Mehajer v Chief Executive of the Office of Local Government

Introduction 1On 29 May 2014 the Occupational Division of the Civil and Administrative Tribunal of New South Wales, constituted by the Hon W Haylen QC, Deputy President, determined that the plaintiff, a Councillor of the Auburn City Council had breached s 449(1A) of the Local Government Act 1993 (NSW) (to which all legislative references relate unless otherwise indicated) by lodging returns that he knew or ought reasonably to have known were false or misleading in a material particular and suspended him from his office for one month: Office of Local Government v Mehajer [2014] NSWCATOD 64. By summons in this Court the plaintiff seeks to appeal and leave to appeal his suspension under s 29(4)(b) of Schedule 5 of the Civil and Administrative Tribunal Act 2013 (NSW), which provides for an appeal "as of right on any question of law or, with the leave of the court, on any other grounds". It is also relevant to note ss 29(7) & (8) - (7) Non-lawyer appeals The court in a non-lawyer appeal may: (a) decide to deal with the appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and (b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances. (8) In determining a non-lawyer appeal, the court may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following: (a) the decision under appeal to be confirmed, affirmed or varied, (b) the decision under appeal to be quashed or set aside, (c) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (d) the whole or any part of the case to be reconsidered by the Tribunal at first instance, either with or without further evidence, in accordance with the directions of the court. 2The plaintiff contends that leave to appeal should be granted and the Court proceed by way of a hearing de novo to reconsider the appropriate sentence which, it is submitted, should be that the plaintiff should be counselled or reprimanded pursuant to s 482(1)(a). The defendant submits that leave to appeal should be refused or, if granted, the appeal should be dismissed. Background 3The plaintiff was elected as a councillor to Auburn City Council in September 2012. He was required to make disclosures of pecuniary interests in accordance with s 449(1), which provides - (1) A councillor or designated person must complete and lodge with the general manager, within 3 months after becoming a councillor or designated person, a return in the form prescribed by the regulations. 4The prescribed form provides for the listing of "Real Property", being the "address of each parcel of real property in which I had an interest at the return date or at any time during the return period". In respect of "Sources of Sources of Income", they are described as those "I reasonably expect to receive from an occupation in the period ..." and those "received from any occupation during the period ...". Also required were disclosures of income from trusts, from any other source, gifts, contributions to travel, interests and positions in corporations and positions in trade unions or professional bodies, creditors and dispositions of property. Provision for "discretionary disclosures" was also made. The form (correctly) does not suggest that anything other than complete disclosure of this information is required. Facts 5The following facts were found by the Tribunal and are not sought to be gainsaid in the appeal - "[7] It is convenient at this point to briefly consider the defects in both returns. The October 2012 return identified three sets of properties in the same street in Lidcombe although various street numbers were recorded. The nature of these properties was not identified. The 2013 return nominated possibly fourteen properties mostly by reference to lot numbers only and there were four further lots within this group that were listed. There were also a number of shops listed that were in the same street referred to in the 2012 return but appearing under different street numbers. [8] In 2012 the only occupation listed was that of Auburn councillor. In the 2013 return Clr Mehajer added his employment as a builder, his role as a Strata Manager and a Directorship in "Sydney Project Group/Mehajer Bros. P/L". [9] The 2012 return listed nothing under the heading of Sources of Other Income. In 2013 three rental properties were listed by reference to lot and DP numbers. This return also identified a Mehajer Bros trust as a potential source of income. [10] There were no positions or interests in corporations identified in the 2012 return. In the 2013 return, however, five directorships were identified described as being a development undertaking in four cases and a building undertaking in the other. [11] Under the heading of debts, nothing was listed in 2012. In 2013 mortgages with two Banks were listed together with family loans. In the 2013 return, for the first time, Clr Mehajer listed a number of discretionary disclosures. [12] In late November 2013 Clr Mehajer agreed to be interviewed by investigative officers attached to the Department. The councillor was not obliged to attend this interview. At the outset he spoke of his education and the nature of the work he had undertaken. The Councillor had completed a degree in Construction Management (Housing), an Advanced Diploma in Structural Engineering and a Graduate Diploma in Environmental Systems in which he was completing a Master's Degree. He had undertaken short courses at UTS in Local Government subjects and had done so in order to obtain information. He stated that his experience was mainly in project management, engineering and building. [13] During the course of the interview Clr Mehajer provided a number of explanations for the state of the 2012 disclosure return. He stated that he did not understand how the return worked or how to fill it out: indeed he did not know that he had to fill out a form as he was required to declare any interest at meetings of Council. The disclosure forms had been handed out and he had seen Councillors fill them out. He "assumed" it would be the same for himself but he was rushed and thought he had to submit it right away. [14] He had only listed properties or developments in the return that were within the Auburn Council area because he thought that would be where any conflict could arise. Normally he would read the form but this time