Report

REPORT OF INSPECTORS OF MUNICIPAL
ADMINISTRATION INTO AN INVESTIGATION AT FRANKSTON
CITY COUNCIL CONCERNING CONFIDENTIAL INFORMATION
RELATING TO THE CENTRAL ACTIVITIES DISTRICT
DEVELOPMENT PROJECT
Mr Chris Wren and Mr Kelvin Goodall
hspectors of Municipal Administration
May 2002
Ordered to be printed
VlCTORJAN GOVERNMENT
PRlNTER
2002
,, '·
No .164
Session 1999-:2 002
40¥\451
V\C.
REPORT OF INSPECTORS OF MUNICIPAL
ADMINISTRATION INTO AN INVESTIGATION AT FRANKSTON
CITY COUNCIL CONCERNING CONFIDENTIAL INFORMATION
RELATING TO THE CENTRAL ACTIVITIES DISTRICT
DEVELOPMENT PROJECT
Mr Chris Wren and Mr Kelvin Goodall
Inspectors of Municipal Administration
May 2002
Ordered to be printed
VICTORIAN GOVERNMENT
PRINTER
2002
No.l64 :::.session 1999-2002
__________________
.... ' ... ..
Executive Summary
REPORT OF INSPECTOR OF MUNICIPAL
ADJVIINISTRA TION
On 26 March :'001 the Honourable Bob Cameron M. P., :Vfinister for L,Kal
Government appointed an Inspector Mumcipal Administration to undertake an
investigation at Fr:mkston City CoLmcil in relation to allegations concerning the
release of information considered to be confidential to the Frankston Citv Council to
the Gandel Group on or about 26 September 200 I and or to the Member for Franks ton
East, :VIr Matt Vi Qey :VIP on or prior to 2 October 200 I, and if so by whom.
An investigation was subsequently conducted during which time rumours circulated
that bribery hai been involved in the Frankston Central Activities District
Development Prcject bidding process.
INTO AN INVESTIGATION AT
FRANKSTON CITY COUNCIL
CONCERNING CONFIDENTIAL INFORlVIATION
RELATING TO THE
FRANKSTON CENTRAL ACTIVITIES DISTRICT
DEVELOPMENT PROJECT
The process adopted by the Frankston City Council to deal with the Frankston CAD
Project was a complex joint negotiation process that involved the two bidders.
Gandels and Grocon. working with Council's Working Party in circumstances where
all parties were required to strictly comply with a confidentiality protocol. During the
course of the neg·Jtiation process one bidder became aware of the details of the other's
bid prior to it being given to Council.
A public exhibiti(}n of the bidding parties concept plans occurred trom 27 August to
1-1 September 2(>01 with the public being invited to comment on plans. Gandels
embarked upon a public rcbtions campaign criticising the Grocon bid and raising
concerns about its economic vmbility and the level of car parking to be supplied. As
part of that carrpaign. a consultant engaged by Gandels, Rogan Ward, supplied
campaign material to :'vlatt Vincy and advised him of Gandels concerns about the
Grocon bid.
The Working Pa·ty briefed Council on the afternoon of Wednesday 26 September
2001. During that process. the Mayor Councillor Mark Conroy became agitated about
the recommendations and evC~!uation made by the Working Party and developed the
belief that theW c•rking Party \\as wrong in its assessment of the two proposals.
Councillor Conrcy's attitude during the briefing session surprised other Councillors
and his subsequent attack on the motivation of the Working Party led to a breakdown
in relationships between him and other Councillors. At the end of the Working
Party's briefing, Councillor Conroy believed he could not rely upon the CEO or the
Working Party to provide him with explanations for what he thought was wrong with
the recommendat:ons.
On fhe same evening Councillnr C:onroy sought infonnation from Rogan Ward about
car parking. The following morning, copies of documents said to be similar to
documents Councillor Conroy took away with him from the meeting were left on
Rogan Ward's doorstep. Those documents contained details of the Working Party's
recommendations, details of the scores of the two bidders and other
information considered confidential to the Council. That atiemoon Ward produced a
two page facsimile transmission that contained details of information provided durmg
the confidential b-iefing the day before.
·.-:-:::::r_;;:;::-•
•··--
I
'lr:z:r.,.-."!ltJr7'F'Jl7Wm--·=;..:::-·.·-~...:_~.~ '-'-'--=--'-'-:...,.-...; •.J;:"-""=.o-'0 .. .;.<.~;.··:~··
:· .. c:.;,.:.:..,.-2;\:..;.~:JI.::l..tt:'L1m'I:::.'lltlmJJli.DmlD~-:~r.,u.:;a:c-·
7JIT7'ctt;""VF"'"J.,=\WJI
On the Thursday moming and subsequently. Councillor Conroy had lengthy
conversations with Matt Viney during which details of the infmmation provided in the
Working Party briefing were discussed. although Viney was aware of much of that
detail from his prior conversations with Ward and the information that had been
provided to him by Gandels.
During the course of the Worbng Party brieting, Councillor Conroy was allegedly
seen making a telephone call during a cotlee break. At the end of the briefing session
a phone call we1s received by a member the \V orking Party trom a Gandels
representative advising of a change to Gandels' bid. There has been speculation that
the change of bid occurred as a result of a tip-off said to have been made by
Cnuncillor Conroy during the alleged telephone call. The evidence examined during
the investigation does not suggest a tip-otf was made to Gandels nor led to a change
of the bid.
Neither does the e\ idence suggest there is any substance to an allegatron or rumour
that bribery was involved in the bidding process.
There has been a release of information considered confidential to the Franks ton Citv
Council to Rogan Ward by the delivery of documents to him on '27 September. It i~
highly likely Councillor Conroy provided Ward with the documents. lt is also highly
likely that Councillor Conroy gave Ward confidential information that formed the
basis of a bcsimrlc document produced by Ward on Thursday 27 September 2001.
There has also been a release of information considered contidential to the Frankston
City Council to Matt Viney during the course of a conversation or conversations
between Councillor C onroy and Viney on and subsequent to 27 September 2001.
These releases constitute a breach of section 77 ('2) of the Local Govemment Act
1989.
INDEX
Executive Summary
2
3
6
10
13
16
19
21
22
25
26
30
31
33
38
40
44
45
45
46
48
51
52
54
SS
57
59a
60
ll
Appointment and Terms of Reference
Summary of Allegations
Historic Background
Expression of Interest
The Process
Local Politics
Rogan Ward
The Bids
Gandels Aware of Grocon Bid
Public Exhibition
Viney ~ s Position
Gandels Non Compliance
Notice oftl:e Working Party Briefing and Special Meeting
The Morning of 26 September
The Working Party Briefing
Cr. Conroy -s Response
McNamara ::s phone call
The ~:::ti13off phone call
Notes and IX1cuments
The Special Meeting
The Evening of 26 September
An early morning delivery
Thursday morning telephone calls
Ward=s Fax to Viney
Viney- s Telephone Call to Wilson
The Friday Meeting
The Monday Meetings
Response to the Terms of Reference
Addendum
Appendix A
Appendix B
Appendix C
Appendix D
Appointment and Terms of Reference-
I.
On 26 .\larch, 2002, the Honourable Bob Cameron M.P" :VIinister for Local Govemrncnt (''the
Minister'') appoint<~d me as an inspector of:V!unicipal Administration under Section 22JA of the
Local Government Act !989 ("the Act") to undertake an investigation at Frankston Citv Council in
accordance \vith the following Terms of Reference: raJ
To advisl' regarding issues identified by inspector o/.'vfunicipal Administration ..VIr. Kdvin
Goodall during enquiries in relation to a!/egations of a breach ofSection 7712) ofth<' Act
wherein information considered confidential to the Franks ton Citv· Council was rell'ased 10
the press and reported ifl the Frankstoflindependefll of2 October. 2001. namely: (i)
whether confidential infi;rmation concr'ming the Franks/on Cemral Activities
District Development Project ("C'AD Project') was provided to the Candel Croup
on or about 26 September. 2001 and ifso. by whom.
(ii;
whether conjidl'ntial information concerning the CAD Project was provided to the
J[ember jiJr Frankston East..Vfr. t'vfatt Vinev !vfP. on or prior to 2 October. 2001
ana· ifso. bv whom.
!hi
Whether the circumstances considered in rl'lation to items (cl)(i) and la)(ii! indicate that:
(i)
there have been any and what breaches ofScction 77(2! or am· other Section ofthe
Local Government Act1989, and ifso, bv whom.
(ii;
there are anv and what matters arising under other legislation which require
furtiJer investigwion.
(c)
To report O'llhe above and anv other issues which may arise as a result of this inquiry.
The initial period of appointment was from 26 March until 30 April 2002. which period was
extended pursuant 1o my request to !7 May 2002. The appointment was further extended
to
22
May. 2002 to enable me to finalise my report.
Inspector Goodall rrovided the Minister with a Progress Report dated 25 March 2002 in which he
identified further possible breaches in addition to allegations that he was investigating concerning
the publication ofc<mfidential information in the Frankston Independent newspaper on 2 October
200l. The further possible breaches are referred to in paragraphs l(a) and (b) of the Terms of
Reference. inspector Goodall considered that in order for the additional matters to be addressed, a
broader investigation would need to be undertaken. led by an Inspector with particular legal and
'
J
I
probity experience.
5.
3.
The Select Committee also accepted that a meeting was organised by a party not pnvy to the
Around the same time that Inspector Goudall provided his Progress Report. a Report from a Select
Frankston CAD r;rocess indicating that the confidentiality of the process was breached.
Committee ofthe Legislative Council on the CAD Project was published. The Select Committee
particular, the crucial evidence given by Cr. Asker, to the effect that he had attended the meeting
\Vas :llso conducting an examination into the publication of the cont1dential details in the
held in the electontc office of Mr. Matthew Vinev MP. at which Mr. Vincy was present and at
newsoapcr and concluded that a breach of Section 77 of the Act had occurred by the publication
which meeting infum1ation already the subject of confidentiality was discussed, strongly suggested
and further that a breach of the Act may have occurred in similar circumstances to those Identified
a further breach ot confidentiality (p.26.).
In
bv Inspector Good;lll. The Select Committee recommended that an investrgation be undertaken by
the Oftlce of local Government (sic) into the process !allowed by the Frankston City Council and
6.
During the course of this investigation there have been rumours that bribery may have been
the C.\D Project negotiations.
involved in the bidding process.
Summarv of Allegations-
Historic Background -
The Select Committee Report's Introduction referred to an allegation that during the confidential
7.
The development of the Frankston Central Actnities District (CAD) has not been a huppy
brieling ofCounclllors concerning the CAD Project, it became obvious that a particular developer
experience tor the Frankston Ciry Council and its predecessor. Over 20 years ago, the Council
was to be recommended. At this point. one of the Councillors allegedly leti the room to make a
entered into a joint venture with the Galvin Group (GalvinJ to develop the Balmoral Car Park into
mobile telephone calL Shortly afterwards. a telephone c:1ll was made to one of the consultants
the Quayside Shopping Centre. Unfortunately, Galvin went broke and the joint venture properties
assisting the Working Party from the lower ranked developer indicating an alteration to its bid.
were sold by the mortgagee to the Gandcl Group ("Gandcls"). This included the Central Car Park
The Committee was satist1ed that the change to the (]andel bid (as communicated in the telephone
that is at the southern end of the Quayside Shopping Centre.
call and subsequent e-mail and formal letter) constituted a significant and material alteration to
development of the Balmoral Car Park came from Gandels. which was an unsuccessful bidder m
their original tender (p.25 ).
the subsequent public tender process required by the then CounciL
8.
Ironically, the idea for the
In the early 80's Council decid,:d to acquire properties to the north of Beach Street to establish a
car park to service the CAD. Unlortunately, news of the proposal leaked and Council was !arced
to pay more than was necessary tor the acquisition. Gandcls purchased one of the houses at 2
Evelyn Street and retained it as a dwelling that formed an island site on the edge of the car park
that was eventually constructed (the Beach Street Car Park)
2
3
9.
In 1990 Council entered into an agreement with Quayside Pty. Ltd., Braybridge Pty. Ltd. and
ln March 1997, thE first Council was elected for the Frankston City Council following local
Cialvin in relation to, inter alia, the construction of a pedestrian lmk from the Frankston Retail
government amalgfmCition.
Commercial Centre to the Beach Street Car Park. The agreement provided that if the Council had
Councillors elected to that Council for a three year term.
Mark C:onroy (Conroy) and Bill Parkin were two of the seven
not itsclftirstly constructed a turther level of car parking at the Beach Street Car Park, Braybridge
was granted the entitlement to construct on the existing structure. a further level of car parking
13.
Shortly after the election, the Council was approached by Gandels to purchase the Beach Street Car
bcilities of not less than 265 car parking spaces. Gandels purchased the Braybridge entitlement
Park to expand their shopping centre. To support their proposal, Gandels introduced an American
under the agreement when it bought Quayside.
expert in retail shopping centres 1\ ho spoke about how to revitalise the Centre and make it become
an entertainment centre. In response to this, Council engaged property consultants Pinnacle
Ill.
In early 2000 correspondence between Council and Gandels over the terms of the agreement led
Property to provide 1dvice. Pinnacle recommended that Council should sell the land to Gandels.
Gandels to write that Braybridge and the Gandel Retail Trust would have to consider issuing legal
One of the factors in Pinnacle's recommendation revolved around the legal agreement concerning
proceedings by way of appropriate declarations, injunctions and claims for loss and damage should
the car park and 2 Evelyn Street.
Council persist with its position that the agreement would expire upon the sale ofthe Beach Street
Car Park. During the course of the subsequent negotiations over the CAD development proposal,
14.
At about the same time. Conned had been undertaking a strategic review to plan and promote
this issue remained the subject of considerable debate and concern on the part of the other bidder.
Franks ton's future as a vibrant cee1tre. The "Frankston Project" which was partly funded by the
Cirocon.
A further concern was raised over contributions that had been made by Gandels'
State Government a> part of their Pride of Place Program. was prepared by Hassell and adopted by
predecessor to the construction costs of the Beach Street Car Park and whether a ··swtutory trusr"
Council in 1999. The Franks ton ProJect provided the framework for the development ofthe CAD
existed for the bene tit of Gandels over its entitlement to use the car park. These two issues were
and also instigated a number of other projects for the City.
vigorously contested between Gandels and Council during the bidding process and led Grocon to
seck an indemnity trom Council as part of its conditional bid.
15.
At the instigation of Conroy, Council elected not to accept the Pinnacle advice but rather embark
upon a full public lender process.
11.
Conroy believed the tender process would elicit a more
In approximately 1997. the Council with the State Government and the Public Transport
competitive result for the City. On 21 June 1999, the Council authorised the Chief Executive
( 'orporation. issued an approval for a Readings 12 screen cinema complex, plus car parking. on
Otiicer to conduct negotiations concerning the possible future development of the site.
part of the former railwav site and providing a linking building across the railway tracks between
Young Street and Fletcher Street. The approval has not been acted upon and it is now proposed
that Readings be part of Gandels' development.
4
5
1!1.
Cuuncil clectton' occurred in :V!arch 2000 at which Conroy was re-elected and subsequently
became Mayor. Gandcls approached Cunroy as Mayor about negotiating a way out of the possible
expression ofinterest'tendcr process on the north of Beach Street. Apparently discussions revohcd
e1round the need for a new e1quatic centre likely to be built on the Sherlock Reserve, not far from the
CAD. These negotiations were unsuccessful from Gandels perspective.
17.
In June 2000, Conroy was endorsed as the A.LP candidate for the Federal Seat ofDunkJcy. On 7
magnitude cf the proposed developments. the competitive advantages sought hy the
respondents in their proposals and the competition among the respondents (or major
tenantsj!Jr tile redevelopment of the sites.
The Council Jjjicers ·assessment was that confidentialitv »ould become even more critzcai
in the secona stage ofthe process. particularly as more details about each o/thc proposals
would be required fi-om the shorr-listed parties.
The Council s solicitors, Maddock Lonie & Chisholm, advised that it was crzticalthat anv
process to seLect a preferred developer fors uch prominent commwzitv-owned assets. should
not onlv be f;lir, but should be seen to be fair to all parties. Council officers therejiJre
thought it appropriatefrJ" Council to adopt a process by which the details of' each partv 's
proposals fo' the development of the Franks/on CAD be restricted to a small working
party, pezzdir.g prese/1/ation of' the final proposals to Council.
August 2000 the Council approved a brief to develop an "Expression o/Interest" document t()[ the
sale and development of three sites being the Beach Street Car Park and 1:\vo sites at the southern
end of the CAD. the Shcrlock and Hay site :md the fi.Jrmer Police and Law Courts site.
