with all Councillors about the report at the next CLC meeting.[121]

• [202] At the CLC meeting on 13 November 2017, Ms Kelsey spoke to the proposed changes to the branch reporting for Committees.[122] The proposed names for committees were not discussed. There was widespread Councillor support for Ms Kelsey's proposed changes to the branch reporting (which Ms Kelsey proposed in order to overcome any existing siloes and ensure a cross organisational, collaborative approach to reporting).

• [203] Following the meeting, Ms Kelsey sought to implement a structure that reflected the branch reporting supported by the Councillors and alignment with the Corporate Plan. She relied upon Mr van Wyk and Mr Strachan to prepare the necessary report and briefing note.[123]
• [204] On 22 November 2017, Mr Strachan emailed Cr Schwarz the final draft report on the review of the Committee Structures.

• [205] On 23 November 2017, Cr Schwarz and Mr Strachan exchanged emails regarding the content of the draft report, including Cr Schwarz's "surprise" at some of the content.[124] The Mayor and Ms Kelsey were copied into the emails. In response to an email from the Mayor, Ms Kelsey outlined her "confusion" about the background to the report, to which the Mayor replied that Ms Kelsey should:

"...Please feel free to circulate both the Report and Briefing Note to Committee Chairs prior to Monday's meeting".[125]

• [206] In accordance with Mayor Smith's direction, Ms Kelsey circulated the draft report containing the proposed Committee Structure and Briefing Note to all Chairs.

• [207] On 27 November 2017, the draft report was discussed at a Portfolio Cabinet meeting attended by Ms Kelsey and the Chairs. Ms Kelsey squarely raised with Councillors that the draft report was not binding.[126]

• [208] After the meeting on 27 November 2017, the report was apparently changed by Mr van Wyk to revert to the existing names for the various committees and to remove the description of the existing silos within Council, consistent with the feedback given on 27 November 2017.

• [209] On 30 November 2017, Mr van Wyk provided Cr Schwarz with the final version of the review of Committee Structure report following her email identifying that she would prefer for the report to be discussed with all Councillors, "to ensure the Councillors have the opportunity to have a full understanding and the technicalities of what we are being asked to endorse is accurate". She stated that she will circulate the report in its current format to her colleagues to ensure they have an opportunity to read prior to the meeting.

• [210] Cr Schwarz's email gave no indication of any concerns with the revised version of the report.[127]

• [211] Cr Power gave evidence that the issue had been exaggerated and was not controversial, but also said that he was 'sort of against what she proposed' because the names whilst aligning with the corporate plan, were straying away from what the public understand. As stated by Cr Koranski, '...at the end of the day, what's in a name, you know'.[128]

• [212] The CEO has a legislative role in making preliminary assessment of Councillor complaints.

• [213] All Councillor complaints were dealt with following, and in accordance with, Council's legal advice and in conjunction with Mr Strachan and Mr van Wyk.

• [214] In around December 2017, Ms Kelsey was advised by Mr Strachan that Cr Pidgeon had made complaints about other Councillors. Ms Kelsey asked Mr Strachan and Mr van Wyk to seek legal advice regarding the complaints, including draft correspondence to all relevant parties and a preliminary assessment of the complaints. That advice was received and followed.

• [215] Ms Kelsey arranged to speak with Cr Pidgeon about his complaints. When they met, she provided him with correspondence regarding her assessment of his complaints. Cr Pidgeon queried whether he made a complaint. Ms Kelsey confirmed he had.

• [216] Cr Pidgeon contacted Ms Kelsey subsequently and indicated that he was upset that the Councillors, the subject of the complaint, knew it was him that had lodged the complaint.

• [217] Ms Kelsey confirmed that the correspondence had been drafted by Council's lawyers.

• [218] Cr Dalley later raised issues regarding the Councillor complaints' process with other employees. Ms Kelsey confirmed she needed to be the contact person.

• [219] Subsequently, at a Civic Leadership Cabinet meeting on or around 22 January 2018, Ms Kelsey spoke to a number of matters including:

(i) the process for councillor complaints, including the preliminary assessment components and the nature of a referral;

(iii) the reliance on legal advice.[129]

• [220] The Applicant says that Cr Pidgeon was aggressive and said words to the effect that there had been a breach of privacy and he had taken legal advice.

• [221] The meeting agenda contained a reference to 'industrial relations'. Later in the meeting, the Mayor indicated to the effect that he and Ms Kelsey would leave. Ms Kelsey requested clarification about why this was the case, as she considered it may relate to the bargaining that was occurring for Council staff, and agreed to leave when it was confirmed the matter to be discussed was an interlocutory hearing of this application.

• [222] After Ms Kelsey left, Cr Pidgeon proceeded to explain that he was very angry at the CEO because he said he had not made a complaint and she had breached his privacy.[130]

• [223] Ms Kelsey had placed Councillor complaints on the Agenda for the CLC meeting prior to the meeting because of the number of Councillor complaints that were circulating.

• [224] On around 24 January 2018, Cr Dalley indicated to Ms Kelsey to the effect that Cr Pidgeon "swears blind" that he did not make a complaint. Ms Kelsey confirmed that he did and explained the Councillor complaint process to Cr Dalley.[131]

• [225] When Ms Kelsey commenced her employment the Budget and Corporate Plan for 2017‑2022 was already in place and had been approved by Council.[132]

• [226] The Applicant argues that the six-month probation period, set to expire in December 2017, did not provide her with the opportunity to have active engagement in the 2018‑2019 budget process during her probation period.

• [227] Further, no Councillor raised with Ms Kelsey that she was not producing results or had failed to identify and/or communicate a plan or strategy to achieve results nor did they ask the Applicant to prepare a forward plan, financial analysis or similar. Nor did they raise concerns with her about her performance in budget meetings.

• [228] On around 4 December 2017, Ms Kelsey and Councillors attended a budget meeting. Approximately an hour after the meeting had commenced, a CCC inspector attended at the Council to explain the reason why the warrant had been served on Ms Kelsey, on behalf of Council.

• [229] The Applicant brought the inspector into the room where the budget meeting was taking place and the meeting continued for around 30 minutes in relation to the CCC matter, including with the warrant on the overhead for Councillors to view.[133]

• [230] The budget aspect of the meeting on 4 December 2017 was abandoned once the CCC representative attended.

• [231] The Applicant said that the behaviour of Councillors Pidgeon and Swenson changed after the warrant was served on Council in the 4 December 2017 Council meeting.
• [232] Ms Kelsey received queries in relation to services which staff and Councillors could access in relation to the warrant, including employee assistance and legal advice. She sent emails in relation to both matters. The email about the EAP was not sent in response to a query specific to Cr Lutton.[134]

• [233] On around 22 January 2018, Councillors and Ms Kelsey attended a CLC meeting. She spoke about a number of matters including about Committee seating.

• [234] Ms Kelsey was of the view that it was important for her to actively participate in Committee meetings as a result of a number of comments made in the Hunter Report.[135] Ms Kelsey's attempt to enhance her participation in Committee meetings in response to the comments given to Ms Hunter is, she submits, entirely reasonable. Ms Kelsey understood that most Councillors considered it would be helpful for her to enhance her participation by having a seat at the table. A number of Councillors had made comments to that effect.

(a) Ms Kelsey explained the feedback received from the Hunter Report, Councillors and staff and indicated that this feedback reflected that there should be consideration of Ms Kelsey sitting at the Committee table when she attended meetings.

(b) Ms Kelsey then spoke about the different arrangements that could be considered including that she could sit either side of the Chair or next to the minute taker.

(c) Ms Kelsey explained that she was not going to be attending all of the Committee meetings but when she did it would be useful to be able to participate as appropriate. She said most councillors nodded and she did not hear anybody disagree or give comments to suggest this was not supported. There was discussion between the councillors about where it would be best for her to sit.[137]

• [236] The CLC was the appropriate place for such a matter to be tabled and discussed. Ms Kelsey was keen to have a seat at the table when she attended, but she was open to suggestions as to where she would sit and she was never aggressive and she listened to the feedback provided by Councillors. She also encouraged Councillors to give it a try.[138]

• [237] Ultimately, at the next budget meeting, an additional chair was added to the table and Ms Kelsey went to sit at the end chair. Mr Strachan suggested that Ms Kelsey take his seat next to Cr Schwarz. Cr Schwarz indicated she didn't have a preference as long as the minute clerk was beside her.[139]

Budget Meeting in January 2018 and further CCC Action

• [238] A further budget meeting occurred on 30 January 2018 (as part of the two-day workshop held across 30 and 31 January). Cr Schwarz chaired the 30 January meeting. The Applicant was allocated 5 minutes to speak as a welcome and introduction and she did so. She had also prepared notes in relation to other aspects of the program but was prevented from presenting in relation to the strategic projects list.[140]

• [239] The Applicant says she was not distracted throughout the meeting, though she did check her phone intermittently.

• [240] The CCC served notices to discover, which included matters the subject of the CCC Referral and the Council Complaint on individual Councillors including:

(a) On or around 25 January 2018 Councillor Dalley; and

(b) On or around 30 January 2018, during a budget meeting of the First Respondent, the Fourth, Fifth, Sixth, Seventh and Ninth Respondents.[141]

Fourth, Fifth, Sixth, Seventh and Ninth Respondents.

• [241] The CCC attended at the budget meeting on 30 January 2018 toward the end of the program. The Applicant said she was aware that the CCC wanted to see Councillors and the officer asked her to take him to the meeting.

• [242] The CCC attended at this time because they had asked the Applicant when all Councillors were scheduled to be meeting next. She advised that it would be at the budget meeting.[142] Ms Kelsey did not say the CCC officer was there to serve documents. The CCC officer had met Councillors on other occasions. Ms Kelsey walked with the CCC officer to Cr Schwarz who was conducting the meeting. The Applicant did this so Cr Schwarz could adjourn the meeting.[143] As CEO of the Second Respondent she said she had no control or involvement over how service was effected by the CCC. When the CCC officer arrived at Council on 30 January 2018, she was advised of their presence by her Executive Assistant.[144]

• [243] The Applicant said she was concerned and looked around the room at all Councillors to check their welfare. She held a solemn expression. She said, "I was not smiling or 'pleased' with the service of individual Councillors".[145]

• [244] Following the service of the individual search warrants Ms Kelsey said that:

(a) Councillor Lutton was visibly angry towards Ms Kelsey when Ms Kelsey spoke in relation to budget matters during a meeting on around 30 January 2018 in that:[146]

(iv) Cr Lutton's demeanour differed from his usual demeanour in meetings, which was more relaxed.

(b) Councillor Swenson was visibly angry towards Ms Kelsey when Ms Kelsey spoke in relation to budget matters on around 30 January 2018, in that:[147]

(iii) he had an annoyed and strained facial expression.

(c) Councillor Schwarz was visibly unhappy towards Ms Kelsey when Ms Kelsey spoke in relation to budget matters on around 30 January 2018, in that:[148]

(i) when Ms Kelsey entered the room with a representative of the CCC Councillor Schwarz stated to Ms Kelsey to the effect 'Not again' and 'Are you doing this deliberately because this is budget?';

(ii) Ms Kelsey responded to the effect 'No - this is up to the CCC, this is their process' and 'the CCC is contacting me as representative for Logan City Council';

(iii) Councillor Schwarz was terse, short and sharp in her interactions with Ms Kelsey; and

(iv) Councillor Schwarz's facial expression was annoyed and unhappy.

