Ombudsman SA Investigation into the City of Charles Sturt Final Report November 2011 Ombudsman SA PO Box 3651 Rundle Mall SA 5000 Telephone 08 8226 8699 Toll Free 1800 182 150 (outside metro SA only) Facsimile 08 8226 8602 Email [email protected] CONTENTS SUMMARY 1 OPINIONS 2 Conflict of interest 2 Bias and open mind 2 Code of conduct 3 The consultation process 4 Confidentiality of meetings and documents 5 Prudential requirements 6 RECOMMENDATIONS FOR AMENDMENT OF THE LAW 8 Register of interests 8 Conflict of interest 8 Code of conduct 9 Valuation of community land 10 1. INTRODUCTION 11 1.1 NAMING OF WITNESSES 12 1.2 JURISDICTION 13 Ombudsman Act 1972 (SA) 13 Meaning of ‘agency’ 13 Meaning of ‘administrative act’ 13 Power to investigate 14 Referral for investigation from a House of the Parliament — section 14 14 Own initiative investigation — section 13(2) 14 My investigation 15 Whistleblowers Protection Act 1993 (SA) 17 1.3 MY INVESTIGATION 18 Commencement of my investigation 18 Scoping my investigation 18 Conclusion of scoping the investigation and notifying council members 19 Defining the administrative act and the issue of legal representation 20 Legal proceedings initiated by the council 21 Mediated settlement of the legal proceedings 22 Resumption of my investigation 23 Further challenges to my jurisdiction 23 Release of my provisional report 23 i Responses to my provisional report 24 Conduct of elected members of the 2006-2010 council 26 Standard of proof 28 Total evidence taken 28 Consultation 28 Acknowledgement of the CEO and staff of the council 29 Observations of the evidence of some council members 29 2. CONTEXT OF THE ADMINISTRATIVE ACT 30 2.1 ROLES AND RESPONSIBILITIES — COUNCILS AND ELECTED MEMBERS 31 Principal role of a council 31 Functions of a council 31 Objectives of a council 31 Role of council members 32 Declaration on taking office 33 General duties of elected members 33 Council members are fiduciaries 34 Abuse of public office 34 Register of interests 34 Remuneration 35 Conflict of interest 35 Bias 36 Code of conduct 36 Other relevant statutory provisions 37 2.2 OVERVIEW OF THE REVOCATION AND LAND SWAP 38 Introduction 38 Background to the revocation and land swap 39 Revocation of the community land classification of the St Clair land 41 TODs 42 SA government policy objectives and the 30 year plan 44 2.3 PREVIOUS INVESTIGATIONS ABOUT THE REVOCATION AND LANDSWAP 48 2.4 COUNCILLORS’ MEMBERSHIP OF THE ALP 52 Background 52 Councillors’ membership of the ALP 52 Assistance given by ALP councillors to state and federal ALP candidates and MPs 53 Assistance provided to ALP councillors by MPs and their electorate offices 53 Being a councillor and a member of the ALP 54 ii The Member for Croydon 55 Meeting at Parliament House for ALP councillors after the 2006 elections 58 Croydon electorate office assistance — councillors’ street corner meetings 62 Croydon electorate office assistance — councillors’ land swap letters 65 Comment 66 3. DECISION-MAKING IN RELATION TO THE ADMINISTRATIVE ACT 67 3.1 CONFLICT OF INTEREST, BIAS AND THE ADMINISTRATIVE ACT 68 3.2 CONFLICT OF INTEREST 69 Background 69 What is a conflict of interest? 69 Conflict of interest under the Local Government Act 70 Conflict of interest and the code of conduct 74 Whether council members had conflicts of interest 74 Whether Councillor K had an interest — employment in the DPLG 74 Whether 12 councillors had an interest — membership of the ALP 79 Whether Councillors J and P had an interest — engagement in the Enfield electorate office 84 3.3 BIAS AND OPEN MIND 86 Background 86 Whether the ALP councillors brought an open mind to their decision-making 88 ALP councillor discussions outside the council 89 Member for Croydon 90 Voting pattern of the ALP councillors 92 ALP membership 93 ALP councillors’ motivations in voting on the revocation 93 4. CODE OF CONDUCT 98 What is the code of conduct? 99 City of Charles Sturt’s code of conduct 100 The principles in the code of conduct 100 Behaviour contrary to the code of conduct 101 Recording of complaints 103 Whether councillors may have breached the code of conduct during the revocation process 103 1. Whether Councillors K, P, A and G may have breached the code of conduct — the Member for Croydon and the councillors’ letters supporting the land swap 103 2. Whether Councillor M may have breached the code of conduct — writing a letter to the press 109 iii 3. Whether Councillor M may have breached the code of conduct — writing to a St Clair protestor’s employer alerting the employer to the fact that his employee was using her work email address for communications unrelated to her work 111 4. Whether Councillor M may have breached the code of conduct — asking another to obtain information about the employee 114 5. Whether Councillor B may have breached the code