Although the final decision concerning the selection of a preferred developer restedsole/v
with the Frankston Cifl Council/on· themsdves, ,V/addock !.onie and Chisholm
recommended that, durin,~ the negotiation process. it was desirable that/he Working Partv
exclude C our•ci!lors j!H numerous reasons, including:
A collateral contract could exist between Council and each of the short-listed
pcrties. Such contract could entitle an unsucccssjid bidder to take action
against Coun,:il if it appeared that any person had breached conjidentialifl'
during negotiations;
,¥on-involvement of Councillors in the negotiation phase of the process would
moid mzv perceived or real conflict of interest; and
It was not uncommon for a Council or other policv-making bodv to remove
itself collcctiveiy and individuallv from the detail of negotiating with each
part:<- This also had the benefit of protecting Councillors Jrom potentiallv
being harassed by bidders during the negotiation process.
Expression of Interest-
I X.
In September 2000 Council formally called for expressions of interest for the development of those
sites. The advertising period for the Expressions oflnterest closed on 3 November 2000 by which
date six parties had indicated an interest.
19.
The Select Committee Report provides a useful summary of events between November and March
200 I which, at the risk of plagiarism. I adopt: "Six expressions of interest were received b)i the due date of 3 "Vovember 2000, and. of
those. all but one expressed an illlerest in developing one or more of' the Council sites.
The jive parties that registered an interest in developing all ofthe sites were invited to an
intervieH· with Council officers on 5 December 2000.
Prior to tlze interviews, the Council provided each of' the five parties a list of questions to
which written responses were to be delivered bv 29 Sovcmber 2000. These questions
concerned information required as part of' the expression of interest but not adequate/].·
supplied in the origimzl submissions.
Prior to the interviews, one oft he parties withdrewfrom the expression ofinterest process.
resulting in!iJUr parties being interviewed.
During the expression of interest process. concerns regarding confidentiality and the
probity of the process were raised bv three of the jour interviewed parties because of the
6
-c
------.----...:~~..;.:,;~.T!=mu,":...>"•.:.;.~'·'"'l:.-".1
" .. J:;
Following the interview stage, three ofthejour parties were short-listed and mvited to
participate in the next stage of the process.
On 18 December 2000, the Council held a Special Meeting (closed to the public in
accordance with Section 8CJ(2) of the Local Government Act 1989! and resolved that a
Working Par~· be established to consider the Expressions of Interest. The Council
discussed optzons for proceduresji1r dealing with the second stage ofthe process with the
short-listed parties and decided to embark on a concurrent negotiation process with the
remaining parties.
It was r;onsidued that the Working Party would conduct this process which would allow
greater jlexibilityjor Council to address the individual elements ofeach proposal Formal
resolutions of the Council carried at this meeting included-(a)
(b)
(c)
That Coun,;i/ confirm the composition of the Working Party.
The Council authorise the Working Party to proceed with negotiations with
the short-listed parties.
That Council appoint a Probitv Auditor to oversee the process and report
regularly to the Council on the progress of the process.
In accordance with the Council's Resolution. the Working partv was to comprise:
7
Jon Edward1·. Chic:! ExccutiHc Officer. Frankswn Cirv Council;
Peter Fitche/1, General A.fanager, \1arkct De\·e/opment and Planning,
Franks/On Cin· Council:
Stevc /)a/ton. General J.f<1nager. Corporate and Covernanct' Services,
Franks/On City Council;
Ceorge J!odrich. General Jlanager, FrankC01p:
Lidia Orsini. Senior Strategic Planner, Franks ton Cin· Council;
Craeme Parton. Director, Pinnacle Propertv Group: and
Andrew Williams, Consultant. Pinnacle Propern· Croup.
In a written submission to the Select Committee, .Hr. Jon Emvard1·, ChiefExecurive Officer,
Franks/on Citv Council, noted that "In due course, rhe Working Party became- for all
practical purposes rhe Corporare }v[anagement Team [himself, Fitchert, Dalton and
J!odriclzj and the Senior Strategic Planner. "
Mr. Ed1vard\ also stated in lzis submission rhat the Council Resolution o/18 December
:!I)()() was intended to vest the Working Part'c with the responsibility for-conducting rlze
concurrent negotiation process. The Working Partv was to report to the Council at the end
of' the proc·css. and the Council was to then decide wherher anv (and, if'so. which) of the
hidY were to he accepted
On :'.0 December ::!OIJIJ, the Council sent a lett<:r to the three parties biddingjiJr the project
that outlined the rules ofrhc negotiation process. These "rules ofparticipation" outlined
thcfiJ!lowmg:
Probitv -- 10 ensure the probity of the negotiation process. the Council would
appoint a prohin· auditor;
Confidentialin· --a condition ofthe invitation was that anv matters discussed in
reiL;tion to th~ process were 10 he confidential;
.
Canvassing- approaching, or requestinganvone to approach, any Councillor,
member of the Council's staf}: or consultant engaged bv the Council to so/icir
supportfiJr a particular proposal or otherwise seeking to influence the outcome
of the negotiation process would not be permiued: and
Collusion-- the short-listed partv, its emplo.vees or consultants were not to enter
into an_v agreement. arrangement or undersranding with any other short-lis red
party or anv industrv association concerning the preparation ofan offer;or the
purchase of the properties or any of them without the prior consent of the
Council
Mr. Edwards c:om·eved this injiJrmationto the Mavor and Franks ton Cin· Councillors in a
memorandum dated 5 March 2001. A copr ofthe ;nemorandum appears-at Appendix D (of
the Select Committee Report).
:lccording to page .f of' the memorandum, the terms oj engagement lrere executed bv the
three parties.
Jlr. Edwanis· submitted to the Select Cummirtee that rhe Council wished to engage a major
accountingjinn to act as a prohin· auditor and it was crucial that a firm he engaged thar
did not have a conflict of interest, i.e. had not worked for anv of the three shorr-listed
parties. ...Jccording to ;\Jr. Fdwards, both himself and the Council's lawvers made a
1111mher of' 1elephone calls to ascertain which of the major accounting fir~s working in
8
probitv aud'ting did not have a conflict. PricewaterhouseCoopers was found tu meet tlus
requiremen' and was. therejiJre, approached to he engaged as prohitv auditor.
On 17 Januan 2001, PricewaterhouseCuopers sent a letter ofengagement tu Mr. t'dward\
agreeing to act as prohitv auditor and advisors to the Frankston City Council on the
Franks ton CAD Developmenr (see Appendix E) (of the Select Committee's Report)
In his evidence to the Select Commirtee, /vir. Ceojf Harry of' PricewaterhouseCooper.\
described tAe role ola probitv auditor as someone who could provide an opinion on the
process bei.1g pursued in choosing a developer and to ensure that due process was
followed ,'VJI·. Harry confirmed that it was commonfor prohitv auditors ro he appointedfi;r
large propertv development projects such as the one in question.
.vir. Harry ,old the Sef,,U Committee that the Franks/on City Council had developed
specified rllles relating to the prohity of the process and, as the probitv auditor. his work
was concerned wirh comoliance with those rules, as well as the broader concepr ofprohiry.
Like anv audit, the probitv auditor was required to provide an opinion at the end of the
procl!ss.
Jdr. Han:v i'l/iJrmed the Select Commil/ee thar his jirm also provided Franks/on Citv
Council wirh probity advisory work in relation to this project. This amou!lled to advice or
guidance to Council on how to deal with a matter ij'a prohuy issue arose during the course
of the negoti:1tion process
In .Vir. Edwards' memorandum dated 5 March 200 I (li'hich appears at Appendix D). Mr.
Edwards ou:lined to the tvfayor and Councillors how a Councillor was to de/ermine
whether a ccnflict of interest existed and urged the recipienrs to formallv decf,,re such a
conflict.
Following the circulation uf this memorandum, the ,V/ayor, Cr. A-lark Conrov, in a letter
dated 27 Ma•'ch 2001. declared that he mav have such a conflict (see Appendix F; The
letter stared:
"On 16 November 2000 I conducted a jimd raising jimction jiJr the Australian
Labor Partv at ivlount Eli::.a }or the Federal seat of Dunklev I arranged the
fimction in mv capt!Ci(v as the endorsed candidate.
In addition to 65 ,Jfher guests, thefimction was attended by representatives of the
Candd Retail Trust as well as :vfr. Colin Stubhs and ,Vir. Don Simpson
f have suspended ,my contact with these parties until the CAD redevelopment
propowls have been finally determined"
,"vfr. Edward> >fated in his submission that the Council sought legal advice over this marter.
,'vfaddock Lonie and Chisholm, the law firm actingfiJr Frank> ton Cirv Council, advised that
no conflict of inrerest existed
Two ofthe thr.?e parties thm had submitted ill/ Etpression of/merest completed negotiation
with the WorKing Partv and submitted bids·. The two parties were Candel Retail Tmst
("Gandel ") a'ld the Harbour Citv Consortium (Grocrm Pty, Ud and Proclan Pty, Ltd.
"Crocon")."
9
The Process
20.
1 he process adopted bv ( 'ouncil was a jomt negotiation process as opposed to a straight out tender.
The process did not involve a simple sale of three lots ofland owned bv Council. It was a process
•
that had a very specitic agenda of achieving the vision of the Frankston ProJect of promoting the:
Council will be responsible for management of the puhlic car parking spaces The
public t:ar parking ~paces vvill be either tran:.,j2rred inltJ C(;;.£ncil rnvncr.vhip ut no cost
to Council, or managed b)'· Council for no management fee.
Prefertnce ~t'il! be given to tenderers 'vrho are able to develop the :·;itcs in c~ccordance
with the Council's ohjcctives for urhan design. and other Council policies either
e.tplicitlv referred to in Council's documentation fin· this Expression of lntaest. or
othcrw,se endorsed hv Council.
PreferEnce will he given to tenderers who promote in their developmnzl u( the sites
innm·mion and des(Qn excellence." (P.LJ)
Franks ton CAD as a vibrant business centre. The objectives contained in the Express10n oflnterest
document were: ·
lt is apparent from the Select Committee Report summary that probity and confidentiality were of
'"The Franks/on Citv Council has enshrined us policv in the Franks ton Planning Scheme
objectives to realise the full potemiul of the C4D. The objectives aim to jacilitate
development and uses within the Frankston CAD that: .
Improves !he phvsical image and integration of/and uses of the C4D.
Strengthens the economv and regional influence of the CAD.
Provides residenls and husiness with state of art facilities and services.
Provides an emphasis onfimzilv and entertainment." (P.6)
utmost importance to Council and that these matters were emphasised to the parties engaged m the
joint negotiation process. The parties executed a "'Terms ojEngugemenl" in Fcbmary 200 I which
specifically dealt v;ith the probity of negotiation process m Clause 6, which provided:-
"6.
PROBITY OF .VEGOTIATION PROCESS
The Short-Listed Partv agrees to be bound hl· the jiJ/Imving rules in participating in
the •wgmiation pmcessfor the proposed sale ofihe Properties.
21.
In order to achieve tts objectives for the CAD, Council provided Development Imperatives in the
6.1
Expression of Interest document which provided:
"Development Imperatives
Council has development imperatives for the sites which must be satisfied in order to
achieve its ohjeclivesfor the CAD.·
Development ofthe north ofBeach Streel site is the primaryfocus ofthis opportunitv to
strengthen and enhance the role ofthe CAD. Council wishes to see a signijzcam level
u(investment in the site
Preference will be given to tenderers who can also demonstrale the ability to provide
an ecozzomic benefit to the soulh end of the CAD (i.e .. south of Wells Street). Thzs mav
he by a commitment to devt'lop an ailernative site which is located in this area i;z
addition to the north ofBeach Street site, or to develop either or h01h of the Council
owned sites (Sites 2 and 3). Anv development must he ofappropriate scale to generate
a significant economic benejil to the area.
The development soulh of Wells Streel must occur prior to. or concurrentlv with, the
development on the north of Beach Street site.
All existing puhlic cur-parking spaces must be replaced either on site lpreferabiv), or
within reusonah/e proximitv to their existing location, at the developer's expense, and
made uvailableforpuhlic use. Replacement ofpuhlic car parking spaces must occur in
addition to the provision of those car spaces required bv the intended development
]()
Probity Auditor
6. 1.1 The Short-Listed Partv acknowledges that Council has appointed
,v/ichuel Shutter of PricewaterhouseCoopers. 333 Col/ins Street,
,v/dhourne, us its prohitv auditor ("Probity Auditor") to oversee the
negotiation process jiJr the proposed sale of the Properties.
6.1.:'. The Short-Lisled Purtv agrees to complv with anv request of 1he
Prohity Auditor in connection with the negotiation process.
Confidentiality
Umil the ·'·ucces.\jit! Short-Listed Party's ojfer is accepted neither:
6.:'.. 1
6.:'..:'.
the Short-Listed Partv. its ernplovces or consultants, nor
anv Councillor. m em her of' the Council's stafl or consultant
engaged by Council:
may dzsclose the terms ofunv offer. or the uccepwnce or 171JIJ-acceptance of
anv offer, or any discussions between the parties unless:
6.2.3
6.:>.-+
6.3
in !he case ofproposed disclosure hv the Short-Listed Partv. the
Short-Listed Partvfirst obtains the consent of Council: or
in the case ofproposed disclosure bv Council, Council jirst obtains
the consent of the Short-Listed Parn·.
Canvassing
The Short-Listed Party. its ernplo;vees or consultants must not approach, or
request any other person to approach, unv Councillor, member of the
Council's staff or consultant engaged bv Council:
I!
6.31
6.3~
to solicit supportjor zts offers: or
o!hf!rwi.Ye seck to il?flut>nce the outcome ofthe negotiation proc;:ss.
One of the difficulties the Working Party found during the course of the process was that it had to
be reactive rather than proactive in order to satisfy the requirements of the rrobity process. That
6.4
Collusion
The Short-Listed Parn·. its cmplavces or consultants must not enter into anv
agreernf:'nt. arrangement or understanding -.,-vith any other Short-Listed
Party or any industry association concerning the preparation ofan r1ferjor
the pw"<·hase ofrhe Propt'rlics or w1v of' them without the prior consent ol
Council"
process seems to !1ave constn,ined a free tlow of communication and gave rise to a considerable
amount of second-guessing. For instance, if one party requested infonnation from the Working
Party, it felt const1aincd to makt: that information available to the other party hut without indicating
why it was domg so. That gave rise to conjecture on the part ofrhe receivmg party about whether
In February 200 I, the Council approved a set of evaluation criteria and weightings to be used by
it was being given a message that it should therefore respond to in some way within its bid. During
the Working Partv to assess the bids it was to receive
The preparation of the criteria and
the negotiations Gandels dcv~loped the be!tef the Working Partv was treating it differently to
wcightings had been developed by the Working Party using a point sconng system with a total
(]rocon and that the Working Party was developing a bias agamsl it. On the other hand Grocon
potential score nf 1000 points. Each member of Council's Working Pat1y was required to sign a
was concerned tbat it vvas prl>posing to build a new shopping complex next to a neighbour
contilkntiality agreement concerning his or her involvement in the process.
(Gandels) that ha cl a $150M investment it would try and protect through VC AT and the courts and
wanted some kvcl of protection. As l said earlier. the process was not without its difficulties
2-l.
Gandels and Grocon engaged teams of consultams specialising in areas such as urban design.
planning, traffic. retail economtcs. retail/real estate leasing, quantitv surveying and finance to
prepare their bids. ln order to assess the level of compliance with the Development Imperatives
during tht· negotrations the Working Party engaged a similar team
Local Politics -
27
25.
In late 1999 the Victorian state election occurred with the subsequent by-electwn for the scat of
During the course of this invcsttgation, a number of critical comments have been made about the
Franks ton East, w 1ich was won by the ALP candidate. Matt Viney (Viney). At this ttme, C:onroy
process, its cornplexitv, length, difficulty and cost. I make no Judgment about the appropriateness
was the Deputy Mayor and assisted in Viney's campatgn. Conroy joined the Frankston branch of
or otherwise of the process embarked upon. as it rs not part of my investigation. ! can understand
the ALP in 1995
that it gave rise to tlustration on the part elf the bidders who were seeking to achieve a commercial
Party most of his life having handed out how-to-vote cards when he was 13 years old.
a~d
was a member of the Lab or Unity Faction. He had been on the fringes of the
outcome through the purchase and development ofland with a total value in the order of $lOOM
whrlst the Working Party were seeking to achieve an aspiratwnal outcome consistent with the
Matt Vincy has been a member of the ALP on and ofT since 1975
abovemcntioned objectives and Development Imperatives. These outcomes do not necessarily
pretty strong political relationship between himself and Conroy and he had assisted Conroy in
waltz to the same tune.
being dected as a Councillor in his first election in 1997. In the March 2000 Council Election,
He considered there was a
Conroy solicited Cathy Wilson 1_Wilson) and Vicki McClelland (McClelland) to run for election.
Wilson had been a member of the Cranboumc Branch of the ALP fclr approximately five years.
