Part 5: Substance of a new Act

The Local Authorities (Members' Interests) Act 1968: Issues and options for reform.

5.1
This Part addresses the key substantive issues to be dealt with in a rewritten Act. Where relevant, we refer to approaches that the Crown Entities Act 2004 or foreign jurisdictions72 have taken to particular issues.

5.2
As noted in the Introduction to this report, our primary aim here is to identify issues and options, rather than to advocate particular solutions. We express a preference or suggestion about some of the matters that follow, but not on all of the issues raised.

General provisions

Bodies covered by the Act

5.3
As noted in Part 3, the range of entities covered by the Act could usefully be reviewed. One broader question might be whether to limit the Act to bodies properly considered part of “local government”, as that term is usually understood,73 or whether to continue to include a range of miscellaneous statutory bodies.74

5.4
Some foreign jurisdictions extend legislation of this sort beyond members, to also include officers and advisers of local authorities. That would be a significant policy change, and may require extending and complicating the Act considerably. The purpose and principles of the present Act (and most similar legislation75) are clearly focused on the role of statutory decision-makers, not their subordinate officials. We have no firm view on this issue, but for convenience we limit our consideration in this report solely to authority members.

Penalty for breach

5.5
Consideration needs to be given to the penalty (or range of penalties) for a breach of the Act. The key question is whether the primary legal sanction should be criminal, or civil, or both. Several foreign jurisdictions retain offences for a breach of the equivalent to the discussing and voting rule, while others have established civil sanctions and specialist bodies to enforce them.

5.6
If a criminal offence is retained, the maximum fine needs to be increased so it represents more than a nominal punishment. The next question is whether vacation of office should follow conviction, or whether a criminal conviction alone is a sufficient punishment.

5.7
Many foreign jurisdictions create a wholly civil (as opposed to criminal) enforcement process for a breach of the discussing and voting rule, with a range of penalty options, imposed at the discretion of the adjudicating body. The penalty options can include:

  1. publishing adverse findings;
  2. formal censures or reprimands;
  3. compulsory counselling;
  4. ordering restitution or damages if financial gain resulted;
  5. suspension from office for up to several months;
  6. vacation of office; and
  7. disqualification from future office for up to 5 years.

5.8
A solely civil sanction applies to members of statutory entities covered by the Crown Entities Act 2004. Breach of that law is a ground for removal from office by the Minister.76

5.9
For the reasons outlined under the “Enforcement and penalties” heading in Part 3 of this report, we consider that a wholly civil penalty for breach of the rules may be more effective than the current criminal sanction. A civil sanction is likely to allow for a more proportionate response, in that it can provide for a more flexible range of remedies, including (in deserving cases, but not necessarily in all cases) vacation of office. These remedies – if effective – ought to be sufficient, without the need for the additional penalty of a criminal conviction. Rights of appeal would probably need to be created to go with any new civil enforcement process.77

5.10
At present, vacation of office is either a mandatory consequence of conviction (in the case of the discussing and voting rule), or an automatic result as soon as the law is breached (in the case of the contracting rule). If vacation of office is to be retained as a penalty (either through a criminal or civil proceeding), it could perhaps become a discretionary matter for the judge to decide, following an enforcement proceeding. To remove uncertainty, such a result should be brought about only by a formal determination following the enforcement proceeding, rather than automatically by operation of law. The period (if any) of any disqualification from office also needs to be addressed.78

5.11
Regardless of what form of penalty is used, it may be useful to specify – for the avoidance of doubt – the standard and onus of proof for proceedings, and whether or not an adverse finding affects the validity of the relevant authority decision.

5.12
Consideration also needs to be given to whether any person should be permitted to initiate proceedings over an alleged breach, or whether only the named enforcement agency may do so.79 The question of whether a special limitation period for bringing proceedings is appropriate could also be addressed.80

Administrative agencies

5.13
Up to 4 different administrative and enforcement agencies may be necessary:

  1. the body that investigates possible breaches of the Act;
  2. the body that grants applications for exemption and approval;
  3. the body that prosecutes breaches by bringing formal enforcement proceedings;
  4. the body that adjudicates in the ensuing proceedings.

