Phillips v Director General, Department of Premier and Cabinet [2014] NSWCATOD 48

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Phillips v Director General, Department of Premier and Cabinet [2014] NSWCATOD 48 Hearing dates: 11 February 2014, 26 March 2014 Decision date: 06 May 2014 Before: W. Haylen, Deputy President Decision: The primary conclusion of the Tribunal is that Clr Phillips' appeal is upheld and the decision of the Director-General to suspend Clr Phillips from civic office for a period of two months due to misconduct is set aside. Catchwords: Scope of Appeal under Local Government Act 1993 - misconduct by councillor - alleged disclosure of confidential information - refusal to comply with direction to apologise - alleged breach of Code of Conduct Legislation Cited: Local Government Act 1993 Cases Cited: Councillor Martin Ticehurst, City of Lithgow Council (LGPIDT 06/2012) Category: Principal judgment Parties: Clr Max Phillips (Applicant) Office of Local Government ( Respondent) Representation: Clr M Phillips (Applicant in person) Peter Barley, Principle Lawyer, Office of Local Government ( Respondent) File Number(s): 1420087

reasons for decision 1Councillor Max Phillips ("Clr Phillips) is a member of Marrickville Council having been first elected in 2008. Pursuant to the provisions of s.440L of the Local Government Act 1993 (the Act), he has appealed against disciplinary action taken against him by the Director-General. 2On 14 January 2014, the Chief Executive, Division of Local Government, Department of Premier and Cabinet, determined to suspend Clr Phillips from civic office for a period of two months. Clr Phillips was found to have engaged in misconduct as defined by s.440 F of the Act. Although the surrounding facts will require more detail, it is sufficient at this point to note that Clr Phillips was found to be in continuing breach of a Council resolution requiring him to apologise for certain conduct and in so doing was in breach of the Council's Code of Conduct. 3The circumstances leading to this finding of misconduct commenced a number of years ago with a Meriton development that had attracted the attention of members of the community as well as members of Council, including Clr Phillips. On 27 November 2012 a Councillor briefing session was conducted, apparently at the initiative of Meriton, to informally discuss the possibility of Council agreeing to Meriton's proposal for a Voluntary Planning Agreement in relation to its Lewisham development. It appears that at this meeting Meriton proposed that if Council would support increased density for the development site, being a twenty storey tower, it would contribute $5m to the Council. Clr Phillips did not attend this meeting but was informed of the proposal by fellow councillors who expressed concern about the development. Clr Phillips formed the view that the information presented by Meriton to this briefing session was not confidential : other councillors informed him that the details presented were not confidential. 4Clr Phillips was opposed to the Meriton proposal and commenced to canvass community support against it, including attendance at the next meeting of Council. Another councillor had passed the information about the Meriton proposal to a community group acting on the basis that the proposal by Meriton was not presented to the briefing meeting on a confidential basis. 5The Meriton proposal was listed for discussion by the Development Assessment Committee of Council on 11 December 2012. Business papers for the meeting were distributed to councillors on 7 December 2012. The Meriton item was placed in a "red paper" apparently indicating some form of confidentiality in relation to that matter. 6Clr Phillips said that he was surprised to find the Meriton item being treated as confidential and on 8 December 2012 sent an email to the Director of Planning disputing the confidential treatment of the item. A response was not received until the early afternoon of 10 December. In that response the Director of Planning informed Clr Phillips that Meriton had advised the council that their offer had been submitted in confidence and that argument had been accepted. 7Clr Phillips said that he opposed such a proposal being dealt with in secret and regarded the Meriton offer as being highly significant for the community. In his view the principle of transparency required by the Act could not allow the proposal to be dealt with in a confidential meeting of Council. He regarded the issue as being of such importance that following receipt of the Business Papers for the meeting he had raised the issue with fellow counsellors and had commenced to seek publicity for his opposition to the Meriton plan. He was not prepared to await an answer to his query raised with the Director of Planning as it was delaying his efforts to publicise the proposal before the meeting of the Development Assessment Committee. 