;'vlcClelland tcnd·~d to relv mor~ on Fuller and Parkin than Cnnroy owmg to their assessment of the
!'vlcCicll::tnd was not a member of the ALP but had been active in a local campaign to save the
latter's lack of communication skills. Over that pcnod there were incidences where Wilson and
Pines Forest Pre-School from closure. Another member of the Franks ton Branch of the ALP" as
McClelland clashed with Conmy and did not vote m unison. but until S.:ptembcr 200 I considered
David Ask cr. He had stood J()r the previous Council election but had been unsuccessful and stood
they had a ti·iendly relationship with him.
again in 2000.
The relationship between Conmy and Vinev is an important one in the context of this mvestigatwn.
2LJ.
Conroy provided assistance in the election campaigns
to
Wilson. \1cClelland and Askcr and
C orU"oy regarded Vincy as a mentor and a confidant and described their relationship as a fairly
received advice trom Vincy in tenns of preparing campaign matenal. There was a fifth candidate
close one politically and personally.
who was also supported but was unsuccessfuL
development of ,t pretty strong political relationship between himself and C:onroy. 1-lc stated
Viney considered that over tim.: there had been a
Conrov would of en drop into his ot1ice and use a workstation that was available for volunteers. It
is Vinev's view that there would not be many people in hanks ton that would not know that Conroy
and he, politically, are very closely aligned. Viney also considered his relationship with Wilson a
good one. She had actually worked for him on a casual basis for six weeks when he had a shortage
Viney describes the campaign f(Jr the March 2000 election as a fairly successful one as four of the
of staff Viney thought he got on quite well with her and regarded himself to be like a rnamage
five candidates were elected. That resulted in Conroy having a majority of the Cotmcil. However.
guidance counsellor between her and C onroy in trying to keep them together when they clashed.
Wilsun said they all voted however they wanted to vote. except on things of importance. like the
mayoralty when they met at Viney's otlice and caucused.
34.
In June 2000, Conroy was enc.orsed as the ALP candidate for the Federal seat ofDunklcy. In a Jlle
note printed in A11gust 2000. Gandels noted: -
31
Other Councillors elected in March 2000 were Bill Parkin who had been a councillor for many
".V!avor .Vark ConrO\' is now the endorsed ALP candidate for the Federal seal ofDunkley,
cun:entlv held bv Br~ce Bi/lson ofthe Liberal Partv. The date of the next election could be
anv tim; a tier the Olvmpics or at up to late 200 I. The szgnificwzce ofthis is that Conruy is
op.eratingto ensure ihat evervthing has politicallv beneficial results. Thus he takes no riskY
unless he .;ees it as an advantage to his political career.
years and had aftiliations with the Liberal Party, Dianne Fuller who had previously been on the
Franks ton Council in 19XO's and had been but was no longer a member of the ALP and Ban)'
Priestky who was not politically aligned. Conroy regarded Parkin and Fuller as being his political
Gandels have approached Conroy about negotiating a wav out ofa possible expression of
illlerest/tender process on north of Beach Street. Conrov's "deliven·/ist" includes a new
aquatic untre likelv to be built on Sherlock Reserve, not jar ji-om the CAD. The capital
cost ofthis project will be Si 2!vf- 3 !3i'vf. Gandel had discussions with Conrov as to how
he might use the cash out of North Beach site to substantiallv develop this premises. "
opposition on Council.
:1:2.
Over the initiall2 months. Wilson, McClelland and Ask er acknowledged their lack ofexpenence
35.
C:onroy was elect ..;d Mayor after the election in March 2000. Towards the end of2000 Viney ~nd
and their reliance on their more experienced colleagues for advice and guidance. Wilson and
Conroy obtained che agreement of\Vilson tor Conroy to run a second tenn as Mayor to assist hi;,
14
"----------
-----~--------·-------
15
chances in winning Dunklcy.
Vinev spent a lot of time advising Conroy on how to position
himself to best political advantage throughout 200 I.
37.
40
Interestingly. at an internal meeting of
Ward has been a r~al estate agent since 1970. His business is commercially oriented and consists
of management and development in the retail area. In the five or six years prior to 2000, he had
Ciandels concerning the Franks ton tender in 'v!ay 200 I, ''.'v!ayor Conruv's concern over Dunklev
been heavily involved in
~vas
thf! regional (u.-Juatic centre being his priority ...
Frankston. He idcntilies sites that could be development opportunities and introduces these to
At a Council meeting in August 200 I. Parkin unsuccessfully moved to defer consideration of the
clients and potential tenants. In particular, he was involved in the Bulky Goods Precinct known as
Frankston CAD Project until after the forthcoming Federal dection because of his concerns over
the Bunnings site with the directors of the Proclan Group. which was the joint bidder with Cirocon
the impact the election may have on the negotiation process. The other Councillors did not support
for the CAD Project. The
thts motion.
been and still is involved in a number of other developments with Simpson and Stubbs in addition
Throughout late 2000 and all of 2001. Conroy was actively involved in promoting his interests as
to Bunnings.
seen
!.JS
a risk,
~y·irh
puttin~
together a number of significant development sites in and around
dir~ctors
ofProclan were Don Sirnpson and Colin Stubbs. Ward has
the ALP candidate. A number of fund raising functions \vere organised. one of which is referred to
in the select committee summary referred to in paragraph IS. \Vhilst Rogan \Vard was not then a
41.
Prior to signing
th~
agreement, Ward had not done any work for Ciandels. When they approached
member of the ALP. his political affiliations were closely aligned with Conroy and the election
him, he had already been aprroached by Proclan to work for their group and had various
campaign was the subject of trequent discussion between them over this time.
discussions wnh Woolworths ;n their own right. After being approached. Ward spoke to Simpson
and then agreed to join Ciandels' team. Ward's contract with Gandels provided for a monthly
Rogan Ward
JS.
retainer and a commission dependent upon a successful outcome for Gandels.
In May 2000, Gandels produced an internal issues paper for discussion about what was termed
"lhe Frankston Pmjf!cl ". A number of issues were identified in the paper ranging trom the local
42.
One of the attractions of\Vard to Gandels was that he is well known in the area and to many ofthc
dislike for Gandek the Gandel Pro tile, the need for local supporters. a role for Rogan Ward, the
significant players especially Councillors. landowners, tenants. members of the Chamber of
new Council being kd on CAD issues by Conroy and Parkin and a number of other issues.
Commerce and lo,2al members of Parliament. He had been on the Counctl for approximately S
years in the SO's having one term as Mayor. He had been a member of the ALP in the then Centre
3lJ.
A strategy meeting occurred on 11 :V[ay 2000 with one of the actions agreed on being to seek an
Unity faction although he did not renew that membership after going to Queensland in the mid
association with Rogan Ward. This was undertaken and eventually an agreement was reached on
80's. He had previously been an endorsed ALP candidate. Conroy recalls handing out how to vote
I cl June 2000 whereby he agreed to provide consulting services in regard to property advice.
cards for him in his youth. Ward recalls meeting Conroy in the mid 80's through politics, Ward
strategic development advice and real estate agency services in respect of the CAD Project.
also did a lot of work with the local media and had known Tony Murrell of the Frankston
Independent since 1977.
16
17
Becaltsc of the nature of his business_ \Vard often dealt with the mayors of munietpalities and
:'.00 1, m the four months prior to the Working Party briefing Ward was in constant contact with
sought
involve them in the openmgs of various developments with which he \Vas imolved. In
Conroy. In this time the Bunninc;s project was the subject of a considerable amount of attention as
Ward's \ iew he had been engaged because Gandels had difficulties in the past with local politics
were a number of C>thcr projects with which Ward was involved. He said it was necessary for him
and had been the subject of a campaign over the Quayside Shoppmg Centre development with
to contact the Mayor m order to deal with the various projects. lt is apparent hom these records
tem1s such as "'Gancleltuwn" being used against its interests. \Vard \>:mted to make sure "that the
that v;ard had free Jccess to Conroy and that they had a number oflengthy telephone conversations
rigfzt it?J(;nnation this time fvas going out in the interest.<:; ufFrank\'tun "
over this period. Both sav that their discussions otten dealt with the election campaign, but did not
In his evidence to the Select Committee. Ward said that at the time the parttcs entered into the
canvass the CAD Project.
tu
Terms of Engagement he advised Gracmc Part on of the Pinnacle Group that while he understood
the need for contldcntiality, his ongoing and regular business dealings in and around Frankston.
including the CounciL could not be a!Teeted by the terms. He said Parton understood this and
The Bids-
-+7.
The bids were reqwred to be provided to Council by 20 August 2001. This date had been extended
indicated that the terms would not be extended to contacts with Councillors or offtcers or to
from the original jate of 23 April on a number of occasions o\ving to delays that occurred
Council's other projects but only to the CAD Project. He said he continued to operate m the
throughout the neg•.Jtiation process. It was a requirement of Council that the bidding parties would
Frankston area but avoided any discussion or contact with Councillors or Council officers on the
provide an executed Contract of Sale that Council could accept, should it so choose.
Frankston redevelopment proposal.
-+8.
-+5.
Ward also gave e\·idcnce that he had been instmmental in bringing Readings to Frankston and for
nonh of Beach Street site, Home Street and the Stratum Lease of air space over part of Beach
them to commit to the Public Transport Corporation site in 1995. He said he was instrumental in
Street. The otTer was to be on the basis of a Contract of Sale, a Section 173 Agreement and Stratum
convincing Readings to review the Central Park site with Gandels, and that once Readings and
lease subject to acceptance of the offer by Council and satisfaction of a condition that was as
Gandcls had negotiated an agreement, he arranged a meeting to introduce Readings to Matt Viney,
follows:-
due to the fact that the matter involved a change to agreements in place with the Public Transport
"GRT's ojfir i\' subject to and conditional upon the Board of the Responsible Entity being
satiojied. bv the date which is 90 davs ajier the date ofthis offer. that the proposed Central
Park development would generate a commercial property return acceptable to the Board,
which must be a return equal to or better than that which GRT enjovsjrom comparable or
Corporation and Vincy vvas the local member of Parliament. He said Viney identified that he was
happy to discuss the Readings development but would not discuss the CAD redevelopment.
-+o
Gandeb submitted its bid, whicl1 included, inter alia, an otTer of $5M for the acquisition of the
Appendtx ,-\to this report is a telephone chronology that has been prepared based on a number of
similar inves·tments"
-+9.
It is impm1ant to appreciate the ltructure ofGandels. The Gandcl Group is a private company that
telephone accounts and Telstra records. but should not the regarded as an exhaustive compilation of
provides management services t<\ the Gandel Retail Trust (GRT). GRT is controlled by Gandel
relevant telephone calls. What it does show from Ward's phone accounts from June- November
Management Ltd. which is the public company that would be the ultimate beneficial owner of the
.j
18
19
50.
land. The final decisiOn on the bid rested with the Board ofGandel :V[anagement Ltd. after it had
to determine what an acceptable rate of return would be generated by the development. In addition,
received advice and recommendations from the Gandel Group.
as the Readings siwation was contidential Gandels could not go out and market the cinema
rhc m mutes <lf a director's meeting of Gandel 'v1anagement Ltd held on-+ Julv 200 l reported on
component of its bicl to other pwspcctive tenants. In those circumstances the Board was not able to
the tender. They record that Bemard McNamara .Gandels Planning & Development Manager.
make a commercial judgment about the viability of the Cc,ntral Car Park component of it's
provrded the Board with a presentation. which included a report from Jebb Holland Dimasi (retail
development. At the same time the existing rental returns from rts pnncipal tenants withm the
economists) dealing with the demographics and retail spending expenditure for the catchment area
existing shopping centre meant that its overall rate of return on capital expenditure were at a level
<lf Frankston. i\lcNamara noted that due to confidentiality agreements. management had not been
that made the wh01e development questionable.
able to market the project to prospective tenants to gauge rental levels. The minutes furtlJ<:rrecord:
approached it is two principal tenants Bi Lo and Kman to get them to agree to increase their rent to
As part of its negotiating process, Gandcls
enable Gandels to justify embarkmg upon such a substantial redevelopment project
.. 7he Board then discussed !his and uther issues extensivelv beforejiJrming the view thal
Hhilst thev wish to colllinue to participate in the tender process they were not in a position
ltJ en/er imo any contractual ohligation at this time. Principallv as a result of the
uncertaintv surrounding the Central Park component ofthe project.
).J.
ln failing to lodge an executed contract of sale on20 August :200 I, Gandcls realised its brd tailed to
comply with the requirements imposed by the Working Party .
.Hanagement were therefi;re requested to submit a letter to Council indicating the group's
willingness to continue to negotiate with Council in an altempt 10 find a satisfacton:
solution jiJr all parties.
5-+
The Board in doing so recognised that there was a risk rhat Council may accept !he
competing render. Nevertheless, until managemenl were in a position to place a firm
recommendation before the Board it was not in a position 10 approve the project."
Grocon also lodged a bid on 20 .\ugust. It required a legal indemnity from Council relatmg to
action that Gandels might take over the "s!alutory !rust'' which might affect the Beach Street Car
Park (emanating from the former Bayside development having funded car parking on this land in
51
52.
In a Gandels internal discussion paper on the tender submission dated 16 August :2001. a number of
1970/1971 ). Grocon offered S9 5M for the Beach Street Car Park site. Both the bids included the
alternatives were outlined which included. inter alia, the eventual bid. initiating legal steps over the
provisions of car parking spaces to replace existing spaces within the Beach Street Car Park. The
Beach Street Car Park and 2 Evelyn Street or seeking a purchaser for Gandels· Frankston assets
Grocon bid provided considerably less spaces per I 00 square metres of retail tloor area than
and withdrawing from the process.
Gandels bid. Thrs wets to be a significant issue in the coming month
During the negotiation process Gandcls had been provided with an architect's brief for council
Gandels Aware of Grocon Bid-
offices that theW orking Party provided in response to a request for the same from Grocon- see
para. 26. Gandeb interpreted this as a requirement by the Working Party that it should provide
55
The minutes of an internal Gandels meeting of 4 May 200 I record: "Grocon,Proclan:
''advir~c"
is that agreement with Council over replacement car parking
on :Vorth ofBeach Street has delayed negotiations".
er vie ol1ices on the Central Park site. The difficulty the Board faced with having to provide these
offices was not having any agreement with Council about leasing the same and thereby being able
20
i ~
ii..
21
56.
TillS advice consisted ofinfOimation gleaned by Ward through his other dealmgs in Frankston. In
59
of their concept plans on 22 August 2001. Because of the confidentiality provisions in Terms of
his evidence tll the select comrmttec, Ward said:
"J/v 111\'0ivemcnt with Cande/ 's proposal continued through the early months ofrhe vear
]()(}I and illfo the period when Bi/1 Kerr. the principal negotiator. was added to the team
During that time !was !oose/v aware of rhe currem negotiations being undertaken b,
Crucon-Proc/an rhrough nn· invohement wirh Co/in Stubbs and Don Simpson Thev were
the princ'iples of Proc/un ..'vir Chairman At around the Jfm· period both Gande/s
execwi ves and I detected a significant change in the dealings of the Franks ton H'OI·king
partv. That was demonstrated by a number of items: inabilitv to he clear on car parking:
the avoidance of anv discussion of commercial terms. despite Gande/ raising this on a
number oftimes when f was in attendance; and diffzcu/tv in getting correct figures as to the
car parkmg expenditure and income on north of Beach SireN. "
Following the lodgement ofthc b1ds. each party made an individual presentation to the ( 'ouncillors
Engagement. Councillors could only ask questions through the i'vlayor after they had privatelv
discussed each presentation in the Council chamber awav f)·om individual bidders
60
The concept plans were placed
'Jn
public display between 27 August and !4 September 200 I and
public co111111em was sought in response to the exhibitiOn. This was an interesting stc;p. to seek
public co111111cnt on a process that had been enttrely confidential and subject to a vigorous
.~s
prn·ious/v slated I was loosely mnzre of the current negotiations with Grocon and
Proclan and it was made quite obvious to me that both parties \\Ere dissati4ied with the
pmcess Proc/an stated on numerous occasions it was the worst process thev hac/ ever
!wen im Dived with. This loose relationship also made me aware that Grocon-Proc/an were
being dealt with in quite a different way to the Gandel Retail Trust .
assessment by the Working Party based on a set of criteria and wetghting that presumably would
not be int1uenced by public opimon. In the Tenns of Engagement. Clause 6.3 specificallv provided
parties must not approach or request a person to approach any councillor. member of Council staff
or consultant to solicit support ur otherwise seck to intluence the outcome of the negotiation
'i7
Gandcls were aware that Grocon would be offering $9.5M and be seeking an indemnity from
process, and yet the public were being invited to do JUst that.
Council over the issue of car parking prior to the Grocon bid being lodged. What Gandels did not
know was how Grocon could justify the level of the bid until after inspecting the plans that were
61.