5.14
The Auditor-General currently undertakes the investigatory function. Foreign jurisdictions use a range of entities, including specially created central agencies, local authority committees, Ministers, and existing government departments. None of the foreign jurisdictions looked at to date use the Auditor-General. In the New Zealand context, other possible agencies might include:

  1. the Minister of Local Government;
  2. the Department of Internal Affairs;
  3. the Ombudsmen;
  4. the Local Government Commission; and
  5. the local authority itself or a committee of the local authority.

5.15
We think it is probably unnecessary to create a whole new administrative bureaucracy to administer a relatively small piece of legislation, so we will confine our consideration to existing agencies. We consider that the Auditor- General remains well-placed to continue to carry out the investigatory function, and that none of the other existing agencies immediately stands out as being better suited.

5.16
The Auditor-General has long institutional experience in administering the Act. In addition, by virtue of his other statutory functions81, he also has:

  1. broad powers of investigation in relation to all entities covered by the Act;
  2. a role in relation to investigating probity issues and statutory compliance by public entities;
  3. powers to report to Parliament and any other person about the activities of public entities; and
  4. a sound working knowledge of the relevant public entities.

5.17
Local authority contracting is another area in which he has expertise.82 The Auditor-General may soon also have a specific function in relation to registers of interests.83

5.18
It probably makes sense for the investigatory body to also undertake the administrative functions of granting exemptions and approving contracts, as is the case at present. The investigation and exemption/approval functions are closely related. Foreign jurisdictions we have looked at give the exemption power to a range of bodies, including Ministers, courts, and local authority committees. None of them use the Auditor-General in this role. For statutory entities governed by the Crown Entities Act 2004, the exemption power is given to the chairperson, or deputy chairperson, or Minister.84 However, we prefer the independence that should result from giving this function to an external, non-political body.

5.19
For these reasons, and the reasons mentioned above in relation to the investigatory function, we think the Auditor-General is well-placed to continue exercising the exemption function.

5.20
At present, the Auditor-General is also the person who prosecutes alleged breaches of the law. The Auditor-General does not have significant expertise or experience in bringing legal proceedings for breaches of law, and neither do the other agencies listed above. More importantly, it may be worth considering whether it is desirable – from a procedural fairness and independence perspective – to formally separate the investigation and prosecution functions. In other words, once an investigation has been completed and reported on, for the matter to be formally referred to another person or body for decision on whether to take legal action (and if so, to then take such action). We understand that such a practice already exists informally in the Police, and more formally in the human rights and privacy fields.85

5.21
The fourth administrative role is that of adjudicating on alleged breaches. New South Wales and the UK have established specialist administrative tribunals. Local authority committees and courts are used in other places.

5.22
Where foreign jurisdictions have enforceable codes of conduct for local authority members, breaches of pecuniary interest rules are usually handled by the same agencies that investigate and determine other breaches of the code of conduct. That wider issue is worth bearing in mind if consideration is to be given to creating an enforcement mechanism for breach of the code of conduct that territorial authorities and regional councils are now required to establish under the Local Government Act 2002.

5.23
We think that adjudication is a judicial function. We suggest that the Courts should continue to perform this role, particularly for sanctions as serious as loss of office. New Zealand is not large enough to warrant a specialist judicial tribunal for this subject matter. The District Court is probably the most suitable body to handle proceedings, especially those which could result in monetary penalties or in vacation of office and disqualification from future office. Alternatively, the investigatory agency could perhaps be empowered to grant some of the lesser remedies (such as formal censure or a report to the local authority) itself, where legal proceedings are not considered necessary.

