Office of Local Government v Toma

The legal framework

1. Section 440 of the Act provides that: 1. the regulations may prescribe a model Code of Conduct applicable to councillors; 2. the model Code may relate to conduct by councillors, acting as such, that is likely to bring the council or holders of civic office into disrepute; 3. each council must adopt a Code of Conduct that incorporates the provision of the model Code, together with the option of provisions supplementing those model provisions, although the model Code prevails over supplementary provisions to the extent of any inconsistency; and 4. councillors must comply with such provisions.
2. Section 440F(1)(b) of the Act provides that 'misconduct' of a councillor includes: … (b) a failure by the councillor to comply with an applicable requirement of a Code of Conduct under s 440.
3. By s 440H of the Act, the departmental Chief Executive, that is to say, the applicant in these proceedings, may conduct an investigation for the purpose of determining whether a councillor has engaged in misconduct and, following an investigation, is provided with a report and, then, as occurred in this case, may, instead of directly taking disciplinary action against a councillor, refer the matter to this Tribunal for consideration: see s 440J of the Act. The referral to the Tribunal is by means of a report, together with such other material and observations as the applicant thinks fit: s 440J(3). The relevant report is before me in evidence.
4. The power to conduct that investigation extends to investigating the conduct of former councillors in relation to alleged misconduct as councillors, see s 440N.
5. Upon that referral, the Tribunal, if it finds that the behaviour concerned warrants such action, may take the action set out in s 482A of the Act against a councillor or former councillor: see s 482A(4). As I have found the behaviour does warrant such action, I will return to those powers later in this decision.
6. In this case, Fairfield Council adopted a Code of Conduct on 30 September 2008 (the Code). That is a Code which meets the definition in s 440, breach of an applicable requirement of which, as already noted, constitutes misconduct: s 440F(1). The key provision is clause 3.1 of the Code, which relevantly provides in relation to councillors: You must not conduct yourself in carrying out your functions in a manner that is likely to bring the council or holders of civic office into disrepute. Specifically, you must not act in a way that: … (c) is improper or unethical.
7. The applicant contends that this clause has been breached. I now turn to the evidence.