of conduct — providing a community member’s email to the Member for Croydon 117 6. Whether Councillor G may have breached the code of conduct — forwarding a community member’s email to the Member for Croydon 125 5. THE CONSULTATION PROCESS 127 The council’s consultation obligations in the revocation process 128 Background 128 Whether the council complied with the requirement in section 194(2)(a) to prepare a report 131 Whether the council complied with the requirement in section 194(2)(b) to follow the steps in its public consultation policy 133 Whether the council adopted good administrative practice in carrying out its public consultation 138 1. Whether the timing of the consultation process was appropriate 138 2. Whether the council took sufficient action to publicise the consultation process 143 3. Whether the council made enough information available to the public 145 4. Whether the council misleadingly described the land area as ‘same for same’ 146 5. Whether the council should have accepted submissions after the deadline 150 6. Whether the council properly considered the results of the consultation when making the revocation decision 152 6. CONFIDENTIALITY OF COUNCIL MEETINGS AND DOCUMENTS 161 Council meetings of 28 April 2008, 11 August 2008 and 9 June 2009 162 Whether the council acted in accordance with section 90(2) and (3) 164 Meeting of 28 April 2008 — whether the council acted in accordance with section 91 166 Meeting of 9 June 2009 — the council’s report and resolutions 168 Whether the council acted in accordance with section 90 — 9 June 2009 170 Whether the council acted in accordance with section 91 — 9 June 2009 170 Whether the council should have alerted the public to the release of the 9 June 2009 report and minutes 172 7. PRUDENTIAL REQUIREMENTS 174 Section 48 Local Government Act 175 Meeting of 9 June 2009 — the prudential report and the Deloitte review 176 iv Whether a report was required to be prepared by the council under section 48(1) 177 Whether the council adequately addressed the risk of ‘conflict of interest’ 179 Whether the council complied with section 48(4) in preparing the prudential report 182 Whether the council should have sought valuations of the St Clair and the Sheridan land 184 8. RECOMMENDATIONS FOR AMENDMENT OF THE LAW 189 8.1 REGISTER OF INTERESTS 190 Changes to information on the Register of Interests 190 Ready public access to the Register of Interests 191 8.2 CONFLICT OF INTEREST 192 Addressing perceived conflict of interest 192 Conflict of duty — extending section 73(3) 193 Conflict of duty — being a council member and an electorate officer 195 The interests of the council and interests of the state government 196 Conflict of duty - Local Government Act 1989 (Vic) 197 LGASA response 198 Prohibition in the code of ethics 198 Disclosure of political affiliation 200 Remove the requirement to abstain from voting in some circumstances 201 Councillors’ lack of understanding of conflict of interest 202 Past benefits / inducements 202 8.3 CODE OF CONDUCT 203 Lack of enforceability of the code of conduct 203 Elected members’ perceptions of their role — training and the oath of office 203 8.4 VALUATION OF COMMUNITY LAND 206 9. CHRONOLOGY OF EVENTS 207 10. MAP 217 11. APPENDIX A — Mediation Heads of Agreement 218 12. APPENDIX B — Further description of the administrative act 220 13. ABBREVIATIONS 222 v Summary SUMMARY In December 2009, the City of Charles Sturt revoked the community status of land in St Clair Reserve under the Local Government Act 1999, in order to swap this land with land from the former Sheridan industrial site owned by the state government’s property arm, the Land Management Corporation. This swap enabled the council and the state government to deliver on a significant target in the new planning strategy set out in the 30 year Plan for Greater Adelaide, through the establishment of one of the first of fourteen proposed transit oriented developments (TOD) near the Woodville Railway Station adjacent to the St Clair Reserve. The Land Management Corporation had earlier purchased the Sheridan land from developers for $15.8m (exclusive of GST) with the intention of achieving the land swap and establishing the TOD. Some sectors of the council’s community expressed concern about the influence of the ALP (in particular the Member for Croydon) in the council’s revocation decision, as 12 out of 17 of its councillors were members of the ALP and six were employed within state government. Concerns were also raised about the council’s lack of genuine community consultation about the revocation and its inattentiveness to prudential risks about conflict of interest. The matter was referred to me for investigation by the Legislative Council; and I resolved to use my own initiative investigation powers under the Ombudsman Act 1972.