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19 Aug 2020

Development and decision-making: Parliament tables Report of the Inquiry into the City of Perth

By Brad Wylynko, Mark Etherington

The Power Inquiry makes recommendations to improve transparency and accountability and the quality of decision-making.

From time to time, and not too discreetly, halls echo with mutterings about another meritorious development proposal refused by local authorities to appease vocal sectional interests, leaving it to the State Administrative Tribunal to make the correct, but what Sir Humphrey (of Yes Minister/Yes Prime Minister fame) may call a "very brave" or "courageous", decision.

In Parliament's tabling of the much awaited report, the Power Inquiry into the conduct of the City of Perth, a spotlight has been shone on, amongst other things, the failure of good government in the exercise of statutory decision-making.

Notably, such failures in decision-making occur even in instances where legal framework (and precedent authority) makes clear the relevant considerations to which due regard must be had.

What is Local Authority "Good Government"?

The Inquiry agreed with previous inquiries into the City of Canning and the City of South Perth that good governance is measured in the quality of decision-making and the community participation in it, accountability to the community, and efficiency and effectiveness of its actions, specifically that:

"If what they do is in accordance with the law and their delegated authority, advances the objectives of the City, and is beneficial to the community, then it is good government.

When council members or employees do not act in accord with the objectives of the City or to the benefit of the community; if they act from self-interest, with bias, with a conflict of interest, or outside their authority, then their actions are not good government".

The Inquiry report includes a summary of the qualities of good and poor government in the areas of roles and responsibilities, decision-making, and integrity and ethics. Regarding decision-making, poor qualities include:

  • Self-interest or bias in decision-making;
  • Lack of transparency and decisions not being capable of review; and
  • Lack of accountability for decisions.

Decision-making case studies

The Inquiry considered a case study involving a development application for a shop in commercial premises that formed part of the Adagio apartment building in East Perth and found a failure of good government.  This was because:

"evidence suggested that some council members decided to refuse the application, known that their decision would be overturned by the State Administrative Tribunal, but believing that their decision would gain votes at a forthcoming Council election".

The Inquiry having found that the "decision by the Planning Committee, and then Council, to refuse the application was not based on proper planning principles", given that the proponent "had agreed to conditions that went further than ordinary planning concerns would require" and that the alleged reason for refusal of unspecified "amenity concerns" were baseless (with there being "no evidence before the Inquiry that the Planning Committee turned its mind to identifying or considering what were valid amenity concerns or appropriate conditions").

Significantly, the Inquiry found that:

"At least some of the council members knew, at the time of making the decision, that if the decision was reviewed by the SAT it was likely to be overturned, at significant cost to both the City and Applicants.  They appear to have done this to appease some residents of The Adagio apartments who opposed the shop".

A further case study involving a sponsorship proposal to rejuvenate the Piccadilly Theatre was similarly found to involve a failure of good government because "lobbying by two local businessmen appeared to have caused it to be rejected by Council, without any adequate reasons being given". 

The Inquiry considered that Council's decision-making and record-keeping were poor, with decisions:

  • made on a factional team basis and there was not, therefore, proper debate or consideration of community views; and
  • often made on the basis of personal interest, either of a council member or their associates.

Notably, the Inquiry considered that when "decision-making is poor the real reasons for a decision are often not disclosed".


Inquiry recommendations for improved decision-making

The Inquiry recommendations to improve transparency and accountability and the quality of decision-making include that:

  • Part 2 of the Local Government (Administration) Regulations 1996 be amended to require all council meetings and committee meetings of Council be audio-visually recorded in their entirety, which recordings should be kept in compliance with the State Records Act 2000;
  • Regulation 11(da) of the Regulations be amended to require the reasons for all decisions of council or a committee of council be recorded in writing in the minutes of the meeting in sufficient detail to explain why the decision was made;
  • All lobbying communications are recorded – specifically that local governments ensure that their policies make clear that all communications sent or received by any council member relating to any decision of a council or a committee of the council are records which must be forwarded to the CEO and stored in accordance with the State Records Act 2000 and the State Records Commission's guidance on local government elected members' records.

The Power Report provides a convenient refresher for regulatory authorities, not just those dealing with proposed developments, of the legal expectations and corresponding limits of their jurisdictional powers. This includes the need to have regard not only to materially relevant considerations, but to be transparent (through the expression of appropriate reasons) in the application of those considerations.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.