Members must watch interest conflicts

Press, Volume CXII, Issue 32941, 13 June 1972, Page 15

Members must watch interest conflicts

Local body members must watch a conflict that may arise with the law when discussions are held on matters in which they have a greater interest than the other members of the local body. The Local Bodies (Members’ Interests) Act lays down penalties for those who offend. Designed to stop any possibility of special pleading or direct financial advantage to local body members, the act protects them as much as the interests of the public in honest local government.

The law says: “A member of a local authority or of a committee thereof shall not vote on or take part in the discussion of any matter before the governing body of that local authority or before that committee in which he has, directly or indirectly, any pecuniary interest, other than an interest in common _ with the public.” A pecuniary interest does not necessarily imply a pecuniary advantage. A member’s position in a company in which he or his spouse singly or between them own a certain shareholding or hold certain positions applies. Any interest of a member's spouse is disregarded if at the time of discussion or vote the member and his spouse were living apart. A member is deemed to have a pecuniary interest if the incorporated company has, directly or indirectly, a pecuniary interest in the matter. A member does not offend if he discusses or votes on: Any payment to or for the benefit of a member where it is legally payable and the amount or the rate of the payment has already been fixed, or an election of appointment of a member of the authority to any office, notwithstanding that any remuneration or allowance is or may be payable in respect of that office, or any formal resolution to seal or otherwise complete any contract or document in accordance with a resolution already adopted, or the preparation, recommendation, approval, or review of a district scheme, under the Town and Country Planning Act, 1953, or any section of such a scheme, unless the matter relates to any variation or change of or departure from a district scheme or section thereof or to the conditional use of land as defined in that Act, or any matter in which, in the opinion of the Audit Office given before the vote or discussion and on written application to the Audit Office for its opinion, the pecuniary interest of a member is so remote or insignificant that it cannot reasonably be regarded as likely to influence him in voting on or taking part in the discussion of that matter. Any person who is prohibited from voting on or taking part in a discussion at which he is present must, when the matter is raised, declare to the meeting that he has a pecuniary interest in the matter. The fact of

opinions may help to clarify the position. A member infringes if he has a greater interest than the public at large. If the governing body was discussing or voting on the award of a contract for which the member had tendered, the member would have a direct interest and would be

required to refrain from the discussion or the vote. Although not required to withdraw from the meeting, the member should take the initiative and depart until the matter has been dealt with. Where a member is an electrical trader and his authority is discussing its

trading policy, the member is in a similar position to the builder and housing policy. Similar circumstances could apply to a garage owner when his authority is discussing its policy on motor vehicles and transport. If there is a general discussion on electricity tariffs,

members would be free to discuss the subject provided their interest came under the heading of “in common with the public." If, however, a special tariff of immediate interest to a particular member is under discussion, then that member would almost certainly be debarred.

this disclosure and of the abstention from discussion and voting must be recorded in the minutes of the meeting. This record is prima facie evidence of its contents, in the event of any question arising as to whether a member made a disclosure of interest and abstained from discussion and voting.

Where any person acts in contravention of or fails to comply with the provisions of this section, he commits an offence and is liable on summary conviction to a fine not exceeding $lOO. A member has a good defence if he can prove that when he took part in the discussion of or, as the case may be, voted on the matter, he did not know and had no reasonable opportunity of knowing that he had a pecuniary interest in that matter other than an interest in common with the public. The Audit Office is required to institute the necessary proceedings against a member who commits an offence if it considers that the circumstances warrant it following either receipt of a complaint or of its own motion. Proceedings cannot be taken by any other person. The 1968 Act eased earlier provisions but there will undoubtedly be people who still consider that the Act is too restrictive. However, it must be remembered that elected members are in a fiduciary position, similar to trustees, and it is an inflexible rule of equity that a trustee must not make any profit by his trusteeship, dirfectly or indirectly, and he is not entitled to put himself in a position where his interest and his duty conflict. Section 6, in particular simply restates this' principle of law and then is permissive i to the extent that it ex--1 cludessome circumstances. The words which give the greatest concern to many people are, "directly or indirectly, any pecuniary interest, other than an interest in common with the public.” The question many elected members will ask is, “How does the law apply in my particular case?” The answer is that it will depend on the circumstances but the decisions in previous cases and various legal