8Clr. Phillips' efforts to obtain publicity lead to an article appearing in the Sydney Morning Herald on 11 December and an on air interview on ABC Sydney radio on the morning of the same day. Clr. Phillips disclosed that he had revealed to journalists the content of the business paper dealing with the Meriton proposal ,but had done so on the basis of an undertaking that the material would be treated as confidential .The only material to be published was information he had received from other councillors who had been present at the briefing. He said that he had taken this course with journalists because they had demanded proof that such a proposal had been put by Meriton. He stated that he had been careful not to disclose anything from the Business Paper that had not been disclosed at the Briefing meeting. Clr Phillips had also distributed this information by way of email to residents prior to the meeting of council and had urged attendance at that meeting where he would attempt to have confidentiality set aside to allow public discussion of the Meriton proposal. 9The Development Assessment Committee meeting held on 11December 2012 does not seem to have endorsed or otherwise required the Meriton proposal to be treated as confidential. A number of councillors voiced their objection to Clr Phillips' public statements about the proposal and argued that his actions had effectively overturned the confidential status of the item. The documents before the Tribunal do no disclose the ultimate fate of the Meriton proposal. 10By 13 December five councillors had lodged a complaint with the General Manager of the Council alleging breaches of the Code of Conduct by Clr Phillips. The complaint concerned the public disclosure of information contained in a confidential report considered at the meeting of the Development Assessment Committee held on 11 December 2012. It was alleged that Clr Phillips had thereby breached nine Clauses of the Code. In essence, these allegations were that Clr Phillips: had conducted himself in a manner likely to bring the Council into disrepute by contravening the Act, regulations, administrative requirements and policies of the Council; had not ensured that development decisions were properly and fairly dealt with considering the parties involved; had released council information contrary to established council policies and procedures and contrary to legislation; had not maintained the integrity and security of confidential documents or information in his possession; had not protected confidential information; had released confidential information without authority; had used confidential information for purposes other than those for which it was intended; had used confidential information with the intention to cause harm or detriment to Council or another body; and had failed to maintain the integrity and security of confidential documents or information in his possession. It was further alleged that for mere political purposes he had released commercial information in making unauthorized media comment and had thereby " seriously impacted Council's credibility with a major developer" that would have an ongoing negative impact on the preparedness of other developers and businesses to deal with Council on important planning matters. 11Under the provisions of the Code of Conduct these complaints were referred for consideration by a Sole Conduct Reviewer. On 8 March 2013 the Reviewer provided a report to the Council making the following recommendations: that the councillor be censured for misbehaviour pursuant to procedures appearing in s.440G (1) to(5) of the Act; that he be required to apologise to Council and Meriton unreservedly for his actions; that the findings of inappropriate conduct be made public; and that Council take steps to adopt specific policies and procedures for conveying and dealing with information that is intended to be confidential so that there is no potential for confusion by councillors and staff as to whether information is confidential, the period it is to remain confidential and the obligations of Councillors and staff to maintain that confidentiality. 12In making those recommendations the Reviewer noted that the invitation to the Briefing contained no reference to the matter being confidential or that the discussion would be about a confidential offer. No written material was provided to the councillors who attended. It was therefore "difficult to conclude on balance that it had been appropriately communicated" that the Meriton offer was provided in confidence. On consideration of all the material it was concluded that the information provided to the Briefing was not confidential. It was also observed that the council had limited experience in dealing with Voluntary Planning Agreement negotiations and that no precedence on practice and procedure, including confidentiality, had been developed. It could not be assumed that councillors should have been aware that the matter was confidential. 13The Reviewer also came to the conclusion that the material provided to the Briefing could not be retrospectively made confidential. It was thought that the information had been released to a "small group" but was not generally in the public domain. However, there was a clear "attempt" to deem all that information as confidential for the purposes of the committee meeting held on 11 December because of the terms of the business paper circulated on 7 December. Meriton had wanted its offer to be treated as confidential and councillors should have been aware that releasing the information "possibly carried some risk to Council's reputation and Meriton's commercial position. 