Purported failure to grasp the difference in local governments

• [245] The Applicant said that no Councillor ever raised concerns about her apparent inability to grasp the difference between local government in Queensland, South Australia or Victoria or her performance in respect of those differences.[149]

Councillor updates and levels of information provided to Councillors

• [246] Early in the Applicant's term a Councillor update initiative was tabled for consideration. It was proposed that relevant information supplied to all Councillors or Council as a body from Council staff, would be consolidated in one update email that could be accessed by all Councillors.[150] This was approved by the CLC.[151]
• [247] In her 100 Day Report at page 8, the Applicant said she introduced the Councillor Update because she considered:

The free flow of appropriate information between the Mayor, Councillors, the CEO and Directors is important to build a 'one team' environment ... The initiative to commence a daily Councillor Update as a single point of distribution of day to day information from administration to councillors is to ensure the efficient and impartial delivery of administrative advice to all councillors.[152] (emphasis added)

• [248] The Councillor updates was also a matter completely separate from any discussion in relation to how reports are prepared for Committees, which suggested a project-based approach to complex committee reports and is explained elsewhere in these submissions.[153]

• [249] No Councillors raised concerns with the Applicant about the Councillor updates, the level or timeliness of information they were receiving including in relation to any concern about 'vetting' or 'controlling' information.[154]

• [250] The Applicant's evidence is that at no stage did she instruct or direct employees not to contact Councillors directly (or Councillors not to contact employees).[155]

• [251] Further, Councillors did not stop receiving information directly from council officers and directors and remained able to request information from staff members as needed as is evident by the various emails attached to their affidavits and other emails tendered as exhibits in this matter.[156]

• [252] Several Councillors refer to Ms Kelsey introducing a 'one right advice' process. This is not a term that Ms Kelsey can recall using.[157]

• [253] The Applicant says that at no time did she 'vet' information before it went into a Councillor Update or assert 'control' over this, but rather it was to ensure that information was distributed equitably, in a consistent and fair way to improve transparency of information and to ensure the same information was given to all Councillors at the same time where it related to all of them.[158]

• [254] On 7 February 2018 a Special Council meeting was convened to consider two resolutions. The first sought to retain Ms Kelsey's employment; and the second motion was to terminate her employment.
• [255] Ms Kelsey attended the Special Meeting of Council on 7 February 2018. As she walked to the Council Chamber, she says that she was greeted by a number of "well-wishers" who were waiting outside. Around 1.00 pm she attended the meeting and declared a conflict of interest. The Applicant left the Chamber and waited outside to hear the outcome of the decision.[159]
• [256] Immediately prior to the Council Special Meeting of 7 February 2018, Mr Trinca said that he recalled Cr Dalley attending at his office and asking him if the Council were to resolve to terminate the contract of employment of Ms Kelsey, whether he would be prepared to act as the Council's Acting Chief Executive Officer. Mr Trinca agreed to take on the role, adding that he found nothing remarkable about this brief discussion. Mr Trinca said that it was entirely appropriate for Cr Dalley as Acting Mayor and Chair of the Council Special Meeting to be able to inform the meeting that another Council employee was willing to accept an appointment to act as the Council's Acting Chief Executive Officer, in the event that the Council's decision was to terminate the contract of employment of the then current Chief Executive Officer.[160]
• [257] In the absence of the Mayor, Cr Dalley was the acting Chair of Council. Cr Dalley adopted what was described as the 'rules of debate'. In short, the 'rules of debate' had the effect that if no one Councillor spoke against a resolution, no one, apart from the mover, would be permitted to speak in favour of it.[161]
• [258] No Councillor gave an example when such a rule had been previously imposed. Although the use of straw polls or informal votes was frequent within Counci1, no such process was followed in relation to these resolutions.[162]
• [259] A motion confirming the Applicant's employment was moved by Cr Raven. He spoke in support of the motion to confirm the Applicant's employment with the First Respondent. As no Councillors spoke against the motion and in accordance with the rules of debate, debate ceased. The motion supporting the Applicant's employment was formally put to the meeting and defeated with five for (Councillors Power, Koranski, McIntosh, Bradley and Raven) and seven against (the Third to Ninth Respondents).[163]
• [260] The following motion was then moved by Cr Laurie Smith and seconded by Cr Swenson:

1. Pursuant to clause 2.3(b) of the Chief Executive Officer Employment Agreement:

(a) The Agreement be terminated by the giving of two weeks' notice; and

(b) The Chief Executive Officer be paid two weeks of the Remuneration Package in lieu of requiring the Chief Executive Officer to serve her period of notice.

1. Mr Silvio Trinca be appointed as Acting Chief Executive Officer until further Council resolution.[164]

• [261] The Third to Ninth Respondents were the seven Councillors who voted to terminate the employment of the Applicant and to appoint Mr Trinca as acting CEO.
• [262] Sometime later the doors of the Chamber opened. Ms Annette Turner one of the Managers at the First Respondent left the room crying and said, 'I am so sorry Sharon'. Other staff left the room crying and the Applicant said she knew that she must have had her employment terminated.[165]
• [263] Other staff left the Chamber together with Councillors Power, Raven, McIntosh and Koranski and apologised to the Applicant.[166]
• [264] After some time, the Applicant returned to her office and was advised that both Cr Dalley and Mr Trinca had come to see her. The Applicant telephoned Cr Dalley and said words to the effect that, "I know what was decided". Cr Dalley replied that she would come and see the Applicant in her office.[167]
• [265] Cr Dalley came to the Applicant's office and gave her the letter of termination. Cr Dalley said words to the effect that, "the letter says everything - we will pay for you to have a return flight home."[168]
• [266] The Applicant said that she hugged Cr Dalley and said, " ... it must have been really hard" to which Cr Dalley apparently replied, " ... it was really hard."[169]
• [267] No reason was given for the termination.[170]
• [268] The first time the Applicant became aware of the purported reasons for her dismissal was on receipt of the affidavits of the Third to Ninth Respondents filed in April 2018 for the interlocutory reinstatement application in the Commission.

• [269] The Applicant contends that the Second and the Third to Ninth Respondents communicated on what the Applicant described as "several clandestine groups" on social media messaging platforms, including WhatsApp and Telegram.

• [270] With that awareness, six of the seven Councillors said to be aligned with the Mayor went to great lengths to conceal their discussions from the non-aligned Councillors.

• [271] In the immediate aftermath of the dismissal, the Councillors and the Mayor deleted the WhatsApp accounts in what the Applicant submits was an apparent attempt to conceal their discussions leading up to the dismissal.

• [272] Neither the Second nor the Third to Ninth Respondents disclosed any of the records of the social media messaging platforms in accordance with the initial discovery orders. Nor did they refer to them in their initial affidavits.

• [273] When the prior existence of the destroyed records emerged as a consequence of forensic retrieval techniques utilised by the CCC, the Applicant alleges that the Respondents gave spurious reasons for this action. They did not provide any information about the nature of the records. Instead they strenuously resisted all attempts by Ms Kelsey to access the records.

• [274] The Applicant submits that the records establish an alignment as pleaded by the Applicant and denied by the Respondents including in sworn evidence. The Applicant contends that the records reveal the clandestine leadership role played by the Second Respondent before and after he was injuncted from participation in the probationary process, and the unqualified support for him from the aligned group. They reveal in stark detail the unfolding secret strategy which culminated in Ms Kelsey's dismissal.

• [275] As a starting point, it is useful to briefly outline the statutory framework creating a local government.

• [276] Section 70 of the Constitution of Queensland 2001 (Qld) provides that there must be a system of local government in Queensland consisting of "a number of local governments". By s 71, a local government is an "elected body that is charged with the good rule and local government of a part of Queensland allocated to the body" and "another Act ... may provide for the way in which a local government is constituted and the nature and extent of its functions and powers". The other Act is the LG Act.[171]
• [277] The First Respondent is a body corporate with perpetual succession: a common seal; and may sue and be sued in its name.[172] The Second Respondent who is the Mayor is elected to the First Respondent and the Second to Ninth Respondents are elected to the First Respondent as Councillors. A Councillor must represent the current and future interests of the residents of the local government area.[173] All Councillors of a local government have the same responsibilities, but the Mayor has some extra responsibilities.[174]

• [278] Pursuant to r 254E of the Local Government Regulation 2012 (LG Regulation), the business of the Council may be conducted at a meeting, but only if a quorum is present. At each meeting of Council, a question is decided by a majority of the votes of the Councillors' present. Each Councillor present has a vote on each question to be decided and if the votes are equal the presiding Councillor has a casting vote.

• [279] Pursuant to s 170 of the LG Act, the Mayor may give a direction to the CEO or senior executive employee, but not a Councillor. No Councillor, including the Mayor may give a direction to any other local government employee. No Councillor, who is not the Mayor, may give a direction to the CEO.

• [280] In Hanley v AMWU,[175] the Full Court accepted that a corporation could be liable at common law for the contravention of a civil penalty offence in two circumstances, mainly:

(a) directly, where the contravention had been undertaken by the directing mind and will of the corporations;[176] or,

(b) through the principles of vicarious liability, where the contravention had been undertaken by an employee within the scope of their actual authority.[177]

• [281] The LG Act does not constitute the Mayor or Councillors as servants, employees or agents of the First Respondent. Indeed, s 162(1)(h) of the LG Act provides that if a person is a Councillor, and becomes an employee of a local government, the person's appointment to office as a Councillor comes to an end.

• [282] Individual acts of Councillors cannot constitute an act of the First Respondent unless they are subject to a decision of Council. The First Respondent may, by resolution, delegate the authority of Council to an individual Councillor to carry out or perform some act or action on behalf of the First Respondent. Subject to the above, it must follow therefore that an elected member of a local government constituted by the LG Act is not a servant and/or agent of the First Respondent with actual or ostensible authority.[178]

• [283] It is conceded that the First Respondent's reason for acting in respect of the termination can be determined by ascertaining the reasons of the individual Councillors who comprised the majority which became the Council decision.

• [284] If the reasons of a sufficient number of the Third to Ninth Respondents for voting as they did on the part include a material proscribed reason, the outcome of the vote may be examined by the Commission accordingly.

• [285] It is submitted that the correct approach is to ascertain whether any, and if so which, Councillors may have voted on 7 February 2018 with a proscribed motive. If any of them are found to have done so, the vote of each such person on that day is to be disregarded as if it had not been cast, and the resultant effect on the vote on 7 February 2018 is to be assessed.

• [286] If the result is that the vote would still have passed, the vote and decision of the First Respondent will be valid and unimpeachable. If the result is that the vote would not have passed, then the decision of the First Respondent can be ruled as null and void and relief granted accordingly.[179]

• [287] In order for the corporation to be liable, the relevant act must be performed by a person who has, at the time of performing the act, the lawful ability to control the corporation's actions.

• [288] In Tesco Ltd v Nattrass (Tesco Ltd)[180] Lord Reid said:

Reference is frequently made to the judgment of Lord Denning in Bolton (Engineering) Co. v. Graham [1957] 1 Q-B. 159. He said (at page 172):

A company may in many ways be likened to a human body. It has a brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such.

In that case the directors of the company only met once a year: they left the management of the business to others, and it was the intention of those managers which was imputed to the company. I think that was right. There have been attempts to apply Lord Denning's words to all servants of a company whose work is brain work, or who exercise some managerial discretion under the direction of superior officers of the company. I do not think that Lord Denning intended to refer to them. He only referred to those who "represent the directing mind and will of the company, and control what it does.[181]

• [289] In the same case, after quoting Denning LJ in Bolton, Viscount Dilhorne wrote:

If when Lord Denning referred to directors and managers representing the directing mind and will of the company he meant, as I think he did, those who constitute the directing mind and will, I agree with his approach.[182]

In the case in which this metaphor was first used Denning L.J. was dealing with acts and intentions of directors of the company in whom the powers of the company were vested under its Articles of Association. The decision in that case is not authority for extending the class of persons whose acts are to be regarded in law as the personal acts of the company itself, beyond those who by, or by action taken under, its Articles of Association are entitled to exercise the powers of the company.[183]

• [291] Tesco Ltd is authority for the proposition that the actions of the individual will only be the actions of the corporation if the individual is, in performing the relevant acts, lawfully entitled to exercise the powers of the corporation.

• [292] It is accepted that when the Third to Ninth Respondents participated in a collective decision making process authorised by the LG Act, they are, along with the other Councillors, the directing mind and will of the Council.

• [293] The Second, and Third to Ninth Respondents did not have the legal right to act as the First Respondent, other than by participating in meetings of the Council. In those circumstances it can be said that the natural person is not acting, but that it is the corporation who is acting.

• [294] It is an essential element of a finding that the Third to Ninth Respondents were involved in the First Respondent's contravening decision, that the Councillors each knew that the others were going to vote in the way they did, and that such a vote would be a contravention as alleged.

• [295] Section 571(3) of the IR Act addresses under which circumstances a person will be taken to have been involved in a contravention of a civil penalty provision. Specifically, it states:

(3) For this section, a person is involved in a contravention of a civil penalty provision only if the person -

(a) has aided, abetted, counselled or procured the contravention; or

(b) has induced the contravention, whether by threats promises or otherwise; or

(c) has been in any way, by act or omission, directly or indirectly knowingly concerned in or party to the contravention; or

(d) has conspired with others to effect the contravention.

• [296] Section 571 of the IR Act 2016 is virtually indistinguishable from s 550 of the FW Act. Section 550 of the FW Act was considered in Fair Work Ombudsman v Priority Matters Pty Ltd[184] where it was held that in order to be involved in a contravention there had to be some conduct to implicate a person in the offending conduct.

• [297] In Australian Building and Construction Commissioner v Parker,[185] Flick J comprehensively surveyed the authorities concerning the accessorial provisions and the application of those provisions to alleged contraventions involving a specific state of mind or intent. Flick J held:[186]

1. For a person to fall within the reach of s 550, that person must associate himself with the contravening conduct. When addressing the terms of s 550 of the Fair Work Act, North and Bromberg JJ in Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37, (2015) 228 FCR 346 at 404 ("Quest South Perth Holdings") thus observed:

[253] The nature of the liability imposed by s 550(1) (in the context of the meaning of "involved in" set out in s 550(2)), was explained by Tamberlin, Gyles and Gilmour JJ in Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26] as follows:

Regardless of the precise words of the accessorial provision, such liability depends upon the accessory associating himself or herself with the contravening conduct - the accessory should be linked in purpose with the perpetrators (per Gibbs CJ in Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 at 479-480; see also Mason J at 493 and Wilson, Deane and Dawson JJ at 500). The words "party to, or concerned in" reflect that concept. The accessory must be implicated or involved in the contravention (Ashbury v Reid [1961] WAR 49 at 51; R v Tannous (1987) 10 NSWLR 303 per Lee J at 307E-308D (agreed with by Street CJ at 304 and Finlay J at 310)) or, as put by Kenny J in Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2002] FCA 61; (2002) 117 FCR 588; 112 IR 388 at [34], must participate in, or assent to, the contravention.

[254] The requirements of what was then s 75B of the Trade Practices Act 1974 (Cth) were considered by the High Court in Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661. The terms of the former s 75B are the same as those found in s 550(2) of the FW Act. A wide range of elements are identified by the four sub-paragraphs of s 550(2). ...