It was atler seemg Grocon · s plan that Gandels were able to detenmne how Grocon could afford to
placed on public exhibition on 27 August 2001.
otleralmosttwice the amount fo:the Beach Street Car Park site. Gandels commissioned its traffic
engineers Grogcm Richards, its rt"tail economists Jebb Holland Dimast and its quantity surveyors to
5)1
Whilst Gandels were aware of the amount of the offer to be made by Grocon, its own bid was
do a thorough analy:;is of the Grocon plans.
driven by its assessment of the levels of return it could generate by the rental stream it cou[d expect
to receive from its eventual tenants if it was to be successful. This assessment was the subject of
62.
Gandels then embarked on an aggressive campaign to intluence public opinion against the Grocon
considerable research and analysis on part ofGandcls in preparing the bid. I am satistled from my
plans based on these reports. Meelings were arranged with tenants and landowners, particularly at
examination of Gandels' tiles that the possession of the Grocon information, whilst of interest did ·
the southern end of the CAD. local members of Parliament were approached as part of the
not intluence Gandcls eventual bid. It is apparent from the files that the overriding factor dictating
campaign, in particular Viney and A:ndrea M cC all. The Chamber of Commerce was lobbied and an
the financial offer was predicated upon a rate of return acceptable to the Board of Gandcl
organisation of the Southern Traders was formed with significant input ti'om Ward in the form of
Management Ltd. The figures the Board was looking at in August 200 I placed this development ,
drafting correspondence and faCJ!itating the dissemination of information to anyone interested.
on the borderline of acceptability.
Public Exhibition -
22
63.
projects on the kev sites, with morejund1· available to prm·ide superzor il'vels ofparking
ilijras/ructure. better public spaces, better access and heller integration with the rest ofthe
The thrust uf the campaign was based on the assertion that Grocon · s plans showed 36078m' of
let table tloor space. but only provided 2259 car spaces, which was a ratio of2.54 spaces per I OOm'.
cw
whereas Gandels v.ere proposing l5210m' and !914 spaces or 4.58 spaces per I OOm'. Gandels
We would dso request !hat/he Franks ton ( 'ity Council ensure anv development is likdv to
be sustainable and economicallv viable un its own merits. and >Vith a view 10 its broad
impact on the Franks ton CAD."
asserted GroC<lll had underestimated the necessary car spaces by bct\veen 500 to 600, which at
approxim~nely
S 12,000.00 per spot meant Grocon could afford to otter almost twice the Gandels
offer.
66.
Nut surprisingly this campctign provoked strong complaint from (jrocon which wrote to the
Working Party protesting it was contrary to the Terms of engagement The problem wets that the
it was also asserted that by significantly increasing the retail floor space in the northern CAD. the
plans had been put '·m public exh>bition with invitations f(Jr comment and it appears there was very
southern traders would be overwhelmed and the Centre would not be economically sustainable.
little the Working Party could do. Grocon did not enter the public debate.
kbb Holland Dimasi predicted that the impact of Grocon's development on the Franks ton CBA ·
would be a lo" of $2S.31'vl of sales from a total forecast of $160l'vl or 17.5°o.
67.
I am not in a position to make any judgment on the merits of the Ciandcls assertions
To do so
would require the equivalent of a two-week fully contested court case to explore the relatiVe merits
This campaign gave rise to a groundswell of concern amongst tenants and landowners and
of the Grocon. Gandel and Workmg Party assessments ofectch case. The Working Party received
culminated in the Chamber of Commerce writing a letter expressing its concern to the Working
the Chamber of Commerce letter and submisstons rrom Gandcls detailing its concern. It believes it
Party's coordinator on 14 September 2001. That letter outlined a number of concerns about the
properly factored these matters into its assessment and that assessment led to its eventual scoring or
north of Beach Street Cctr Park and summarised that by saying: -
the two proposals and recommendation that neither of them be accepted.
"W<' arc uncertain of the henejits to be gained by the existing ratepayers in the C. A. D.
from these 1\vo proposals. On balance it appears that there mav conceiv·ablv he some
advantage )Yom the GRT proposal, hut there appears to be n~ne whatsoe~er in the
(Grocon) proposal. For the above reasons we would recommend the Council reject the
(Grocon) proposal outright, and require significant improvement from GRT
fmportamlv, a large number of employees of the businesses in the CAD currentlv park in
the all-dav area ofrhe Beach Street car park. These existing emplm·ees and rhe additional
generated hy the development need to he accommodated elsewhere. and we wouldstrongh
urge that a multi deck car park on the Evelvn Street west site he built jar this purpose.
Vinev's Position -
We are also concerned about the impact of the construction phase on existing businesses
and would urge that the Evelvn Street car park be built before any development commences
o{the Bt>ach Street site to help ojf>etthe loss ofparking spaces.
Viney was the member for Franks ton East in which the Bunnings bulky goods zone is located. lie
had a greater in teres~ in the development of that project then he did in the CAD Project Ward had
approached him on a number of occctsions concerning the bulky goods zone and issues associctted
W<' are concerned that the waters had been unnecessarily muddied bv the inclusion of.
proposals jar swimming pools and civic centres. While these may be worthwhile projects:·
in themsdves. thev need to be evaluated independently and stand on their own merits. If
these eleml'nls are removed the developers mav he free to build better and more sustainable,,
~
24
j
with the acquisition of houses to accommodctte stage 1:\vo. Ward was apparently the instigator of
that proposal. Vinev says he was less interested in the CAD Project but nonetheless, Ward also
25
briefed him on the concern that Gandels had about its position.
Vinev had a number of
The workmg part·; was surprised at Gandcls failure to supply an executed contract of sale. On 6
comcrsations with Ward particularly at the time the plans werc put on display. He went down to
September 200 l th.e CEO wrc•tc to Gandels nottng it did not incorporate a tinal executed contract
have a look them and says that he was pretty stunned that both sets plans contained a civic centre as
of sale and did not conform with the development imperatives of ensuring that the development
nobodv had mentioned to him that the project was going to involve a civic centre. He attended a
south ofWells Str:ct occurs in conjunction with the development of the north ofBt:ac·h Street site
brieting at the invitation of' Gandels and considers that it was at that time Gandcls started to
During the cmme of contmuing negotiations. the Working
"'!ohbv"' him. They started to push their case, which they were doing all around town. Viney
requirement for executed contr;tct.
P~rty
conveyed to Gandels its
~-;~,t\Y ~~D>~
recalls Gandcls saymg that there was a substantial shortfall in the number of car parking spaces in
'
the Grocon bid, Grocon \\as too large and would cause a massive funtre problem tor the
7~.
On 20 September 200 l Gandch wrote to the CEO: -
letter~
development and the existing retail area. Grocon was also believed to be seeking a legal indemnity
'
~
J
i'r "":;, ---=-~ [>.'3-4,. #
..~.'~
r;;L:~"'~~nf
~t't'
"Further /1J your
of 11 September H·ith respect to the
that
execute
Contract o(Sale by 3.1JO p.m. 25 September 2001.! ~t-rite to advise that the manager is
preparing Contracts on this basis to he executed bv Gandel Afanagement Ltd.
from the Council. His main source of contact was Ward. Ward told Viney that he believed Grocon
1
would be bidding around about SSM more than Gandels. He said Grocon would demand the legal
However, ihe nett meetmg of the Board ofGande/ Jlanagement Ltd. is not due until :!"'
October. '~onscious o( vour time ji·ame. ! am attempting to hm•e the documents sign<'d
early ! shall advise as soon as [have information on this. "
indemnity and that the parking shortfall was a problem. He advised Vinev that those things were
cause for serious concern and that the Working Party was dealing with it unequally.
73.
n'J.
70.
On the same date Gandcls received a letter from their Solicitor, Andrcw Erikson of Mallcsons
Viney took some of what he was being told with "the pro\'erbia! grain of sa/(' on the basis that
acknowledging the- requirement to prepare the contracts that were in the process of being prepared
Ward would be seeking to embellish his client's case. However, he did take some of the matters
and having to get them to Gandds on Monday (the 2-+'h). On 24 September Erikson wrote to the
seriously and developed a concem about the impact the proposals might have on Frankston.
directors of Gandel Management Ltd. advising they would receive tor execution three contracts
He considered it is appropriate that he. as the loc::tl Member of Parliament. should be approached
associated with the Frankston proposal and noting the contract for the sale of north of Beach Street
by interested parties to express their concems to him, as the development was a serious matter
contained a conditton to make that contract subject to a condition upon the Board of GML being
involving large sums of money, employment_ local landowners and tenants. Viney was also
satisfied within 90 days of its date that the proposed Central Park development will generate a
concerned about the presence ofthe civic centre in both proposals as he considered it would be
commercial return acceptable to the Board, which must be equal to or better than that which GRT
politically unacceptable tor a Council to be seen promoting new offices tor itself. This was
enjoys from comparable or similar investments.
panicularly of concern because of Conroy's electoral prospects.
7.:1.
Gandels Non Compliance-
On the same date E:rikson wrote to Council's Solicttor advising l>f having <>mailed a copy of the
conrract the previous Friday evening and also advising of the need tor a formal meeting to be held
by the Trust to com.ider and resolve to execute the contract. Notices for the meeting had gone out
27
and the rneetmg was to be held on Thursday 27 September with the documents being delivered to
79
Council's Solicitor later that day
75.
An c-rnail was crrculated to each oft he directors on 25 September 200 I by the company secretary,
Chris Lobb. which stated: -
"Further ·o rhe injiJrmution contained within the Board Papers. attadzed is 11 memo Ji-om
:Yevillc Beer prOt·iding" recommendation thut GAlL execute legal documentation relating
to the tender. rA!so atf,7ched is a confirmation from Andrew Erikson that the documents
Un 25 September 200 I. Council's Solicitor's Maddock Lonie Chisholm wrote to Erikson and
are in orcter).
advised: -
These documents are ,:·rmditional m owlined in ,Vevil!e's memo
"Thank vouji!l- vour feller of 2-Ith September 200 I.
It is propc-sed that if the GG Board accept this recommendation at its meering tomorrow,
that a circ u!ar reso!wion wi!! immediately be sent to all G.'vf!. directors reLJUesting thev
approve tile signillg o/dzese conditional documents.
We are instructed that Councit1· briefing session is going ahead tomorrow. Council
cmzsiders that it has allowed a reasonable timefiJr submission ofcontracts and therefore
will not agree to extend the time fiJr submission"_
The urgencv is due to Franks ton Citv Council insisting these documents be executed prior
to a!!owing Gandel to proct'ed with its tender process.
7h.
77
This letter was bxed to Erikson at 5.01 p.m. on 25 September. It was in turn taxed to Gandels at
Subject to the necessarv approvals being obtained we arc aiming to have the document
signed rm al least advise Council on theu- pellding return) bv Thursday 27 Sepwmber
I 0.-15 a.m. on 2h September.
2001"
The dates ofthc various meetings in McNamara and Erikson's correspondence are incorrect. The
80.
Also accompanying the Board papers was a memorandum from McNamara dated 24 September
2001, which provided revised north of Beach Street in Central Park feasibilil!es. The memo stated:
cycle of Board meetings of the Gandel Group and Gandel Management Ltd. are set at the
beginning of each year. The Gandel Group meet on the last Wednesday of each month whilst the
Ciandcl Management Ltd_ Board meet the following \Vednesday. being the iirst Wednesday of each
month. The Gandcl Group meeting was planned for Wednesday 26 September at the beginning of
81.
"These jeasibi!ities di;'j;T from !he August figures because of the revised Kmart and Bi Lo
rentaL\·. Tire alternative feasibi!ities of the Bi Lo and Kmart renta/.1· are attached"
The attached doc11ment disclos~d increase rentals that had been agreed to by the Kmart and Bi Lo
Boards and a slightlv higher
ralC
of return on the overall investments contemplated.
the year and the Gandel Management Ltd. meeting was set for the following Wednesday, 3
October.
82.
IX.
The Gandel Group Board mectmg commenced at 10.00 a.m. on Wednesday 26 September 2001.
The minutes of the meeting records:
Board papers were usually required one week prior to Board meetings. The Frankston Tender was
"1 ~ FranAston Tende;
item 12 on the meeting agenda_ The recommendation of the report to the Board was:-
"That tlze Board agree to the requirement bv Franks ton Cirv !hat Contractsjor the sale of
the land and S. 17J Agreement he executed. with the provision !hat the documents contain
conditions that will give G1\fL the right to decide wherher to proceed or not. if GRT is
se leered hv the Council as the preferred developer"
The Board discussed >clzether the group should submit a conditional or unconditional
tender ,Vevi!!e Beer distributed a paper reflecting revised returns jiJr the various project
a!ternatiws. He noted that leasing are becoming more comfortable with the rental levels
reflected in the feasibility. It was noted that the returns exclude the (xx) managi'mentfee
fCJr the jirsr two _vears_ The preferred projects (combinedVorth ofBeach Street and Central
Park l~ithDut Council <>}}ices), reflect (cx.x rates ofretum). John CJande!, Tom· Gande! and
David Thurin will discuss this matter fi1rther and advise their preferencejiJr a conditional
or unconditional tender
::\
i:
28
~~
i~
t~
1-~
----------'~~·~~~,.~·~··~•m·•~"~'~"''-~~~~~-r~•~====~~~~~~~~~~~~~~~~~==~~==~======~~~~~~~~~~~~------------.
·
·
··,:;:·.r::r.t:.!·~u·
.•
,,·;,(..'.~·.:
7:":JL:!:J.."l!:0.'1511lmli.'"~:l<nJt..illlll2tJ.•;:;r;=.ru::~r-~•
29
John GLindel,
7(!11t'
Gande! and David Thurin leji the meeting ·
S6
(The bracketed fie(ures have been removed at the request of Gandels
confidentiality rca:ons).
for commercial
The Working Party bricfmg took place on Wednesday 26 September 200 I The CEO gave notice
of the briefing to
l~ouncillors
seven days previously. On Monday 24 Sept..;mber the CEO requested
the :V!ayor to authorise gi\·ing notice of a special Counc1lmceting l(lr 211 September. The next
regular Council meeting wa' 10 occur on Monday l October 200 I
During the conrsc of the meeting the issue of whether to 1·11 cJude the 90-day condition was
Conroy says he agreed to
discussed. ' \ '· it w as a J ewJs h h o ].d
1 ay period. three of the directors were leaving to go on holiday
authorise issuing the notice of special meeting as he had been totd there might be some technical or
1
legal matters that might need to he clarified
'J
Queensland in the company plane.
ft was decided those directors would continue their
~md
that the Councillors may need it or they may not.
Conrov says that .)n that basis he was prepared to authorise the 'pecialmeeting, which required 24
discussions abuut the conditions and report back to the rem · · d.
ammg 1rectors. They were aware of
hours notice to be given to Councillors. but insisted he was not gomg to be stampeded into making
the urgency of resolving this issue and that it mav
be critical to their chances of-success 111
· gmn1ng
· ·
~
L
any sort of decisicm
the Working Party's support.
fhc directors kti the meeting at lunchtime and proceeded inunediately to the airport and took their
t1ight to Coobngatta.
Upon their arrivaL Tony Gandel telephoned Clive Appleton. a fellow
director. on Gandels'
· d contmue
·
d t h e d1scuss1on
·
· concerning the issue. advising
· mobile pho ne an
The Morning of 26 September
that he and the other directors thou<>ht it would th. .
·.
· ·
·"
c appropnate to remove the cond1t10n. That
telephone call was conducted on a conference phone in Appleton's office at which McNamara.
87.
The Working Pa:1y briefing was due to start after lunch on 26 September
Six of the seven
Applcton and Beer were present. Th e d, CCISJon
· ·
was made that Mc0iamara would contact the
Councillors were to be present Cr. Pricstley was attending a conference in Perth and would not
Working Pat1y and advise the Contract would be,execute d an
· d t h e condmon
· · would be removed. At
return until atier tl1e regular meeting due to be held on I October. Parliament was sittmg that week
and Viuey was in Melbourne unt1l Friday 28 September.
the time that deciston was made, all of the above denied having received any telephone call from
any person associated with the Working
Partv
briefing
whi c-11 \Vas
..
•• ·
·
~
.
~·
occumng
Simultaneously.
~~~-
X5.
1:
I
.
ll~lephone
records that have su far been mspected and reproduced in
McNamara immediately
· party and advised him of the Board's
. t'l
e ep h one dB 1ll K err ot· the workmg
Appendix A, that Ward rang Vi ney twice that morning from his office and tried to ring Conroy on
decision. That tckphone call occurred at ).
- 16 p.m. and was made as soon as the telephont.'
his mobile at 10. i 9. Conroy made a number of calls from his telephone in the Mayor's ol1icc
conversation with Tony Gandel ceased.
including two to Ward's mobile phone at 10.28 and 10.39. At the time of the l0.2X calL Ward's
.')
I
It appears from the relevant
mobile phone recnrds indicate was on the telephone to Gandcls. lt appears these calls overlapped
Notice of the Working Partv Briefing and Special Meeting _
although. surprisingly for someone who uses mobile phones as much as he does. Ward alleges he
l:
'. ~:~~;-~.,-!!
