When the going gets tough

INVESTIGATION CHALLENGES
When the going gets tough...
Megan Philpot
SA Deputy Ombudsman
9th National Investigations Symposium
Ombudsman SA
Two major jurisdictions
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investigation of administrative decisions of state and local government
agencies under the Ombudsman Act 1972 (SA) & Local Government Act
1999 (SA)
review of freedom of information determinations of these agencies and
Ministers of the Crown under the Freedom of Information Act 1991.
Investigative powers for both derive from the Ombudsman Act and
Royal Commissions Act 1917 (SA).
What and when we investigate
What?
• ‘ administrative acts’… (or omissions) not judicial acts or policy (City of
Salisbury v. Biganovsky (1990) 54 SASR 117)
• allegations of fraud and corruption must be referred to the AntiCorruption Branch of the SA Police (Whistleblowers Protection Act 1993
(SA))
When?
• on receipt of a complaint
• on the Ombudsman’s own initiative
• on receipt of a referral from the SA Parliament
Features of the SA Ombudsman jurisdiction
The Ombudsman is the inquisitor – the fact finder and final decision maker.
This means double the responsibility of ensuring propriety in investigations
and decision making.
We have :
• broad (royal commission) investigation powers
• broad discretion about the how and when to use investigation powers and
means of obtaining evidence
• wide powers of entry and inspection
• not bound by the rules of evidence
• power to obtain Crown legal advice
Features of the SA Ombudsman jurisdiction,
contd…
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power to determine whether parties may have legal representation
investigations are in private
we are prohibited from disclosing information obtained in an investigation –
except for the purposes of the investigation or report
not a court of record
not subject to FOI legislation
decision on investigation is not subject to external review or appeal (except
judicial review), although Ombudsman SA offers internal review
While these features strengthen and offer considerable flexibility in an
investigation, they can also be a source of vulnerability if internal controls are not
in place.
Managing expectations of the parties
We need to manage expectations of parties. This also brings a
necessary accountability to our processes and procedures.
Information Sheet at the beginning of the investigation
dealing with:
• who, what, when, how and why of the investigation
• the powers that will be used, and our responsibilities (eg
confidentiality, procedural fairness)
• the parties’ and witnesses’ responsibilities and the consequences of
breaching those responsibilities
• legal representation; confidentiality, protections and privileges
• what will happen with transcripts of evidence
• release of provisional report for comment in the ‘natural justice’
phase, prior to finalisation of opinion and final report
• offer realistic timelines for conclusion of the investigation
City of Charles Sturt - St Clair Reserve decision
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Council located in Labor heartland – decided to revoke the community status
of St Clair Reserve under the Local Government Act.
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This allowed the Council to swap the Reserve with adjacent land from a
former contaminated industrial site owned by the state government’s property
arm, the Land Management Corporation (LMC).
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The land swap enabled the state government to deliver on a target in its new
planning strategy for Greater Adelaide, by establishing the first of its
proposed 13 Transit Oriented Developments (TODS) next to St Clair Reserve
(and a railway station).
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The LMC had much earlier purchased the industrial land from developers for
a significant sum – in anticipation of achieving the land swap and establishing
a TOD.
City of Charles Sturt - the community’s response
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The Council’s revocation decision attracted community anger, as the Council
had few ‘open space’ areas.
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The community felt excluded, and that the Council’s consultation processes
under the Local Government Act had been a sham.
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There was concern that 12 out of the 17 Councillors were members of the
Labor Party, (3 had been employed in Labor MP’s electorate offices), and that
the Councillors had been improperly influenced in their decision to revoke the
community status of the Reserve by the (local) Member for Croydon (then the
Attorney General).
Legislative Council - Terms of Reference (1)
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Noted general community concern about the influence of the ALP on the
elected members, including:
• 12 of 17 Councillors were ALP members
• 3 Councillors were employed by Labor MPs
• and the influence of the Member for Croydon
Noted specific concerns about potential for conflict of interest in the
revocation of the community status of the St Clair land arising from • … the revocation of land was essential to the policy objectives of the
State Government
• … the Council decision-making process would be assessed by a Labor
Minister
• the Council’s lack of any strategy adopted … to manage potential
conflicts of interest arising from the role played by ALP members
Legislative Council - Terms of Reference (2)
Referred the following matters to the Ombudsman for investigation and report:
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the potential for actual conflict of interest of elected members of the
Council in relation to revoking the community status of land at St Clair
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the extent to which the Council met its prudential risk obligations under the
Local Government Act to manage the risk of conflict of interest associated
with the revocation of the community status of land at St Clair
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any other relevant matter.