5.24
The answer to these questions may depend in part on the form and range of penalties that are to exist.

The deeming provisions

5.25
The deeming provisions regarding companies and spouses need to be reconsidered.86

5.26
They could be improved by:87

  1. Considering whether the deeming provisions should be indicative or exhaustive in relation to the matters they address (and expressly saying so).
  2. Considering whether the company provisions should be expanded to include any directorship (rather than the present requirement to be managing director and a shareholder).88
  3. Referring to company ownership with terminology that speaks of having a “beneficial interest” in shares (as opposed to the present reference to being “a member of” a company), so as to exclude persons who own shares purely as a trustee.
  4. Considering whether to establish a threshold for a deemed interest in a partnership (or alternatively, deeming any partner to share the interests of their partnership).89
  5. Considering whether to deem persons to share the interests of any “business” that they conduct (thus catching sole traders and other legal entities in addition to companies and firms), and/or the interests of any business in which they are employed.
  6. Considering whether to expand the spousal provisions even further, to cover some other relatives.90

The discussing and voting rule

Scope of interests covered

5.27
Some foreign jurisdictions – and the Crown Entities Act 2004 – extend the statutory rules to cover non-pecuniary conflicts of interest. This could be considered, and it would be possible to extend the Act to cover non-pecuniary interests if that was thought desirable. Such an extension would raise further drafting issues and exceptions that might need to be provided for. On the other hand, as discussed in Part 4, there is a long-standing basis for drawing a distinction between pecuniary and non-pecuniary interests. It could be argued that the Act is likely to have most clarity and force if it remains focused on the most important type of conflict – that is, pecuniary interests. This report proceeds on the assumption that the Act will remain focused only on pecuniary interests.

Definition of pecuniary interest

5.28
The term pecuniary interest is not presently defined in the Act. In practice, we have relied on a definition from Victorian case-law.91

5.29
We think a statutory definition of “pecuniary interest” might be useful. A statutory definition could helpfully address whether a pecuniary interest must be one that is already being affected at the time of the meeting, or whether it may be an interest that is reasonably likely to be affected in the future. The definition could also address whether or not an interest is to be determined objectively (that is, the view of a reasonable informed observer) or subjectively (that is, what the member honestly believed at the time), or by some hybrid test (such as the honest and reasonable belief of the member).

5.30
Interests which are “too remote or insignificant” currently have to be the subject of an application for an exemption.92 However, these issues are, by definition, of little importance, and requiring applications for formal determinations about the most minor of interests may not be a useful use of public resources. Most reasonable people would not complain about an interest that was remote or insignificant. If they did complain, we would be unlikely to launch a prosecution. Even if we did prosecute, a Court would probably exercise any discretion in favour of the member.

5.31
This concept may overlap with the common law de minimis principle, which suggests that the law does not concern itself with trifling matters.93 Several foreign jurisdictions – and the Crown Entities Act 200494 – exclude remote and insignificant interests from the definition of pecuniary interest.

5.32
Accordingly, we think it may be desirable to incorporate a “remote or insignificant” exception into the definition of pecuniary interest, instead of requiring such matters to be the subject of a formal application for exemption.

5.33
A useful statutory definition of pecuniary interest might therefore be:

“Pecuniary interest” means an interest that a person has in a matter if that matter would, if dealt with in a particular way, give rise to a reasonable likelihood or expectation of appreciable financial gain or loss to that person.

To avoid doubt, a person does not have a pecuniary interest in a matter if the interest is so remote or insignificant that it could not reasonably be regarded as likely to influence the person’s participation in any decision about the matter.95

5.34
Consideration could also be given to replacing the fairly formal term “pecuniary” with the more readily understood synonym “financial”.

Interests in common with the public

5.35
An exception currently exists for interests that are “in common with the public”. This is a necessary exception, but there are several ways to provide for it. The current Act, and some foreign jurisdictions, incorporate the exception into the wording of the discussing and voting rule. Others incorporate the exception into the definition of “pecuniary interest”. Some jurisdictions also provide a more explicit definition of the term “interest in common with the public”.

5.36
The concept of an “interest in common with the public” can be difficult to apply because it requires a judgement, often involving matters of degree. A separate and more wordy explanation of it would not necessarily provide greater clarity. However, if the term “pecuniary interest” is to be defined more fully, there may be some benefit in incorporating the “interest in common with the public” concept into that definition, and attempting to explain it more fully. One way to do this could be as follows:

Despite subsection (1), a person does not have a pecuniary interest in a matter if the person’s interest is in common with the public.