~1---
30
31
was not technologically capable of putting calls on hold whilst receiving incoming calls. Based on
bad been prepared for the Councillors should they decide to go into special meeting. rhc report is
the record,, it appears th<1t the call was put on hold.
contained in Appendix B. Two of the recommendations were that:·
"le!
S9.
If)
Ward steadfastly maintains that he respected the requirements of the Terms of Engagement and
Th.it Councz/1 m>lc that the jinal proposals are not acceptah/e to Council.
Th 1 t, as a separate process, Council enter into negotiations with Gro,·on Ptv. l.td
.. . r0 ,. a 30 dav exclusive paiod, and that the CEO be awhorised to negotiate . to
ac;',ieve sati.lj(Ic/Orv contracts o/sale jilr Council's consideration. "
avoided canvassing Conroy about the concerns Gandels had and which he had been actively
promoting since the public exhibition of the concept plans. Equallv. Vine:· asserts that he avoided
92.
The overall score of each of the proposals was Grocon 76/l.::' and Gandcls 654.7. The CEO's
raising any of these matters with Conrov out of respect for the latter's position on Council.
presentation with the DVD component took approximately three hours. There was at least one
Conroy asserts that he specifically divorced himself from anything to do with the CAD Project,
coffee break at approximately 3.30.
going to the extent of not reading articles in the local newspapers concerning the project.
According to Conroy. he did not have any prior information about issues relating to the respective
93.
bids other than both bidders were unhappy with the process.
At the conclusion of the Powerl'oint presentation. a further presentation was made in response to
questions raised by Conroy that addressed the individual scores of each bid against the Working
Party's criteria. This presentation was made usmg an Excel spread sheet projected onto a screen. A
number of the consultants ir.volved in calculating the scores contributed to this part of the
The Working Partv Briefing90.
presentation.
The briefing commenced at approximately at I AO p.m. At the briefing there were six ofthe seven
Councillors, f(lllr members ofstatTand nine external members ofthe Working Party, mcluding the
94.
The briefing session tinished at 5.30 wtth any decision being deferred to the Council meeting on
probity auditor. the solicitors. the trat1ic engineer. two representatives from Pinnacle and two
the following :VIonday. Following the conclusion of the meeting a number of events occurred
representatives ti·om Deloittcs including Bill Kerr who was the head negotiator on behalf of the
which I will address shortly.
Working Party.
Cr. Conrov's Response·
l)j
The CEO Jon Edwards conducted the briefings using a PowerPoint presentation. The Working
95.
The Working Partv brieling occurred in the Acacia Room of Council's offices. The room was set
Party had agreed to commence the briefing by announcing the evaluation valuation of the scores of
up with a large table with the C EO, consultants and stall at one end and along the sides whilst the
the two bids at the outset and then proceed to explain how the evaluation was derived and finished
Councillors were located at tbe other end and sides. Conroy, as Mayor was seated at the head of
with the Working Party's recommendations.
the table with Wi;son and McC!e!Iand on either side.
l,i
Part of the presentation would involve a DVD
presentation of the concept plans and discussion of the urban design issues for both bids. A report
32
33
96.
Wilson, :VIcCiclland. Fuller. Asker and Parkin all gave evidence to the Select Committee in which
consultant to be different from his, he was arguing wnh them all the time. She felt he was trying to
thcj cktailcd observations they made of Conmv's demeanour dunng the course of the Working
impose on others 1is viewpoint. She did not mean he was personally corrupt.
Party briefing. That evidence was given bemecn 2-K November 200 I, i.e., within six weeks of the
meeting. It occurred after the publication in the Franks ton Independent newspaper on 2 October of
.~lcCielland reponed Conroy was "hujjing and pu!fing and when he gets 11·orkcd up ahoul
infonnation that the Councillors regarded as highly confidential that had been grven to them during
mmething, he mOI"I!S around a lot .. he doesn't
the course ot" the brieting and after Inspector Goodall had commenced his investigation of the
In
to hide it. " She thought to herself "what's
wrong >t'ith him:'' She did not feel comfortable herself and was disappointc:d with the scoring
alleged breach. At that stage, there had no doubt been several discussions amongst the Councillors
system that Grocon had done
and speculation over the source of and motivation for the leak of that mfonnation to the newspaper.
Sd
much better than GandeL She was disappointed because she
actually liked the Gandel proposaL When she and Conroy went outside to have a cigarette, Conrov
During my interviews. the Councillors generally confinned their evidence to the Select Committee
said to her "thev are lving to
and their observations ofConroy's demeanour during the course of the bneting. They reported that
liS,
they are nor telling us eventhing. " M cC le !land also said that it
was during this cig1rettc break she observed Conroy on the mobile phone going into the 'V!ayor' ·'
as the meeting progressed Conroy became agitated and appeared to be unhappy with the tact that
room after he had lint shed his cigarette. I vvill deal with this aspect of her evidence later.
Grocon had outscorcd Gandcls. Conroy asked a number of questions and challenged the Working
Party's evaluation and demanded an explanatron ofhow it had arrived at the scores. Thrs led to the
scc,md part of the presentation using the Excel spreadshects and the itemised analysis
llf
99.
each
Wilson reported Conroy was agibted with the Working Party's recommendation and vvanted tu go
through every question and eve:-y piece of the point process and ask reasons why the sconng was
score. It was particularly during this latter process that a number of Councillors considered Conroy
the way it was. She said other CJtmcillors did not seek sirmlar justification but were quite happy to
to be asking questions in a manner that demonstrated a bias in favour of Gandels and opposed to
go through the process. She could tell Conroy was not happy with Grocon outscoring GandcL She
Grocon. l was told that he questioned and pursued each score where Grocon outscored Gandels in
thought that dunng the hrcak he made some comment under his breath about the ctvtc centre bid
a manner that was not balanced. He did not seek to understand the reverse when Gandels outscored
and that there was s.,Jmething about it that he was not happy with.
(irocon.
100.
After the meeting concluded, Conroy and Wilson had a very heated exchange outside the Council
~
9 I.
Fuller said ''inirial!v some ofrlze questioning I thought 11·as actually good but as it went on hejust --
offices. In her evidence to the SL·Iect Committee, \Vilson said: -
lje!t he was almosr debating and that's when I thought he was way overstepping the mark, he was
acruallv 1·hm!'ing preference ... ". She recorded in her diary "}v!C blatantlv bias- corrupt" She
explained to me that the use ofthe word "corrupt" meant he was corrupting the process. She felt
"Jfark was very angry and said to me. "Can you helieve what has happened in there" "
said "vVhat has happened in there)" and he said, "the officers have tainted that process
regarding the civic centre. " 1 said, "What are you talking about"" He said. "The officers
have made it so that the civic centre is part rJfthe bid"
he vvas corrupting the process by his behaviour in that he wasn't allowing the viewpoint from the
That conversation was reported by some members of Council staff to be very heated and led
Wilson to demand Cc,nroy put the allegations to the CEO. This occurred in the CEO's otlice where
34
35
Cunrov repeated his assertion to the CEO in the presence ofWilson and Askcr. The CEO denied
><as unlv wnen he suiJ '!.et ·s go in and accept it now" thut. vou know. I reallv .\tarted 10 he
concerned
the allegation.
I 0 I.
r?96;
I was just s.czmned riftcr that we had a bit of a conji-ontation. f didn't reallv know what
was the problem. but 1 knew that it was the civic centre and I wanted an answer.
afienvard\·. I was actuallv reasonahlv secure when we had it all up there. I could see that,
... that is how it had happened and it seemed reasonable to me. that when the meeting was
through. I Hunted an annver to . . how could it possihlv be that one hidder can ojj(T twice
as much mcnev )or the .'·ame piece of/and/"
On the other hand. some of the consultants who attended the briefing considered Conroy 's
questioning to be a reasonable approach consrstcnt with a decision maker undertaking a vigorous
testing of a consultant's recommendation.
One of the consultants in response to a question of
whether bias had been shown thought Conroy could have been considered to be sitting on the fence
leaning to one side but had certainly not toppled over.
I 0:?..
!03.
Conroy asserts that his reaction was one of puzzlement. he was taken aback by the result but that he
The following excerpt from the transcript ofConroy's interview is illuminating (p.l67):Wren:
''It seems that vou were put in a verv invidious position where at the end of
the workmg parzv briefing .vou had come to !he conclusion that you were
being misled and in ./(tct lied to. and that there was something which vou
couldn ·1 identifj· that was wrong with the recommendation they were
making. Whv not !hen suggest that you d like ajitrther briefing bv the CEO
and/or the working party to explore thatfitnher. giwn that thev were the
e;roup in to whose hands the councillors had entrusled the process:J
meeting and endorse the Working Party's recommendation. Conroy says at that point he did
Conrov:
Another briefing?
become upset and angry and believed the Working Party had hijacked the process and was seeking
Wren:
wasn't, initially, agitated. It is his recollection that he did not ask that many questions and in fact
wished that he had asked more. He admits that towards the end of the briefing he had become
agitated. He says at the end of the briefing, the CEO suggested the Council go into the special
Well not so much necessarilv another briefing, hut just an exploration oft he
that . vou were raising.
(~oncerns
to dragoon the Council into rubber-stamping their recommendation. He considered that there was
Conroy:
vVhv not indeed I made a lot of mistakes in this. I've done a lot of thing.\
wrong. I dun 't resilefrorn that. 1 can't he at the centre ofall ofthis and no I
have played a part in it, and there was a lot of things I would have done
differentlv 1(I had my time over, and how I would have behaved during and
ajier the briefing- I can't answer that. You know, it ·s what needed to be
done. But il 's difficult to say, it's difficult to sit here six, sever months la/er.
zn "Hav an early Jfay evening and sav, I did this and I did that and I didn ·t
do this. At rhe time, you know, it was just the pressure was enormous. The
fear vvas enormous, you know.
Wren.·
Whatfear 7
Conroy:
Well there was a- I was frightened. This is a hig deal. you know. this is a
huge deal for Franhton and itsfitture, you !..7ww. I wasji-ightened about
I wasn '!trembling or anvthing, hut I wasji-ightened about the consequences
and the implications of what I thought was happening. There was a fear of
being- Ifeit impotent, 1felt abandoned. and there there's fear that comes
with that. what do 1 do/
Wren.
Was that
briefing.
something amiss and that by the time he met in the CEO's office he believed there was something
seriously wrong. Conroy said (p.89):"You've got to understand; I don't /mow anything,
All I know there is something
seriously wrong; right:> We have a bid that I know doesn 'r conform. .. it is not the best
hid and it's along wav short of what we are looking for. I have been lied to hy the CEO
uhout what rhut special meeting was intended for. When he said,
"Let's go in there :and do it now it near~v happened. "you know, I panicked, you know; I panicke<l. because
vou can understand the shock ofhow I felt when that happened . . don •t underestimate that,
... I wus stunned. I realise. . .. this is a set up, you know. this is a set up. I couldn't tell
vou whv or how. or what, because I purpose(v distanced mvselffrom it all because I
thoughr that was the right thing to do. I had no idea of the issue surrounding it.
Am war, I went in there and put it to him, vou know, "Have _mu been pushing the cil'ic
centre:>" He said, "No,·· ....
~
(1'.96)
i
Actualh·, at the end of the valuation criteria stuff when I made them put it all up and we
got to tlze conclusion thar it was. vou know. mainlv because thev ofFered more monev and ~
secondlv. thev hadn ·t executed the documents. I ~as reasonabl~· c~mfortable with that. It ~
1
.
36
<l
(ear that developed during the course of the working party
t
f
l
37
Yeah. especiallv the end I realised at the end when we \\'ere nearil· to be
dragooned in and rubher-statnped at the .r.,peciui meeting,
).IOU
c\cacia Room. :VlcN,tmara recalls him saying words to the dtcct that he has JUSt come from the
know, that·
there was something seriously awn: here. .~nd I could tell bv Cutin· 's
u!litude that she'd been go/ten at in .some wav or other.
.
.
meeting and Kerr rec.tlls :Vlc"'arrnra asking whether it was still in prugress. Mc:--Jamara told Kcrr
that Gandds had agreed to excc:Jte the contract of sale and to withdraw the 90-Jay condition
Wren:
llzere 's rhe orher e.tplwzation probablvfor that that she was sati.1jied ofthe
,•.tplwzation thcll was given bv the working partv during rhe course ofyour
discussions with them about the scoring, thal shefelt- well. she was happ_1·
relating to Central
Pa~k.
Ken reqarred that to be put m writing and \kNamara then e-mailed that
adv1ce irrunediatcly :md nndertook to arrange written continnation the following day trom
to gu along H}ith their recornmendation. ha1/ing put her trust in them at the
outset.
,_·\.
Gandcls' solicitors.
Conro_l
J'hae was more to it than that. Vicki picked it up. lhere \HIS more to it
than that And it 's nor just that. it's what happened later. vou know. this
You know. it's a fairlv
massive quamum leap into corruption
extraordinarvjump to take. 1_/nless I was a raving frothing at the mouth
lzmaric at the bri<Jing, I wouldn't think that vou would awomaticallv think.
hc- 's corrupt This is the bloke who started this process who could have
given it to Gandels in tlzejirst place. vou kno~t·.
!06
Thee-mail anived at 5.34 p.rn. and said:"The Gandel .\-fanagement Board has resolved to execute the documents as provided to
.'v!addock Loni,, & Chisholm with a modification that condition 35ofthe contract ofsa!e i1
to be deleted
Andrew £ricks-m of.~la!lesons has been requested to advtse the Councilj(mnalh· o/thi.\
He is in transit this afiernoon. "
10~.
What can h<: said about Conroy·s demeanour particularly towards the end of the briefing is that his
1
107
As the briefing was concluding without any decision being made by the CounciL Kerr did not
behaviour and the Councillors' response to lt and subsequent events have led to breakdown of
immediately advise
C\
ervone of the phone call, but rather advised the CEO. The CEO, ltrllowing
relatwnships, particularly between McClclland and Wilson and Conroy. \Vhether Conroy\ view ;
of the merits of the two proposals had been infected by the Gandels campaign priorto the briding
his meeting with Conrov, Wilson and Asker then consulted the solicitors about how the working
f
party should deal with this new information
The solicitors sought further advice trom senior
session, either directly or indirectly. [ am unable to say. He denies it and legitimately asks the (
!
counsel retained to advise the working party generally and it was decided, that as the Council had
question why would he be biased in favour of Gandels · bid when he was the instigator of the
not yet met fonnally :o consider the Working Party's recommendations, the new information
tendering process in order to maximise the return for the City.
'Nhatcver his view at the l
commencement of the briefing was, I think it can be safely concluded that at the end of it, he
was~
obviously upset and concemed that the working party· s recommendations were not acceptable.
needed to be facto red into the oveall evaluation of the two bids.
~
108.
t
l\'lcNamara's phone call
105.
The working party briefing concluded at 5.30 p.rn. At 5.16 p.rn. Bill Kerr received a call on his
mobile phone and ,;aw that it was from \1cNamara. This is the call referred to in paragraph 83.
The following day. 27 September, Mallesons e-mailed Maddock Lonie & Chisholm (Council's
Solicitors) and confirn1ed McNamara·s e-mail. The letter provided:"Further to our recent correspondence. I have been instructed that the Board ofGandel
}vfanagement Limited has now resolved to execute the contracts, copies of which were emailed to you last Fridav e\'ening, subject to one change.
Special Conditiun35 of the :\forth ofBeach Street Sale Contract has been deleted You will
recall that this >vas a condition subsequent relating to economic viabilitv.
Seeing it was Mc:\amara. Kerr excused himself trom the briefing and took the call outside the
39
r
,~fl- di.:nt has taken note ofrhejizct that the Grocon scheme proposes in excess of518 car
pc.zrking spaces less than the slated requirements jar retail uses. I am }itrther ins true led
that i( mv client >ms permitted to remove fimn its scheme the basement level of -!30 car
parking :>'fJUCes. therebv bringing it closer ro the Groe<m scheme in terms of car parkmg
illllnbers. the GRT commercial ojfer jiJr North ol Beach Street could be mcreased bv
hr:tm:en $-! million and $5 million.
11'~Y eye
was thejact that he closed his door to the Jfavor 's office. He never does that when
I m around l/ Uzere are a couple ufother council!un; he mighr, but certuinlv not me. Then
when I found out thar Bili Kerr had had I his phone call, when I read the m~mo. I thought,
Oh-· because ~Hark was so for Gwzdel. It was blatantlv obvious during the whole brie}ing
he was dtmng our breah He almost convinced me.
Can ~vou;ust recall in vow mind which one of the many breaks that we covered'!
I think it was 1/w last one .
Clearlv. the jizct that the Grocon schemejCzils to compl_v with the Franks ton Cit.>' Council
car parking policv will have given Grocon the abilitv to submit a commercial ojfcr greater
than would be the case if the pulicv were observed lfGRTwas to }allow the same course.
this would allow its commercial offer to be improved as stated above.