14The content of the business paper was said to be considerably more detailed than the material disclosed at the Briefing. The Reviewer came to this conclusion although nothing in writing was put to the Briefing meeting and recollections of those who attended varied widely. Any material that supported that conclusion was not before the Tribunal although Clr Phillips seems to accept that the Business paper was more detailed because he took care to ensure that only material from the Briefing was disclosed. Nevertheless, he was not at the Briefing and could not say anything about the detail disclosed at that time. The Reviewer concluded that the Business paper material was "clearly confidential" but provides no analysis for that conclusion. The Business paper and associated documents were not before the Tribunal. 15There was some material that the Reviewer regarded as not being "strictly" confidential in the Business papers - they were plans and diagrams shown at the Briefing and the money offer made by Meriton. The Reviewer concluded that the written information that reproduced what was said at the Briefing was "more valuable" because it provided proof for the story that Clr Phillips was seeking to publicise. 16Although the Reviewer noted that Council was not the approving authority for any application and that the proposal from Meriton was in its infancy in seeking to enter preliminary negotiations, it was concluded that Clr Phillips's actions effectively closed the door on any preliminary discussion or debate on the merit of the issue. The basis for this conclusion was not disclosed in the report. Reference was then made to the detriment that could be caused to the existing approval and the possible effect that disclosure could have on Meriton's "wider business interests". There is nothing in the report that reveals the basis for that conclusion and in particular there appears to be no material from Meriton that supports that conclusion. The report contains nothing directly from Meriton in relations to the allegations of misconduct insofar as they would affect the business interests and confidential operations of Meriton. 17The Report then concludes that in releasing council information that was not in accordance with established council policies and procedures and relevant legislation Clr Phillips had breached several provisions of the Code of Conduct. No council policy or procedure is identified relating to the use to be made of information that was not confidential when initially released and how it could be made confidential for the purposes of a later meeting. It was further concluded by the Reviewer that Meriton was not treated fairly in the process because its proposal to enter into further negotiations was not considered on its merits. This conclusion is difficult to understand. It is not explained how the merits of the proposal could not be considered because of Clr Phillips' actions and there appears to be no reason why other Councillors could not pursue the proposal further even in the face of opposition being organised by Clr Phillips. Clr Phillips main issue seems to be that proposals of this nature should be publicly debated. 18At the meeting of the Council held on 19 March 2013, in a close vote, it was resolve that the Reviewer's report be received and that the Reviewer's recommendations as to the findings of misconduct be accepted. Clr Phillips was required to apologise to Council and Meriton "unreservedly" for his actions. It was proposed that Council censure Clr Phillips for misconduct at its next meeting having given the notice required under the provisions of the Code of Conduct. Officers of Council were directed to prepare policies and procedures for conveying and dealing with information "intended to be confidential". Council officers were directed to facilitate Code of Conduct refresher training for councillors. It was also resolved to refer to the Director General of the Division of Local Government the Council's finding of misconduct against Clr Phillips. 19At its meeting held on 16 April 2013, Council resolved to censure Clr Phillips for misconduct arising from the particularised numerous breaches of the Code of Conduct. By letter dated 18 April 2013 the Acting General Manager of Council referred to the Chief Executive of the Division of Local Government the findings of misconduct made against Clr Phillips. It was noted in this letter that at the meeting of Council held on 19 March Clr Phillips had expressed his disagreement with the findings of the Reviewer and had refused to apologise as required by the resolution of Council. 20Approaches were later made to Clr Phillips requesting him to make the apologies required by resolution of Council but again he refused to do so. His conduct in this regard was apparently reported by officers of the Council to the Local Government Division of the Department of Premier and Cabinet. By letter dated 17 July 2013 the Deputy Chief Executive of the Division informed Clr Phillips that he had received information that the Councillor had refused to apologise as required by a resolution of Council. Officers of the Division were making inquiries into this alleged conduct as it may constitute misconduct in breaching Council's Code of Conduct. Clr Phillips was reminded that the Code required him not to conduct himself in a manner that was likely to undermine confidence in the integrity of the Code or its administration. He was invited to respond to the allegations and to confirm that he had not complied with the terms of the Council's resolution. While it was noted that he had advised a member of the investigation team that he would not apologise Clr Phillips was given the opportunity to "immediately" comply with the resolution. 