Conflict of interest — Joy to the world (hopefully)!

LG Leader December 2019

It would appear from the LG Reform Papers (find them here) that our current statutory conflict of interest provisions (section 73 – 75A, relevantly, of the Local Government Act 1999) have been recognised for their difficulties in application and their shortcomings generally. It is with much anticipation that a revised conflict framework will be presented in 2020.

In the meantime, from the many requests that we receive, the following tips are worthy of noting:

• the provisions do not apply ‘in a vacuum’. They must be applied to specific fact situations and according to the agenda item then under consideration. Therefore, where the material conflict of interest provisions may be relevant, it is necessary to consider whether the outcome of the consideration would give rise to a benefit or a loss. This is a certain outcome which transcends the previous test of a ‘reasonable expectation’. Therefore, if a matter is recommended only to be ‘received and noted’ the current ‘test’ for a material conflict of interest will not be satisfied;
• where a member has a recognised declared interest in a matter, that does not entitle the CEO, without more, to excise that member from distribution of associated agenda or other materials;
• where a member has an actual or perceived conflict of interest, subject to considerations of being able to deal with it in a transparent and accountable way, the member may:
• remain in the meeting and both debate and vote, or
• remain in the meeting and debate but not vote (this is an exception from the obligation to vote), or
• remain in the meeting and not debate but vote; or
• remain in the meeting and not debate or vote.

Otherwise the member may believe that the only manner in which to deal with the interest is to leave the meeting following their declaration.

Let us cheer for a simpler new year!

For more information please contact Michael Kelledy on mkelledy@kelledyjones.com.au or 08 8113 7103.