A person’s interest is “in common with the public” if that person’s interest is:

(a) of the same kind; and

(b) of the same or substantially similar size as the interests of the general public, or of an appreciable section of the general public, in the district.

Other exceptions and defences

5.37
The list of exceptions to the discussing and voting rule needs to be reviewed for relevance and obsolescence.

5.38
The district plan exception in section 6(3)(e) needs to be clarified. We consider it should apply to consideration of an entire district plan, regional plan, regional coastal plan, regional policy statement, or a territorial section of any of those documents. It should specifically exclude consideration of part of a plan, particular issues dealt with by a plan, variations, plan changes, designations, or applications for resource consent.

5.39
Several foreign jurisdictions exclude interests as a member of another public entity. This may be desirable.

5.40
New South Wales and Victoria exclude interests as a member (but not as an officeholder) of a non-profit club or similar organisation. This may be desirable, for the avoidance of doubt.

5.41
We think an exception for trustees who have no beneficial interest in a matter may be desirable.96

5.42
The “lack of knowledge” defence97 could be reviewed, but probably does not require much change. It presently requires that the member “did not know and had no reasonable opportunity of knowing” of the pecuniary interest. British Columbia also provides a defence for an error of judgement made in good faith. Such a defence may be fair if the rule is changed so that members themselves are able to judge whether their interest is remote and insignificant.98

Application of the discussing and voting rule at meetings

5.43
Currently, the rule requires the disclosure of a pecuniary interest in a matter at a meeting, and prohibits the member from discussing and voting on the matter. It does not say what else a member must or must not do.99

5.44
The UK distinguishes 2 types of interests (personal and prejudicial), the first of which requires mere disclosure, while the second requires withdrawal. This is probably an unnecessary complication. We think that one simple rule is likely to be easier for members to understand and apply.

5.45
Some foreign jurisdictions are more lenient than the current Act, in that they permit participation in the authority’s discussion of the matter, and require withdrawal only when the matter is to be voted upon. This is presumably on the basis that members with a pecuniary interest sometimes have useful knowledge or expertise to contribute to a debate. However, permitting members to participate in their official capacity at a meeting in this way is not consistent with the principles of the Act; nor with the view the Court would be likely to take in a judicial review proceeding. Allowing the member to discuss the matter around the meeting table could be seen as a form of participation in the decision.

5.46
A lesser option might be worthy of consideration, namely to specifically allow the member to retire to the public gallery and exercise any rights that an ordinary member of the public may have to observe or to seek to address the meeting.100 We suggest this is preferable to the option outlined in the preceding paragraph.

5.47
Alternatively, some other foreign jurisdictions take a more stringent approach than the Act. They require the member to leave the room; to stay out of sight of the meeting; and not to seek to “influence” the decision in any way. These requirements are probably not necessary.

5.48
Another issue that has been raised in the past is whether the Act should specifically prohibit an interested member from continuing to chair a meeting.101 This may be desirable.

5.49
Some foreign jurisdictions require disclosure of interests in relation to meetings that the member did not (or does not plan to) attend. However, this seems an onerous task, and not necessary in order to fulfil the principles of the Act. If the member did not attend, there is no risk that they participated in the decision.

Exemptions

5.50
At present, there are 2 separate exemption-type provisions – sections 6(3)(f) and 6(4).102 If both provisions are retained in some form, we think they should be combined, and the procedure renamed. One label, and one procedure, for these sorts of applications will be easier to understand. We suggest calling this type of decision an “exemption”, rather than using the current forms of statutory expression – “opinion” and “declaration”.

5.51
We consider that section 6(3)(f) (which relates to remote and insignificant interests) should become an automatic exception written into the definition of “pecuniary interest”, so that such interests do not need to be the subject of applications for exemption.103 We acknowledge though that, to provide certainty for those members who still wish to seek a formal determination, there may be an argument in favour of retaining “remoteness or insignificance” as a ground for an exemption as well.