21By letter dated 29 August 2013, Clr Phillips relied on "detailed" submissions already made to the Reviewer and did not wish to add anything further. He stated that while it was easier to apologise he regarded that course as being "meaningless" as he had not done anything wrong or unethical. In taking his ethics seriously Clr Phillips stated that he would not provide an "insincere apology" simply because it was convenient. 22In late October 2013 the Division of Local Government provided Clr Phillips with a copy of the draft report of its investigation and he was invited to make any further comment or submission within 21 days. Clr Phillips did reply, stating that he could not understand why he was being required to publicly lie and make an insincere apology under threat of sanction. He had consistently said in numerous public forums that he was not sorry for his actions and that he believed that he had acted ethically and in the best interests of the citizens of Marrickville. In particular he relied upon the provisions of s.439(1) of the Act requiring every councillor to "act honestly". He asked that if he made an insincere apology, thereby lying, would action be taken against him for misconduct in breaching s439(1). It does not appear that Clr Phillips received a reply to this query. 23The report from the Divisional Investigator was provided in late November 2013. The report recommended that the Chief Executive, pursuant to s.440I(2)(g) of the Act, suspend Clr Phillips for misconduct for a period of two months. In a statement of reasons dated 14 January 2014, the Chief Executive of the Division found that Clr Phillips had failed to comply with the Council's resolution and had thereby breached provisions of the Code of Conduct, in particular Clause 8, and thereby had misconducted himself. The Chief Executive then determined that Clr Phillips be suspended from civic office for a period of two months. 24When Clr Phillips' appeal to this Tribunal against his suspension was listed for Directions, by consent of the parties, the suspension was stayed until the appeal was determined. 25On the hearing of the appeal, Clr Phillips' initial position was that he could not be required to unreservedly apologise when he believed that he had done nothing wrong-to do so would be contrary to s.439(1), a provision that required him to act honestly. He had specifically raised this proposition with the Division and had asked whether he would be in breach of that provision and would be acting dishonestly if he agreed to apologise. 26This initial submission for Clr Phillips may be dealt with immediately. The Act not only gives statutory force to the Code of Conduct but requires every council to adopt a code that is not inconsistent with the model code for local Councils. The code adopted by Marrickville Council spoke of the duty of a councillor to act honestly and then refers to the need to declare private interests relating to councillors public duties and resolving conflicts of interest. The Code speaks of avoiding improper conduct in dealing with the development assessment process. Councillors are instructed not to seek bribes, improper inducements or gifts or benefits of any kind. 27While the word "honest" has a wide meaning it appears in the Code in the context of the obligation to act so as not to place private interest above the public duties of a councillor. The code also speaks of acting ethically and with integrity. None of these duties permits a councillor to disregard or ignore the provisions of the Code of Conduct which itself is a codification of proper conduct. Section 440F of the Act defines misconduct to mean amongst other things, a failure to comply with an applicable requirement of a Code of Conduct. Pursuant to the provisions of s.440G a council may, by resolution, formally censure a councillor for misconduct. The Marrickville Council Code of Conduct, in Clause12.25, empowered the council to impose specified sanctions where it had determined that there had been a breach of the code. One such sanction was the power to require a councillor to apologise to any person adversely affected by the breach. It may well be said that in complying with the Council resolution and the Code of Conduct Clr Phillips would have acted honestly and would have exercised a reasonable degree of care and diligence in carrying out his functions under the Act as required by s.439(1) of the Act. 28Notwithstanding the fact that Clr Phillips thought he was acting appropriately and ethically the finding that he had disclosed confidential information opened the door for the council to impose sanctions including a requirement to apologise to any person adversely affected by the breach. The scheme of the Act does not contemplate that a councillor can be absolved from a finding of misconduct arising from a breach of the Code of Conduct because of a strongly held personal ethical belief. 