The Evidence

1. It is convenient to quote from the Applicant's report, which I adopt: Executive Summary: Pursuant to an authorisation by the Chief Executive, Local Government this report deals with alleged misconduct by Councillor Zaya Toma of Fairfield City Council. The matter investigated relates to the unauthorised access of email accounts of Councillor Joe Molluso, Councillor Ninos Khoshaba and Councillor Charbel Saliba all of Fairfield City Council, between 10 December 2012 and 6 January 2013. By way of background, this matter was initially reported to the NSW Police. The NSW Police commenced an investigation during which a significant amount of evidence was obtained. The NSW Police determined to refer the matter to the Independent Commission Against Corruption, who in turn referred the matter to the Office of Local Government. After the Local Government election in September 2012, each Fairfield City councillor was provided with electronic devices such as iPads and iPhones to assist them in their role as a councillor. Each of the councillors was supplied separately with their Council operated 'groupwise' email account which included their username and password. When first allocated the username and password were generic, basically consisting of a councillor's first initial followed by their surname and the number 1. For various reasons the three Councillors mentioned did not change their passwords as recommended by Council staff. On 6 January 2013 an anonymous package was delivered to all councillors and selective Council staff. The package contained two emails which suggested that Councillor Del Bennett had forwarded 'confidential' information to Councillor Joe Molluso. This resulted in an internal examination of the Council email system. This identified that there were two static IP addresses (internet service) in which multiple councillors' email accounts had been accessed. One of the IP address was registered to Councillor Toma's home while the investigation has established that the second IP address was that of Councillor Toma's employer, the former member of the NSW Parliament, Andrew Rohan. The computer records show that in each of the 12 incidents when the 23 unauthorised accesses to councillor email accounts occurred, on each occasion immediately prior to these incidents, Councillor Toma's email account was accessed. This becomes significant due to Councillor Toma confirming that he had changed his password for his Council email account. The investigation established that it was, on the balance of probabilities, Councillor Toma who had accessed the email accounts of Councillors Molluso, Khoshaba and Saliba. The investigation also established that the accessing of the email accounts was unauthorised. Accordingly, the investigation concluded that Councillor Toma has on those 23 occasions contravened clause 6.1(c) of Council's code of conduct, specifically in that he acted in a way which was improper and unethical. These breaches of Council's code of conduct constitute misconduct, under the Local Government Act 1993. This report recommends that the Chief Executive consider a period of suspension from civic office. Notwithstanding the conclusions and recommendation made, the determination as to whether Councillor Toma committed misconduct under the Act, and if so, whether any such misconduct warrants such disciplinary action, is one for the Chief Executive or the NSW Civil and Administrative Tribunal. 7.2 Finding Two That the accessing of Councillor Khoshaba's, Councillor Molluso's and Councillor Sabila's email accounts was unauthorised. 172. In relation to this finding, there is evidence: That each of the councillors were provided with their own separate email accounts to conduct their official function. They were provided with passwords to prevent unauthorised access. From Councillor Toma that his relationship with Councillor Molluso was 'toxic'. That Councillor Toma was advocating for a member of the public against the interests of Councillor Molluso. That Councillor Molluso did not authorise any person to access his Council email account. That Councillor Toma was the campaign manager for Andrew Rohan, the successful Liberal Party candidate for the seat of Smithfield in the 2011 State Government election. Prior to 2011, Ninos Khoshaba was the sitting member for the seat of Smithfield and a Labor Party member. That Councillor Khoshaba did not authorised [sic] anyone to access his email account. That while Councillor Toma and Councillor Saliba did work closely together and there is evidence that Councillor Saliba attended Councillor Toma's home and used Councillor Toma's computers, there is evidence that Councillor Saliba did not access his council email account whilst at Councillor Toma's place. That Councillor Saliba's email account was accessed at times when it was unlikely that he would have been present at Councillor Toma's place. That Councillor Saliba's email account was also accessed from Councillor Toma's work internet service. 7.3 Finding Three That the unauthorised accessing of Councillor Khoshaba's, Councillor Molluso's and Councillor Saliba's email accounts is contrary to Council's code of conduct and amounts to misconduct under the Act. 173. At the time of the alleged behaviour, Council had an adopted code of conduct. 174. Clause 6.1(c) places the following obligations on councillors in their official capacity. "You must not conduct yourself in carrying out your functions in a manner that is likely to bring the Council or holders of civic office into disrepute. Specifically, you must not act in a way that is improper or unethical." 175. Normally unauthorised access of another councillor's email account is improper, however in this case, given the circumstances of the breaches, I am of the view that this behaviour is also unethical. 176. This investigation found that all 23 unauthorised accesses of Councillor Khoshaba's, Councillor Molluso's and Councillor Saliba's email accounts were contrary to Council's code of conduct. 177. Accordingly, by definition, a breach of Council's code of conduct amounts to an act of misconduct pursuant to the Act.
2. In Office of Local Government v Councillor Campbell of Murray Shire Council [2015] NSWCATOD 129, I said: [4] This Tribunal derives jurisdiction from s 482 of the Act. The jurisdiction is disciplinary and protective in nature, in a similar fashion to the discipline of professionals such as lawyers and medical practitioners: compare Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 680 at 637-8; NSW Bar Association v Meakes [2008] NSWCA 340 at [114]. [5] The rules of evidence do not apply in this hearing: Civil and Administrative Tribunal Act 2013, s 38(2). Nevertheless, findings have been based on probative evidence, also applying the caution expressed by the High Court in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 362-3 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66 in relation to the required strength of evidence required in a hearing such as this, where the allegations are serious, as are the potential consequences of adverse findings.
3. In this case Mr Toma does not contest the evidence, the findings in the report or the submissions by the Applicant. In view of that concession and in view of the material in the report filed by the Applicant, I am satisfied that between 10 December 2012 and 5 January 2013, the respondent accessed the official accounts allocated by Fairfield Council to three other Councillors on the following occasions, and in the circumstances quoted in [12] above: 1. Councillor Khoshaba: 8 times; 2. Councillor Molluso: 8 times; and 3. Councillor Saliba: 7 times.

'Improper or unethical'