5.52
We think the section 6(4) power should be retained. Similar powers exist in foreign jurisdictions, and for statutory entities governed by the Crown Entities Act 2004.104 The grounds in the present Act are very similar to the grounds used elsewhere. It is important to continue to spell out the grounds in the Act. They probably do not require substantive amendment, but a fresh or fuller restatement may be desirable.

5.53
We suggest something along these lines:

The [exempting authority] may grant an exemption where it is satisfied that benefits of allowing the member to participate outweigh the risk that the member’s pecuniary interest might unduly influence the outcome, having regard to such of the following factors that the [exempting authority] considers relevant:

  • the nature of the matter;
  • the significance of the matter to the community;
  • the nature, directness and significance of the member’s interest in the matter;
  • any special expertise or perspective that the member would bring to the matter;
  • the effect of applying the Act on the adequacy of representation of a significant section of the community;
  • the effect of applying the Act on the ability of the local authority to effectively and efficiently transact its business;
  • any relevant principles of the Local Government Act 2002;
  • the purpose and principles of this Act; and
  • any other relevant aspects of the public interest.

5.54
This statement is broadly consistent with our current approach to applying section 6(4) in practice.105 A fuller statement along these lines is also more in accord with the modern drafting practice of explicitly spelling out in legislation the criteria relevant to an administrative decision. And the balancing requirement in this suggested approach echoes the modern administrative law concept of proportionality.

5.55
The exemption provisions could usefully spell out that an exemption can be granted on the application of the member concerned or the local authority, or by the exempting authority on its own motion. An exemption should be able to relate to a single matter or a class of matters, and to a single member or several members. The exempting authority should have the express power to attach conditions.

5.56
The question of whether the Auditor-General should remain the exempting authority, or whether some other body should carry out this task, is considered above under the heading “Administrative agencies”.

The contracting rule

5.57
For the reasons discussed in Part 4, we doubt whether the contracting rule needs to be retained. We think its usefulness should be reviewed.

5.58
There are several options for the future of the contracting rule, including:

  1. simple abolition;
  2. replacement with extra statutory decision-making requirements; and/or
  3. retention, but in an improved and modernised form.

5.59
We discuss these 3 options below, but do not express a firm preference.

Simple abolition

5.60
Outright abolition of the contracting rule, with no replacement, is just that. It does not require any further explanation.

Replacement with other decision-making requirements

5.61
There may be other ways to ensure proper transparency and encourage fair processes for contracts concerning members, which could enable the contracting rule to be safely abolished. These could include some or all of:

  1. a requirement for local authorities to instead make public disclosure of contracts with members (or at least those contracts which exceed a specified monetary limit);
  2. additional procedural requirements (such as mandatory tendering) for contracts concerning members; and/or
  3. a requirement for local authorities to maintain a public register of members’ interests.106

5.62
Such requirements might usefully sit in Parts 4 or 6 of the Local Government Act 2002.

5.63
To some extent, these requirements would simply codify elements of what is already common and expected practice. For instance, when we consider an application for approval of a contract, we would ordinarily expect the authority:

  1. to have taken all reasonable steps to ensure that potentially interested parties had an opportunity to tender or quote for the contract;
  2. having considered and evaluated each tender or quote, to be able to justify the preferred choice on the basis of cost, performance, or quality of service; and
  3. to have ensured that the member did not participate in the authority’s decision-making about the matter.107

Retention, with improvements

5.64
If, after a review of the contracting rule, it is decided to retain it, some improvements that could usefully be made to the rule. This section of the report assumes that the contracting rule is to be retained in similar form to the present rule, and discusses areas where improvements could be made.

Operation of the contracting rule

5.65
The statutory limit of $25,000 (above which the Auditor-General’s approval is required of a members’ interest in contracts) needs to be increased. It no longer represents an amount that is regarded as significant. From our experience, a more realistic figure might be $50,000 or $100,000.