1. Jurisdiction – identifying the administrative act
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The Terms of Reference were generally worded. Our task was to identify
and the administrative act/s to investigate.
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We notified parties that we would be investigating the administrative acts
concerning:
• Councillors’ responsibilities in relation to conflict of interest, acting
without bias, and code of conduct; and the impact of ALP membership
and the Member for Croydon on the discharge of these responsibilities
in relation to the Council’s revocation decision
• Council’s community consultation; meeting confidentiality orders; and
prudential risk in relation to the decision.
2. Legal representation
• This became a significant issue. The Ombudsman has the power to
decide whether witnesses may be legally represented in an
investigation.
• The Council and some of the ALP Councillors were initially represented
by the same legal representative. However, the Council’s and the
different Councillors’ interests were clearly not congruent. We were
concerned to protect the confidentiality of evidence, and the integrity of
the investigation.
• We advised the legal representatives that they had a conflict of interest
in their representation of the Council and the Councillors.
2. Legal representation, contd
• We decided that no legal representation would be permitted at
interview, but witnesses could have a support person, provided that this
was not the same person for each.
• Further, we decided that:
• the Councillors and the Council were required to maintain
confidentiality in respect of their interviews
• information could not be divulged, except to legal advisors for the
bona fide purpose of obtaining legal advice and provided that the
legal advisors did not have a conflict of interest and/or duty arising
out of or in connection with the investigation and the maintenance of
each client’s obligations of confidence.
3. Providing transcripts of evidence
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We initially decided not to provide copies of transcripts to witnesses – to
protect the integrity of the investigation.
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In the ‘natural justice’ phase of the investigation, we envisaged that
witnesses could come to the Ombudsman SA office and listen to their
hearing tapes and/or read their transcript.
Legal proceedings
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Six months into the investigation, after we had interviewed 24
witnesses, the Council commenced proceedings in the Supreme Court.
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The grounds included:
• 1. failure to sufficiently define the administrative acts that we were
investigating. The Council essentially wanted us to define a single
administrative act, namely the Council’s decision to revoke the
community status of the St Clair Reserve.
• 2. denial of procedural fairness in not allowing witnesses legal
representation at interview.
• 3. denial of procedural fairness in not providing witnesses with a
copy of their transcript of evidence after their hearing.
Suspension of the investigation, mediation
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We notified all parties that we would suspend the investigation.
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We advised the parties and the Legislative Council of the suspension,
and the Council’s reasons for initiating proceedings.
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We continued to assess the evidence to see if evidence indicating
corrupt activities needed to be referred to the Anti-Corruption Branch of
the police.
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Five months and $55,000 in legal fees later, we achieved a mediated
outcome.
Mediation outcome
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1. We set out the administrative acts with greater clarity.
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2. We permitted legal representation of the 17 Councillors at interview,
on the condition that they had separate representation from each other
and from the Council.
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3. We provided witnesses with hard copy individually watermarked
pages of their transcript of evidence, after they had signed a
confidentiality undertaking.
What did we learn?
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Clarifying the administrative acts we were investigating was not a
‘game changer’. However, in future, we will seek to have input into
drafting any Terms of Reference.
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The mediation outcome allowing separate legal representation,
addressed our concern. We invited back those Councillors whom we
had already interviewed, for another interview in the presence of
their lawyer. (There was no response.) We will continue to question
legal representation when we think a conflict of interest arises and
where there are threats to the integrity of our investigation.
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Releasing transcripts after interview was a helpful step. With
appropriate confidentiality undertakings in place, this prevented a
‘bottleneck’ during the natural justice phase.
Finally …
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Six months later, we released our ‘provisional report’ in the natural justice
phase.
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There were more threats of legal proceedings from individual Councillors.
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We halted the investigation again, and released our final report 6 months
later.
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We were reasonably satisfied with our process; but although we put in place
steps which we thought would fairly manage issues of accountability and
expectations of parties in the investigation, it didn’t prevent legal proceedings
from being issued.