29It may well have been beyond the power of Council to require Clr Phillips to "unreservedly apologise" as the Code only specifies the sanction of requiring a councillor "to apologise". The wording of the Code would recognize as appropriate an apology given in recognition of the Council's resolution where the councillor nevertheless protested innocence or disagreement with the sanction while bowing to the terms of the resolution. It may even be open to a councillor who denies an allegation of misconduct to request the matter to be referred by Council to the Division for investigation. Regardless of the possible options open to Council and Clr Phillips in relation to this matter, his initial submission must fail. 30This conclusion does not, however, end the matter. During submissions Clr Phillips sought to argue an additional ground of appeal, namely that he had not breached the Code of Conduct and had not misconducted himself in disclosing confidential information. While the Director-General did not oppose that argument being addressed on appeal it was submitted that the Tribunal was confined to considering a much narrower proposition. The Director-General was not concerned with issues of validity in dealing with Council's resolution - that was a matter for judicial review in a superior Court. All the Director-General was required to investigate was whether or not Clr Phillips had complied with the resolution by unreservedly apologising to Council and Meriton for his behaviour. Indeed there was no issue between the parties on this aspect as Clr Phillips had always conceded that the required apology had never been offered. The original decision by council finding misconduct for releasing confidential information was not open to appeal in these proceedings. 31These submissions raised somewhat novel issues regarding the scheme of the Act and the nature and scope of the appeal available to this Tribunal. No binding judgments on the correct approach were referred to by the parties nor was the Tribunal directed to persuasive analysis regarding the same or similar provisions in the area of Local Government legislation. It may well be the fact that no such helpful material is available. 32In considering the legislative scheme it is appropriate to commence with the provisions of s.440L of the Act. Sub-section (1) allows a councillor against whom disciplinary action has been taken by the Director-General to appeal to this Tribunal "against the decision of the Director-General to take disciplinary action." 33Clr Phillips argues that the Director-General cannot simply assume that misconduct has occurred and then decide an appropriate penalty, if any. Where, as in this case, the underlying resolution of Council found that Clr Phillips had misconducted himself, it was open on appeal to demonstrate that there had been no misconduct. If there had been no misconduct Clr Phillips could not be in breach of the Code of Conduct for not apologising and the Director-General was not able to impose a penalty in relation to his failure to apologise. 34For the Director-General it was argued that the only issue on appeal was whether or not Clr Phillips had complied with the council resolution directing him to apologise to council and Meriton. The basis for council's determination that Clr Phillips had misconducted himself could only be challenged in judicial review proceedings and therefore could not be dealt with by the Tribunal. This construction of s.440L(1) was said to be supported by the administrative burden that would be imposed on the Division and the Director-General - there would have to be a full investigation by the Division of the alleged misconduct and that was likely to be a costly exercise. 35The administrative burden argument is of little assistance in the exercise of statutory construction involved in this matter. The Division and the Director-General are given a number of tasks under the Act relating to the conduct of councillors. In the area of pecuniary interests ,for example, it is the Director-General to whom complaints are to be made. In addition, a council may refer to the Director-General alleged misconduct and such allegations may then be investigated by the Division. Importantly, s.440M(1) of the Act provides that the Director-General may recover from a council the reasonable expenses incurred by or in respect of the Department in the conduct of an investigation into a councillor or the council conducted under that division of the Act. These provisions indicate the important role played by the Director-General in assessing and penalising improper conduct or misconduct. 36The focus therefore returns to the statutory scheme. A variety of conduct is identified in the Act that may result in a councillor coming under scrutiny and/or being disciplined. Under s.440B the Governor may dismiss a person from civic office and disqualify a person from holding civil office for not more than 5 years where an ICAC report recommends that consideration be given to suspension or dismissal because of serious corrupt conduct and the Minister suspends that person and advises the Governor that dismissal is necessary. While the person is to be given an opportunity to show cause why there should not be a dismissal, there appears to be no appeal open to this Tribunal. That situation can readily be understood when another statutory authority has dealt with the issue and has made the necessary findings. 37In relation to pecuniary interest matters and councillors duties of disclosure s.460 permits a person to complain to the Director-General. The Director-General may investigate the complaint or refer the matter to ICAC, the Ombudsman, the Commissioner of Police or the DPP. The Director-General must notify this Tribunal of a decision to investigate a complaint or to refer it(s.465) and must present a report to NCAT of an investigation into a complaint (s.468).After considering a report into such a complaint this Tribunal may decide to conduct proceedings into the complaint. Although this process does not operate as an appeal, the role given to the Tribunal ensures that allegations against a councillor receive independent consideration in circumstances where all parties will be heard. 