1. The next question is whether such conduct is 'improper' or 'unethical' or both, within the meaning of the relevant Code.
2. As Finn J said in Kelson v Forward (1995) 60 FCR 39: "[w]ords that have a pejorative connotation need to be used with particular care. Used inappropriately they can damage unfairly".
3. In Carmody v Mackellar [1996] FCA 791 Merkel J observed that the "... meaning of "improper" must be determined from the context in which it appears."
4. The Code relevantly follows the terms of the model Code as defined by Local Government (General) Regulation 193 which provides: (1) For the purposes of section 440 of the Act, the document entitled The Model Code of Conduct for Local Councils in NSW published in the Gazette on 13 November 2015 is prescribed as the model code of conduct.
5. Clause 3.1 of the Code provides: PART 3 GENERAL CONDUCT OBLIGATIONS 3.1 You must not conduct yourself in carrying out your functions in a manner that is likely to bring the council or holders of civic office into disrepute. Specifically, you must not act in a way that: a) contravenes the Act, associated regulations, council's relevant administrative requirements and policies b) is detrimental to the pursuit of the charter of a council c) is improper or unethical d) is an abuse of power or otherwise amounts to misconduct e) causes, comprises or involves intimidation, harassment or verbal abuse f) causes, comprises or involves discrimination, disadvantage or adverse treatment in relation to employment g) causes, comprises or involves prejudice in the provision of a service to the community.
6. Part 2 of the Code states: PART 2 PURPOSE OF THE CODE OF CONDUCT The Model Code of Conduct sets the minimum requirements of conduct for council officials in carrying out their functions. The Model Code is prescribed by regulation. The Model Code of Conduct has been developed to assist council officials to: • understand the standards of conduct that are expected of them • enable them to fulfil their statutory duty to act honestly and exercise a reasonable degree of care and diligence (section 439) • act in a way that enhances public confidence in the integrity of local government.
7. The expression 'unethical and improper' is to be found in analogous professional standards legislation. So, for example, in the medical profession, the Health Practitioner Regulation National Law 2009 (NSW) defines 'unsatisfactory professional conduct' in s 139B of the National Law as including: (a) Conduct that demonstrates the knowledge, skill or judgment possessed, or care exercised, by the practitioner in the practice of the practitioner's profession is significantly below the standard reasonably expected of a practitioner of an equivalent level of training or experience.(b) A contravention by the practitioner (whether by act or omission) of a provision of this Law, or the regulations under this Law or under the NSW regulations, whether or not the practitioner has been prosecuted for or convicted of an offence in respect of the contravention....(l) Any other improper or unethical conduct relating to the practice or purported practice of the practitioner's profession.
8. In Health Care Complaints Commission v Mitchell [2015] NSWCATOD 151 the dictionary definition of those words was adopted, thus: [56] The words "unethical" or "improper" are not defined in the National Law. The Macquarie Dictionary defines "improper" relevantly as not in accordance with propriety of behaviour, manners etc. or abnormal or irregular and "unethical" as "contrary to moral precept; immoral; 2. in contravention of some code of professional conduct." There is no reason to suppose that the words should be given a different meaning in the National Law.
9. In R v Byrnes & Hopwood (1995) 183 CLR 501, Brennan, Deane, Toohey and Gaudron JJ were considering the meaning of s 229(4) of the Companies (South Australia) Code, Byrnes and Hopwood having been charged with its contravention. That sub-section provided that: An officer or employee of a corporation shall not make improper use of his position as such an officer or employee, to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the corporation.
10. Their Honours said this: "[24] "Improper" is an indefinite term, not commonly used in the criminal law. Counsel for Hopwood submitted that "improper use" should be understood to mean a deliberate use of position for a proscribed purpose "without giving any consideration at all to the interests of the company". No doubt such a use of position by a director would be improper: it would be an abuse of the power or authority conferred by the position. But, contrary to counsel's submission, that case does not exhaust the categories of impropriety. [25] Impropriety in the context of s.229(4) and its statutory antecedents has not been understood to be limited to conscious impropriety on the part of the offender. Thus in Grove v. Flavel, Jacobs J said: "The word 'improper' is not a term of art. It is to be understood in its commercial context to refer to conduct which is inconsistent with the 'proper' discharge of the duties, obligations and responsibilities of the officer concerned." He also said: "It seems to me, therefore, that what is 'improper' for the purposes of s.124(2) cannot be determined by reference to some common, uniform, or inflexible standard which applies equally to every person who is an officer, but rather must be determined by reference to the particular duties and responsibilities of the particular officer whose conduct is impugned." In Chew, Dawson J said in reference to "improper use" in s.229(4) that "an objective standard must be applied in determining what amounts to impropriety". His Honour added: "It is clear enough that a director of a company may act improperly with no intention of acting dishonestly or otherwise than in the best interests of the company as a whole." He gave Whitehouse v. Carlton Hotel Pty. Ltd. as an example. Also in Chew, Toohey J said: "The expression is, as the appellant accepted, one to be determined objectively; essentially the issue is whether the conduct impugned is inconsistent with the proper discharge of the duties of the office in question. To resolve that issue it will be necessary to look at all relevant circumstances, including, for instance, the extent of a director's awareness of the financial stability of the corporation. But that does not mean that the test of 'improper use' is subjective; it simply indicates the range of considerations that may have to be taken into account." It was unnecessary for the other judgments to expound the meaning of "improper use" but that case has rightly been taken to approve an objective test of impropriety. Impropriety does not depend on an alleged offender's consciousness of impropriety. Impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case. When impropriety is said to consist in an abuse of power, the state of mind of the alleged offender is important: the alleged offender's knowledge or means of knowledge of the circumstances in which the power is exercised and his purpose or intention in exercising the power are important factors in determining the question whether the power has been abused. But impropriety is not restricted to abuse of power. It may consist in the doing of an act which a director or officer knows or ought to know that he has no authority to do." [emphasis added]
11. Applying these authorities, I do not need to state an exhaustive definition of improper or unethical conduct. Rather it is enough to here note that the expression encompasses conduct which, viewed objectively, would be regarded by reasonable persons as falling below the standards of conduct to be expected of Councillors, in that it has a tendency to bring into disrepute the civic office held by Councillors, or the Council, or both. In Dallas Buyers Club LLC v iiNet Limited (No 3) [2015] FCA 422 at [5], Perram J said, aptly for present purposes: The difficulty in locating where a line is to be drawn is a well-known problem in legal discourse. But here, as in other contexts, it is best answered not by seeking to find where the line is but instead by asking which side of the line one happens to be on.
12. In my opinion the conduct I have found and which the Respondent has not contested clearly falls on the wrong side of the line. It reduces public confidence in the institution of local government. It amounts to improper and unethical behaviour. It is therefore a breach of clause 3.1(c) in each instance and amounts to misconduct within the meaning of s 440F. In this regard I agree with the submissions made by the applicant that: 1. It is self-evidently improper and unethical to access someone else's email account without their permission or authority, as occurred here; 2. That proposition gains strength where the email accounts are those of other elected councillors of the same council, with whom the respondent was required to deal lawfully and in a way conducive to democratic representation at the local government level. 3. The conduct was dishonest.