The person must have engaged in conduct which implicates or involves that person in the contravention such that there is a "practical connection" between that person and the contravention: Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034 at [950] per Katzmann J.

1. The phrase "aided, abetted, counselled or procured" is a phrase borrowed from the criminal law. In that context, the phrase requires that for a person to assume liability he must have "intentionally participated" in an act and to have "knowledge of the essential matters which go to make up the offence": Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 667. Mason ACJ, Wilson, Deane and Dawson JJ there observed in the context of the liability of individuals for a contravention by a corporation of the Trade Practices Act 1974 (Cth):

1. the words used, "aided, abetted, counselled or procured", are taken from the criminal law where they are used to designate participation in a crime as a principal in the second degree or as an accessory before the fact. Both in the case of felonies where the principal offender and the secondary participant commit separate offences, and in the case of misdemeanours where no distinction is drawn between the two, a person will be guilty of the offences of aiding and abetting or counselling and procuring the commission of an offence only if he intentionally participates in it. To form the requisite intent he must have knowledge of the essential matters which go to make up the offence whether or not be (sic) knows that those matters amount to a crime. ...

1. There can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention.

1. In order for a person to have the requisite intention, the person must have knowledge of the "essential matters" which go to make up the events - but it is not necessary for the person to have knowledge that those matters constitute a contravention: Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [176] per White J.

1. Where a contravention involves a "state of mind", that "state of mind" is an element of the contravening conduct and a person can only be an accessory if he also has the required knowledge. In Quest South Perth Holdings [2015] FCAFC 37, (2015) 228 FCR at 406 to 407, North and Bromberg JJ went on further to observe:

[267] The need to establish an accessory's knowledge of the primary contravener's state of mind in an adverse action claim brought under s 340(1) of the FW Act, in which the contravener's motive is an essential element of the contravention, was considered by Bromberg J in Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446; (2013) 232 IR 290 at [288]- [290], in a passage not dealt with subsequently in the reasons of the Full Court that considered that judgment. His Honour said:

[288] The CFMEU contended that whilst it is necessary to prove that the accessory knew what the principal contravener was doing, an accessory cannot know what the other person is feeling or thinking. It argued that whilst it was necessary for an accessory to have knowledge of the essential elements of a contravention, it was not necessary for an accessory to have knowledge of the principal contravener's motive for the contravention.

[289] That submission must be wrong where a particular motive is a necessary element of the contravention. For instance, a person who assisted in the dismissal of an employee carried out by a contravener because of the employee's race, could not be an accessory to the discriminatory conduct in the absence of having assisted knowing that the contravener's conduct was motivated by race. Without that knowledge, it could not be said that the alleged accessory is "linked in purpose with the perpetrators".

[290] An accessory will often know the principal perpetrator's motive because the perpetrator will have revealed it. Alternatively, an accessory may know the perpetrator's motive because their conduct is so intertwined, that the motive of one will be the obvious motive of the other.

See also: Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd (No 2) [2015] FCA 1088 at [448], [2015] FCA 1088; (2015) 253 IR 391 at 476 per Murphy J.

1. For a person to be "knowingly concerned in or a party to the contravention" for the purposes of s 550(2)(c), the person must have been an intentional participant with knowledge at the time of the contravention of the essential elements constituting the contravention: cf. Yorke v Lucas (1985) 158 CLR at 670. Actual knowledge is required - mere constructive or imputed knowledge is not sufficient. But actual knowledge may be inferred from "exposure to the obvious": Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 at 507 to 508.

• [298] The Third to Ninth Respondents contend that in respect of the vote to terminate the Applicant, in order to establish accessorial liability, the Applicant must establish actual knowledge on behalf of the alleged accessory of each of the essential elements of the offence. The Applicant must show that the Third to Ninth Respondents knew of the proscribed intention in not only their own vote, but in the votes of others.

• [299] No such knowledge was pleaded; no evidence was adduced of any such knowledge; and the Third to Ninth Respondents were not cross-examined about the state of their knowledge of the other Councillors. It is argued that the absence of a positive allegation of knowledge being either pleaded or put to the Third to Ninth Respondents is indicative of the absence of any basis for those claims.

• [300] As a consequence of the Applicant's failure to either plead or prove the requisite degree of actual knowledge, the Third to Ninth Respondents urge the Commission to strike out this part of the Applicant's claim.

• [301] Absent clear evidence of knowledge on behalf of the Second to Ninth Respondents, the Applicant cannot succeed in attributing personal liability to the individual respondents. Accordingly, none of the Third to Ninth Respondents can be held to be involved in the contravention of the First Respondent for the purposes of s 571 of the IR Act_._

• [302] The Applicant's claims against Mayor Smith are set out in her Further Amended Application dated 23 March 2018 which define the ambit of the issues to be decided against Mayor Smith.

• [303] The Applicant seeks the following relief against Second Respondent:

(a) A declaration that he contravened section 285 of the Industrial Relations Act 2016 (Qld) by virtue of section 571 of the IR Act (the adverse action allegations);

(b) Orders that Mayor Smith pay penalties and damages due to the contravention of the IR Act;

(c) An order that Mayor Smith pay the applicant's remuneration lost as a result of 7 February 2018 pursuant to section 314 of the IR Act and 51 and 52 of the Public Interest Disclosure Act 2010 (Qld); and

(d) An order that he not participate in any resolution by the Council in future in respect of her employment or have any involvement with any such resolution (that assumes she is reinstated - which is in order sought against the Council as her employer): relying on section 51 of the PID Act) and section 314 of the IR Act.[187]

• [304] It is contended by the Applicant that the Second Respondent engaged in adverse action and contravened s 285 of the IR Act because he committed all of the acts pleaded in the further amended application.[188]

• [305] In short, the adverse action is said to be the following:

Alleged continuing involvement in the probation process specifically set out in paragraph 4(h)(i);

Alleged "additional process" because Mayor Smith asked the Applicant to respond about the Acceptable Request Guidelines in an email - paragraph 4(h)(ii) and paragraphs 8 and 9;

Allegations that references in the Hunter report to the Applicant's refusal to endorse a media release were criticisms made by or "at the instigation of" Mayor Smith - paragraphs 10 to 12;

Allegations that Mayor Smith made certain statements in a meeting with Ms Hunter and the other councillors - paragraph 12.1;

Allegations that Mayor Smith had asked an employee what he thought of the Applicant and said she was litigious - paragraph 14.2;

Allegations that some meetings were cancelled - paragraph 14.3; and

Allegations that Mayor Smith made certain statements in meetings with all other Councillors - paragraph 14.4(a).

• [306] The Second Respondent submits that aside from a general allegation that Mayor Smith caused the termination, the Applicant alleges that Mayor Smith relevantly:

1. commenced a different probation process for her to that of the previous CEO;
2. participated in the probation review process in relation to the applicant to a greater degree than the Applicant alleges he should have;

1. reduced and cancelled some meetings with the Applicant;

1. made certain statements in two meetings of the Councillors;
2. made some limited statements to a single employee in the USA; and
3. asked for the Applicant's response to a query about legal advice received by the Council and sought her response by the following day.[189]

• [307] In the section entitled "Material facts relied upon to support the Application", commencing at page 6 of the Further Amended Application, only the following matters are relevant to Mayor Smith:

(a) Mayor Smith is "politically affiliated" with each of the Third to Ninth Respondents;

(b) each of the Second to Third and Fifth to Ninth Respondents held a "chair" position at the direction or instigation of Mayor Smith;[190]

(c) Mayor Smith has indicated that he is politically affiliated or aligned with the Third to Ninth Respondents;[191]

(d) on or around 10 August 2017 the Applicant commenced a probation review process in relation to an employee of the Council, Ms Jane Frawley;[192]

(e) Mayor Smith is alleged to have been involved in that probation review and expressed a contrary view;[193]

(f) there is an allegation that the Applicant holds a view that Mayor Smith and Ms Frawley had an undisclosed personal relationship;[194]

(g) on 27 September 2017, the Applicant alleges that Mayor Smith commenced a probation review process in relation to her which commenced with the provision of a "probation conversation report" on 10 October 2017;[195]

(h) it is alleged that Mayor Smith's purpose was to retaliate against the Applicant for:

(i) her conduct of the probation review process in relation to Ms Frawley;

(ii) because of an alleged seeking of funding for the relocation or refurbishment of his office (named the "relocation conduct" in the Further Amended Application);[196]

(iii) due to the Applicant's refusal to release a media release in connection with operation Belcarra (referred to as the "Belcarra request" in the Further Amended Application);[197]

(i) it is also alleged that the September and October review in relation to the Applicant was different from the process completed by Mayor Smith in relation to the previous CEO, Mr Milner;[198]

(j) thereafter on 12 October 2017 the Applicant sent correspondence which she says constituted a complaint to the Council and to the Crime and Corruption Commission and sent a complaint to the Director-General of the Department of Infrastructure, Local Government and Planning on 17 October 2017;[199]

(k) it is alleged that Mayor Smith reduced his interactions and invitations sent to the Applicant after that time and directed comments and questions to others in meetings in circumstances where he would previously direct those comments and questions to the Applicant;[200]

(l) as a consequence of the complaint, the Council appointed an independent reviewer, Ms Rachel Hunter, to undertake the Applicant's probation review;[201]

(m) on 6 November 2017 the Council's solicitors stated in correspondence that Mayor Smith had "no role to play in the probation review process except be interviewed by Ms Hunter";[202]

(n) Mayor Smith allegedly continued to be involved in the probation review in ways that have been said to be adverse to the Applicant (without an explanation of how that is so), including by undertaking the conduct referred to below:[203]

(i) Mayor Smith allegedly chaired meetings of Councillors at which the probation was discussed (referred to as the meeting chair conduct);

(ii) Mayor Smith allegedly provided input to the managers who would be interviewed by Ms Hunter (the feedback conduct);

(iii) Mayor Smith allegedly was involved in the removal of Mr Strachan from the Applicant's probation review (referred to as the removal conduct);

(iv) Mayor Smith allegedly was involved in discussions and voting on motions in respect of the management of the probation review (referred to as the voting conduct);

(v) Mayor Smith allegedly was involved in the defeat of a motion to the effect that he would not be involved any further in that process (referred to as the defeated motion);

(vi) Mayor Smith allegedly made comments critical of the probation review report including questioning how findings were made and commenting on the process (referred to as the hunter report meeting conduct);

(o) it is alleged that Mayor Smith wrote to the Applicant on 28 November 2017 seeking to raise matters outside of that review about alleged legal advice (referred to as the additional process);

(p) a draft probation report was then prepared by Ms Hunter;[204]

(q) further it is alleged that whilst on a business trip in the USA, Mayor Smith spoke to a Ricardo Martello and allegedly asked him what he thought of the Applicant and stated that she was litigious (referred to as the Mayor information conduct);[205] and

(r) it is then alleged that Mayor Smith had made certain comments at two meetings of the Council: on 13 October 2017 and 1 December 2017.

• [308] Firstly, the Second Respondent submits that none of the matters pleaded by the Applicant amount to "adverse action" within the definition of the IR Act. In any event, for the reasons advanced above, only the employer of the Applicant, the First Respondent can take adverse action. Mayor Smith was not the employer and therefore none of the matters alleged against him can be adverse action.

• [309] Secondly, the Applicant contends that the conduct was adverse action because each aspect of it altered her position. However, the actions complained of can only be adverse action if they alter Applicant's position in a meaningful and substantial way to her prejudice.

• [310] In Unsworth v Tristar Steering and Suspension Australia Limited ('Unsworth'), Gyles J said the following:

A "before and after" test is usually applied to see whether there has been any injury to, or prejudicial alteration of, the position of the employee by reason of any act of the employer (eg per Evatt J in Blair v Australian Motor Industries Ltd (1982) 61 FLR 283 at 289, 3 IR 176; per Branson J in Commonwealth Bank of Australia v Finance Sector Union of Australia [2007] FCAFC 18; (2007) 157 FCR 329 at [127]). Applying what had been said by the Full Court in an earlier interlocutory appeal (BHP Iron Ore Pty Ltd v Australian Workers' Union [2000] FCA 430; (2000) 102 FCR 97 at [35]), it was succinctly put by Kenny J in Australian Workers' Union v BHP Iron-Ore Pty Ltd [2001] FCA 3; (2001) 106 FCR 482 at [54] as follows:

Before s 298K(1) can apply, it must be possible to say of an employee that he or she is, individually speaking, in a worse situation after the employer's acts than before them; that the deterioration has been caused by those acts; and that the acts were intentional in the sense that the employer intended the deterioration to occur.

Tracey J usefully summarised the authorities as to the former s 298K in Australian and International Pilots Association v Qantas Airways Ltd [2006] FCA 1441, (2006) 160 IR 1 at [13]- [22]. "Injury" is concerned with an adverse effect upon an existing legal right, or "compensable" injury. Prejudicial alteration of position goes beyond that concept. There are many examples in the cases. It is sufficient to refer to Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30; (1998) 195 CLR 1 per Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ at [37] and [38]; Community and Public Sector Union v Telstra Corp Ltd [2001] FCA 267; 107 FCR 93 at [17]-[22]; Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union [2001] FCA 349; (2001) 112 FCR 232; and Commonwealth Bank of Australia v Finance Sector Union of Australia [2007] FCAFC 18; 157 FCR 329.[206]

• [311] The Applicant has failed to demonstrate how each alleged matter altered her position. The Second Respondent contends that none of them are established to have done so. I agree.