38Under s.440F of the Act misconduct is defined as a contravention of the Act or regulations or the failure to comply with the Code of Conduct. A council may censure a councillor for misconduct but there appears to be no direct appeal to this Tribunal against a council censure alone(s.440G). The Director-General may investigate misconduct on his own motion or if a General Manager refers an allegation of misconduct or a council refers such an allegation to the Director-General, or if the Ombudsman or ICAC find that a councillor may or has engaged in misconduct(s.440H).The Act then sets out a variety of disciplinary action that the Director-General may take if satisfied that the councillor has engaged in misconduct(s.440I).One alternative open to the Director-General is to refer the matter to this Tribunal(s.440J).As earlier noted s.440L(1)allows a councillor to appeal to the Tribunal against a decision of the Director-General to take disciplinary action. 39This brief survey of the Act demonstrates the important investigative role of the Director-General in matters where misconduct is alleged or a breach of pecuniary interest disclosure provisions. When the Director-General decides to take one of the disciplinary measures available under s.440I a counsellor against whom that action is taken may appeal to the Tribunal. Absent clear words in the Act, such an appeal may encompass the underlying conduct that has brought the councillor to disciplinary attention. The legislature would be reasonably expected to specify in clear terms that a counsellor under such circumstances would be required to challenge the underlying finding of misconduct by way of judicial review and could only appeal the consequential finding of misconduct in the Tribunal. The facts of the present case show how unlikely is that course: here, there is no issue that the required apology has not been given and thus it follows that there has been a breach of the Code of Conduct. The Tribunal would not be permitted to consider the underlying conduct but would be restricted to perhaps dealing only with the appropriate penalty to be imposed for the consequential breach. It follows from this unlikely conclusion that it is open to Clr Phillips in this appeal to challenge the finding of misconduct for allegedly disclosing confidential information. In short, the Director-General must be satisfied that there has been misconduct in the entire behaviour of a counsellor justifying a disciplinary response: the Director-General may not presume misconduct for disclosing confidential information and deal only with the consequential allegation of misconduct for not complying with the resolution concerning the apology, an matter that itself only arises because there was an initial finding of misconduct. 40It is then necessary to consider whether or not Clr Phillips was in breach of the various provisions of the Code of Conduct as particularised in the allegations. In essence those allegations were based on an unauthorized disclosure of confidential information. The Reviewer ultimately accepted that the information provided to the councillors briefing meeting was not confidential and had been disclosed to a community group by another councillor. The Reviewer also accepted that the councillors were not experienced in dealing with Voluntary Agreement negotiations and that there was no practice or procedure dealing with these matters including issues of confidentiality. It could not be assumed therefore that councillors should have been aware that the matters being discussed were confidential. It was also concluded that the information could not be retrospectively made confidential. These were among the findings accepted by resolution of the Council. None of these matters can therefore form the basis of an unauthorised disclosure of confidential information by Clr Phillips. 41Attention then turns to the Business papers for the meeting of the Development Assessment Committee. A central issue here is how the non- confidential information put before the Briefing meeting could become confidential in the agenda of the Development Assessment Committee. It was argued for the Director-General that the agenda for the Committee was in the hands of the General Manager who could list matters as confidential until the Council determined otherwise. This was the effect of placing the Meriton matter in a red cover. Indeed Clr Phillips regarded the placing of this item in a red cover as a decision by staff to claim confidentiality in relation to it. 42In terms the Reviewer does not deal with the issue of how non confidential information could become confidential in the Business papers for the committee meeting or how the use of a red cover could bring about that status. It was suggested on behalf of the Director-General that s.9 of the Act empowered the General Manager to have agenda items treated as confidential prior to the meeting of council. The terms of s.9 however do not support the width of that submission. 