At 3 30 ish. 4 o dock:'
Ye:s. something like that. Jr
Your client mm· wish
to
lHIS
the last break we had that I saw him mz the phone. "
consider this in ils deliberations.
Your sincere{v, ··
112.
109.
Councillor McCklland confirmed the above to me in an interview when she said (p.l :i ): _
On Friday 2~ Scpttomber, the CEO tined the Mayor and Councillors a memorandum outlining the
"We'd both been out there having a cigarette (outside the back door of the ojji,·e; .
And he h(l(~ jinished his and he walked back and was standing in !he doorcvay of the
mavural ojfzce and I was wlking to him; I can '1 remember what about. and the next minute
I looked around because l '.vas still having my smoke. !looked around and he was on the
mobile phone and he started to talk and then he just like talked to. not me,justsomebodv 011
the phone and just closed the door I thought OK, and that's sort of what I didn ·/ sav
anythzng to anvone at that stage. I thought it was strange that he closed the door becaus-e
he never did that before when I was around It wasn't umil a dav or two later that! started
to think I thought because we got a fax saying that the bids had ~hanged am/you know this
was a bll happenzng and I thoughtjee::, I wonder who he was speaking to during our-_rou
know. fthoughtJee::, I ho~,, he wasn't speaking to anvone he shouldn't have been.
above indicating that the signed contracts had been received at 9.50 that morning. The memo
concluded by saymg: "These issues and the way jiJnmrd will be 1he subject of discussions at a meeting of the
Working Partv and Haddock Lonic & Chislwlm. commencing at 8am on :vfondav I
October. The reportfor Council will include options identified ar that meetzng
110.
The select committee report on page 25 said it was satisfied that the change to the Gandel hid
Yes, I actuallv menrioned iz to Bill Parkin and then sort ofeverv bodv knew about it· that
const 1tuted a signiticant and material alteration to their original tender. It is apparent from the
1--vas it."
·
·
'
above, that the change to the tender or bid communicated to the Working Party was that Gande1s
She said nll1her lp.l6):were prepared and did execute the Contract of Sale and withdraw condition 35. being the 90 day
from Mallesons highlighted Gandels' argument that the two bids were approaching car parking
"Well. I aas 'landing there basicallv I wasn't inside but! wasn 'tjur outside, mu know.
close enough. that I was- because I was talking to him, and then all of a sudden~ he was on
the phone so i was standing there looking at the door and him in the doorvvav and he thc-n
just closed the door.
·
differently and that if(_jandels used the Grocon approach and was able to reduce its number of car
From lhe bac.-'.: itlookedjwt like our Council issue .Vokia.
parkmg spaces, it would be in the position to use the money otherwise saved to increase its offer.
I only heard tike one or t'vo words and I can't even tell you what thev were because 1
wasn't- I wac' talking to him and he just~- he wasn't answering back,\'(; I looked around
and he 's got this phone.
Central Park economic viability condition. The quantwn of the bid did not change.
The letter
lt did not, however, increase its offer.
Well, I didn't hear it rino
know. but it didn't ring. ,;
unless. 1 don't know. maybe it was
The "tip-off' phone call l I l.
Councillor McClelland said in her evidence to the Select Committee:
"/saw Mark Conrov on the phone·- on the mobile phone. It did not occur to me at the time
what he was doing and he could hare been ringing anvbodv: I don't know What wught
~
1
I
..J
J
-~.
41
-----
11
vibrating one, J don't
113.
Conmy CJd:Hnantly denies having made a telephone call during the Working PCJrty briefing and cm
117.
!fit is assumed that Conroy was intent on ·"tipping off' Gandcls, the logical person he would speak
to would be Ward. He would nut necessarily know what time he could slip out to make a call and
,mlv assume that McCldland has somehow confused the above observatwns with some other
if some pre-ammgt:d plan had been hatched, it would be likely he would ring Ward's rnohrk
I.)Ccasion.
number. Ward's mobile phone records indicate during the crucial period ofthc alleged rhone call
Il-l.
At that time. all Councillors had been rssucd with \lokia mobile phones consistent with the
that he did not receive a call from a mobile phone number. Ward's mobile phone records disclose
description provided by McC!elland. It was a model that did not have a vibration when calls were
the only call made from his phone at around the time MeClclland suggested the phone call
n;ccivcd. Because ,,fhis involvement in the Dtmkley campaign. Conrov had an arrangement with
occurred was to Nokia when he was reportmg a fault for which he has the appropnate Nokia
Council's finance manat!cr that he would pav one-third of his mobik phone account back to
reference number. \Yard's office phone numbers do not record any calls around the rekvant trme
Council because the phont' use would be unrelated to his Council activities. He denies having
to Conroy. lf on tr e other hand Conroy was contacting McNamara, his mobile phone records
another phone that day and says be had not replaced the Council phone si m card. as he would not
similarlv do not reveal any calls :1eing made or received relevant to the alleged tip-otf
know how.
118.
!15.
Another factor to bt· considered is the level of detail and insight that Conrov would have had into
The tekphone records for Conroy's mobile phone record a call being made at 10.24 for -\.07
the critical aspects ,Jf scoring at the time the tip-otl phone call was allegedly made.
mmutes to Pricstley·s mobile phone, he being in Perth at that time. The next call made from
until after -\.30 that the Excel spreadsheet component of the briefing occurred at which stage
Conroy 's phone is at 5.0-lpm. which was a diversion to 101 (the message retrieval number). The
Conroy may have aopreciated the scoring significance of Ciandels failing to execute the contract
next three entries on the phone arc also to I 01 at 5.39. 5.55 and 6.18. The record of incoming calls
and requiring the 9U-day assessment condition. At the time of the alleged call all Conroy would
to Conroy's mobile number indicate a locctl call was received at 1.26 and lasted for I minute and
have had was the cv aluation of·:he total score of both bids and there may have been a drscussron
26 seconds, another local call was made at 1.50 but did not get through and the next call is another
about the risks of each. which was part of the CEO's presentation.
[t was not
local call at 5.04 for -\7 seconds which, 1 suspect. was a message.
119.
116.
A further factor to remember is that by the time the alleged tip-otl phone call was made. the
It would therefore appear fi-om the above records that Conroy's Council mobile phone was not
Gandel Group Board meeting had concluded and the holidaying directors were in the e1ir having
used during the cDurse of the briefing other than at 5.04 p.m.
already discussed ne execution of the contract and whether it would or would not retain the
condition. As stated previously the Gandels' personnel all deny receiving any tip-off
120.
fn the circumstance,;, notwithstanding McC!elland's observations, I am satisfied that there was no
tip-off phone call made to Gandels that gave rise to McNamara 's subsequent call to Kcrr.
-\2
43
· The Special M eetl!!.g
'iotes and Documents
121.
During the course of the bricting, Councillor;, were handed /d sized copies of the concept plans.
125
As indicated earl er. notic<: of the special meeting had been circulated should it he required.
Wiison used the bad~ of these to take notes dunng the presentation. :V!cClelland told the Select
Because of the concern expre"ed by Conroy and his obvious reticence to mak<: a decision that
Committee she and Fuller also took notes.
evening, it was agreed to dekr further consideration of the n:cornmendations until the regular
meeting tixed for the following ;\Ion day.
122.
f'ht~ notes taken by W ilson were on two A3 pages. One page dealt with the Gandel bid and the
other dealt with the Grocon bid. She recorded the total scores and details of the oilers and
123.
Lc6.
Conroy agrees that had a vote been taken that evening on the recommendation, it would have been
~nd
conditions oft he two bidders. Conroy, who was sitting next to her, made some additional notes on
a 4:2 vote in f:n·o,Ir ofGrocon with he
her page dealing with Gandcls.
was no need for a vote as there was no dissension about postponing the decision.
Towards the end of the CEO's presentation, a formal Council report was handed out summarising
The Evening of 26 Septembl:r
the briefing and providing ten recommendations for the consideration of Council. At the end of
the bricting, as Ctlllncil did not go into its special mcetmg, the report was retrieved from the
Councillors to be re-presented the following :Vlonday. Conroy retained the last two pages of the
report that contained the recommendations (see Appendix B). Conroy also asked Wilson to
provide him with a copy of the notes. Wilson took them to the photocopier that was set on
automatic and plac~d the A3 sheets on the photocopier
Her recollection is the copier
automatically reproduced the notes on AJ sized paper as it was pre-set to do. If it did not re-
127.
McCklland likely to vote against it. As it was, there
That evening, Ward says Conroy rang him at around 8pm. His evidence to the Select Committee
was:-·
.. That eve1.·ing at arouncl8. 00 pm-·· it could not he much earlier because I \HIS Ill another
meeting-/ recezved a telephone call Ji'om )vfark Conrov. He urgentlv wanted answers tu
questions that he believed had not been answered during the Council presentation. He was
clearly up::et. he asked him if it was true that Coles !v!ver was injinancial trouble JJe
stated that the ChiejExec·utive OjjicerofFrankston City Council had stated such I replied
that ifColES ,Yfver. Australia's biggest retailer, was injinwrcialtrouble, then Australia was
in trouble. He asked me questions about car parking and could he have a copy otthe cur
parking reportfi'om Crogan Richards- that is one we have preparedfiJr their assessment.
I said I \1Muld have to get hack to him. I made a number ofphone call,- to Bernard
)~1cVamanz to get information"
produce in A3 size, the notes would have required a significant reduction or alternatively been
copied to four A4 sheets of paper. Wilson did not retain those notes but left them with a member
ofCtmncil staff owing to her concerns over the contldentiality of the material contained in them.
124.
Thcrefon:, C onroy kft the meeting with two pages containing typed recommendations and two A3
pages of handwritten notes. Conroy recalls copying the notes with Wilson but can't remember
what happened to them after they went through the photocopier and does not recall seeing them
again. He accepts that he probably left with them but denies he gave them to anyone else.
44
Ward also said th;,t he rang Viney the following morning and said: .
"I had a cc nversation 1vith Viney in the morning. I rang him. He was involved in Conrov 's
political campaign. I mean, one suspects everyone got a touch ofpoliticalji:ver down in
Franks ton when vou go hack over this. hut I was concerned Conrov was ve~y upset. He
was. I suspect, erratic. and quite angry. I told Viney that he ought to reallv have a quiet
word to hi'11 and- to put it cmdely wash him down a bit. !justfC/tthat his hehaviour
was not mzat I would describe as stable. He was verv upset.
Since reading what other councillors have given here in their testimonies, obviouslv I was
not the onlv one thinking that. I mean, he made statements that he was lied to. that he was
heing com,ed; and when you analyse the two tenders that go in, !just wonder ifvou could
give me a ?erter explanation ".
45
A.l'Wiil'JJL'JSIJ.SILUSJIBSJI! .tt:S.MUHilhEf
M. &&l-II!JiF"iiMJJMI.lf!lf~_l!ji)~<M1Jli\."/_WJij\}df'J!fm!"1
13::'.
At the time of the above interview. I had already interviewed Ward. He had made no reference to
the notes that he fixed to McNamara. I therefore re-interviewed Ward and asked him about the
1::'~.
\Van! said that h~ had bad one conversation with Conroy that evening that laoted 5 or 6 minutes
notes. His explaratwn was as follows:mavbe longer. Ward then spoke to McNamarJ a nwnber of times to obtam the details requested
"Ward:
by Conruy
1::'9.
Wren:
Ward:
Wren:
Ward:
Ward says he rang Conroy m thc morning to make arrangements to pick up some documentation
from one of the members of the Southern Traders, David Ray at Rav's Shop. He made this call
e~ticr
!30.
he spoke to Ray between 9 and 10
Ward
:1.111.
Apart ti·om the request for parking infonnation and a comment concerning Cutes :Vlyer. Ward says
1 haven't been asked this question heji;n:. hut I am under oath The
docwne111 came into n1_v po,..,·session that morning, ear!_v I don't know,
some~vhe.ve between midnight and that morning. earZv that rnorning, it 1vus
wairingji1r me.
.vfmm. Where:>
On mv doorstep.
What was it"
It was some handwritten notes and it was some tvped 1wtes tharlouked like
a recommendation .
It is not the first time that things have been leji on mv doorsrep. I can assure
_mu. In I 1)8}, 1 had the whole Liberal Partv Branch Membership List onmv
doorstep. I also had in 82 ajidl report of'the Liberal Partv thev had d01;e
on the demographic and who was who and was who down at .Frankston
7/zis is not unusual . The onlv thing thev have in common. is there never a
return address. ·
Conroy did not tcil him about any details of what he had been told during the briefing.
133.
".Vo, this is not it at all. ,Vo. the handwritten notes I had were dij/erent to
that. Thev are similar, but look, this is not ir. In actualfact. rhc one I had
was on 4 pages ... the handwritten notes.
Wren: Do vou still have those notes:'
Ward:
.Vo I do11 't. Tlzev didn 't make a lot ofsense to me Thev are' not the notes I
saw
that is similar sorr ofstufl hut it is not it. "
An early morning dcliverv 131.
During the cuursc ufmy interview with 1\lcNamara. he advised that on the morning of Thursday
27 Septcmbc:r he saw
:1
I showed Ward a ':opy of Wilson's notes and asked whether they were the same. He rcplil'd: -
note that indicated Gandcls were not favoured. The note was part of
Council's recommendation and had probably bccn sent to him by Ward. It was handwritten but it
dfectivciy confirmed what he knew the night before. by which he meant the inference he drew
from Conroy 's questions. There were some handwritten numbers in terms of scoring but he did
13-t.
I also showed \Vard pages -+ and 5 of the report to Council of 26 September that contained the
recommendation ,_nd he said: -
, I
I
not keep the notes. He was also sent a copy of something that was typed. 1 showed McNamara a
copy of the report to Council of26 September and asked whether that was the document. He said:
Wren:
FVard:
Wren:
Ward:
"It Joesn 't look like it. it \msn 't this jimn It was- there were .~ 's. B ·s and Cs, but it
vmsn 'tin this form. lr was genera!lv rhe sum!" as that, but not in the same(i!rmat ..
Ward:
YVe!l I 'm sa;ving to _vou !here was a sheet handHTitten and - there vverc some sheets
Wren:
Ward:
"This is not the same document. The document. as ! remember. the tvpe
was bigger.
Did it contain those recommendations?
:Vo. I haven't seen that either. It looked /ik,; a Council Rcporr.
Yes.
But it didn't look as ji)rmal as that. J mean, it didn't have that. This is
similar. hut this is not what f was giwn .
But what f saw did look like some sort of Council document. hut not that
one.
handwritten. tlzae was a sheet ofnped".
Ward:
.Wren.
46
What were the contents of it:'
It was mainlv around the ru·o proposals that hadgoilt' to Council, bur it was
not complete, there was onlv two pages of that .
It was t1,vo pages of n·ped and from memorv there was jimr pages o/ this
sort of thing
By which vou mean the handwritten docwnent"
47
Ward:
vVrcn:
Ward.
Ward:
Wren.
Ward:
Wren:
YJ'ani:
Wrew
IYuni:
Wren:
Ward:
Wren.
car parking H hi eh he vvas afreac.(v unto and he was
czhovt car parking.
,\!mm.
So in !otul .Yix pages?
10~·ing
to understand what was the issue
Ye.\"
l gul!ss the rn.rin substance ofth<! conversation 11-·as ahoutthe politics around the Council
chamber. The main suhs!ance ofthe conversation was hisjalling-out with Cathy and his
view that she was inthere!ighting real(v hardjiJr CroCIJ/l and he couldn '!understand it
and he told me: that he -1 ·m prellv sure he told me, butvou know, it's hard to remembt!r six
months ago tl•e detail ofa conversation and I had a number ofconvcrsations with him over
several days in rh is period so just remembering what was said in each one is difficult".
Were the\' .~cf--!don't knmv whether it was .-14. not !his (.-13) but around six pages. ves ..
You sav that il was deli1·ered at some stage during the evening:'
if was there H'hen I vvent out to get the paper.\", it vvas there.
Whereabouts?
On mv mat.
In an ell\ ·elof'e.
So. just stuek on !he mar You couldn 'I miss it .
So lvhere are these documents not-t·?
! got rid ofthem. !t didn '!make a lot ojsense 10 me: tlzn· didn't make a lot
ofsense to me. The handwrillen sllljf a·as hard /o jiJ!low.
:VIm m. What did it have on it:'
137.
In response to some observations made by Wilson of her conversation with Viney later that day,
Vinev said: -
Ward:
Wr<'n:
vVurd:
Ward:
!1 spoke about part ofwhatlooked like a Candel part ofour transaction and
part ofwhatlooked like a CroL'Im transaction. It spoke ahout the fact that
H'e had to pavjiil· the air rights- Council had to gi1-e up the air rights. and
we didn't H'W1t to pavjor them or something between Beach Street and the
shopping centre -the car park on the shopping centre. It spoke about cars.
l'h,· handwritten notes referred to how some ofthe scoring was being done.