he had just made an error. He accepted that he lacked knowledge in these matters. [15] Regarding the 2013 return, Clr Mehajer said that he was told that there were breaches of the Act arising from the manner in which he had completed the 2012 return. He therefore undertook "more research" as to what was needed to properly complete the return. He read "a bit of the handbooks" and had gone to the Division of Local Government. He also spoke to the General Manager of the Council who told him to declare everything he knew: they went through the form briefly. This had occurred just before he had completed the 2013 return. [16] Clr Mehajer said that he would have spoken to his accountant in 2012 about his expected sources of income. At the time of his original return he was working as a builder. He agreed that he should have disclosed in this return the rental income he had received. At that time his website described him as being a Project Engineer, a Construction Manager, and a Builder/Developer working closely in a "vast number of projects". [17] The August 2013 return had listed his interest in a number of corporations as being "pecuniary": that was meant to indicate that mostly he had shares in the companies. In the companies he had listed he could have been a shareholder, the secretary or a director, or all three. He was the company secretary in three companies but did not identify those positions. He had received directors fees from Mehajer Bros. but this had not been listed in the correct part of the form - he had missed that detail and that was an error. He agreed that he had not supplied the address for some companies and had not specified the registered address but had inserted the business operating address in the form. Some of the properties he listed he owned but others were owned by a company or other people." The submissions in the Tribunal 6The plaintiff did not give evidence before the Tribunal. His submissions were summarised in its reasons (about which no complaint is made) - "[18] ... [At] the hearing before the Tribunal Clr Mehajer accepted the essence of each complaint and that the returns lodged were false and misleading in material particulars and therefore were in breach of the requirements of s.449(1A) of the Act. In written submissions it was accepted that the Councillor should have taken more care to understand what was required of him in lodging the 2012 return but the errors appearing in the 2013 return should be treated as relatively minor breaches. The councillor regretted and apologised for his lack of care in completing the 2012 return and for the "relatively minor deficiencies" appearing in the 2013 return. [19] It was further submitted on behalf of Clr Mehajer that his various explanations for filing these returns were not relied upon by way of excuse, for he accepted and appreciated that he had failed to take proper care in understanding his obligations when filing out the form. He blamed no one else for these deficiencies but pointed out that he was only recently elected and had not been provided with any information, support, training or specific assistance from the Council regarding his obligations when completing the return. While he felt under pressure to complete the return he accepted that no one had placed him under such pressure. In any event s.449(1) required a return to be within three months of becoming a councillor. [20] While accepting that the 2012 return was false and misleading it was submitted on behalf of the Councillor that a simple and single misunderstanding had caused these errors and therefore little turned on the number of deficiencies relating to properties, sources of income and positions in corporations. These were said to be innocent errors arising from a misunderstanding and were not to be regarded as selective or designed to hide the real position." 7On 12 June 2013 Mr Murphy, a Senior Investigator with the Division of Local Government, who had been in communication with the plaintiff about his returns, sent him an email which contained a link to the Division's website "which has resources to assist Councillors completing their return" and attached a guide to completing the return. The Tribunal (accurately) summarised the guide as follows - "[23] The self-help guide for councillors set out the statutory framework regarding disclosure returns. In relation to each section of the return a "plain English" explanation was provided and common mistakes were discussed. In dealing with Real Property the guide stated that a councillor must declare any directly owned or leased property "anywhere in Australia": the word "anywhere" appeared in bold type. In dealing with sources of income the guide stated that occupation included any form of payment as an employee or through employment/consulting or through directorships or holding an office in a corporation. In relation to interests and positions in corporations the guide stated that it was necessary to include the full company and full details of the business address or registered office of the corporation. There was also information concerning the nature and level of debts that were required to be disclosed." 8The Tribunal accepted the submission by the Chief Executive as to the defects - "[24] ... [The 2012 return was] deficient in a number of significant areas. The particulars omitted were matters that Clr Mehajer was aware of: he had numerous real estate interests that were not disclosed; he knew he had income from rental properties that were not disclosed; he knew he was likely to receive income from his employment that was not disclosed; he knew he was likely to receive consultancy fees that were not disclosed; he knew he was a potential beneficiary of a family trust but this was not disclosed; he knew that he was likely to receive income by way of dividends but this was not disclosed; he knew he held shares in corporations but this was not disclosed; and he knew that he held positions in corporations but they were not disclosed. [25] The complaints about the 2013 return were more limited: there was a failure to disclose a Castle Hill property, positions in a number of corporations, the correct address for corporations in which the councillor held a position, and the failure to provide an address for one of the corporations." The Tribunal's conclusion