• [312] It is contended by the Second Respondent that the allegations against Mayor Smith to the extent that they involve the IR Act cannot succeed because the complaints made by the Applicant were not the exercise of "workplace rights" within the definition of s 284 of the IR Act.

• [313] The workplace right alleged to have been exercised by Ms Kelsey involved her responsibilities as an employee and CEO of the First Respondent under s 13 of the LG Act and s 38 of the CC Act.

• [314] In summary, the Applicant allegedly exercised her workplace rights by commencing the Frawley probation process; refusing to agree to the allocation of funds in relation to the relocation conduct; in refusing to release the media request for the Belcarra matter; and by making the complaints and commencing this proceeding.

• [315] Whilst I do not accept that the Applicant exercised a workplace right under s 38 of the CC Act, I do accept that she exercised a workplace right under s 13 of the LG Act.

• [316] As a consequence of the exercise of the workplace right, it is contended that the Applicant experienced "adverse action" as a result of the actions of Mayor Smith as particularised in the Further Amended Application.[207]

• [317] Further it is alleged that the Council is vicariously liable for the acts of Mayor Smith because they were committed by him in the performance of his responsibility as Mayor and he is therefore part of the "directing mind and will" of the Council.[208]

• [318] The following is alleged against the Second Respondent:

1. The Second Respondent is taken to have contravened s 285 of the IR Act because, by s 571 of the IR Act, the Second Respondent by committing the acts pleaded in paragraphs 26 to 30 was a person involved in the First Respondent's contravention/s.
2. It is alleged that the adverse action was engaged in by the Mayor Smith for certain reasons: in paragraph 30 of the Further Amended Application.

• [319] However, the Second Respondent submits that it is not alleged that Mayor Smith is somehow responsible for the acts of others nor does it otherwise pick up any of the other language in s 571 of the IR Act.

• [320] By way of example, it is submitted that no allegation of conspiracy, aiding, or abetting has been pleaded in the Further Amended Application against Mayor Smith. The Applicant needed to fully articulate the argument it wished to advance if it was her intention to pursue this element of the claim in these proceeding. Accordingly, the Commission is urged to decline to consider any such claims because to do so would involve a basic lack of procedural fairness and natural justice.[209]

• [321] Further, and in any event, the evidence of the Applicant does not establish any form of causal link between the alleged conduct on the part of Mayor Smith and the termination, in circumstances where he did not vote upon the resolution to terminate and did not attend the relevant meeting.

• [322] The Commission is confronted with a paucity of evidence to establish that any conduct of the Second Respondent constituted adverse action against the Applicant. Moreover, the evidence does not support a conclusion that Mayor Smith's conduct altered the Applicant's position to her prejudice.

• [323] Mayor Smith was required by s 12(4)(d) of the LG Act to undertake a performance appraisal of the Applicant. Clause 8 of the Applicant's contract of employment also included a requirement for a performance appraisal.

• [324] The Probation Conversation Report was part of the appraisal process. The process was to start with a probation conversation on 10 October 2017. That conversation had barely started before the Applicant took exception and left the meeting suggesting that she had been placed at a disadvantage. What started on 10 October 2017 was not the entirety of the appraisal process. It was explained to Ms Kelsey that the meeting on 10 October was only the beginning of the process. She accepted that she was asked for feedback on the probation conversation report and was advised that she could take the document away.[210]

• [325] It needs to be recognised that the approach adopted by the Second Respondent to conduct a performance appraisal of the Applicant was not an extraordinary one. Ms Kelsey held a well remunerated position. She had extensive responsibilities to manage a significant local government body. She was aware that her contract of employment required that she was subject to a six-month probationary review. It would be extraordinary if the sum total of the probationary process was limited to the 100 Day Report as suggested by her. As Ms Kelsey said in her evidence, that in preparing the 100 Day Report she would be receiving contributions from across the executive leadership team to inform the report.[211]

• [326] The probationary process was supported by advice from the First Respondent's HR department. It was a process which had been adopted by the First Respondent in respect of reviews of other senior management within Council. It was a process that the Applicant acknowledged she had adopted in respect of another employee.[212]

• [327] Ms Kelsey made reference to the completed probation conversation of Mr Milner in her affidavit of 12 March 2018. However, in cross-examination she accepted that she did not know whether that document was the full extent of the probationary process for Mr Milner.[213] There is no evidence before the Commission from anyone actually involved in Mr Milner's probation process. Rather the Commission is left to wonder.

• [328] Ms Kelsey accepted that she was guessing when she said that the probation report appeared to be completed by Mayor Smith.[214] Further, the assertion that Mayor Smith was responsible for all or a majority of the input and it was apparent that no input had been sought in relation to her performance from other Councillors, the Executive Team or other staff, was again a matter of guessing.[215]

• [329] The evidence of Ms Kelsey does not establish how her position was altered as a consequence of the different probation process.

• [330] However, it is not said that any of the limited conduct of Mayor Smith referred to in paragraph [307] above caused their decisions to terminate.

• [331] Further, insofar as the Applicant relies upon the Third to Ninth Respondents conduct in respect of the vote to terminate the Applicant, in order to establish accessorial liability, the Applicant must establish actual knowledge on behalf of the alleged accessory of each of the essential elements of the offence. The reverse onus does not apply to claims of accessorial liability.[216]

• [332] It is accepted that the Third to Ninth Respondents were not cross-examined about Mayor Smith's conduct in any way that impacts the case against him. Nor was it put to the Third to Ninth Respondents that any of the conduct identified caused their decision to terminate Ms Kelsey.

• [333] It is alleged against Mayor Smith that he had played a role in the Applicant's probation review other than to be interviewed by Ms Hunter.

• [334] There is no evidence to support the contention that Mayor Smith provided feedback to managers to be interviewed by Ms Hunter. Indeed, the evidence of Ms Kelsey was to the effect that Mr T. Wild had advised her that Mayor Smith had played no part in the selection of managers to be interviewed as part of the probation process.[217]

• [335] Ms Kelsey's evidence was that she was "... concerned that the Mayor has had and has a continued role in the probation process, to my detriment ...".[218] The Applicant was challenged in cross-examination on the issue of Mayor Smith's involvement in the probation process but was unable to provide any specific detail as to what the Mayor might have done as part of that process.[219]

• [336] What is apparent from the evidence is that there was to be further feedback, that others were to be interviewed as part of the probation process and that there was to be other occasions for the Applicant to read and provide feedback on the probation conversation document. The Applicant chose not to engage in the review process in a measured way but rather sought to engage lawyers the following day.[220] Ms Kelsey's evidence was that she could not recall if she had actually read the probation report prior to meeting with her lawyers.[221]

• [337] On or about 1 November 2017, a meeting of Councillors was held to discuss the progress of Ms Hunter's probationary review of Ms Kelsey. It was at this meeting that it was agreed that Mr Strachan would be replaced by Mr Wild of Peak Services as the point of conduct between the Council and Ms Hunter. Cr Schwarz's evidence was that it was felt that Mr Strachan was being placed in an unnecessarily difficult position, given that he reported directly to Ms Kelsey; and was to be interviewed by Ms Hunter as part of the review.[222]

• [338] It is alleged that on a trip to the USA, Mayor Smith had commented to Mr Martello to the effect that the Applicant was litigious.

• [339] The file note of Mr Martello records the following:

TLS then said to me that he had tried to get the CEO to have the Media branch report directly to her in the past but had been unable to convince her to do so. He then asked me: "What do you think of Sharon?" My response once again did not speak to my opinion of Sharon as an individual, and was along the following lines:

I have not really had in-depth conversations with Sharon and the direct interactions I have had with her did not really go much beyond the surface. I have only attended one Executive Leadership Team (ELT) meeting in Jane's place since Sharon's appointment and hadn't had a lot of exposure to her leadership style beyond that. What I have seen though was positive and given the churn in the CEO role, she has brought some much-needed stability and support for the organisation. I would suggest that she has certainly met the brief given to you by the staff that you met with prior to recruiting the CEO. Her background as a lawyer comes in handy at a time like this too.

TLS' response to my last comment was along the lines of: she is certainly very litigious. TLS did not elaborate further on his comment, nor did I offer a reply or comment of my own.[223]

• [340] I accept the argument of the Second Respondent that the Applicant could have led evidence from Mr Martello, but chose not to. Notwithstanding that objection, it is unclear how it can be suggested that the question by Mayor Smith as recorded by Mr Martello is said to have altered the Applicant's position. There is no evidence to assist the Commission in reaching any conclusion on the allegation.

• [341] I accept that the reasons advanced by the Third to Ninth Respondents to terminate the Applicant's employment were unrelated to any of the matters pleaded in paragraph 29(b3) of the Further Amended Application.

• [342] It is asserted that through the Second Respondent's actions in the cancellation of the One on One Meeting, Budget Meeting Failure and the Reduction and Cancellation of Meetings limited the involvement of Ms Kelsey in the First Respondent's processes and limited the information available to her in relation to the First Respondent.

• [343] In paragraph 14.3 of the Further Amended Application the allegations concerning the meeting reduction and cancellations is set out more fully. In particular, it is stated, "Full details of these cancellations cannot be provided until disclosure has been completed".

• [344] In cross-examination, the Applicant said that there had been a significant "drop-off post the - PID". Ms Kelsey accepted in cross-examination that she had not attempted to quantify how many meetings have been "dropped off", nor did she provide specific details of the reduction of meetings either in her affidavits or oral evidence.[224]

• [345] The Applicant accepted that there was nothing stopping her from going to see a Councillor or seeking a meeting with them.[225] She acknowledged that her primary interactions were not with Councillors but rather were with Council staff.[226] The reality is that the evidence does not establish in any satisfactory way that there was any meaningful cancellation of meetings nor that it affected or altered Ms Kelsey's position as alleged.

• [346] At paragraph 29(b) of the Further Amended Application it is alleged that Mayor Smith required Ms Kelsey to participate in an additional process and this had the effect of altering the position of the Applicant to her prejudice.

• [347] The additional process alleged to have been required of Ms Kelsey was an email request from Mayor Smith on 28 November 2017, requiring information from her in respect of legal advice received by the First Respondent in relation to the ARGs, and seeking a response by 29 November 2017.

• [348] The evidence demonstrates that the request by Mayor Smith formed the normal part of the business of Council and certainly could not be characterised as a process in addition to the Hunter Process.

• [349] It was further submitted that the request for information cannot constitute adverse action in the absence of any proper foundation for a conclusion that it had any effect on the position of the Applicant whatsoever. I accept the submission that there was no material cross-examination to the effect that this caused any of the decisions to terminate the Applicant's employment.

• [350] Cr Dalley was a long-standing and experienced member of Council. She served as the Deputy Mayor; was a member of the Mayoral Cabinet; and was the Acting Mayor when the Mayor was absent on leave and during the period when the Mayor was stood down.

• [351] Cr Dalley was a participant in a variety of social media platforms.[227]

• [352] The matters identified by Cr Dalley as justifying termination of the Applicant are set out in her affidavit of 18 April 2018[228] as follows:

(a) Ms Kelsey attempted to change standard, longstanding practices of Council in an effort to exert excessive control over Council and its operations;

(b) Ms Kelsey demonstrated disregard for the development of functional working relationships with Councillors;

(c) Circumstances indicated to me that Ms Kelsey was lying, or not being fully truthful, to Councillors on more than one occasion;

(d) Ms Kelsey made decisions demonstrating that she lacked comprehension of the way Queensland local governments function;

(e) Ms Kelsey failed to discharge her duties appropriately and in doing so, restricted Councillors' ability to perform our roles adequately;

(f) Ms Kelsey continuously made important decisions without first consulting Council;

(g) Ms Kelsey publicly undermined my professional ability; and

(h) Ms Kelsey had a miscomprehension of the limits and requirements of her role.

• [353] In her affidavit, Cr Dalley said that the above reasons were her only considerations when deliberating whether to affirm or conclude the Applicant's appointment with the First Respondent and at no stage did she consider the PID, CCC Referral, Council Complaint and 176B Referral or these proceedings when forming her decision.

• [354] Cr Dalley together with Mayor Smith and Cr Schwarz participated in the Probation Conversation on 10 October 2017. Cr Dalley's evidence is that as at the probation meeting on 10 October 2017, nothing had occurred which justified the termination of the Applicant's employment.[229]

• [355] In referring to the receipt of the PID, Cr Dalley told the Commission that she was upset, not by the PID itself, but by the 'manner it was delivered'[230].

• [356] In her evidence, Cr Dalley spoke of the environment in which the Council operated. It was as Cr Dalley explained, toxic. There was a high degree of distrust amongst and between some Councillors.

• [357] In cross-examination, Cr Dalley explained that she felt that a relationship was forming between Ms Kelsey and Councillors Power, Koranski, Mcintosh, Raven and Bradley. As the following extract from the cross‑examination reveals:

MR MURDOCH: Let's just go back a step. You'll recall before I asked you questions about the probation conversation report?

MR MURDOCH: You'd made that decision because she'd lodged the PID?

