The Office of Local Government v Councillor Pauling

reasons for decision 1The Chief Executive, Office of Local Government has referred two allegations to the Tribunal concerning the alleged conduct of Councillor Jason Pauling of Lake Macquarie City Council. In relation to each matter the Office of Local Government provided a report following its investigation. In each case the Tribunal determined that the matter proceed to hearing. 2The first matter raised alleged breaches of Sections 451, sub section 1 and sub section 2 of the Local Government Act 1993 and concerned two meetings the Council's Community Development Committee meeting on the 8 of April 2013 and the ordinary Council Meeting held on 22 April 2013. It was alleged that Councillor Pauling had a pecuniary interest relating to a review of the delivery of economic development activities by the Council, a matter that was considered at the two meetings. Councillor Pauling's alleged pecuniary interest was said to arise because he was both a member and office holder of Business Charlestown Incorporated (BCI) being a Chamber of Commerce in the Lake Macquarie City Council local government area. A pecuniary interest has said to arise in both the meetings, including consideration of whether Council might adopt a proposal to make a $25,000 payment to a number of local Chambers of Commerce in the area including BCI. It was stated the Councillor Pauling was present at the two meetings and had participated in the consideration of the matter and voted on a related motion. While he asserted that he had a non-pecuniary conflict of interest in the matter that was 'less significant' he did not disclose that he had a pecuniary interest. At these meetings he did disclose that he was the President of BCI. Ultimately the Council made a $25,000 payment to BCI on 23 August 2013 pursuant to a resolution adopted at the meeting held on the 22 April 2013. It was alleged that Councillor Pauling had an obligation to declare a pecuniary interest in the matter and therefore should not have been present at or at the site of the meetings on the 8 April and 22 April 2013 when the matter was considered. 3The second matter investigated concerned whether Councillor Pauling had complied with conflict of interest disclosure and management requirements of the Council's Code of Conduct. It was alleged that breaches occurred at three meetings held on 8 April 2013, 22 April 2013, and 24 June 2013 where general consideration was given to the Council's review of the delivery of economic development activities. At the three meetings Councillor Pauling disclosed that he had a non-pecuniary conflict of interest in the matter arising primarily from his involvement and affiliation with local Chambers of Commerce and in particular BCI. It was noted that councillor Pauling at the relevant times was the President of BCI and publically involved in its activities. It was alleged that at the three meetings Councillor Pauling asserted that the nature of his conflict of interest was 'insignificant'. He then participated in the debate on issues related to BCI's interest and the determination of motions related to those interests. It was submitted for the Office of Local Government that given the Councillor's admission that he had a non-pecuniary conflict of interests the allegation of misconduct arising from his participation in the determination of the matter rested on whether the nature of his conflict was significant. 4Although a large number of documents attached to the report in each case were placed formally before the Tribunal there was ultimately no serious factual issue in contest for the purposes of the proceedings before the Tribunal. Indeed the parties were able to produce agreed statement of facts although Councillor Pauling was concerned to have the Tribunal note that there were many other facts that placed his interests, for the purpose of these proceedings, in a wider context namely, his much more general interest in programs designed to foster economic development within the Council's area. Notwithstanding that concern, Councillor Pauling agreed that for the narrower purposes of the Tribunal's hearing, the agreed statement of facts was sufficient. The agreed statement of facts is set out below: (1)CIr Pauling was elected to Lake Macquarie City Council (Council) in September 2012. (2)CIr Pauling was at all material times the President of Business Charlestown Incorporated (BCI). - (3)Prior to 2013 Council had in place a program known as the Town Centre Program. This was a program designed to foster economic development within the Council area. (4)The program was delivered through a process of grants being given to local chambers of commerce. BCI was one such chamber. The grants were subject to a number of conditions particularly to do with program delivery. (5)The grant to BCI in 2012/13 was $81,700 - noting that at the time this was the last grant to be paid as the program at that time was to terminate as at 30 June 2013. (6)Council decided to review the way in which it fostered economic development and to this end prepared a report entitled 'Review of the delivery of Economic Activities'. (7)The report canvassed a number of issues including: (a)The efficiency of the delivery of services (b)Lack of transparency between Chamber funds and Town Centre funding (c)Chambers of Commerce see Town Centre funding as 'their money' without an acknowledged need to deliver economic development outcomes outlined in their strategic plan (d)Town Centre Coordinators found it difficult to distinguish between their priorities in their role as Town Centre Coordinators and general Chamber support. Town Centre Coordinators were carrying out the majority of the administration duties for the Chambers. These observations were not directed at any particular chamber. (8)The central recommendation of the report was the dismantling of the town centre program and the establishment of an external board to oversee economic development activities in the Council area. The budget for the provision of economic delivery services on a council wide basis was approximately $1.2m. (9)The report also recommended that an untied grant of $25,000 be made to the chambers of commerce which had hitherto delivered the Town Centre Program. As at 8 October 2012, BCI had a balance of $17,155 in a Chamber account and $56,213 in a Council account. This was not part of the actual recommendation in the agenda but was discussed at the meetings of 8 April and 22 April 2013. (10)The report's proposals had the potential to significantly affect the scope of operations of the chambers of commerce including BCI. They would no longer be delivering the Town Centre program including certain cultural events. There was no assessment of the nature of the impact on chambers within the report. BCI would receive a financial benefit which was a small component of the overall economic delivery strategy but which represented a significant sum on the context of BCI's finances. (11)The report was discussed at the Council's Community Development Committee meeting on 8 April 2013, and the council meetings of 22 April and 24 June 2013. (12)The agenda including business papers was made available to councillors prior to these meetings. CIr Pauling received those agendas and was aware of the proposals within the report prior to the meetings. (13)CIr Pauling attended all three meetings and participated in discussion about the report. (14)At each of the three meetings CIr Pauling declared a less than significant non-pecuniary conflict of interest but did not leave the meetings. At the time of the meetings there was no objection taken to CIr Pauling's attendance and participation. (15)CIr Pauling sought advice as to whether he should remain at the meetings. CIr Pauling asserts that the advice was equivocal. 5From the documents before the Tribunal, the agreed statement facts and the uncontested material put forward by the Office of Local Government, the following facts are established.