43Section 9 of the Act deals with the giving of public notice of meetings of council. By sub section (2) there is to be available to the public copies of the agenda and associated business papers. Sub section (2A) then provides that where the agenda includes receipt of information that, in the opinion of the General Manager," is likely to take place when the meeting is closed to the public", then the agenda must indicate that the item is of such a nature but must not give details of it and the public will not be provided with copies of the business papers regarding such an item. Section 9 does not support the submission for the Director-General that a power resides in the General Manager to declare agenda items confidential. There was no evidence before the Tribunal of any delegation by council to the General Manager to take such a step and no such delegation was referred to by the Reviewer. 44Consideration of sections 10A, 10B, and 10D suggest that only council can close its meetings to consider confidential matters. Under s. 10A a meeting of council may be closed where the information to be disclosed would confer a commercial advantage on a person with whom council is conducting business or proposes to do so. Also restricted is commercial information that if disclosed would prejudice the commercial position of the person who supplied it or would confer a commercial advantage on a competitor of the council or would reveal a trade secret. Section 10B states that a meeting is not to remain closed during the discussion referred to in s10A(2) except for so much of the discussion necessary to preserve the relevant confidentiality. Section 10D requires the Council to state the grounds on which part of a meeting is closed and those reasons are to be recorded in the minutes. The grounds are to specify the relevant provisions of s.10A(2)relied upon and the reasons why part of a meeting is being closed together with an explanation of the way in which the open discussion of the matter would, on balance, be contrary to the public interest. As recorded earlier in this decision, the committee did not get to the stage of closing the meeting regarding the Meriton proposal apparently because it was thought that the public debate entered into by Clr Phillips had rendered that step pointless. The committee was therefore not required to make the detailed judgments as to the nature of the commercial information and whom it might advantage nor did it address the public interest in closing the meeting. In short, apart from placing the agenda item in a red cover, no action had been completed to render the item confidential. 45The Reviewer concluded that by releasing the business papers to media representatives Clr Phillips had breached his general obligations under Clause 10.9(d) of the Code of Conduct. That is he had released council information contrary to established council policies and procedures and relevant legislation. Unfortunately the Reviewer does not identify such policies and procedures nor is any relevant legislation identified. On appeal no relevant policies and procedures of council were identified. 46The absence of relevant council policies and procedures is suggested by the terms of the Reviewers recommendations that steps be taken to prepare specific policies and procedures for conveying and dealing with information intended to be confidential so that there could be no potential for confusion by councillors. Council adopted that recommendation. The importance of these matters is that the Reviewer considered that only an "attempt" had been made to render the item confidential in the Business papers with the clear inference that something more needed to be done to achieve confidentiality. 47Having regard to these matters the question arises as to how Clr Phillips released confidential information that had never been rendered confidential by council resolution and where there was an absence of practices and procedures whereby councillors would know or expect the information to be confidential? While it might be said that Clr Phillips thought that the red cover made the agenda item confidential prior to the Council meeting there is no analysis or evidence of what material was disclosed to the media that raised any of the confidential commercial interests specified in the legislation. The report adopted by Council presumed that the material was commercially confidential in the way specified by the legislation because Meriton had stated that it wished the agenda item to be dealt with as confidential. That request accepted apparently by either the Planning Director or the General Manager did not descend into detail or identify the matters referred to in the Act. There was no evidence before the Tribunal as to the nature of the confidential material submitted by Meriton to the committee. Importantly, no one in the council independently turned their mind to the question of whether or not the material was confidential. An interested party clearly could not make that decision in their own interest but needed to present appropriate material to council to justify confidentiality of the material and in a way that reflected the legislative requirements for confidential status. 48If confidentiality had not been conferred on the Business paper concerning the Meriton proposal Clr Phillips would have been free to discuss the item in detail with interested community groups and representatives of the media. The Act requires quite specific conditions to be met before a council meeting can be closed to the public because of confidentiality. On the material before the Tribunal it cannot be concluded that the Business paper concerning Meriton had been resolved by council or under delegation to be confidential. 