CR DALLEY: No. As I explained, at least three times before, this is more about Ms Kelsey's apparent relationship with other councillors. And to be in a safe, secure environment, one needs to be able to talk to the CEO about anything, including other councillors.

MR MURDOCH: Well, you see, you obviously felt that you could talk to Ms Kelsey in a safe and secure environment on the 10th of October, because you had the probation conversation report meeting with her, didn't you?

CR DALLEY: That was an obligatory meeting that I had to attend.

MR MURDOCH: Yes. Yes. But you - by the time we get to the 13th, three days later, somehow you don't feel safe to talk to her; correct?

CR DALLEY: I wasn't feeling particularly comfortable in the probation conv - I wasn't feeling particularly comfortable, period, around about that time. The whole environment was toxic.

MR MURDOCH: And, in fact, we get to the point, by the time we get to page 97, that you were not even, I suggest, going to have a - any further conversations with Ms Kelsey. Look at the second line?

CR DALLEY: That was my position at that point in time. Things changed.

MR MURDOCH: Well, you keep saying that, but that was your position on the?

MR MURDOCH: Again, because --- 13th of October, wasn't it?

CR DALLEY: I was concerned that conversations that I might have with Ms Kelsey would come back and bite me via other councillors.

MR MURDOCH: And that concern arose because she'd lodged the PID; correct?

CR DALLEY: No. No. I understand Ms Kelsey had every right to lodge a PID. that's true. But that wasn't ---

CR DALLEY: the reason I was feeling this.[231]

• [358] Cr Dalley is a member of the Australian Labour Party (ALP) and she is aware that other Councillors are, or have in the past been, members of political parties. She said that Mayor Smith was a former member of the Liberal National Party (LNP).

• [359] Despite being a member of the ALP, Cr Dalley considers herself to be an independent Councillor within the Council. As such, she said her focus has always been on what is best for Logan City and best for her Division.[232]

• [360] Cr Dalley was elected unopposed as the Councillor for Division 8 at the 2016 Council Election and unopposed for Deputy Mayor. Equally both she and her husband have assisted other candidates in their campaigns.

• [361] In regard to voting patterns, Cr Dalley denies that the Second to Ninth Respondents frequently vote together, as they are politically aligned.

• [362] Her evidence is that she has never voted on a motion (either for or against) at the request of the Mayor, or the request of any of her fellow Councillors; she always exercised her vote on what she considered to be in the best interests of Logan City and her Division. To her knowledge there are no voting "blocs" or formal alliances, within Council. Rather, it has been her experience that Councillors commonly vote based on what they personally believe is best for Logan, and what may be best for their Division.[233]

• [363] To the extent that a voting bloc or political alignment may have developed within Council, it has been her observations that Councillors Power, Koranski, Mcintosh, Raven and Bradley appear to have formed a common dislike of the Mayor, and therefore will commonly oppose his views.[234]

• [364] Cr Dalley said that in her view Cr Power was hostile towards Mayor Smith and had described himself as the "leader of the opposition".[235]

• [365] Ms Kelsey was amongst the final three candidates selected with the assistance of Davidson Recruitment. Each candidate was interviewed by the full Council and each Councillor was provided with the opportunity to ask questions.

• [366] Cr Dalley thought Ms Kelsey was the better of the three candidates. While there was another candidate whom she considered had superior skills and experience on paper, and in particular in the areas of project delivery and financial management, she recalled discounting this candidate due to a remark made by him that he "drives past Logan on the way to the Gold Coast", when asked to describe what he knew about Logan.[236]

• [367] Cr Dalley said that Ms Kelsey had some local government experience, although with smaller Councils in Victoria and South Australia; she evidenced a commitment to the role, by "regaling" to the Council about how she had come up to Logan early, and spent the weekend travelling around the City on a public bus; had experience working with the Victorian Independent Broad-based Anti-corruption (IBAC); and presented to Council as being quite personable.[237]

• [368] The only real concern that Cr Dalley had with Ms Kelsey was how she would transition from acting as a CEO in a smaller Victorian Council, to Logan City Council which is the fifth largest local government body in Australia, and subject to the very different Queensland local government regime.[238]

• [369] Drawing on her own experience, Cr Dalley said that the local government systems in Victoria and Queensland are vastly different in regard to the roles and interactions between the CEO, Senior Officers and the Council. In particular, she is aware that in Victoria, local councils are often much smaller with part-time Councillors, while the Mayor is generally elected from amongst the Councillors for a shortened two‑year term. This is very different to Queensland, where Councillors are elected on a full-time basis, and the Mayor is elected by the residents directly for a four-year term. In these circumstances, it is the Mayor and Councillors who drive the strategic direction of the Council and the community it represents. The CEO is required to work with the Mayor (with oversight from the full Council) to run the operational arms of Council to give effect to that strategic direction.[239]

• [370] Cr Dalley said her interactions with Ms Kelsey ordinarily occurred through formal meetings such as Civic Leadership Committee (CLC) meetings, Executive Meetings, Committee Meetings and full Council Meetings. Cr Dalley said she had significantly more contact with Ms Kelsey during periods when she was acting Mayor, because in those circumstances it was appropriate for her to have greater oversight on Ms Kelsey's activities.

• [371] In particular, during the period 5 December 2017 to 15 January 2018, when the Mayor was absent in the USA, Cr Dalley made a point of dropping in to catch up with Ms Kelsey at least every second day during the period. Other than the periods during which Cr Dalley was acting Mayor, she did not believe her interactions with Ms Kelsey changed in any material way.

• [372] Shortly after the event, Cr Dalley was informed that Ms Kelsey had attended the Relay for Life as part of a team including Councillors Power, Koranski and Mcintosh, and further that Cr Power and Ms Kelsey had attended in matching costume.

• [373] This was of concern to Cr Dalley because Cr Darren Power and Mayor Smith have had an acrimonious relationship for a number of years. The degree of acrimony is well known by Councillors, staff and the broader Logan community, due to Cr Power's constant political grandstanding.[240]

• [374] Of particular concern for Cr Dalley was the fact that in the weeks leading up to this event, Cr Power had been continuing his public demands that the Mayor stand down.

• [375] In Cr Dalley's view, Ms Kelsey's role requires that she conduct herself in an apolitical fashion at all times. Any perception to the contrary will only cause distrust and division within the Council, due to it being a political environment.

• [376] Cr Dalley considered Ms Kelsey's decision to publicly partner with Cr Power at this event created a perception that she was siding or otherwise aligning herself with Cr Power, given:
  1. the event was not being held in Cr Power's Division (nor was it held in Cr Koranski's or Mcintosh's Division);
  2. it was unusual for Cr Power to be seen anywhere west of the City, as his electorate is located in the east;
  3. Ms Kelsey turned up in joint costume with Cr Power; and
  4. the Mayor was also in attendance at this event, making this differentiation in alignment even starker.

• [377] As Ms Kelsey and Mayor Smith are required to work closely together for the Council as a whole to succeed, Cr Dalley was concerned that this public display with Cr Power would likely cause tension or difficulties in that relationship, given Cr Power is a long term protagonist of the Mayor.[241]

• [378] Cr Dalley considered that Ms Kelsey's actions were the result of either severe ignorance, political naivety; or a deliberate and intentional act of favouritism. In either case, she considered Ms Kelsey's conduct to be completely unacceptable, because to properly discharge her duties, Ms Kelsey needs not only to be apolitical, but also be seen to be apolitical.[242]

• [379] Approximately three months into Ms Kelsey's appointment, Cr Dalley was requested by Mayor Smith to participate in a probationary conversation review with Ms Kelsey, along with Cr Schwarz.

• [380] As a member of the Mayoral Cabinet, Cr Dalley accepted that it was appropriate that she participate in this review.

• [381] As part of the probation process, Mr M. Goldsworthy, a Manager in the Council's Human Resources Department, provided Mayor Smith with a template document to complete, and also set down a process whereby:

1. the Mayoral Cabinet would meet with Mr Kelsey's three times during her probation (i.e. at the 3,4 and 5 month marks); and
2. towards the end of the process the Council would complete a 360 review of Ms Kelsey's employment.[243]

• [382] Cr Dalley recalled receiving a copy of the Probationary Conversation Report from Mayor Smith a few days prior to the proposed meeting with Ms Kelsey on 10 October 2017.

• [383] When reviewing the report, Cr Dalley considered that the overall marking in regard to Ms Kelsey appeared to be fair and reflected where she thought Ms Kelsey was tracking in regard to her role. Whilst Ms Kelsey had taken some positive steps in her role, she also made a number of critical errors (such as the issues regarding Relay for Life) which needed to be raised and addressed.[244]

• [384] On or around 10 October 2017, the Mayor, Cr Schwarz and Cr Dalley commenced the first probationary conversation review meeting with Ms Kelsey. Cr Dalley recalled that during the meeting Mayor Smith explained to Ms Kelsey that the meeting was meant to be a probationary conversation, and that it was intended to meet with her monthly to consult with her about how her performance was tracking. Mayor Smith explained that Ms Kelsey would be provided with an opportunity to put her views forward as the 10 October meeting was just the commencement of the process.

• [385] Mayor Smith provided Ms Kelsey with a copy of the Report, and attempted to talk to her about the sections, and what was meant by each. However, Cr Dalley recalled that rather than listen to Mayor Smith, Ms Kelsey kept flipping through the pages, and was looking visibly uncomfortable. Cr Dalley said that Mayor Smith asked Ms Kelsey if she was feeling okay. To which Ms Kelsey responded with words to the effect of, 'I am feeling at a disadvantage'.[245]

• [386] The Mayor explained that the probationary review is a normal Council process and part of an ongoing probationary review process. However, Ms Kelsey repeated that she was still feeling at a disadvantage. Ms Kelsey was offered the opportunity to take the Report away with her for further consideration.

• [387] Cr Dalley recalled that Mayor Smith suggested to Ms Kelsey that she come back by Friday of that week, as Cr Dalley was going to be away shortly thereafter. There was some urgency to have the conversation before Cr Dalley went on leave, because if it waited until she returned, the Council would be close to a month behind in the process.

• [388] Without responding or making any further comments, Ms Kelsey stood up and left the room. Cr Dalley said she was shocked at Ms Kelsey's reactions during the probationary conversation, as she considered that a person in Ms Kelsey's position should be able to take and respond to criticism in a constructive manner. It was explained to Ms Kelsey that the purpose of the Probationary Review was to ensure that she was performing her role adequately and to discuss the concerns detailed in the Report. The Probationary Review was not a personal attack on her.[246]

• [389] Cr Dalley said her statement that 'She's making it personal'[247] was not a reference to the Second Respondent but rather a reference to Cr Dalley and Cr Schwarz because the Applicant had included in the PID the following paragraph in relation to the Probation Conversation Report:

The form has been completed to finality. From the text and context apparent, (it is) apparent the Mayor is responsible for all or the majority (of its content).[248]

• [390] During one of the meetings to discuss the process for Ms Kelsey's performance review, it was put forward by Councillors Mcintosh, Raven, Bradley, Koranski and Power that the Mayor should not:

b. participate in any meeting where the matter was discussed;

c. discuss the probation review with members of staff or other Councillors; or

d. vote in relation to the CEO's employment contract.

• [391] Cr Dalley did not support the arguments put forward by those Councillors as:

1. the Council had already received legal advice from King and Company advising that the Mayor could be interviewed as part of the process, and continue to undertake his ordinary duties as Mayor; and
2. Councillors cannot vote to exclude other Councillors or the Mayor from undertaking their statutory function.[249]

• [392] As part of the Hunter review Cr Dalley told Ms Hunter that she did not believe that Ms Kelsey understood the difference in the operation of local government in Queensland as compared to Victoria and South Australia, and that this was causing difficulties with how Ms Kelsey was interacting with Councillors; that Ms Kelsey needed to focus on remaining apolitical, given the damage to the Council Chamber already caused by her decision to go in joint costume with Cr Power to the Relay for Life event in October (which decision she considered to have resulted from political naivety, stupidity or arrogance); that Ms Kelsey needed to focus on working closely with the Mayor, and other Councillors, in particular to repair the damage in confidence caused by the events surrounding the Relay for Life events; and Ms Kelsey needed to demonstrate greater performance in the areas of finance management and strategy, as to date, Ms Kelsey had not yet displayed any skills in these areas.[250]

• [393] When reviewing the Hunter Report, Cr Dalley did not consider that it accurately reflected her views or concerns. Rather, she considered it appeared to be a barometer of the overall views of the staff, more so than the Councillors. As a result, Cr Dalley did not place significant weight on the Hunter Report. Further, the 360 review was only meant to be part of the probationary review process.[251]

• [394] On or about 13 November 2017, a Civil Leadership meeting was held which was attended by Councillors, the Mayor, and Ms Kelsey.

• [395] During this meeting, Cr Dalley recalled that Ms Kelsey informed Councillors that she would be implementing a "One right advice" methodology, whereby the Executive Leadership Team (ELT) would preview all reports prior to them being sent to Council Committees and then would provide a report containing the relevant information and the ELT's recommendation. Previously all options on a particular issue were presented to Councillors.

