Decision about Councillor Noone's application

Our view that Cr Noone does not have a direct financial interest in the decisions

Cr Noone’s application states that he owns, through a family trust, a 900 hectare sheep and cattle farm. His son now does the day-to-day work on the farm, with Cr Noone providing support and working as a farm hand for two or three days of the week.

The Water Permit Plan Change (WPPC) and Cr Noone

Cr Noone’s farm has no water rights attached to it, and his land is not suitable for irrigation.

He submitted that he has no direct financial interest in the WPPC because he does not hold any water permits. Based on  the information provided, we are satisfied that he does not have a direct financial interest in the WPPC.

The Omnibus Plan Change and Cr Noone

The Omnibus Plan Change contains some additional rules for sediment, which may apply to Cr Noone, as he also has some forestry interests. However, we were told that the Council is separating out all forestry matters from the rest of the Omnibus Plan Change, and potentially conflicted councillors such as Cr Noone will remove themselves from the forestry-related discussion.

Dairy farmers are the farmers most affected by the Omnibus Plan Change, and Cr Noone is not a dairy farmer. He does, however, winter graze cattle.

Cr Noone’s application states that he will not need to put in additional fencing because the cattle already cannot access the North Branch of the Waikouaiti River, which the farm has a short boundary with.

According to the application, while he does winter graze cattle, he does not do so intensively. His farm carries about 7 stock units per hectare, which is about half the amount of stock that an intensively farmed property carries. Cr Noone does not consider that he will not suffer any financial loss as a result of the Omnibus Plan Change because he will not need to apply for the type of consent proposed for intensive winter grazing.

Cr Noone submitted that any direct financial interest he has in the Omnibus Plan Change is “de minimis” as the farm is not intensively grazed over winter, and he and his son do not anticipate that the farm will ever be intensively grazed over winter. His application states that this is not part of the family’s short or long-term planning for the farm, so he is “highly unlikely” to turn his mind to his own farm when discussing and voting on the Omnibus Plan Change.

Based on the information provided, we are not satisfied that Cr Noone has a reasonable expectation of direct financial gain or loss from the Omnibus Plan Change, and so he has no direct financial interest in the decision.

Our view on Cr Noone’s potential indirect interest in the decisions

Cr Noone’s application states that he also holds shares in CP Wool Limited, Silver Fern Farms Limited and Ravensdown. The shareholdings are set out in the following table:

Cr Noone’s shareholdings are small – less than 1% in each company.

CP Wool is a collective selling wool. Silver Fern Farms is a collective selling meat. Both of these companies have extensive shareholdings. Other farmers in the Otago region may stand to gain or lose financially from the upcoming Council business on water, and some of these farmers may hold shares in Silver Fern Farms and CP Wool.

Cr Noone submitted that he may have an indirect interest through any share price changes associated with gains or losses from other shareholding farmers, for example from increased compliance costs, or increase or decrease in meat or wool production. However, any increase or decrease would have to be to such an extent that the overall value of the company increased or decreased, affecting the value of Cr Noone’s shares.

We agree that, with each farmer likely to have only a small shareholding, it is unlikely that any changes to their individual circumstances would then increase or decrease the value of the company, and therefore the value of Cr Noone’s shares. We agree with Cr Noone that the small number of individual shareholders who may have a direct financial interest in the WPPC and the Omnibus Plan Change, coupled with the degree of separation between their financial interest and the overall share price of these two companies, means that any indirect financial interest held by Cr Noone is insignificant.

Ravensdown is a company specialising in fertiliser and other farming supplies. It is not a collective of farmers like the other two companies. Therefore, we share Cr Noone’s view that his shareholding in Ravensdown does not result in an indirect financial interest in the WPPC or the Omnibus Plan Change in the same way that his other shareholdings may do.

Exemption allowing Cr Noone to participate

Based on the information provided, we are satisfied that Cr Noone’s indirect financial interest in the WPPC and the Omnibus Plan Change is so remote and insignificant that it cannot reasonably be regarded as likely to influence him in voting, or taking part in discussion, of those matters.

The Auditor-General therefore grants Cr Noone an exemption under section 6(3)(f) of the Local Authorities(Members’ Interests) Act 1968 to vote and take part in discussions on the:

• WPPC to be considered by the Council on 11 March 2020; and
• the Omnibus Plan Change on 25 March 2020.