Councillor Lisa Austin claims she could be dismissed from her seat on Nelson City Council on Thursday. What’s going on?
The first-term councillor has been embroiled in questions about her business’s interests and legal ability to sit on the council over the last month.
During its Thursday meeting, the council will discuss the issue behind closed doors, one week after its Audit, Risk, and Finance Committee did the same.
Whether Lisa is disqualified from office and any related legal risk will be central to the confidential discussion.
She has denied any wrongdoing and says the council is not like the Hunger Games “where we get to kill each other off”.
How did the problem arise?
Her troubles stem from her financial interests in a company she co-owns with her husband, Austin Transport Tippers.
The business has no contracts with the council, but it does hire trucks out at regular rates to provide carting services to companies contracted by the council to deliver infrastructure projects.
However, the Local Authorities (Members’ Interests) Act 1968 prohibits people who have financial interests of more than $25,000 with the council from standing for election.
She maintains that her company’s supply of hired trucks is neither contracting nor subcontracting, and so is not prohibited under legislation.
But that opinion is not shared by the Audit Office, the independent transparency watchdog.
After an Austin Transport Tippers truck was seen on a council worksite after her election, the mayor said the council decided to be “cautious” and approached the office, seeking retrospective approval for her financial interests.
The Audit Office can grant approval, including at times retrospectively, for incumbent elected members seeking to engage in contracts worth more than $25,000, and has granted such approvals for Nelson’s elected members in the past.
However, the office says that legislation prevents it from approving interests held by individuals before their election – an opinion that the council’s independent advice from law firm Simpson Grierson disagrees with.
With the council’s application having been brought to the office’s attention, the office was then obliged to investigate prosecuting Lisa.
The Audit Office eventually opted against prosecuting her, saying “a prosecution would not be in the public interest”.
But it was also of the view of the Audit Office that Lisa had not been eligible for election, “and remains disqualified from office”.
While the office has no power to remove her from office, its opinion was that she cannot be, and technically is not, a councillor.
So what happens now?
Lisa said on Saturday that elected members will vote on Thursday on whether to dismiss her from office.
If, during its meeting, the council agrees with the Audit Office’s opinion – that she is disqualified from office and her seat is vacant – it could decide to hold a by-election to fill the gap.
A by-election could cost upwards of $200,000.
But continuing to make decisions with her at the council table could create legal risk, former two-term councillor Rachel Sanson warned in an opinion piece in Saturday’s Nelson Mail.
“Her seat is vacant under law… subsequent council decisions can be challenged on the basis that a disqualified member participated.”
'Council is not like the Hunger Games'
Mayor Nick Smith has previously touted the “collegial” nature of his council, but the legal risk surrounding Lisa’s situation is now upsetting that public image.
Lisa alleged in late May that fellow councillor Aaron Stallard has been trying to “oust” her.
But the mayor and Aaron deny Lisa’s claim, with Nick saying that Aaron is seeking to understand and mitigate council’s risk.
“We are all working together – staff and councillors – to get a solution that, if possible, avoids a by-election.”
Lisa denies any wrongdoing and says that she has appropriately declared her interests.
In her Saturday Facebook post, responding to Rachel’s opinion piece, she said her business’s engagements with council contractors were “too far removed” to be covered by the Act.
“It is so wrong that council is now going to vote on getting rid of me without any court or judicial process. Council is not like the Hunger Games where we get to kill each other off.”
Plans for a law change
The Government is currently updating the law to increase the contract threshold to $100,000, and the local government sector and the Audit Office itself also agree the legislation needs updating.
But it is the current legislation that was causing headaches for Lisa and the council.
With the Audit Office and the council’s legal advice differing, it appears there is an untested legal grey zone in the legislation.
The council’s willingness to stomach that unknown legal risk will be debated behind closed doors when elected members discuss the issue on Thursday.
“We recognise it is a matter of significant public interest and will make a public statement as soon as possible,” Nick says.