• [396] Cr Dalley perceived that the new proposal was for the ELT to stand in the shoes of the Councillors and make the decision about what was "best for Logan" based on all of the information, and once that decision was made, report to the Councillors what the ELT considered to be the correct recommendation, and why, for approval by the Councillors.[252]

• [397] Cr Dalley said this decision was made by Ms Kelsey without any consultation with Councillors. Cr Dalley believed that the action proposed by Ms Kelsey would impede the Councillors' abilities to discharge their duties as they would no longer have all options and information presented.[253]

Acceptable Request Guidelines - August to November 2018

• [398] Ms Kelsey informed Councillors that the Mayoral Directions Register be removed. This Register exists to ensure the Mayor is acting appropriately and not making unacceptable requests to staff and Councillors. When Ms Kelsey was asked if legal advice had been obtained, she responded with a firm "no".

• [399] During the meeting of 14 September 2017, Ms Kelsey again assured Councillors that the only change to the ARGs was to remove the Mayoral Directions Register, and that this was necessary to comply with changes to the legislation.

• [400] Ms Kelsey assured Councillors that the changes were necessary and appropriate, and that she had undertaken this legislative review herself. Based on Ms Kelsey's assurances, Cr Dalley proposed that the changes be accepted by the Committee, and they were later passed on to Council for formal ratification.[254]

• [401] Cr Dalley believed that Ms Kelsey had presided over a "shemozzle".[255] It is entirely reasonable and understandable that Cr Dalley would have those concerns.

• [402] Mayor Smith informed Cr Dalley that staff had received legal advice on 8 September 2017 from Holding Redlich regarding the ARGs.

• [403] Ms Kelsey is said to have advised the Councillors, "My staff requested the legal advice and did not advise me that they were doing so".[256]

• [404] Concern was expressed that the legal advice was sought without Ms Kelsey's knowledge and then hidden from both her and the Councillors' views. In doing so, it was suggested that a divide was being created between Councillors and staff.

• [405] Cr Dalley considered the debate surrounding which Director would be a part of the USA delegation was a further demonstration of Ms Kelsey's unwillingness to reasonably respect or listen to the views of the Councillors, where those views differed from her own.[257]

Proposed changes to Committee and Cabinet portfolio names - November 2017

• [406] Ms Kelsey proposed changes to Committee and Cabinet portfolios so that "the names will align more clearly with the Corporate Plan". Ms Kelsey did not consult with any Councillors about this issue. In the view of Cr Dalley, this demonstrated Ms Kelsey's miscomprehension of her role and attempt to exert control over Councillors in the performance of their duties.[258]

• [407] Ms Kelsey said, "the names were decided in the Council workshop of 7 August 2017". However, Cr Dalley said she could not recall any such decision. She felt the names were not functional and would serve only to create confusion within the community.[259]

• [408] On 18 December 2017, Cr Dalley received an email from Ms Kelsey directing Cr Dalley not to have contact with Ms K. Orr, the Mayor's Chief of Staff. The email from Ms Kelsey to Cr Dalley read as follows:[260]

I have left a message on your voicemail and as indicated am following up via email.

I understand that Kirby Orr, Chief of Staff, has communicated with you in respect to her absence from the workplace.

If there is further contact from Kirby please re-direct her to me as her supervisor. 1 would also ask that you not initiate contact with her.

• [409] Cr Dalley replied to Ms Kelsey's email stating, "[u]nderstood".[261]

• [410] Cr Dalley was upset by Ms Kelsey's email because she believed Ms Kelsey had no reasonable basis to direct her not to make contact with the Mayor's Chief of Staff, in circumstances where Cr Dalley was the acting Mayor (hence she was at that time, Chief of Staff)

• [411] It was in Cr Dalley's opinion, appropriate and reasonable for her, as a colleague of Ms Orr's, to telephone her to check on her personal wellbeing. Cr Dalley was of the belief that Ms Kelsey was attempting to intimidate her, by enforcing a direction that she could not talk to certain people within Council, further demonstrating that Ms Kelsey was attempting to create and maintain a divide between the Councillors and Council staff, with her being the only bridge between the two divisions.[262]

Proposed changes to the Committee meetings seating arrangements - January 2018

• [412] On or about 22 January 2018, during a CLC meeting, Ms Kelsey advised that she would amend the seating arrangements in Committee meetings, so that she could sit next to the Committee Chairperson. Ms Kelsey proposed amended seating arrangements without any prior consultation with Councillors or the Mayor. Cr Dalley said several fellow Councillors explained that the proposed arrangement would not work.

• [413] Cr Dalley said the issue highlighted Ms Kelsey's inability or unwillingness to listen to views of Councillors. Cr Dalley said that to put the issue into perspective, in her entire 21 years as a Councillor, she has never had to have a prolonged debate with any person (let alone a CEO) about where they should sit in a meeting.[263]

• [414] On or about 7 February 2018, Cr Dalley approached Mr S. Trinca and asked to the effect that he take Appointment as Acting CEO. She did this because at the time, she was Acting Mayor and she knew that a vote was being held later that day regarding the continuation of Ms Kelsey's employment. As part of her duties, she felt it necessary that an interim CEO was prepared, should Ms Kelsey's employment not be continued.

• [415] On 7 February 2018, two motions were put to Council to vote on, including:

b. a motion to terminate Ms Kelsey's employment at the conclusion of her probation.

• [416] To Cr Dalley's knowledge, the vote needed to occur on 7 February 2018, as Ms Kelsey's probationary period was set to expire later that day, and Ms Kelsey was not agreeable to further extending this probationary period to allow Council to further consider this matter.

• [417] On or about 5 February 2018 Councillors received correspondence from Mr A. MacSporran QC, the Chairperson of the CCC concerning Ms Kelsey's employment and the upcoming motions.[264]

• [418] Cr Dalley was apprehensive upon receipt of the letter as, on her reading, she understood the letter to be a warning from the CCC against taking any steps adverse to Ms Kelsey's employment. That is, she interpreted the letter to mean that if she did not vote to continue Ms Kelsey's employment beyond probation, she may be committing a criminal offence.[265]

• [419] On 6 February 2018 the Council's lawyers (King and Company Lawyers) received correspondence from MinterEllison regarding the upcoming vote on Ms Kelsey's appointment.

• [420] On the morning of 7 February 2018, prior to the vote on Ms Kelsey's employment, the Councillors (excluding the Mayor) met with Mr T. Fynes-Clinton from King and Company, and Mr A. Herbert of Counsel. At this meeting the following was discussed:

b. the MinterEllison letter of 6 February 2018; and

1. broadly, the general legal obligations as Councillors and how those obligations related to the matters raised in this correspondence.[266]

• [421] In particular, Cr Dalley recalled that Mr Herbert stressed that in order to act lawfully, when deliberating in regard to Ms Kelsey's appointment, Councillors needed to disregard the fact:

1. Ms Kelsey had a made a Public Interest Disclosure (including the other associated letters she had sent to the CCC and the Minister); and

ii. Ms Kelsey had commenced proceedings against the Council and the Mayor.[267]

• [422] In deciding to terminate the employment of Ms Kelsey, Cr Dalley took into account: the CCC letter and the MinterEllison letter which had put her on notice of what her personal liability would be if she took into account any unlawful reasons in her decision making process; and, the advice of Mr Herbert and Mr Fynes-Clinton who had reiterated the need to act lawfully and carefully consider her reasons for voting for or against Ms Kelsey's employment.[268]

• [423] For the reasons which follow, I accept that Cr Dalley did not make her decision to terminate Ms Kelsey for a prohibited reason. Whilst I do not propose to traverse all of Cr Dalley's evidence I will highlight some of the key features of that evidence to support my reasoning.

• [424] The Applicant challenges the evidence of Cr Dalley on the basis that she had given careful consideration to how she would present when giving evidence, particularly in relation to the WhatsApp communications.

• [425] The Applicant argues that the evidence of Cr Dalley was "obviously false evidence". She contends that on no reasonable interpretation could the expression be interpreted as a comment "personal" to Cr Dalley and Cr Schwarz.

• [426] It was asserted by the Applicant that the real reasons for terminating Ms Kelsey can be found in the transcript of the meeting of 13 October 2017, immediately after Ms Kelsey lodged her PID. Following this question from Cr Pidgeon to Cr Dalley, "what do you think we are supposed to do?", Cr Dalley said, "I don't know and I don't care".[269]

• [427] Cr Dalley said that it was a long meeting and that she became upset and frustrated. Her comment, "I don't know and I don't care" in answer to the question from Cr Pidgeon "What do you think we are supposed to do?" was a product of that frustration.

• [428] It was further asserted that the statement by Cr Dalley that, "I'm breathing fire" was an attempt by Cr Dalley to falsely explain that she was "breathing fire because of the way it has been done".[270]

• [429] Cr Dalley said that she was still angry and remarked that she was "breathing fire" because of the way the PID had been delivered. She said that "... had it been delivered, as all the ERP information and directors' reviews had been done in the previous 20 years that I had been in council --- that would have been perfectly acceptable to me. And Ms Kelsey has every right to launch - lodge a PID. I don't have a problem with the PID. What I have a problem with is the way it was delivered."[271]

• [430] In so far as the Applicant relies upon the comment to the effect that Cr Dalley was "breathing fire", I accept that the comment can be seen in the context of a discussion about the restriction of staff passing information directly onto the councillors.[272] This reflects the concerns the various Councillors held in relation to Ms Kelsey's conduct in restricting Council officers from making direct contact with the Councillors.

• [431] It was submitted that Cr Dalley, "... gave obviously false evidence to the effect that the reference to Kelsey 'making it personal', was not a reference to the Mayor, but rather a reference to Cr Dalley and Cr Schwarz because Ms Kelsey had included in the PID the following phrase in relation to the Probation Conversation Report":

The form has been completed to finality. From the text and context apparent, (it is) apparent the Mayor is responsible for all or the majority (of its content).[273]

• [432] However, as the Third to the Ninth Respondents submit, the reference to "making it personal" was because the complaint provided that it was the "Mayor's probationary process" when in fact it was the organisation's process.

• [433] The relevant part of the transcript of the meeting of 13 October 2017 reveals that the conversation went along the following lines:

1. I have an objection to the last line on the first page. It says she will not be attending any further meeting or participating in any process relevant to the Mayor's process. It is not the Mayor's process. It is the organisation's process.

1. She feels it is the Mayor's process, that is what she is saying.
2. Well, that's what her lawyers making a statement that is simply ... it is the organisations ... and can I tell you I have been involved in this process. I have been on ERP between 2004 and 2008. I was involved in it again between 2008 and 2016 and I am back there again. I have seen this sort of process, and I'd have to say, probably not as good as this sort of process, not as well documented, but this sort of process take place with numerous executive management team members since 2004 over 13 years. So, I object to this "Mayor's process" it is an "organisational process" it is an "organisational process".

RL Was she aware that this process was going to happen?

• [434] The comment needs to be considered in the context of the conversation which took place at the meeting on 13 October 2017. I accept that the comment "She's making it personal" did not have the meaning ascribed to it by the Applicant.

• [435] In the affidavit of Cr Dalley of 18 April 2018, she states:

I did not contemplate at any time that the Probation Review would lead to the termination of Ms Kelsey's employment. Further, there was no discussion regarding termination of Ms Kelsey's employment.[275]

• [436] The WhatsApp transcripts reveal that it was proposed, apparently by the Second Respondent that a few hours be put aside for a meeting:

I would suggest an urgent strategic meeting be held so you can support the deputy mayor and everyone knows what is planned and needs to happen.[276]

• [437] Whilst Cr Dalley accepted that "we" referred to the members of the WhatsApp group she said it also referred to the rest of the council.

• [438] In cross-examination it was put to Cr Dalley:

MR MURDOCH: You understood that what was being proposed was a planning session for the members of this WhatsApp group, didn't you?

CR DALLEY: I understood it to be a strategy meeting if there was a result in the court that declared I think seven of us were not able to vote. We needed a strategy how to go forward. And you wouldn't have invited the other councillors because it would have ended up on the front page of the media. There was no trust at this point.[277]

• [439] Immediately after the Applicant lodged the PID on 13 October 2017 an informal meeting was held. With the exception of Cr Smith who was on leave, all Councillors attended. The meeting was secretly recorded. The discussion at that meeting centred on the correspondence that had been received from MinterEllison.[278]

• [440] The Applicant makes reference to a number of references in the transcript which it is submitted reveals that Cr Dalley had lost trust in Ms Kelsey. Cr Dalley's evidence needs to be read in context. By the meeting on 13 October, Cr Dalley had lost confidence in what was happening at the time - "I've lost trust completely"[279]. It was accepted by Cr Dalley that she said, "I tell you now, I will not speak about those things with the CEO from this point on, ever."[280]

• [441] Cr Dalley's evidence was that she had not lost complete confidence in Ms Kelsey at that stage, but she was concerned that anything she might say in confidence could end up in the media.

• [442] For Cr Dalley, the whole probation conversation had ended up in something of a "nightmare". It was suggested to Cr Dalley that the "nightmare" was the lodging of the PID by Ms Kelsey. In reply, Cr Dalley said:

No. Because the - we couldn't - we seemed to be heading down a path - we'd had a number of CEOs. We seemed to have been heading down a path where we might have another problem with another CEO. That was a concern for me. A concern for me in relation to the community and the whole of council. That was the nightmare. And I was really concerned that anything I might have said to Ms Kelsey at the time - because, yes, I'd lost a bit of trust - that might come back to me in - in some form or other and maybe on the front page of the local paper. I was concerned.[281]

• [443] I do not accept the submission of the Applicant that Cr Dalley was outraged that a PID was lodged against Mayor Smith and, as a result, decided that Ms Kelsey's relationship with the First Respondent was over.

