The West Australian government has defended its $7.8 million City of Perth inquiry and legal pursuits stemming from the probe after its latest bid to have a former councillor charged was thrown out.
Last week, Supreme Court Justice Matthew Howard dismissed the state’s attempt to have ex-councillor Lily Chen fined for contempt of court over claims she omitted $75,000 in funds from financial statements demanded by the inquiry panel.
Chen was suspended alongside the rest of the city’s council in March 2018 by then-local government minister David Templeman amid allegations of mismanagement and infighting.
The panel, charged with the powers of a royal commission, issued a notice demanding a rundown of Chen’s income between 2016 and 2017, excluding her salary or funds derived from a trust.
Chen was dragged to court in April 2022 by WA Attorney General John Quigley, accused of failing to disclose a string of payments she said were fees obtained under an “arm’s length” business deal that did not meet the notice’s definition of income.
While finding the payments constituted income in a general sense, Howard ruled they were not required to be disclosed under the definition outlined by the panel’s demand notice.
Howard did, however, highlight evidence adduced at trial that indicated Chen had failed to disclose the payments in that year’s tax return, which he said “obviously” did not reflect well on her.
When quizzed about the ruling, a spokesperson for the attorney-general told this masthead the court’s finding would be considered and that it was too early to discuss the possibility of an appeal.
The spokesperson confirmed the state had been ordered to foot the bill for Chen’s legal costs, but would not be drawn on how much that would cost taxpayers.
The state did, however, vigorously defend its decision to establish the inquiry and pursue the lawsuit.
“The decisions to establish the Inquiry Panel into the City of Perth and to commence these proceedings were appropriate, despite the ultimate outcome of this application,” the spokesperson said.
Chen, who is currently overseas, told this masthead she was pleased with the decision and believed it had reinforced the importance of a judicial system independent of government.
And while pleased her court costs would be at least partially reimbursed, the migration lawyer said she would never recover what she had lost in earnings over the past four years.
Another dead end?
After a two-year inquiry, a 2000-page report tabled in parliament concluded the city had been “poorly led, divided and dysfunctional”, uncovered breaches of the Local Government Act and made more than 340 recommendations for renewal.
At the time, Templeman said it had also unearthed more than 135 matters, many of which concerned suspected criminal behaviour among 23 councillors, city employees and their associates which had been referred to authorities, including WA Police, Federal Police and the tax office.
But the case against Chen is the latest to have fallen over in the wake of the probe, which was bankrolled by the city’s ratepayers at more than double the anticipated cost.
Between 2020 and 2021, police dropped five fraud charges against ex-councillor Jim Adamos over allegations he used a sham lease to run for council and made false allowance claims.
In June, former councillor Keith Yong and his sister Angie Yit-Choo Yong were handed suspended jail terms after being found guilty of giving false testimony during a 2019 inquiry hearing.
But no charges have been laid as part of the electoral fraud claims levelled against Yong, and there have been no criminal convictions stemming from the allegations unearthed by the inquiry.
Current Local Government Minister David Michael refused to be drawn on whether the government still believed the inquiry was worth $7.8 million, nor whether the matters referred to authorities were still under investigation, responding with the same comment as the attorney-general’s office.
The Court of Appeal threw out 26 of the 45 serious Local Government Act breaches the State Administrative Tribunal found had been committed by former mayor Lisa Scaffidi before the council was suspended.
The breaches left remaining included her failure to disclose gifts and travel perks, including a $47,000 trip to the Olympics funded by BHP, which first triggered the 2018 probe.
陳旭@perth 