49When regard is had to the particulars of the allegation of misconduct made against Clr Phillips it is clear that confidentiality of the Meriton item appearing in the Business paper is crucial to a finding that his actions constituted misconduct. However, he could not be in breach of Clause 6.1 of the Code of Conduct by bringing council into disrepute by abusing his power as a councillor. He did not act unfairly to Meriton in the development proposal nor did he act improperly in breach of clause 6.8.He could not be in breach of Clause 10.9(d) by releasing council information contrary to established procedures and policies of council or under relevant legislation. There could be no breach of Clause10.10 because there were no confidential documents that he was required to maintain secure or to ensure their integrity. Similarly, there could be no breach of Clause 10.11 of the Code if the documents were not confidential. 50There is one further loose end of concern. In its resolution of 19 March 2013 council accepted the findings and recommendations of the Reviewer but added a further provision itself, referring the finding of misconduct against Clr Phillips to the Director-General. This decision to refer therefore had to have occurred prior to Clr Phillips' formal refusal to comply with the direction to apologise to the Council and Meriton after the resolution was passed imposing the apology obligation. It was not until 18 April 2013 that the General Manager wrote to the Chief Executive of the Division: in that letter the terms of the resolution made on 19 March were set out and the developments since that time, including the passing of the censure motion and the fact that Clr Phillips during the debate had refused to apologise. The effect of the resolution of 19 March was to refer the entire question of misconduct to the Division for investigation, including what had to be Clr Phillips' later refusal to comply with the terms of the resolution regarding the apology. It appears that the Division has concentrated only upon the refusal to apologise and has undertaken no investigation of the underlying finding of misconduct in making publicly available confidential information. 51Whatever may be the full implications of this situation, at the very least it means that the entire issue of misconduct found against Clr Phillips was referred to the Division. The Director-General has made a decision in relation to that referral although dealing only with the refusal to apologise. Clr Phillips appeal ultimately raised both the confidentiality issue as misconduct and the refusal to apologise. The Tribunal is therefore required to deal with all the matters raised by Clr Phillips. 52In deference to the arguments submitted on the apology issue the Tribunal proposes to briefly deal with the appropriateness of the penalty should the appeal be one confined to that issue alone. On the basis of the foregoing analysis the Tribunal is unable to conclude that Clr Phillips' breach was of such seriousness as to warrant one of the highest levels of penalty, namely suspension from office for a period of two months. The facts and background to this case places it in a very different category to that dealt with in the decision of the previous Tribunal in Director-General, Department of Premier and Cabinet( LGPIDT 06/2012). In this case Clr Phillips has no record of breaching confidentiality provisions and took steps to disclose only the details available from the Briefing meeting. The information had already been passed on to a community group by another councillor in circumstances where no action was taken by council against that person. The confidentiality status of the item was not independently assessed by the General Manager but was the result of a request by Meriton apparently without giving details of the commercial sensitivity of the information. No evidence of actual damage to Meriton has been placed before the Tribunal nor has the potential risk of damage been identified-the risk/ damage was assumed. The breach could not be categorised as reckless in circumstances where the Council did not have policies and practices for dealing with Voluntary Planning Agreements including issues of confidentiality and apparently had no general practices or procedures for treating items coming before council as potentially confidential and securing that status until the council was able to decide the issue. Such practices and procedures, on the recommendation of the Reviewer, were to be developed after Clr. Phillip's breach. Those practices would need to find a balance between preserving the transparency of council business and ensuring legitimate claims to commercial confidentiality as identified in the Act. It is also appropriate to take into account the fact that council has censured him in relation to the disclosure issue. Having regard to these matters the Tribunal considers that a fitting sanction would be to reprimand Clr Phillips. The Tribunal accepts the importance of the Code of Conduct but also notes to wide range of sanctions available where the code is found to be breached. 53The primary conclusion of the Tribunal is that Clr Phillips' appeal is upheld and the decision of the Director-General to suspend Clr Phillips from civic office for a period of two months due to misconduct is set aside. 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 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: 06 May 2014