• [444] The Applicant challenged Cr Dalley in relation to the following exchange between Cr Schwarz and Cr Dalley at the meeting on 13 October:

CR SCHWARZ: 'You know - you may not want to even answer this question - it is probably inappropriate for me to ask - how can we possibly move forward, under the circumstances that have just occurred, in a safe and secure environment? How can we do that in our position?'

MR SPIRO: 'That's not a legal question. That's for you to decide''.

CR DALLEY: 'That's for individuals. I've made my decision'.[282]

• [445] The Applicant's submission is that Cr Dalley's explanation of her evidence "was incoherent and not credible". The Applicant contended that the statement, "I've made my decision" reflected a decision Cr Dalley had made that Ms Kelsey would need to be removed from the organisation because she had "dared to make a PID concerning the Mayor". I disagree.

• [446] The evidence of Cr Dalley was that she made the remark, "I've made my decision" was a decision that she "... would be protecting herself". Her decision was influenced by Ms Kelsey's apparent relationship with other Councillors. Cr Dalley was of the view that she should be able to talk to a CEO about anything, including other Councillors.

• [447] Notwithstanding that a new probationary process had been put in place consequent upon an agreement between the solicitors for the First Respondent and the Applicant, Ms Kelsey sought interlocutory relief in the Commission to prevent a vote of the Council on her probation from taking place and excluding Mayor Smith from having anything to do with her employment.
• [448] What can be gleaned from the exchange contained in the WhatsApp transcript is that Councillors wanted the matter to be determined by the Commission. Mayor Smith said:

I'll be instructing my lawyers that I want the hearing, and I will not be sidelined through the process unless directed to by the Commissioner. I suggest we push on for the hearing. Thoughts, Luke.[283]

• [449] It is apparent from the transcript that the Councillors did not accept the prospect of being denied the ability to consider and vote on Ms Kelsey's probation. There is, in my view, nothing exceptional about the Councillors seeking some certainty by having the matter heard and determined by the Commission. Moreover, the WhatsApp transcripts do not reveal that Cr Dalley or indeed any of the respondent Councillors were motivated by a proscribed reason.

• [450] It is apparent from Cr Dalley's affidavit that she was particularly distressed by the Applicant's direction that she was not to contact Ms Orr when Ms Orr returned to Australia and Cr Dalley was the Acting Mayor. The email exchange between Cr Dalley and the Applicant is terse. Subsequently, there were a large number of contemporaneous text messages from Cr Dalley to other Councillors expressing her anger at being told that she could not contact her Chief of Staff.

• [451] It is not to the point whether the direction from Ms Kelsey was subsequently withdrawn. The issue was the way in which it was communicated and the impression that gave Cr Dalley was that the Applicant did not respect her role as Acting Mayor. Despite the best efforts of Counsel for the Applicant in cross-examination, it could not seriously be suggested that at the time when the direction was given by the Applicant, Cr Dalley was not incensed by the disrespect implicit in that direction. That is made out by the contemporaneous text messages.[284]

• [452] It is submitted by the Applicant that Cr Dalley was never going to confirm the employment of someone who had made a PID or commenced litigation against the Council. The evidence does not support such a conclusion.

• [453] It was the Applicant's submission that Cr Dalley failed to ensure that Ms Kelsey was provided the feedback in the Hunter Report as soon as it was received. This, it was said, was critical to ensuring Ms Kelsey had the opportunity to respond to the Report. It was suggested that not only did Cr Dalley fail to do so in a timely matter, she failed to do so despite a number of requests from Ms Kelsey for the report. Ultimately, the report was obtained following a request by MinterEllison to King & Co.

• [454] The submission ignores a couple of important facts. First, the Hunter process was an agreed process between the First Respondent and the Applicant. Crucial to that process was the fact that the final report would not be provided to Ms Kelsey. It did not form part of what was agreed. It cannot be properly said that Cr Dalley failed to do something when it was never agreed in the first place. Ms Kelsey did receive a draft copy of the report and when she was authorised to do so, Cr Dalley provided a final copy.

• [455] It was asserted that Cr Dalley's evidence that she had not discussed how other Councillors might vote was plainly false evidence. However, the evidence does not demonstrate in either the WhatsApp transcripts or elsewhere that Cr Dalley had discussed how she and the others were going to vote.

• [456] It was submitted by the Applicant that Cr Dalley denied that she had asked Cr Smith to move the vote to terminate Ms Kelsey's employment.[285] It is not correct to categorise Cr Dalley's evidence as false. In cross-examination, Cr Dalley was asked:

MR MURDOCH: Now, did you ask Councillor Smith to move the vote to terminate Ms Kelsey's employment?

CR DALLEY: I didn't ask anybody to move that vote. I asked for a mover from the floor. I was sitting in the chair at the time.

MR MURDOCH: So no discussion with Councillor Smith prior to the meeting?

CR DALLEY: There may have been discussion with Councillor Smith prior to the meeting. I don't recall asking anybody to move it. I recall making the statement that somebody would move it, and somebody would need to second, and that related to both motions. At that point, we were possibly going to have - at the very early stage of the 7th of February, there were possibly going to be three motions on the floor.[286]

• [457] Cr Dalley's evidence to the effect that she did not know how other Councillors would vote was, similarly, categorised as false evidence. It was not put to Cr Dalley that her evidence in respect of how the Fourth to Ninth Respondents were planning to vote was false evidence. What was put to Cr Dalley in cross-examination was as follows:

MR MURDOCH: It was the case, was it, that you knew that apart from the mayor, who had been injuncted, that the other members of Fab 7 were going to terminate Ms Kelsey's employment?

CR DALLEY: No, I did not know that.[287]

• [458] Earlier in cross-examination Cr Dalley was asked whether she had spoken with any of her Council colleagues prior to the vote as to how they might vote. Again, Cr Dalley said she had not, and that she had tried very hard not to.[288] Again it was never put to her that her evidence was false.
• [459] Cr Dalley's evidence was that she could not recall whether she was aware of Mr Strachan and Mr van Wyk's role at the time in which she made the termination decision. Whilst she recognised that Mr Strachan and Mr van Wyk bore responsibility for the changes in name it does not necessarily follow that at 7 February 2018 her concerns about the ARGs were not a contributing factor to the opinions she expressed.

• [460] The evidence of Cr Dalley was that as at 10 October 2017, she did not have any intention of terminating Ms Kelsey's employment. However, by 7 February 2018 Cr Dalley, after considering Ms Kelsey's overall performance, reached the view that her employment should be brought to an end at the conclusion of her probationary period.

• [461] The question that was exercising Cr Dalley's mind was whether or not Ms Kelsey was the appropriate person to perform the role of CEO at the Council. It is entirely understandable and appropriate that Cr Dalley would reflect upon all of Ms Kelsey's conduct throughout her employment to reach that conclusion. I accept the argument that simply because in isolation the conduct prior to 10 October 2017 was not sufficient to warrant termination without allowing the Applicant to complete her probation does not mean that it was not a matter taken into account by Cr Dalley.

• [462] Cr Smith was elected as the Councillor for Division 7 of the Council in 2012, after a career in the printing industry that included senior management roles in sales and marketing, business development and operational management. He was, throughout Ms Kelsey's time as CEO, the Chair of the City Image and Innovation Committee.

• [463] He is not a member of any political party and ran at both the 2012 and 2016 elections as an independent. Prior to his election to Council, Cr Smith did not know, nor had he ever met Mayor Smith.

• [464] In the 2016 election there were five candidates seeking election as Mayor of Logan City. Cr Smith endorsed Mayor Smith over the other candidates because he believed that Mayor Smith had the financial management experience to manage the Council. He was not part of a "joint ticket" with Mayor Smith nor with Councillors Schwarz, Breene, Dalley, Lutton, Pidgeon or Swenson.[289]

• [465] Cr Smith is not aware of any "alignment" or "voting bloc" in Council, whereby Councillors would follow the lead of any other Councillor. To the extent that a voting bloc or political alignment may have developed within Council, it was his belief that Councillors Power, Koranski, Mcintosh, Raven and Bradley, appear to have formed a common dislike of Mayor Smith, and therefore will commonly oppose his views.[290]
• [466] He recalled that during the process of appointing a new CEO for Logan, he considered that Ms Kelsey was "the best of a bad bunch", in the sense that he did not believe any of the candidates were suitable for the position, but of the three, Ms Kelsey was his pick as the better candidate. He recalled that Cr Power appeared to be of a similar view to him, as he said words to the effect that Council "should go back to market".[291]

• [467] Cr Smith's primary concern with Ms Kelsey was that it did not appear to him that Ms Kelsey had any significant background in financial management or strategic planning; nor did it appear that she had any experience managing or running an organisation the size of the Logan Council. Cr Smith was of the belief that if Ms Kelsey was appointed, then it was going to be a very big step up in regard to both organisational size and responsibility for financial management compared to Ms Kelsey's previous roles.[292] Having regard to Davidson's advice that it was unwise to go back to the market and accepting that Ms Kelsey was the better of the three candidates submitted to Council, he decided to vote in favour of her appointment.[293]

• [468] Cr Smith describes his reasons for voting to terminate Ms Kelsey's employment as follows:

Of these matters considered by me (both positive and negative), the issue that weighed most heavily on my mind was Ms Kelsey's failure to display any significant level of strategic or financial management capabilities.

As I expressed earlier in my affidavit, in the coming decade Council's borrowings are going to increase from approximately $201M to $1.4 Billion in order to fund critical infrastructure associated with the City's priority development areas, and increase in population.

Given the monies being borrowed by the Council, it was critical to me that the CEO have those strategic and financial management capabilities, commensurate with the CEO's remuneration (which I understood to exceed $500,000 per year).

As Ms Kelsey had not, in my view, displayed these strategic and financial management capabilities, I could not vote to further appoint Ms Kelsey to the role.[294]

• [469] Cr Smith recalled that at the time of Ms Kelsey's appointment there was discussion about the need for Council to be more vigilant in ensuring the CEO was formally reviewed in the same manner as all Council staff.

• [470] His evidence was that he was unaware of any probationary review of Mr Milner and he thought that was a mistake. In his mind, Ms Kelsey's probationary period provided the Councillors with an opportunity to judge her suitability for the role firsthand. This was particularly important given the concerns he held about Ms Kelsey's skills and experience in strategic planning and financial management. He said that if Ms Kelsey was to be appointed to the position without a probationary period, he would not have voted for her appointment.[295]

• [471] During Ms Kelsey's appointment, Cr Smith did not have any significant interaction with her. His interactions with Ms Kelsey were primarily limited to formal Council meetings such as the CLC meetings; Executive Meetings; Committee Meetings; and full Council Meetings.

• [472] Subsequent to receipt of the MinterEllison correspondence and the lodgement of the PID he said he did not have any more or less interaction with Ms Kelsey.

• [473] On or about 13 October 2017, Cr Smith received a call from Mayor Smith advising him that all Councillors had received correspondence from MinterEllison, acting on behalf of Ms Kelsey. Cr Smith was in Melbourne and had not seen the correspondence. He recalled Mayor Smith saying words to the effect of:

A few days ago, I started a performance review process with her [Ms Kelsey] and filled out the form the business had given to me to use and handed it to her for discussion.[296]

• [474] The Mayor then said words to the effect of:

[A]t the first meeting, she [Ms Kelsey] got upset as soon as we started talking through the performance review document and said that she wasn't prepared - she then left the meeting.[297]

• [475] He recalled the Mayor asking if he had gone about the performance review the right way. Cr Smith said that he responded by saying:

As long as you give her a chance to fill out her own form, as well as seeing yours, there is no problem with that, and that you've had HR involved.[298]

• [476] Cr Smith also said to the Mayor words to the effect of:

I don't see a problem with having the meeting and giving her the form, as long as you are prepared to have another meeting.[299]

• [477] In Cr Smith's view, no Councillor is bound to follow the views or recommendations of the probationary process, in the same way that no Councillor is bound to follow or accept the views or recommendations put to Council from any Committee. In his view, at the end of the day, it is up to each Councillor to determine what they think is best for Logan, and further, best for their Division.

• [478] During the telephone call there was no discussions about Ms Kelsey's employment. The telephone call was limited to the Mayor advising Cr Smith that the PID had been received, and that Mayor Smith was seeking Cr Smith's opinion about whether he thought that he had incorrectly approached the probationary review in terms of its process.[300]

• [479] Cr Smith was interviewed by Ms Hunter as part of the 360 process. He recalled saying to her that he held concerns regarding Ms Kelsey's financial and strategic skills. He said words to the effect that, "there is none, or at least that she has not demonstrated any to date".

• [480] In his affidavit of 11 April 2018, Cr Smith expressed concern that in the coming decade, the First Respondent's borrowings would increase from approximately $201M to $1.4 Billion in order to fund critical infrastructure associated with Logan City's priority development areas and increase in population.[301] In those circumstances, Cr Smith believed it critical that the CEO have the necessary strategic and financial management capabilities.

