The resignation of the NSW Premier over a bottle of Grange has
lessons which resonate for local government.
The recent Panel Inquiry into a metropolitan Council is a cogent
reminder of the extent of the obligations of a Council member to
disclose an interest under Regulation 11(2) of the Local
Government (Rules of Conduct) Regulations 2007.
The rule of conduct in that rule is that a Council member must
disclose the nature of an "interest" to the Chief
Executive Officer before the meeting or at the meeting immediately
before the relevant matter is discussed.
What is an interest?
Interest is defined as "an interest that could, or
could reasonably be perceived to, adversely affect the impartiality
of the person having the interest and includes an interest arising
from kinship, friendship or membership of an
In the State Administrative Tribunal case of Bradley and
Local Government Standards Panel  WASAT 44 Senior member
McNab said that an allegation that a council member has committed a
breach of regulation 11(2) of the Regulations "is an
allegation of undeclared conflict or bias (apparent or real)
clouding the exercise of public duty".
What must be disclosed?
The Panel Inquiry considered that ordinary decision making
processes dictate that factors which might affect, or be reasonably
perceived as affecting, the objectivity of an elected member be
made known before the member's participation in the making of
the relevant decision.
Two members of Council attended a luncheon hosted by
representatives of a law firm. There was no declaration or
disclosure in the Council's gifts register for this luncheon.
No other elected member was appraised of the meeting, its purpose,
Regulation 12(1) of Local Government (Rules of Conduct)
Regulations 2007 requires that any gift over the value of
$50.00 must be entered into the Council's gift register.
It was uncertain whether the value of the luncheon was above
$50.00. However, the Panel Inquiry took the view that the two
members of Council were aware of the fact that they met with and
received a benefit (albeit minor) from the law firm prior to their
subsequent involvement in supporting a motion to introduce the law
firm to the Council's Legal Services Panel. This lunch meeting
was not disclosed at the Council meeting in which the law firm was
In accepting the "free lunch" the two members of
Council were obliged to reveal this benefit as soon as the law firm
became part of Council deliberations.
Finding of the Panel Inquiry
A finding of the Panel Inquiry is that the luncheon provided by
the law firm was an "interest" that could, or could
reasonably be perceived to, adversely affect the impartiality of
the two members of Council for the purposes of Regulation 11 of the
Local Government (Rules of Conduct) Regulations 2007. The
Panel Inquiry recommended that the failure to disclose be referred
to the Council's Complaints Officer as a Minor Breach under
5.107 Local Government Act 1995.
One of the two members of Council was also found to have a
business relationship with the law firm at the time the matter came
before Council. He was receiving legal advice on a person matter.
The Panel Inquiry found that this was a failure to disclose a
financial interest by virtue of his 'close association' (as
defined in Regulation 20(1) and (2) Local Government
(Administration) Regulations 1996) with the law firm and
recommended that it be considered for referral under section 5.114
of the Local Government Act 1995 to the Department CEO as
a Serious Breach.
The lessons for members of Council
It is common for members of Council to attend luncheon meetings
with various businesses or other bodies. Members of Council must be
aware of the extent of their obligation to disclose and should
declare the luncheon as an "interest" if a relevant
matter is before Council. Better still, enter the luncheon on the
gift register even if it problematic that its value is over
We strongly recommend to always disclosure
everything, especially bottles of Grange, that way
you are always protected.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Kott Gunning is a proud member of
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
There has been a range of recent legal developments that affect privacy, child abuse claims and workers compensation.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).