On 9 May 2017, the State Administrative Tribunal WA (the Tribunal) found that Lord Mayor Ms Lisa Michelle Scaffidi had committed 45 serious breaches of her reporting obligations under the Local Government Act 1995 (WA) (the Act). This was followed by a penalty hearing on 14 June 2017, to be resumed on 21 June 2017.
Sections 5.82 and 5.83 of the Act require the relevant person to disclose gifts and contributions to travel which they receive. It also sets out how disclosures are to be made and what they should include. It was in contention whether Ms Scaffidi failed to comply with some of these obligations for the return periods between (and including) 2008/2009 and 2013/2014.
Neither the Tribunal nor any court had ever considered sections 5.76, 5.78, 5.82 and 5.83 of the Act. For this reason, the proceedings were unprecedented, which meant that the Tribunal was obliged to rely on legal argument that centred almost entirely on the statutory construction of the relevant provisions of the Act. The Tribunal therefore had to consider the purpose and intent of the Act in deciding how these sections should be construed.
In the end, the Tribunal accepted the submissions of the Department of Local Government and Communities.
The Tribunal found that the purpose and intent of the Act was for the financial interests of employees of local government to be disclosed and open to public scrutiny, and for the public to have confidence that local government employees (and councillors) are not improperly influenced by their personal interests.
In addition, the Tribunal noted that reporting obligations have been made more exacting since the Act was introduced in the 1990s, and Parliament intended that the Act’s disclosure obligations were to have an exceptionally broad reach and scope.
The Tribunal also considered parliamentary materials such as the second reading speeches for the Act and amendments to it. Those materials suggested that improving the accountability of council members was central to the purpose of the legislation. Hence, the Tribunal found that when interpreting the legislation, one should prefer the construction which best promotes accountability and transparency.
One tool that the Tribunal used was to question what would happen if the interpretation they made of Ms Scaffidi’s conduct was universalised. Officers and councillors would do well to apply the same tool. When you are unsure of what is required of you, ask yourself what would happen if the conduct you are questioning was repeated in all similar circumstances across the sector. Would it enhance public confidence in Local Government as a whole or would it encourage evasion of obligations and lack of accountability?
The Tribunal interpreted the definitions of gifts and contributions to travel quite broadly. It is now clear that an “official” gift intended to be given to the local government, but which benefits a recipient, will be construed as a gift to that recipient even if it was not given directly to him or her.
Accordingly, officers and councillors should be even more cautious about disclosure than they may have been previously.
Ms Scaffidi’s legal team argued that a distinction should be drawn between the provision of accommodation for her personally, and the provision of accommodation for her in her capacity as Lord Mayor. They argued that in the latter case, the financial benefit was provided in favour of the City of Perth as opposed to her personally.
The Tribunal rejected this distinction, as the width of the disclosure requirements under the Act make it clear that the requirements relate to personal and official gifts. The word ‘gift’ is broadly defined in the Act. This Tribunal decision now gives life to the definition, which requires that the transfer be made by one person ‘in favour of another’, rather than ‘to another’.
Put another way, the receipt of the benefit of a gift (even if received in an official capacity) should now be regarded as sufficient to trigger disclosure obligations.
The same principle applies to contributions to travel. The Tribunal found that the context of the term ‘contributions to travel’ in the Act did not limit its scope in any way.
Section 5.83 of the Act is therefore wide enough to capture all travel undertaken by a relevant person, not merely travel connected with their position within their local government.
In the opinion of the Tribunal, things that cannot be quantified or measured cannot constitute “consideration” in the arena of gifts disclosures. This seems to finally knock out one interpretation of the disclosure regime that had been making the rounds in the local government sector: namely that one could give consideration by attending meetings.
Ms Scaffidi submitted that consideration had been provided for the benefits she received in the form of her duties such as giving speeches and ribbon-cutting.
The Tribunal disagreed. It held that if the consideration cannot be measured, it is not possible to assess whether it was adequate and (as a result) the person receiving the benefit could evade being accountable.
The Tribunal also held that just because a councillor may be eligible for reimbursement for costs (such as accommodation), this does not mean that they have not received a financial benefit.
The term “consideration” has been bandied about a lot in the sector, with broad interpretations that could be made to work against disclosure. However, the Tribunal has now clarified that it will be stringent when interpreting this term.
Unlike the Court, the Tribunal deals with multiple breaches in such a way that can lead to adverse findings appearing disproportionately numerous. This has the effect of magnifying the negative publicity of the outcomes.
One issue before the Tribunal was whether a failure to disclose multiple gifts and contributions to travel received in a single ‘return period’ is properly characterised as a single ‘serious breach’ or as a series of such breaches, under sections 5.105(3) and 5.102 of the Act.
The Department submitted that sections 5.82 and 5.83 of the Act required disclosure of each gift rather than ‘all gifts’, or ‘all contributions to travel’. Therefore, section 5.78 had been contravened on each occasion where a gift or contribution to travel was not disclosed properly.
The Tribunal agreed with the Department’s position, namely that that sections 5.79 to s 5.86 of the Act require disclosure of each one of the various types of matters covered by the provisions.
In addition, there is no requirement on the Tribunal to avoid duplicity (a legal term that describes the prohibited procedural situation of unfairly charging a person for more than one offence in the same indictment). Pursuant to section 32(2) or the State Administrative Tribunal Act 2004 (WA), the Tribunal is required to act according to equity and good conscience and the substantial merits of the case and without regard to technicalities and legal forms.
In this case, the Tribunal overcame the legal prohibition by first allowing Ms Scaffidi to address each allegation of failure to make disclosure for each separate gift or travel contribution distinctly, and then determining each allegation separately.
This approach effectively magnified the negative publicity attached to the process and seems to be in keeping with the idea that the currency of the gift disclosure regime is political capital, rather than the principles of punishment that one would normally associate with criminal or statutory offences.
Ms Scaffidi argued that in relation to some of the alleged breaches, section 24 of the Criminal Code Act Compilation Act 1913 (WA) would apply as a defence. Section 24 provides for a defence where a person commits an act or omission under an honest and reasonable, but mistaken, belief in the existence of a state of things.
The Tribunal decided that on a proper construction of section 5.78 of the Act, this defence is excluded by implication.
Even if Section 24 was not excluded, the Tribunal held that, under cross examination, Ms Scaffidi did not establish that she held a mistaken belief that the City of Perth funded certain expenditures and did not receive reimbursement from third parties for them. The Tribunal referred to a number of occasions where Ms Scaffidi had checked that her travel costs were being paid for by third parties. The Tribunal was therefore of the view that even if she had held the belief, she could not have done so on a reasonable basis.
The above points are a good indication that local governments should consider reviewing their disclosure practices and update the knowledge of their officers and councillors.
Good practices include being consistent in making disclosures, and keeping one’s own records of disclosures and training.
There are other lessons to be learned from this case, which still some way to run yet. Those will be discussed in follow-up articles to be published after the Tribunal has handed down its penalties on 21 June 2017 – and also after the Supreme Court determines the appeal that Ms Scaffidi has lodged against the Tribunal’s decision of 9 May 2017.
Disclaimer: This article provides a general summary of subject matter and does not constitute legal advice. The law may change and circumstances may differ. Therefore, you should seek legal advice for your specific circumstances.