• [481] Cr Smith was willing to extend the Applicant's probation until the end of June 2018, as advocated by him in the meeting of Council on 5 January 2018. His rationale for doing so was to allow himself an opportunity to assess whether the Applicant had the relevant strategic and financial management capabilities, by monitoring her performance through the Council's budgetary process.

• [482] However, the Applicant expressed an unwillingness to extend her probation until June 2018.[302] In those circumstances, Cr Smith thought that his hand was forced, and he voted not to appoint her.[303]

• [483] In reviewing the Hunter Report, Cr Smith did not give much weight to the views or opinions of Council Officers. Instead, he focused on the comments in the report which were attributed to his fellow Councillors, as they were elected persons and did not have anything to lose (or to gain) by making either positive or negative comments to Ms Hunter in the context of the report.[304]

• [484] Cr Smith's experience with Councillor complaints was that they were made on a confidential basis unless permission of the complainant was obtained to release their name.

• [485] He expressed his disappointment that Ms Kelsey revealed his identity to another Councillor who he believed Ms Kelsey was aligned with.[305]

• [486] To be successful in the role of CEO, Cr Smith said he believed that a CEO must be able to work closely with the elected Mayor, and they must remain apolitical, in what is otherwise a political environment. In his view, the CEO must not be aligned or seen to be aligned with any particular Councillor.

• [487] Cr Smith said that during Ms Kelsey's employment, he was concerned that her relationship with Councillors Power, Mcintosh and Koranski had crossed beyond that of a professional relationship between Councillor and CEO, and gave the perception to both the Council and the community that she was personally aligned with those Councillors. In particular, he was informed that Ms Kelsey had attended the event as part of Cr Koranski's team, and further went as part of a themed costume with Cr Power (Cr Power going as Hansel to Ms Kelsey's Gretel). Cr Smith found this perception quite alarming, given that Cr Power and Cr Koranski are both politically opposed to the Mayor, to the extent that Cr Power refers to himself as the "leader of the opposition". Cr Smith considered that this would naturally cause strain on their relationship.[306]

• [488] Ms Kelsey advised a Treasury Committee meeting that legal advice had not been received regarding changes to remove the "Mayoral Directions Register". In reliance on that advice from Ms Kelsey, Councillors voted to amend the ARGs by removing the Mayoral Directions Register. Subsequently, Councillors became aware that legal advice had been received and that amendments to the ARGs were incorrect.

• [489] Cr Smith recalls that a number of Councillors were extremely upset by the revelation as it meant that the Council was non-compliant with the LG Act for a number of weeks. Cr Smith considered that it reflected poorly on Ms Kelsey, as she should have been aware about whether legal advice had been received by Council, given the importance of the guidelines to the functioning of Council.[307]

• [490] In or around September 2017 Councillors meet to restructure the existing Committee structures, to reduce the number of Committees and realign them to the Corporate Plan.

• [491] Ms Kelsey prepared a report reflecting her views rather than the agreed views of the Councillors. Mayor Smith stopped the conversation and issued a Mayoral direction to amend the report to reflect the position already agreed by the majority of Councillors.

• [492] The incident left Cr Smith with the view that Ms Kelsey was unwilling to listen to or respect the views of the Councillors and was unable to look past her own views on how matters should be dealt with.[308]

• [493] Despite what Cr Smith perceived to be a personal threat from MinterEllison, and the 'stern warning' from the CCC, he felt that, as a sitting Councillor, he was obligated to vote on the two motions put before Council, even if by voting, he may be at risk of reprisal action by Ms Kelsey, or potential investigation by the CCC.[309]

• [494] Cr Smith believed that Council was obligated to hold a vote in regard to Ms Kelsey's employment prior to the conclusion of her probationary period. In his view, it would have been a dereliction on the part of Council if it sat on its hands and allowed Ms Kelsey's probationary period to elapse; without the Councillors first making a considered decision about whether Ms Kelsey was the right person to lead the Council into the future.[310]

• [495] He recalled that he considered both Ms Kelsey's positive and negative qualities, traits and achievements, and attempted to determine if Ms Kelsey was the right person for the role long term.

• [496] In regard to Ms Kelsey's positive qualities, traits and achievements, Cr Smith considered that Ms Kelsey:

1. seemed quite personable;
2. appeared to be well liked by most staff; and,

1. had been judged by Ms Hunter as doing a competent job.[311]

• [497] However, in the negative, he considered that:

1. Ms Kelsey had not displayed any significant level of strategic or financial management capabilities, during her probationary period, and.
2. there were a number of incidents occurring during Ms Kelsey's appointment, in which he considered Ms Kelsey had failed to show reasonable judgement and leadership; or failed to listen to or respect the views of the Councillors, including:
   1. Ms Kelsey's decision to attend the Cancer Council relay for life as part of a team with Cr Power and Cr Koranski;
   2. Ms Kelsey's actions in regard to the Acceptable Request Guidelines, and the incorrect advice being given to Councillors;
   3. Ms Kelsey's disregard for the views of the Councillors when preparing the Report to Council regarding the Committee restructure; and
   4. Ms Kelsey's disregard for the views of the Chairs, when advocating that she should sit at the top of the Committee table next to the committee Chair.[312]

• [498] Consistent with his expressed reasons for terminating Ms Kelsey's employment, the issue that weighed most heavily on his mind was Ms Kelsey's failure to display any significant level of strategic or financial management capabilities. Given the extent of anticipated borrowings by the Council, it was critical to him that the CEO have those strategic and financial management capabilities, commensurate with the CEO's remuneration. Absent Ms Kelsey having an opportunity to display those strategic and financial management capabilities, he could not vote to further appoint Ms Kelsey to the role of CEO.[313]

• [499] At no stage did Cr Smith consider the PID, the CCC Referral, the Council Complaint, the 176B Referral or these proceedings when forming his decision.[314]

• [500] Despite the Applicant submitting that Cr Smith was the most honest of the Respondent Councillors, it was submitted that the Commission should infer that Cr Smith was overwhelmed by his close political and personal relationship with the Mayor. As a consequence, it was submitted that Cr Smith was infected by it in relation to the decision to terminate Ms Kelsey's employment.

• [501] The Applicant further submitted that Cr Smith acted in alignment with Mayor Smith and the Respondent Councillors to make an unlawful decision which, it might be thought, he would not have made without that negative influence.[315]

• [502] However, notwithstanding those submissions, no evidence is cited to support that assertion nor was it put to Cr Smith in cross-examination.

• [503] Cr Smith describes what his reasons were for voting to terminate Ms Kelsey's employment, as follows:

Of these matters considered by me (both positive and negative), the issue that weighed most heavily on my mind was Ms Kelsey's failure to display any significant level of strategic or financial management capabilities.

As I expressed earlier in my affidavit, in the coming decade Council's borrowings are going to increase from approximately $201M to $1.4 Billion in order to fund critical infrastructure associated with the City's priority development areas and increase in population.

Given the monies being borrowed by the Council, it was critical to me that the CEO have those strategic and financial management capabilities, commensurate with the CEO's remuneration (which I understood to exceed $500,000 per year).

As Ms Kelsey had not, in my view, displayed these strategic and financial management capabilities, I could not vote to further appoint Ms Kelsey to the role.[316]

• [504] Cr Smith's primary concern was Ms Kelsey's strategic and financial management capabilities. This was a concern he held at the time of the interviews for a new CEO and is reflected in the probation conversation report and in his comments to Ms Hunter.

• [505] Throughout his evidence, Cr Smith maintained that he was concerned Ms Kelsey might be unable to make the transition from a small entity to an entity that has a budget of $800 million, with a population of 320,000 people and expected to grow to 550,000; with current borrowings of approximately 190 million and expected to reach $1.4 billion within ten years.[317] In light of that concern, Cr Smith had expressed the view that Ms Kelsey had not displayed any strategic or financial management capabilities.

• [506] I do not accept the submission of the Applicant that Cr Smith struggled to find reasons, which were lawful reasons, to support his decision to vote for her termination.

• [507] Councillor's Smith reasons for voting to terminate the Applicant's employment are supported by his contemporaneous statements made during the Hunter process and his contemporaneous diary note[318] which were not challenged in cross-examination.

• [508] It cannot be inferred that Cr Smith was overwhelmed by his close political and personal relationship with the Mayor. There is no evidence to support such an assertion.

• [509] Despite Counsel for the Applicant's best efforts, Cr Smith maintained his reasons for deciding to vote to terminate Ms Kelsey's employment. There is no evidence to suggest that Cr Smith acted for a prohibited reason. It needs to be remembered that Cr Smith had the desire that Ms Kelsey's probation period would be extended to allow more time for her to demonstrate her strategic and financial capabilities. The lack of a demonstrated strategic and financial capacity was his fundamental concern. Absent that extension of time, Cr Smith was not willing to vote in favour of her appointment.

• [510] Cr Pidgeon was first elected in 1997 as the Councillor for Division 9. His evidence is that he is an independent Councillor with no affiliations with any political party and has always funded and run his own campaigns. He is neither personally nor politically affiliated or aligned with any other Councillor or the Mayor; and did not assist any of those persons with their individual campaigns.

• [511] In the 2016 Council Election there were five candidates for Mayor. Cr Pidgeon did not endorse any candidate. In the same election, Mayor Smith actively assisted and supported an alternate candidate in his attempt to unseat Cr Pidgeon as Councillor for Division 9. In particular, Cr Pidgeon said he was aware that Logan Futures, an entity associated with Mayor Smith's election campaign, donated monies to Division 9 candidate for Council, Ms Katherine de Leon to assist her with her campaign against him. Cr Pidgeon recalled having a terse exchange with Mayor Smith about his support of Ms de Leon.[319]

• [512] Cr Pidgeon's reasons for voting to terminate Ms Kelsey's employment are set out in his affidavit of 11 April 2018 as follows:

(b) I did not believe Ms Kelsey was supportive of the Councillors' views, and that she was not proactive in working cohesively with the Councillors on their vision for the City; and

(c) I did not believe that Ms Kelsey had remained apolitical, but rather had aligned herself with a number of Councillors, causing division as amongst the Councillors.[320]

• [513] Incidents in Ms Kelsey's employment which led Cr Pidgeon to form his view of Ms Kelsey are set out in paragraphs 64 to 195 of his affidavit.[321]

• [514] Cr Pidgeon was upset by the direction Ms Kelsey gave to staff to refer to him as Councillor at all times as she had not consulted with him and he preferred to be called by his first name.[322] He requested that staff revert to calling him by his Christian name, however despite his request staff would continue to refer to him as Councillor.[323]

• [515] Cr Pidgeon was informed by a Councillor that Ms Kelsey had attended the Relay for Life in a matching costume with Cr Power. Cr Pidgeon felt this was inappropriate and a poor decision as the CEO must be seen to be apolitical.[324]

• [516] Cr Pidgeon informed Ms Hunter during her interview for the report that: Ms Kelsey was yet to show him she had any strategic vision for the Council; Councillors felt Ms Kelsey was trying to control or selectively provide the information they received, by funnelling all information and reports through the CEO's office; Ms Kelsey needed to be careful about making politically sensitive decisions without first consulting Councillors; Ms Kelsey needed to appear apolitical; and Ms Kelsey needed to consult and work with Councillors more proactively.[325]

• [517] Cr Pidgeon recalled that after receiving a copy of Ms Hunter's report, he considered that the report did not reflect his view of Ms Kelsey's performance. Further, the report did not clearly articulate the areas where Cr Pidgeon wanted to see improvement by Ms Kelsey.[326]

• [518] Cr Pidgeon raised the following additional concerns regarding Ms Kelsey when interviewed by Ms Hunter: Ms Kelsey speaks in technical, legal terms; Ms Kelsey's leadership style is autocratic, totalitarian and involved micromanaging; Ms Kelsey may be censoring information from Council; Ms Kelsey's management style was partisan; and Ms Kelsey was risk averse which did not suit the Council which needed an entrepreneurial CEO.[327]

• [519] Cr Pidgeon made two complaints in relation to the conduct of two Councillors on separate occasions to Mr Strachan which he considered to be highly confidential. Ms Kelsey presented Cr Pidgeon with two letters advising him of the outcome of the complaints. Cr Pidgeon was made aware that Ms Kelsey had advised the two Councillors of his concerns and had identified him personally as the complainant. Cr Pidgeon felt as though this had breached his privacy.[328]

• [520] Ms Kelsey spoke about Councillor complaints and how they are dealt with. Cr Pidgeon observed that Ms Kelsey was continually, pointedly looking at him while talking about the subject matter and her comments and body language caused him to believe she was intentionally directing her comments at him personally.[329]

• [521] Ms Kelsey's 100 Day Report did not contain reference to Council's budget, financial position or strategic direction for the future and prioritised minor issues such as: implementing Council mentoring and work experience programs and engaging an external consultant to audit the Council's work health and safety structures. Ms Kelsey appeared distracted and disengaged at the key budgetary meetings and did not make any valuable input.[330]

• [522] Ms Kelsey's insistence on trialling a new seating arrangement was rejected and Cr Pidgeon felt that Ms Kelsey displayed an inability to listen to and act collaboratively with Councillors and had a desire to exert greater personal influence and control over all functions of Council.[331]

• [523] Simply put, Cr Pidgeon's reason for voting for the termination of Ms Kelsey's employment was that he had developed an adverse opinion of her and her abilities. He did not regard her as being a suitable CEO of Logan City.