“The minutes of the 20th March record that at that time, Council had spent $65,000 on legal advice relating to Cr Penhalluriack. What is the total amount invoiced up until the 22th July 2012? Further, will council’s legal fees be paid by ratepayers or by Council’s insurance company?”
The Mayor read Council’s response. He said: “On 20 March 2012 in response to a question from a Councillor, I provided the following information:
“Approximately $65,000 has been paid to date in relation to the matters you have raised in your Councillor Question. It is not possible to gain a cost estimate at this stage because that will depend on Cr Penhalluriack’s conduct.
In this regard, it is relevant to point out that all expenditure here is due to Cr Penhalluriack’s behaviour. This behaviour led councillors, including you, to unanimously resolve to refer Cr Penhalluriack to the Councillor Conduct Panel.
It included behaviour towards officers, which was found to be inappropriate by an independent investigation by a solicitor with expertise in occupational health and safety.
Cr Penhalluriack’s choice to refer this matter from the Councillor Conduct Panel to VCAT will also significantly increase the cost.”
Eight days later, the Ombudsman tabled his Report in the Victorian Parliament: “Conflict of interest, poor governance and bullying at the City of Glen Eira Council”. The Ombudsman recommended that Council amend its application to the Councillor Conduct Panel or make a further application to the Panel to make a finding of misconduct against Cr Penhalluriack.
At a Special Council Meeting on 3 April 2012, Council resolved to make an application to the Councillor Conduct Panel based on the recommendation of the Ombudsman. The resolution was unanimous. Cr Penhalluriack elected to have all applications referred to VCAT rather than be dealt with by the Panel.
The matters are scheduled to be heard by VCAT starting on 13 August 2012.
You have asked for the total amount invoiced to Council up to 22 July 2012 on legal advice relating to Cr Penhalluriack. That amount is approximately $147,000 (inclusive of GST).
Council’s Annual Report will disclose the amount incurred by Council during the 2011-12 year which was approximately $124,000 (exclusive of GST).
It is expected that Council’s costs will be paid by Council. It is expected that, under current legislation, Cr Penhalluriack’s costs will also be paid by Council.
A significant part of the cost relates to Cr Penhalluriack’s decision to escalate the matter from the Councillor Conduct Panel to VCAT.
On 20 June 2012 the Minister for Local Government introduced a Bill into Parliament to amend the Local Government Act. The Minister said:
“The Bill will reduce the incidence of Councils having to pay the legal costs of councillors in VCAT misconduct hearings. A council will not be liable for costs when an individual councillor has applied for the matter to go to VCAT instead of a councillor conduct panel.
Councillor Conduct Panels are the appropriate forum to deal with most councillor misconduct matters, as they specialise in councillor conduct matters and involve less cost to ratepayers.”
Council supports the Minister’s decision. It is important for all ratepayers to realise that a large part of the costs of this matter are caused by the decision by Cr Penhalluriack alone to escalate the proceedings from the Councillor Conduct Panel to VCAT.”
RIGHT OF REPLY:
Statement under Section 232(2)(f) of the Local Law.
Cr Penhalluriack stated:
“I refer to the Mayor’s reply to a public question from (xxxxxxxx) in relation to a dispute in which the council has brought allegations against me. In fact it is not the Mayor’s reply; it is on behalf of all nine councillors. Similar misleading statements were made to council, and recorded in the minutes, on the 20th March this year.
It is incorrect to say that council’s expenditure is due to my behaviour. There are now only four allegations against me — it is VCAT, and not the Mayor, who will determine whether I have engaged in any misconduct. Some thirty allegations were made against me at three separate Councillor Conduct Panels. At the first hearing I was given leave to be represented by solicitors, in which case the fees would be paid by council — or more precisely by council’s insurers. At that hearing I asked for the matter to be mediated. The Mayor, Cr Esakoff, refused that invitation so the matter proceeded. I then asked for the matter to be referred to the VCAT, which is my right at any time before a decision is handed down by the Panel. The chairman thanked me personally for not extending the hearing and wasting the Panel’s time.
Subsequently council raised two further lists of allegations and brought two further applications to two fresh Councillor Conduct Panels. I referred each to the VCAT not, as the Mayor alleges, to add to the costs but in order to save both cost and time. The Mayor’s comments are both mischievous and misleading.
None of these three applications has originated from me. At all times council has been the Applicant and I have been the Respondent. Prior to the matter going to VCAT I had always offered to mediate any alleged misbehaviour and it has been the councillors, the CEO and the senior officers who have always refused to discuss a settlement.
The Mayor says that “a large part of the costs of this matter are caused by the decision by Cr Penhalluriack alone to escalate the proceedings from the Councillor Conduct Panel to VCAT.” That is incorrect. The cost of a hearing at VCAT is significantly less than that of a Councillor Conduct Panel since the judiciary is financed by the State, whereas council is obliged to pay for the two-person Councillor Conduct Panel, and the Registrar.
