30th April 2008 Issue No 95
Local Government Advisory Briefly
Special Edition
ADELAIDE PARKLANDS PRESERVATION ASSOCIATION & OTHERS
V CORPORATION OF THE CITY OF ADELAIDE
As most readers would have learnt through the media, the Adelaide Parklands Preservation Association (“APLPA”), together with two individual plaintiffs, commenced proceedings against the Corporation of the City of Adelaide (“the Council”) seeking the annulment of two resolutions of the Council. The annulment was sought on the basis that two of the elected members who voted in respect of the resolutions had a conflict of interest pursuant to Section 74 of the Local Government Act 1999 (“the Act”) by virtue of their membership of the South Australian Motor Sport Board (“SAMSB”), a non-profit organisation. The plaintiffs argued that, as a result of those members’ nomination (by the Council) and appointment (by the Governor) to the SAMSB, they were disqualified from voting in relation to those resolutions.
In his judgment handed down on 11 April 2008, Judge Barrett of the District Court found in favour of the Council on the basis that the plaintiffs were not sufficiently affected by the relevant resolutions, as required by Section 74(5) of the Act, to make application to the Court for the annulment. As such, they did not have “standing” to initiate the action.
Notwithstanding this finding, Judge Barrett went on to find that the elected members in question were disqualified from voting in relation to the resolutions as they were not entitled to rely on the qualification to Section 74(4) of the Act as set out at Section 74(4a)(c) of the Act. That is, on the basis that they were members of a non-profit association, or that they were members of a body to which they were appointed by the Council.
Judge Barrett held that both of these requirements had to be satisfied before an elected member would be entitled to rely on the qualification to Section 74(4) of the Act i.e. to say that they did not have a conflict of interest. Judge Barrett took this view notwithstanding the use of the disjunctive “or”, and held that the requirements should be read conjunctively.
The effect of this judgment is to disqualify all elected members who are appointed to external bodies from any discussion, debate or vote in relation to a matter before their council which affects those bodies unless the body is:
- a non-profit association; and
- comprised of or including a person or persons appointed by the council.
This position is likely to have a particular impact on regional subsidiaries which are undertaking profit making activity, where Council appoints elected members to its board.
The outcome of this decision seems at odds with the intention of the Act, namely that a council should have access to the activities and deliberations of bodies whose activities and deliberations affect councils. Indeed, it would seem that councils are provided the opportunity to appoint or nominate elected members to such bodies for that specific reason.
The Council is currently considering whether further action may be taken to obtain clarification of this point. The Local Government Association has also contacted the Minister for State Local Government Relations to seek further guidance and will provide further details as they become available.
For further information about issues covered in this article, please contact Kate Oliver on
8210 1226 or koliver@normans.com.au.
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