Penalty

1. In Mehajer v Chief Executive of the Office of Local Government [2014] NSWSC 1804 at [17], (albeit that it was a decision concerning a breach of the pecuniary interest provisions), Adams J noted that although the sanctions in s 482(1) have been described as 'punishments', the nature of this Tribunal's jurisdiction is essentially protective.
2. As the jurisdiction is protective, it is important to consider specific deterrence of the person found to have engaged in misconduct, and also general deterrence: that is, deterring others who might be tempted to behave in a similar fashion.
3. Here, the punishment imposed must be significant as: 1. the misconduct is dishonest; 2. there was concealment by the respondent of the true position, namely that he had used others' emails without permission; 3. the fact the behaviour amounted to misconduct should have been obvious to the respondent; 4. save for a late decision at the February directions' hearing in the Tribunal not to further contest any of the findings, there has been neither acknowledgement of wrongdoing, nor apology by the respondent; 5. such misconduct strikes at the heart of the local government system because it means that the element of trust, which should be present between elected councillors, could not be present because other councillors or holders of civic office could not trust the respondent in future given this behaviour; 6. even if the respondent never wishes to seek elected office again, it is important to seek to ensure that others who might be tempted to act in the same fashion do not do so; and 7. although it is not the most serious imaginable case it is a very serious case.
4. Taking account of all of those findings and matters I have concluded that, pursuant to s 482 of the Local Government Act, Zaya Toma, formerly a Councillor of Fairfield City Council, having engaged in improper and unethical behaviour, is disqualified from holding civic office for 2 years, specifically, until 25 February 2018. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar Amendment : 17 March 2016 By consent orders are made in terms of paragraphs 1 and 2 of the document entitled "consent orders" signed by the parties solicitors and dated 17 March 2016. 1. Pursuant to regulation 9 (1) (a) of the Civil and Administrative Regulations 2013 the Tribunal directs that the order made on 25 February 2016 to the effect that Mr Toma be disqualified from holding civil office for 2 years, specifically, until 25 February 2019 be set aside and in its place orders that Mr Toma be reprimanded. 2. The applicant pay the respondent's costs as agreed in the sum of $2,200.00 inclusive of GST.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

1. By consent orders are made in terms of paragraphs 1 and 2 of the document entitled "consent orders" signed by the parties solicitors and dated 17 March 2016.

Pursuant to regulation 9 (1) (a) of the Civil and Administrative Regulations 2013 the Tribunal directs that the order made on 25 February 2016 to the effect that Mr Toma be disqualified from holding civil office for 2 years, specifically, until 25 February 2019 be set aside and in its place orders that Mr Toma be reprimanded.

2. The applicant pay the respondent's costs as agreed in the sum of $2,200.00 inclusive of GST DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 May 2016