Furthermore, it is my understanding that the ratepayers will have to pay the cost of council’s external legal advisors, together with the cost of the salaried staff members. I understand council has recently employed another senior lawyer. I have no such internal support base, but instead have find the time and the necessary resources to counter the large number of false and misleading allegations brought against me by council.
PS#2 – Apologies, we inadvertently left the following sections out!
I expect council’s insurers will pay my legal costs, so they will not, as wrongly indicated by the Mayor, be a burden on ratepayers.
Finally it is relevant that council has conceded that most of its allegations were unwinnable, and has withdrawn all but four, including allegations referred to by the Ombudsman. These will be heard in open court at the VCAT on Monday 13 tAugust 2012.”
PS: It’s also worthy of noting that once more the minutes fail to provide an accurate picture of what occurred. Penhalluriack stated unequivocably on 2 occasions that he ‘disassociated’ himself from Council’s responses. He also requested that this ‘dissent’ be included in the minutes. They are not! Hence, we have a situation where a councillor’s request, so that minutes provide an accurate and truthful accounting of events, is ignored. The acid test of course will come at next council meeting and residents can judge councillors on whether or not they vote to accept these minutes as ‘accurate’ or not. We also note that in the past on the rare occasion that Pilling has voiced some objection to a public question response, plus one from Penhalluriack himself, these objections were included in the minutes. Consistency would not appear to be the forte of this administration – especially in the current circumstances!
Glen Eira Debates 
July 27, 2012 at 12:29 PM
I am not 100% sure of this but should FP be found guilty then the Member of VCAT could entertain the matter of Council costs.FP needs to get advice on this matter and he needs to understand the Ministers recent rulings on costs.
July 27, 2012 at 12:39 PM
The Minister has not “ruled” on anything. All that has happened is that the proposed Bill has gone through the first and second reading. Further it will not apply until at least October 2013.
July 27, 2012 at 12:37 PM
One thing that I think needs to be commented on here is that if Penhalluriack did attempt mediation and this was refused by Newton and Council then they should be held totally responsible for the amount of money that this has escalated to. An appropriate analogy would be whether this council would pursue Hansen and Yuncken for the millions in liquidated damages to the same extent or would they ultimately settle. In the first place there’s nothing much that council can “win” as a result of this case. The worst that can happen is that Penhalluriack gets a fine of maybe $60,000 and the best is that he gets a slap on the wrist or is totally exonerated. Nothing is gained except that it’s cost an absolute fortune to continue on with this instead of trying to settle scores via mediation. That’s not Penhalluriack’s fault but Newton’s and his lackeys.
We’ve heard nothing about the liquidated damages and how much council is holding back from the builders. I don’t expect Hansen and Yuncken to lie down without a huge fight given the economic situation in the building industry at present. If this council is stupid enough to go to court on this will be telling because that will mean more hundreds of thousands of dollars given to lawyers. If they don’t follow up, then it tells me that the vindictiveness directed against Penhalluriack knows no bounds – especially when the money does not come out of councillors and Newton’s pockets, but out of ours.
July 27, 2012 at 2:13 PM
I agree with D. Evans – if Penhalluriack did attempt mediation and it was refused then Newton and Council are totally responsible. Penhalluriack is completely within his rights to take the action he has taken and let an independent arbitrator assess the evidence and decide.
Personally, I’ve always had queries over this entire episode and Council’s persistent legal pursuit – I suspect the Council’s bill will top $400K before a decision is reached. And for what? Elections are in October – there is no guarantee that Penhalluriack (or any other Councillor for that matter) will get re-elected, why didn’t Council let the election cycle take it’s course.
Just what has this guy done that could possibly warrant spending this amount?
July 27, 2012 at 3:40 PM
What he’s done is get up Newton’s nose so the little dictatorship becomes a little wobbly. Ya can’t have all the waste and stuff ups and incompetence out in the open can ya?
July 27, 2012 at 4:40 PM
I’m eagerly waiting for the VCAT decision and hoping it comes out before the October Elections.
It could have a major impact on the election results.
July 27, 2012 at 10:05 PM
Poor Franky. He could never do wrong, could he?Smart Aleck you need to be carefull.
July 28, 2012 at 10:39 AM
How’s business Noel.
July 27, 2012 at 10:09 PM
The answer provided doesn’t seem to comply with either Local Law, or multiple principles contained in the Councillor Code Of Conduct. Its not brief as possible, and was designed to mislead or deceive. Overwhelmingly Council’s expenses in pursuit of Cr Penhalluriack have been discretionary and not related to where any matter is finally heard. VCAT exists to provide affordable justice, and Cr Penhalluriack isn’t entitled to legal representation at VCAT unless Council chooses to be represented. Also its hard to describe Tracey O’Neill as independent when she drafted the original allegations. The question still remains whether Councillors have made decisions concerning public funds impartially, responsibly and prudently.
July 28, 2012 at 10:04 AM
Agree with you completely. What should have been said in two sentences takes forever. The same goes for the rest of the answers to public questions. Could we for once get rid of all the spin and just answer a question or is that impossible?