5.66
The rule should be redrafted so that the value of the monetary amount is judged at the time an expense or contractual obligation is incurred, not at the time payment is made.

5.67
To avoid doubt, the rule could clarify that it is focused only on “pecuniary” interests in contracts.

5.68
The definition of “subcontract” should be amended to exclude a general supply of goods where the supplier could not reasonably be expected to be aware that the goods are to be used for a contract covered by the Act.

Approval process for contracts exceeding the limit

5.69
The Act could permit applications to be made by the member personally, as well as by the local authority.

5.70
The grounds for approval in sections 3(3)(a) and (aa) could be reconsidered. It may not be necessary to have a different test for retrospective applications. In particular, the requirement in section 3(3)(aa) that “prior approval would have been obtained” is currently problematic.108

5.71
Users would be assisted by more explicit statutory criteria for these decisions. We think the grounds could be along the lines of:

The [approval authority] may grant approval where it is satisfied that:

  • the local authority’s reasons for entering or wishing to enter into the contract with the member (or other nominated contractor) are justifiable; and
  • the process followed in awarding or agreeing to the contract is fair and reasonable having regard to the size and nature of the contract and the overall circumstances of the situation; and
  • the member’s position has not caused undue influence or preferential treatment.

5.72
These criteria reflect our current practice in considering applications for approval.109 If inserted into the Act, they could apply equally to both prior and retrospective applications.

5.73
The approval authority should have the express power to attach conditions to an approval, and to grant approval for a single contract or a class of contracts.

5.74
Refer to the discussion under the heading “Administrative agencies” above for consideration of who should be the approval authority. For convenience, it would make sense for it to be the same agency that handles applications for exemption from the discussing and voting rule.

Exceptions and defences

5.75
The list of exceptions to the contracting rule needs to be reviewed for relevance and obsolescence.110

5.76
The lack of knowledge defence is probably too strict in that it not only requires that the member “did not know and had no reasonable opportunity of knowing” of the contract, it also requires that the contract was made under delegation.111 If the former requirement is to remain, the latter one is probably unnecessary. Further, this defence should apply to lack of knowledge of the existence of the pecuniary interest, as well as lack of knowledge of the contract. Finally, this matter is probably best expressed as a defence to an enforcement proceeding, rather than as an exception to the application of the rule in the first place.

Candidates

5.77
Difficulties over contracts with persons who are later elected to the authority could be avoided if the approval power is broadened so that it can be exercised in relation to persons who are candidates for election.112

5.78
If automatic disqualification is to be retained with the intention of preventing certain persons from even becoming members of local authorities, then it may be appropriate to consider whether the relevant electoral statute113 is a more appropriate place for such a prohibition.

72: See the Appendix for more details about foreign jurisdictions.

73: That is, district, city and regional councils.

74: Eight of these “miscellaneous” bodies were recently deleted from the Act’s coverage by section 180 of the Crown Entities Act 2004, but a significant number still remain. Moreover, if the Act is rewritten, it will also be necessary to review the anomalous position of the Greytown District Trust Lands Trustees. This body is not a public entity and so is not audited by the Auditor-General, but sections 6 and 7 of the Act apply to the Trust Board “as if” it was a local authority. See the Greytown District Trust Lands Act 1979, sections 29 and 31.

75: Such as the Crown Entities Act 2004. Codes of conduct now required by the Local Government Act 2002 are also limited solely to members.

76: See sections 53 and 59(2) of that Act.

77: Appeal rights already exist for criminal proceedings, under the Summary Proceedings Act 1957.

78: The legislation could specify a set period, or a maximum period (within which the judge must fix a specific period), or provide that the member is disqualified until the next general election, or (conversely) provide that the member is immediately eligible for re-election. At present, a member who vacates office after breaching the contracting rule remains disqualified until the next “general or ordinary” election or appointment (section 4(2)), but there is nothing to stop a member convicted of breaching the discussing and voting rule from standing immediately for re-election in the ensuing by-election.

79: Currently, only the Auditor-General may do so: section 8.