For example, the feaszbilitv, the benejits to Council. and it was categorised
1 can 'I remember much more abouz it. It didn't make a lot o(sense. There
was handwritten things on there that I didn 't understand ..
.ilc.Vanzara said that the typed document contained a series of fellers; A.B,
C and D, and had Council recommendations attached to it:'
! can't remember that. I sent it to him. !took verv little notice of it and!
had plentv ofreason not to take notice of that document. .....
! c'!Jllldn 't understand the scores. J couldn't understand iz. It looked to me.
what I had been given. was incomplete 1vork and handwritten nozes. "
"Vinev:
Wren:
lJ5.
Ward said that Conroy did not say he would drop the notes otl to him that night and did not know
where they had come from. If Ward took very little notice of the documents as he says. his
Viney:
Wren.
recollection of their contents would be questionable.
Vine1'.
Wren:
Thursdav morning telephone callsVinev.
1.16.
On the Thursday morning, Vincy rang Conroy on his mobile and spoke for almost 28 minutes.
When asked what detail Conroy conveyed to him about meeting the previous day, he replied:"Well not a lot realll·. His main concern was that the - was this issue that I've gone
through witlz vou be/i;re, where he believed he had been lied to. he believed he was being
misled. he believed that there were problems with the bid that he wasn 't aware of and I
explained to him mv knowledge that! had of it was that there were potential problems oj
48
AI/I can sav to vou is that I was privv to the information that CJmrdel had
given me through Rogan and Bernard that! was not privv to the detail oj
what took- of the injiJrmation that was given to cmmcillors in this sense
that !.found mvse!fin the position of knowing things the councillors didn't
A77ow. So. as I said bejilrc. I didn't see mvsclf in a position of actuullv
receiving irrjiJrmation from cowu;i/lors but as rather givzng them
information ...... I told you that Rogan indicated to me thatthev would bt!that their btd would $5 million less and he indicated to me that Crocon
would bidahout $ 9Y, million and thev would bid about $5 million and as I
said to vou he told me that during the period bejore !he Council briejing
and he told that when those plans wert' on display. As ! said to you, !took
that information with a degree of- a grain of salt. I thought mm·be he
knows. mm·he he doesn't, and franklv I don't eare much. vou know, I was
more concerned with the Civic Cenlr<'. 1 was more concerned about the
Aquatic Centre. I was more concerned about the politics. I wasn't
particulariv concerned about/he commercial .
In terms of what :v1ark said to vou, 1 mean your relationship with him !was
close) he was prellvfrank with vou ahoutwhat his concerns were?
Absolutely. ves.
And the relationship would be such that he would be likelv to tell vou what
was said auring the briejing.?
Yes. in the context that he regarded me us an adviser and someone he could
trust, and 1 regarded all the conversations I had with him as conjidentia!. I
didn 't regard anything as I needed to pass on to anvone else.
So did Conroy tell you what the scoring was that the working party had
assessed?
So. He told me- well, he told me that there was a I 00 point difference and
he told me two things about that, he said thev got they put the scores out
on 000 and thev multiplied it hy 10, and !said well that's interesting, i{vou
divide it b1· I 0 then the hid would be 10 points higher. So if it was a score
out of 100. ir would be 10 points, if" it's a score out oj"JOOO. it's 100 points.
We were surf of laughing about it. it was sort of' done to elevate the
difference . .... ]'!/just he clear. He told me that. he told me that he made
the chief executive go out of the room and get the spread1·heet that
demonstrated how thev drew that conclusion. He subsequently told me that
49
that occurred about 4.30 in the ajiernoon-- he Jidn 'tte/1 me Ihis at the time.
he 1·uhsequentlv told me Ihis because it's inreresting - he told me that that
ocnmnf m about 4.30 in the briefing time and it was onlv then that he
reu!iwd that the di~lcruzce in the bid1·,- the dijfert'nce in the scores was for
tvnJ factors.
Wren:
Conrov:
Wren:
Conrov:
One. that Gwzdels had no/ executed their document. and I>V<J. that they had
otlered more nwnc-v. and in case they got
Grocon got 30 points more and
tlw other thev got 7 0 more points which made a different oj 100 and
ultimatefl· the recommendation to go for Grocon .... But J'mjust saying that
that wa.1:the conversation that I've had 1vith him since. and then so- but at
the time he told mc the difference of lOO points. he told me that he had
made the Chie/Executive analvse or show how tlzev had done the analysis
and that was tfze long and short of it J 'm no/here t;J protect _Hark. as much
us I would love to.
111
13S.
know. a wbstantial ummmr of monev. more than twice, he said, '):eh, J
-.~'ha! the prices a;·e. f''>'f:.' got a fair· ideu ". ..4nd he .)·av.\ ''that·.) seetJts
tu he hml' rhev 've won. and it seems to he hecaus<' there's~ shonjiz!l in car
parking that wasn't idcntijied at the meeting .
.
Didvou iel! Vinev what the recommendations \Wr<' oj the workmg partt·''
knoH·
Wren:
Conro1·:
Wren:
Conroy:
Mark came to me. 1 helieve in confidence. 1 he!ieve he came to me before
he had little else to go. other plac:es to go, and he sought m)' advice and 1
"ave him m\' advice in confidence. c\11' advice to him did not go to Gundels.
fr did not ";' to anvone else. vou know Other than one com-ersation that I
had with 'semar~f Mc:Vamc;ra where 1 indicated to him tha1 I had given
advice ro J!ark. because of the complaint where they had about that it was
hiased. the whole process was biased and so on. 1 said look, I have given
ach·ice to :vfark to trv and create Ll level playingjield. 1 don't know what
will happen but thc;t 's the advice I've given him, and that certainlv - I
certainh indicated that to Bernard J!c.Vamara in conversation! had with
him. J think on the Fridav. "
l-+0.
( 'unroy concedes that he had the conversation about the I 00 points diticrence although he did not
I-+ I.
~
.
Or that.
1 told him that thev wanted us to acccpt the GmCim bid, and they wwzted us
to go in there and vote on it on the night, but J told him asjizr as that, hut J
didn't tell him what the recommendations 1vere
But that's not actually what rhe recommendation was. is it'J
It was.
fVel! the recommendation \-·vas to haVC! ano1her 30 days to negotulfl! vvirh
Grocon on the separate bid
Well mv honest heliefis that thev 're weasel word1·, vou knmc
one deal, that they were. _vou know.
That was a
Ward's Fax to VinevAt 1.16 p.m. on 27
s~ptembcr.
Vincy's oftlce received a facsimile transmission from Ward's
otlicc. A copy of this transmissi<m is contained in Appendix C. At that stage Viney was stlll in
:VIelboume as Parliament was Sllling and did not return until the following day.
The facsimile has the appearance of being a submission and specitlcally addresses a nurnbcr of
think he told Viney about Grocon getting 30 points more on one occasion and on the other getting
points that were raised during the course of the presentation on the previous day. Such things as
70 points more. It should be noted Viney says he was told about this "subsequently".
the legal indemnity referred to inltem I, the specific amount of:59.5M included in ·'their offer" in
Item 2 on page 2. th.; reference to the car parking problem on Central Car Park in Item-+ and the
139
issue of the loading dock on the north of Beach Street contained inltcm 5. However. Ward asserts
When asked whether he discussed the actual scores with Viney, Comoy said:Cunroy:
Wren.
Conro_v:
Wr<'n:
Cl)lzrov:
Wren:
Couroy.
" 1 don 'r believe so. Other than in general terms. I would have said that
Gandels- GroCIJ/1 won easilv. I would have talked about making him put
the criteria up and trving to get to the heart of it.
No: but to put jlesh on hones of the conversation it would give it a much
greater context if.vou said well. jur instance, Grocon are 59 11, million .
Well he knew that alreadv. He alreadv knew that. you know.
!Tow did he know that"
J'm not sure how he knew it. I think Rogan Ward told him.
When did vou know he knew that?
That dav. .Actual!v, no.! didn't know hc knew that until- ['m not sure when
1 knew~ no. it wo~tfdn 't have heen that dav, itHould have been a few davs
later, ]think Well veh, ves, the short answer to that is ves. I would have
said that one side w.on b~·. l'OU know. one side out bid the other side b_v you
50
that he was familiar with each of these aspects of the proposal prior to 26 September as he had
either been told about them through his contacts at Grocon or worked it out through Gandels
analysis of the concept plans.
142.
When asked about the reasons for the preparation of this document. Ward was equivocal. He
initially said it had been prepared to assist him in preparing evidence for the Select Committee and
then thought it may have been prepared for the Southern Traders. He then thought it was probably
51
T
noks
h~
prepared for the Chamber of Commerce. The document was ftrst compiled as a tile on his
because of the c:rr parkmg. Vincy drd not mention any sconng to her but he knew Ciroc,m had the
computer on 27 September 200 I. Ward at no stage volunteered that he sent the document to
higher score. Wilson considered he obviously had knowledge that could only have come trom the
Viney's oftlce or prepared it for that purpo,e. He denies that the information contained in the
briefing. She detailed to me that Viney knew there was a loading bay in a pedestrian mall because
docum..:nt could only have been given to him by someone who had been present during the
that was one of the things she thought was against Gandels' bid and he also knew the difference in
Working Party bridin;c.
the Sherlock and Hay site which was S250.000.00 Gandcb offered and :5750.000.00 that Grocon
had offered.
1·-D.
1f this document was meant for Viney and was in response to a conversation Ward had had with
\'incy that morning. it would be reasonable to presume the fax would have gone to Viney's ot1ice
at Parliament. On the other hand. Comoy had free access to Viney's office and was often there.
147.
1-+4.
\Vilson was not aware that Vinev had received the information conveyed to him pnor to the
The telephone records indicate only three calls were made prior to the Lrx between Ward and
Working Party brief.ng by \Vard and Gandels. Wilson says that Viney was seeking to convince
Vincy with the tirst two being messages lefi by Ward. The third call at 11.29 was only for 1
her to support Gandels and not gJ with the officers' recommendations. She says they argued the
mmute and 6 seconds originating in Melbourne. There may have been others not on mobile
merits of the situation. Wilson was not sure whether it was this or a subsequent conversation in
phones
which she said to Vincy. "Look ,l&ztt, is there a donation to the ALP or ro Dunk!ev here that we
don't know about:'" Viney beca·:ne very upset at this and said. ''How dare vou accuse me of that
145.
Ward sa vs he had been given the Cirocon bid tigure and was told about the issue concerning the
sort of thing. "
tmkmnity before the plans went on exhibition. McNamara has confirmed he was aware of this
detail prior to 26 Scpkmber. It is therefore conceivable the tax was based on this prior knowledge.
1-+8.
Viney's recollection of the order ,,f the conversation varies from Wilson's, however, he agrees
It is equally conceivable that it is information (or parts of it) that had been provided subsequent to
Wilson put this question to hirr c~nd that he was incensed at his integrity being challenged.
the brieting.
Following that telephone conversation, Vincy spoke to a colleague at Parliament who alerted him
to the websitc of the Australian Electoral Commission which contained details of donations made
Vinev's Telephone Call to Wilson 146.
to political parties. Viney immediately accessed this information and rang Wilson back. Wilson
Wilson gave evidence to the Select Committee that she had a telephone call with Viney on
Thursday and that he obviously knew that she was happy with the Working Party's
recommendation. She said he spoke about the difference in figures bemccn the two bids. that he
knew the difference in the sale price of the north of Beach Street Car Park and mentioned it was
,,
!,
.,,i
52
records that he said: "Look Cathy I've checked !he internet, he said ··We only got 40, (}()()and the Lihs got over
200.000- I can't remember whether he said 200,000 or 220,000, and he said, "Ifrou don't
believe me"- ire said. "ij)·ou don't believe check it outfor yourself", and he- but he said
to me, "You get on the interne/ and you '!I see the Lihs got 200 offGandels ". And thev on!v
got 40,000 . ... I presume it is on the AEC site. And he started giving me directions o~ ho;,
to get to the sit,, and I didn t want to know. Because ifhe 's only got 40.000, or the ALP has
onlv got-IOJJ()I) ojf0andcls and th<! Liberals got over ]01).000. or zfits on the internetzls
onlh<! inl<:met ... (P.33 '34)
15-+.
Because of the deterioration in the rdationshtp with Wilson and Conroy and the diftlculty Vincv
was also experiencing with Wilson, he suggested to Conroy they e1rrange e1 meeting with Wilson.
\'.mcv 11ad hoped to use the
'v!cC!elland and Askcr at 5.00 r'.m. on Fridav_ in Viney·s
_ lll·t-I''e.
,
1-t'l.
V m~) prodLKed copi~s uf the AEC websitc details which confirmed that Gandels had donated
meeting to discuss tte concerns that he and Conroy had about the recommendations and the fact
'S-tOJJOO.OO to the '\LP up to that time and had donated S:C05.000.00 to the Liberals in the same
that thev now both believed the Working Pany had not provided Council with sutlicient
period. These details have been confirmed independently by Gandels.
mformation about the impe1ct of Ci roe on· s lack of car parking spaces.
150.
This conversation between Wilson and Vincy has been discussed by Wilson with other
!55.
The three Councillors spoke to each other and considered It would not be an e1ppropriak to meet
Councillors e1nd would appear to be the basis upon which a rumour commenced to circulate that
·
with Viney because of the confidcntia!ity
throughout the
, requirements· that J1ad been Imposed
the sum ofS40.000.00 had been paid or otlcrecl for the Dunklev campai~m. It would appear this
process.
rumour led to a qucst10n being asked in the Legislative Assembly about whether this investigation
was mquiring into a bribery allegation involving '540.000.00.
!56.
Viney and Cunroy met in Viney' s office dunng the course of the day to rnap out a strategy tor
Conroy to adopt at the meeting on the following Monday. That strategy involved rnovmg some
151.
Vincy made available all the books of account. pay-in books and ledgers relating to the Dunkley
amendments to the Workin "'a P·u-r·
V·mey dratted
- some amendments that he
' .>'· s re c·o mrnen d atwns.
campaign and I can find no evidence to suggest there is any substance to this allegation. It is
gave to Conroy that afternoon for his consideration. Conrov subsequently prepared a variation un
strenuously denied by Comoy. Viney, Ward. McNamara. Tony Gandel. :-Jevillc Beer and Gandcls'
these and sought the .mpport of i\lcCielland and Asker on the following Monday.
Company Secretary Chris Lobb.
The 1\Iondav Meetings
1::;2.
This is a serious allegation that imputes the integrity ofViney and Conroy. I consider it is baseless
!57.
On the ·Mondav. momna
· ~' Co nruy :1a d a ]engt h y te ]ephonc conversation with Wilson and suggested
'md probably originated from conjecture over the interpretation of Conroy·s behaviour at the
deferring that evening's meeting until Priestley. returned t'1·r)m Pcnh. Conroy rccalb Wilson
bricting ancl subsequent e1ttempts by Viney to support his colleague and address th<.? concerns he
saying: -
hac!. whether justifiably or not. based on information he had been provided by Gandcls.
·'What does it matter ifhe ·,. uor there:' !fits 5;]. it doesn't mattl.'r ... or ifits 5i1to suDport
the Grocon hid? "
'
153.
Vincy disputes Wilson ·s assenion that he knew the offer prices of the Sherlock and Hay Streets
site but agrees he knew the Grocon figure because of what he had been told by Ward.
Conroy askecl where she got the 5/2 from; she said she thought that might be the case at the
meeting. She was ret'trring to the Councillor numbers and the likely vote that night. Conroy says
it was then he realised that he had better get round and see a few people. He rang David Askcr and
The Fridav Meeting54
55
asked to meet with him in Vincy's otlice later that morning. He r:1ng tvlcClelland and when she
Response to the T<·rms of Ref~
wasn't answering her phone he went round to her house and discussed his proposed amendments
163.
The Te1ms of Reference require me to investigate and report on whether:
with her.
la)
l5S.
Confidential information concerning the CAD Project was provided to the (iandel Group
on or about 26 September 200 I and if so by whom.
Whilst he was at i'vlc( 'lclland's house she received a phone call fromJon Edwards who advised the
Working Partv proposed w change the recommendations following their assessment that mornmg
of the revised Gandcl position and that the new recommendation would be to go back into
164.
There are two aspects to this Reference that have bem investigated. The first is whether the '"tipo[f" occurred that led to the change in position ofGandels and secondly whether infonnation was
negotiations with both parties.
provided subseyuenr to the briefing.
!59.
Conroy discussed his proposed amendments with 'vlcClclland and when he left her house. he
165.
thought she was in agreement with him.
l do not consider
su~h
information was provided to the Gandcl Group prior to the phone call by
McNamara at 5.16 j:'.m on Wednesday 26 September, 200 I
160.
Conrov then met David Ask er in Vincy's office and discussed the proposed amendments with him
Vincv was present from time to time during the course ofthat discussion. Following that meeting.
