Cr Celi has no option but to repay, argues David Harrison

“It’s a moral question, not a legal one,” Australia’s Chef de Mission in Rio de Janeiro, Kitty Chiller, told reporters on the subject of drug use when the matter arose during the Olympic swimming events recently.

She was effectively highlighting an extremely troubling modern social problem far wider than sport: the moving of the spotlight off moral principles to focus on what is legal. We are seeing it in the Goulburn Valley clawback of millions already paid to its hapless dairy farmers. Legal, maybe, but clearly not moral.

Moral versus legal is an issue currently bedevilling an aspect of Mornington Peninsula society, with the 23 May declaration by councillors that “there has been no overpayment of expenses incurred by Cr [Antonella] Celi in relation to conferences, seminars and training.

Council accepts that all expenditure undertaken by Cr Celi for conferences, seminars and training has been legally approved by council, either by council resolution or by officers under delegation.”

Further, councillors instructed that “council cease any current or future recovery action for any expenses incurred in the current council term by Cr Celi for conferences, seminars and training.”

There are the words, thrice … “conferences, seminars and training”. But the allowance policy refers only to “conferences and seminars” – or at least it did until this 23 May resolution. The addition of “and training” was presumably intended to widen the expenditure area. It’s not, in this writer’s view, very subtle, clever or persuasive.

Recovery of the claimed overpayment, of some $9020, was previously approved by vote of councillors – before the April resignation of Cr Lynn Bowden and the re-emergence the Rusted-On councillors, plus Cr Bev Colomb, as the dominant council faction.

The request for repayment was promptly reversed by Cr Celi’s factional allies and Cr Colomb. They brandished a legal opinion from the shire’s long-time legal advisers, Maddocks, favouring Cr Celi.

So there you are. A vote of council can make an overspend disappear, turn day to night and make the lame gambol like lambs!

But did Maddocks unequivocally clear Cr Celi? As a legal document it included a clear moral option, echoing a remark by Cr Tim Wood, QC, retired judge, that the money could perhaps be repaid voluntarily.

Maddocks advised that “The most that council can do … is to request that the relevant councillors repay the relevant expenses. It will then be for those councillors to decide whether they will.” [Author’s emphasis.] The law firm was presenting the moral option prominently and in unambiguous language.

This option is point two of Maddocks’ Summary of Advice. Its first point raises questions with this writer about the shire instructions on which the advice was based: “We think that the relevant expenses have been lawfully approved by resolution of council and therefore incurred with the appropriate authority,” it states. [Author’s italics.]

Fact: only $8400 of Cr Celi’s $28,500 expenditure was “lawfully approved by resolution of council”, in the normal meaning of those words. That leaves over $20,000 not approved in this way – presumably given the tick “by officers under delegation”, as the councillor resolution states, apparently in an effort to remedy an ambiguity in the Maddocks advice.

The word “delegation” appears only once in the Maddocks advice, in a rather fuzzily worded question from “a councillor” who is not named. The councillor wants advice on “the legality of the council to resolve to seek retrospective payments, when such payments have been approved … by resolution of council or under delegation by officers …” [Author’s italics.]

Maddocks does not specifically deal with the “under delegation” part of the question, which is at the very least an admission by the councillor that the bulk of his or her spending had no “lawful approval by resolution of council”.

It is perhaps noteworthy that the councillor referred in another question to the legal doctrine of natural justice, or legal fairness. The question is also fuzzily worded and rhetorical in nature – to the degree that it might prompt the response “Nemo judex in causa sua (or in propria causa)”. That is, “No man [or woman] may be a judge in his [or her] own cause.” It was a question inviting a certain response.

The Maddocks advice then deals with two other matters, one with a moral tinge, the other suggesting a possible legal avenue for any recovery of the overspend.

The first matter is “unjust enrichment” – money paid by mistake. Maddocks opines that, since money would have been advanced lawfully by council resolution, “we do not think that there is any legal basis on which council can now require the relevant councillors to repay the amounts in dispute”.

But was the entire sum “ advanced lawfully by council resolution”? The answer is no, as evidenced by the councillor’s use of the words “under delegation” and the repeated use of the “under delegation” phrase in the 23 May resolution.

The second matter raises the prospect of imposing a “surcharge” to compel repayment, which applies to:

* Any spending that contravenes any Act, regulation or local law.

* Any deficiency or loss incurred by the misconduct of a councillor or a member of council staff.

* Any money that should have been brought into account but has not been.

A nominated senior government official, finding that any of these conditions apply, “may by notice in writing require the councillor or member of the council staff to show cause why he or she should not be surcharged” – that is, billed for the overspend.

Do any of these conditions apply? Questions must surely have been asked about how some $9020 in a specified allowance slipped under the shire’s front door. A sum of this size is surely recorded somewhere in the shire’s voluminous ledgers, which deal with more than $200 million annually in income and outgoings.

We have heard almost nothing from shire CEO and accounting expert Carl Cowie on this subject. Not all of the overspend occurred on his watch, but he now carries the can for it. The community awaits an explanation.

A final word or two on the moral aspect of this problem.

Society appears to tolerate commercial leviathans such as Apple, Google, and Vodafone shifting money around the world to avoid tax and to achieve their primary goal and legal duty to maximise profits for shareholders. Accountants and governments help make their practices legal.

Given such practices by our supposed moral exemplars, how are we common folk supposed to set our moral compasses?

The allowances overspend in question is not company money, or a personal sum possibly owed to a family member or a friend – although, in a way, that is precisely what it is. It is community money, ours and our neighbours’ money, paid by the community to our local government body, to be carefully and responsibly spent by our elected representatives.

It is surely up to both councillors and shire staff to keep track of this spending – a point made by several councillors when the matter was debated. In this case both sides have failed.

In this writer’s view both Cr Celi and council staff have demonstrated, at the very least, inattention to their duties to the community. The shire’s lapse is by far the larger. Why on earth did someone not warn Cr Celi she was at or over her allowance limit?

Cr Celi should repay the money and end this sorry episode.

* It is believed that Cr Celi has in recent days applied for a further advance from her conferences and seminars allowance. She was refused on the ground that her allowance has already been overspent.

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