80: Currently a 2-year limitation period exists: section 40, Public Audit Act 2001.

81: Under the Public Audit Act 2001. See Parts 3 and 4 of that Act.

82: Which will be relevant if the contracting rule is retained.

83: The Members of Parliament (Pecuniary Interests) Bill proposes a formal role for the Auditor-General in relation to the register of MPs’ interests.

84: Section 68.

85: Under the Human Rights Act 1993 and Privacy Act 1993, investigation of a complaint is undertaken by the Human Rights Commission or Privacy Commissioner, but those bodies do not themselves take legal proceedings. Decisions to commence enforcement proceedings (and the proceedings themselves) are undertaken by an independent statutory officer, the Director of Human Rights Proceedings.

86: Foreign jurisdictions usually have similar deeming provisions, although they are sometimes inverted and dealt with as exceptions (for instance, by saying that a shareholding in a company does not constitute a pecuniary interest if it is below a certain level).

87: Many of these matters are touched on in the laws of foreign jurisdictions.

88: Compare section 62(2)(d) of the Crown Entities Act 2004.

89: Compare section 62(2)(d) of the Crown Entities Act 2004.

90: Compare section 62(2)(b) of the Crown Entities Act 2004. By virtue of a recent amendment, the spousal deeming provisions will also apply (from 13 October 2007) to civil union partners and de facto partners. See the Relationships (Statutory References) Act 2005, section 4.

91: Downward v Babington [1975] VR 872. This definition appears to have been adopted in a New South Wales statute. We explain our approach at page 25 of our Conflicts of interest publication (see footnote 13).

92: Section 6(3)(f).

93: The courts are unlikely to recognise a pecuniary interest that is de minimis. See Auckland Casino Ltd v Casino Control Authority [1995] 1 NZLR 142 (CA).

94: Section 62(3)(c).

95: This definition is adapted from Downward v Babington and section 442 of the Local Government Act 1993 (NSW). For an alternative approach to defining the term, see section 62(2) of the Crown Entities Act 2004 (although note that paragraph (f) of that definition extends to non-pecuniary interests).

96: Perhaps similar to current section 3(3)(h), with more modern wording.

97: Section 7(2). See also section 3(3)(ab), and foreign jurisdictions.

98: It would also protect members who may exercise their judgement poorly but genuinely about whether or not their interest is in common with the public. Members already have to make this judgement under the current law.

99: This is similar to the Crown Entities Act 2004 (see sections 63 and 66). However, that Act also requires details of the interest to be disclosed, and it also prohibits the member from signing any document relating to the matter.

100: Our view has always been that this is not prohibited by the current Act.

101: At present, a member could argue that they have complied with section 6 by chairing a debate but not formally speaking to (or voting on) the motion. Nevertheless, the chair of a meeting is in a position to exercise considerable control over how the authority’s consideration of the matter progresses.

102: See footnote 11.

103: See discussion above under the heading “Definition of pecuniary interest”.

104: Section 68 of that Act.

105: Our approach is discussed on pages 32-35 of our Conflicts of interest publication (see footnote 13).

106: We already encourage local authorities to voluntarily establish a register, to assist compliance with the Act, and many do so. Most foreign jurisdictions we looked at make this a legal requirement. In central government, Cabinet has long had such a requirement, as do statutory entities governed by the Crown Entities Act 2004 (in section 64). The Members of Parliament (Pecuniary Interests) Bill proposes requiring a register of interests for all MPs.

107: Our expectations are explained in more detail on pages 17-20 of our Conflicts of interest publication (see footnote 13).

108: See discussion under the heading “Candidates for election” in Part 3.

109: Explained on pages 17-20 of our Conflicts of interest publication (see footnote 13).

110: For instance, as noted in Part 3, section 3(3)(j) is redundant.

111: Section 3(3)(ab).

112: See the discussion in Part 3 under the heading “Candidates for election”. This would also enable the existing statutory exceptions relating to candidates to be repealed.

113: In the case of local government, the Local Electoral Act 2001.

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