166
J consider that subseyuent to the Working Party brietlng on 26 September 200 l confidential
information concerning the CAD Project was provided to the Gandel Group in the f()rm of the
Conroy had thought he had Asker's support for the amendments. As a result of his discussions
typed and handwritten notes that were left with Ward. I also consider it is highly likely that
with Askcr and McClclland, Conroy thought the voting numbers would be 3.3 and as he had the
confidential information was provided to Ward that led to him composing the fax that was sent to
casting vote and abo Cr. Pnestley's support he thought the situation was fine and was under
Viney's of1icc at I 16 p.m. on T1mrsday 27 September. 200 I.
controL
11>1.
167
The amendments proposed by Conroy were: -
"UJ
(k!
(C)
(m)
That any plans jar a Civic Centre, not he part ofanv resubmilled proposal.
That no legal indemnitl·. he granted to anv partv.
That both resuhmilled proposals conjorm to Council's Planning Scheme, in
partzcular. in relation to Council's Car Parking Policv.
That both parties submit one proposal only, no other options will be considered"
I consider there is s1rong circumo,tantial evrdence to indicate that Ward was provided w1th the
handwritten and typed notes by c,mroy. He had a motive and opportunity, he was proximate to
Ward and he was th<.· only member of Council with a copy of the report and hand written notes.
His disposition at tbat time is consistent with someone who was angry and was looking for
assistance and infomtation from the recipient of the documents. Although there is an inconsistency
11>2.
The meeting occurred that night at which the Working Party's amended recommendations were
adopted whilst Conroy's amendments were lost.
The report to Council and outcome of the
over the size of the pages of the handwritten notes, this is explainable if they were subsequently
copied into four A+ s1zed sheets. Tlte evidence of their apparent dissimilarity is explainable by the
motions was contained in Appendix D.
56
57
passage uftime e1nd the witnesses' memories of documents thev have not kept or fullv understood
at the time they viewed them. Up tu that time the probitv auditor was satisfied the members ufthc
172.
[n a letter dateJ 18 October. :?1101 to Kelvin Goodall. Inspector of Municipal Admimstratton,
w urking Party had complied with their obligations under their cont1dentialitv a~>reements. There is
Local Govemmer:t Division ,)f the Department of In trastnacture. Peter fletcher the Gcncral
n<l apparc:nt mutivc t(Jr them to have provided Ward with the documents. lfthey were intent on
Manager of the Council stated. mtcr alia:-
·'I.
relee1sing: mlcmnation to Gandeb that would have happened prior to the lodgement time for bids.
There
IS
· l nor did thev have a wpcd
no apparent motive on the part ot· t h e ot ller mcm bers· 0 f Coounct
0
•
Council document.
also consider it highly likely that Ward was supplied with inforn1ation by Conroy that he had
obtained during the course of the Working Party bricl1ng that led to Ward's creation of the fax
which is a polemic document responding to a discussion that has obviouslv preceded it.
169
1 am also asked to consider whether confidential information concerning the CAD Project had been
173.
provided to Matt Vincy on or prior to 2 October 200 I.
The specific inl;rrnation contained in the Franksron Jndependem arriclc un .'
Octub<!r, 2001 1vhich tHIS regarded us confidential and which Council wished lo
kcq conjidential at the time of'puhlication. is asjiJI/ows:
liw cost ofpmposed new Council offices.
1he Working Partv 's advice to reject the ojf'ers of both developers and begin a
nnv process·
zhe initial re.:·ommendation ofrhc Working Partv to enrer into wz exclusive 31)
dm· negoliating period with Gmcon and Proclan;
1he Working Partv 's evaluation scores;
lhe commercial offers ofborh parties:
1hc Working Partv 's recommendation to deal with horlz parties ji!l· one month;
I hat Gandels subsequentlv indicated an increased cash ojfer could he made.
rhe indemnitv as requested hv Harhour Citv."
Council had embarked upon a .stringent probitv process to mamtain the confidentiality of all
mformation relcva:1t to the joint negotiation process until such time as an offer was accepted. In
the circumstances, it seems to me that any of the information disclosed to Councillors during: the
170.
1 consider that cont1dcntial information had been provided to Matt Viney. m particular details of
course of the Working Party b1·icfing relating to the evaluation of the bids was confidential and
the 100-point di ffcrencc between the two bids and that the Working Panv wanted to continue to
that the Council \':ished to keep it cont1dential until an otfer was accepted or until Council
negotiate with Grocon. This infonnation was provided by Conroy during the Thursday morning
determined to release it.
conversation. Viney was also informed in a subsequent discussion of the 30 and 70 point scoring
attributed to Grocon because ofthcm offering more money.
174.
I therefore conside:· Cr. Conrov has released conJ1dcntial details provided to him during the course
of the Working Party's brief1ng to 'vlatt Vincy and Rogan Ward in breach of Section 77(2) of the
171.
The Terms of Reference also required me to consider if there has been any and what breach of
Local Government Act 1989.
Section 77(2) of the Local Government Act 1989. That Section provides:·
"77!2! A person wlzo is. or has been a Councillor or a member of a Council committee
must not release inji1rmation that the person knows, or should reasonably know zs
injiJmzation
21ST 'viA Y 2002
(a)
rh;
that is confidential to the Council; and
that the Council wishes to keep confidential.
58
C J~~PEN
Inspector of Mumcipal Administration
5')
Appendix A
Frankston Phone Chronologv
Addendum to Report of Inspector of :\Junicipal Administration of 21 ~lay 2002.
On :11 1\lay :1()0:1 I reported to the Honourable Bob Cameron :V!P "vlinister tor Local
Government (the Report) pursuant to Tenus of Reference (the Terms) dated 23 April
200:1 whereby 1 was appointed an Inspector of Municipal Administration to investigc1te
certain matters at the Frankslon Citv CounciL
The Terms required an investigation of whether there had been a breach ofs77 (2) of the
Local Government A cl !989 (the Act) and also any other section of the Act, see clause b
(i), or any other matter arising under any other legislation requiring further investigation,
c l:.!use b (ii).
Following my inquiries I considered whether there had been a breach of any other section
of the Act or whether there \vcrc any matters that warranted further investigation under
other legislation and concluded there was no evidence that pointed to such a breach or
required further investigation.
I have de:1lt with the above matters inlhe body of the Report and the Executive Summary
but had not referred to them specifically in my concluding response to the Tem1s, see
pages 57 ··59.
/,-/·
--
/// ~5~ /
(
'yj;,~~uZ~''--_-;//--'-(~
This listts not exhaustive:
26 June
28 June
28 June
29 June
30 June
09 July
11 July
20 July
28 July
30 July
31 July
01 AugWard
15 AugWard
17 Aug
I 7 AttgWard
20 AugWard
21 Aug
27 Aug
19 AugWard
25 Sep
c~lb
Ward to (Jnroy
Ward to Cmwy
Ward to Cmroy
Ward to Cmroy
Ward to Cmroy
\Vard to Cmroy
Ward to Cmroy
Ward to C.mroy
Ward to C.Jmoy
\Vard to Cmroy
Ward to CJmov
to Comoy
to Conroy
Ward to Cmroy
to Conroy
to Conroy
Ward to C.mroy
Ward to Ccmrov
to Conroy
Ward to CcJmoy
onginate from the initiator's mobile unless otherwise showJJ (200 1).
-1.22
1.55
0.-13
3.25
2.19
5.57 & 1.06
1-1.18
0.:18
22.11
2.27
5.-16
1 ).-I 7
6.55
6 08
1 55
3.24
6.12
I-+
13.30
r _____ _j
C J Wren
Inspector of Municipal Administration
22 May 2002
59 A
26 September
9.24
Ward to V;ney's oftice
9.34
Ward to Vcncy's mob
9.-11
McNaman, to Ward
9.-15
V's office to Conroy
10.19
Ward to (,lnroy
10.2-+
Conroy to Priestley
10.25
Ward to Gandels
10.28
Conroy to Ward
10.3-1
Ward to Gmdels
10.39
Conroy to Ward
10.46
Ward to Murrell
V's office to Ward
10.46
Viney to Conroy
12.08
12.12
Ward to Murrell
12.12
v·s office to Ward
1.26
local call to Conroy
1.50
local call to Comoy
3.09
McNamara to Ward
3.11
Ward to N•.Jkia
0.30
3.13
Ward to N,Jkia
330
3.25
V's office to Ward
3.25
Ward to Murrell
.,., Ward's office
1.13 Ward's office
5.19 MeN's office
0.37 V's otlice
0.05
4.07 mayor's phone
5.00
3.12 mayor's phone
1.30
1.34 mayor's phone
0.11 ward's ot1ice
0.11 V's office
3.30
0.25 Ward's office
0.25 V's office
1.26
0.00
0.14 MeN's office
0.32 V's office
0.32 Ward's office
60
-1.5-1
5.0-1
5.04
5 ]6
~.36
5.39
5.):;
6.16
6.1 ~
6.36
6.-11
7.0.'
7.05
2\.33
liandel to Appkton
0.-17 (probably a message)
local cctl1 to Conroy
Conroy to I 0\ number
".'\dvising: of change
ivlcNarnara to Ken
l'vlcNamara cmails Ken
Conroy to I 0 I
Conroy to 10\
9.04 Baysidc shopping centre
Luby to Ward
Conroy to I 0 I
Ward to McNamara
3.00
:\lcNarnara to Ward
4.39
Ward to McNarnara
1.30
2.00
730
!.2h
735
S.Oil
S.05
S.Oh
S.2S
S.-li>
9.2-1
l) 3-1
Ward sctys Conroy rings him
Wctrd to :\lcNctrnctra
Conroy to Wilson
Ward to Mc'-Jamara
Ward to :VlcNamara
Ward to Mc"'amara
tvlcNamara to Erikson 0-1-1
:2.30
around 8.00 that evening [p.5 J
0.30
0.25
1\iB: Wilson says Conroy rings that evening and
3.00
talks about car parking spaces.
16.00
NB: Ward says he spoke with Viney. Conroy &
1.0 I
:VIurrcll during the day.
NB: Wi1son ctnd Vincy have their discussions
concerning donations during the day
27 September
6.-19
7.-1-1
7.5-1
8.10
S.\3
9.~3
10-1~
11.29
!UO
I 1.51
12.03
12.37
1.16
I.SS
2.08
2.17
2.25
3.30
3-10
-1.00
6.12
6.17
6.32
7.15
7.-16
g 06
10.00
Ward to McNctmara
8.48 MeN's otlice
:VlcNamara to Ward
0.30
Ward to Viney
27.51
Vincy to Conroy
0.30
Ward to Viney
0.30
Wctrd to McNamara
Wctrd to McNamara
1.00
Vincy to Ward
1.06
Vincy to Wilson
0.2~
Conroy to McClelland7 3S
Conroy to Murrell
2.07
Vincy to Conroy
-1.20
Ward faxes Viney·s o!1ice document about Grocon bid
Viney to Conroy
0.42
:'vlcNamara cctll from Seaford
0.22 in Frankston
McN<.~mara to Ward
13.59
Conroy to Pricstlcy
3.30
Ward to Conrov
7.33
Conroy to Muncll
1.43 V's otlicc
Viney's office to Conroy
0.01
Vincy to Conroy
11.49
Viney to Conroy
2-1.-16
Conroy to Asker
0.25
McNamara to Ward
4.4-1 MeN's ot1ice
McNamara to Ward
1.0 I MeN's ot1ice
McNamara to Ward
61
28 September
8.29
S.-10
8.43
S.55
9.52
10.00
I 0.-15
10.54
11.25
11.27
1140
11.52
12.32
12.-19
12.57
1.07
1.10
1.-15
2.00
2.28
2.5-1
3.-15
4.27
0.29
Viney to Conroy
0.12
Conroy to Vmcy
11.25
Viney to Conroy
Wilson says a message is kit re meeting [pI S,t 3]
Viney to Wicson
17.50
:V!cNamara to Murrcll
1.31
:VlcNamara to v·, office
0.23
Conroy to Wibon
0.29 v·s otlice
Viney to McNamara
04X
McNamara to V's office
Conroy to 'vlcC!cllandl.37
Wtlson says Vinev leaves a further message [t 3[
Viney to Wilson
15.16 v·s office
Viney to McNamara
0.29
Conroy to Munell
2.29
Conroy to McCielland
0.35
Viney to Ward
9.53 V's ot1ice
Viney to McNamara
14.-10
Conroy to tvlunell
Viney to McNamara
11.25 V's ofticc
Wilson to Vcncy
'vlurrell to Wilson'''.''.'
Viney CAD document created
Conroy to Munell
31.44
11.25 V's office
Vincy to McNamara
0.18
Viney to Conroy
29 September[grand final day[
1.37
Viney to Conroy
Viney to Conroy
7.27
30 September
Viney to Conroy
12.54
5.12pm
5.36
Conroy to Priestley
Viney to Conroy
0.02
15.30
0.51
5.-18
1.59
1 October
10.07
10.08
10.11
10.12
10.13
10.20
10.26
10.27
10.30
10.-15
10.46
11.01
Ward to Vincy
0.30
3.00
Ward to Conroy
0.-19 v·s office
Viney to Conroy
Viney to Ward
0.19 V's office
10.00
Ward to Viney's otlice
19.-17
Conroy to Wilson
9.00
Ward to McNamara
0.25 V's ot1ice
Viney to Conroy
0.25
Viney to W11son
4.23
Conroy to l\lunell
1.30
Ward to Murrell
0.25
Conroy to l\1cC1elland
62
T
I
11.03
ll 10
ll.lh
11.29
llYJ
!:'.OX
12.53
l.l:i
l.lh
1.3:-1
1.5 I
2.07
2.2-+
3.03
3.-+5
..(. !-+
-+.::'1
·-L~2
-+ ..:29
-+.39
-+.33
-+.-+7
1.56
5.12
~.2-+
Conroy to Asker
Ward 10 Murrell
1-+5
0.33
v·s office
0.22 V's ot11ce
0.06 Ward's office
0.05
I 0.26 Ward's office
3.03 Ward's office
0.30
1.00
1.32
5.38
Vincy to Conroy
Conroy to Yiney
2.3---\.
The project responds to the Community Plan 2001-2004 Goals, Objectives and
Strategies for Commerce, Industry and Tourism In particular:
5.30
5.23
1.16
the goal to "Develop and reinforce Frankston City's role as the major
commercial, business and tourism focal point of the south-eastern region for
employment growth and community prosperity".
the strategies to "Assist, advise and promote elements of The Frankston
Project', "Facilitate the introduction of a quality and diverse retail mix in the
CAD" and "Examine options for regenerating the southern end of the CAD,
possibly with a tourism focus to complement the Arts Centre and foreshore·.
2.01
-+.15
0.17
25.51
0.17
Background
On 21 June 1999, Council made the following resolution:
"that Council authorise the CEO to conduct negotiations with interested parties
regarding the possible future development of the site ... "
2.5-+
Ward to Conroy
7.00
Ward to McNamara
7.00
Conroy to Vincy
0.07
Ward to Yiney
0.30
Ward to V's office
1.00
Ward to Conrov
20.30
Wilson speaks to Conroy and Viney at some stage during the morning
Ward to Conroy
Ward to Conroy
To determine an outcome from the concurrent negotiations and to make
recommendations to Council on the Frankston CAD Redevelopment
Opportunities .
0.22
2 October
9.-+:'
Purpose
Community Plan Objectives
O.OX
~UlJ
1216/74 (LO:CEO)
7.00
1.39
0.01
0.07
X.-+3
lUX
8.-+9
9.39
940
9-+0
_ _:1~---2=6 September 2001 (SPS~
2.35
Ccmroy to Munell
Vincy to CcJnroy
Asker meeting)
Viney to Wilson
Ward to Murrell
Vincy to Ward
VincytoWard
19.13
Viney to Ward
9.52
Ward to McNamara
Ward to Vincy's mob
Ward to MeN
Ward to MeN
Yincy to Conroy
Yincy to Conroy
Yincy to Ward
0 17
Ward to Vinev
Viney to Conroy
Yincy to Conroy
Ward to MeN
McNamara to Ward
Conroy to Pricstlcy
ConroytoYiney
Conroy to Vincy
X.-+X
X.5l
9.0::'
9.30
@pecial Meeting -
-+ 04
5.00
1.06
0.19
In September 2000 Council·-advertised for Expressions of Interest to develop three
Council owned sites within the CAD. Six submissions were received, with three
parties being short-listed and invited to participate in the concurrent negotiations.
They were the Gandel Retail Trust, Harbour City Consortium and Wilbow
Corporation.
Due to the complexity of the expressions of the interest submitted, the substantial
variation of the proposals, and the extreme difficultly in preparing generic sets of
tender documents to cover all the submitted scenarios, Council's solicitors advised
that a tender would be an inappropriate process to achieve Council's objectives. it
was therefore agreed that the next stage of the process be undertaken by
concurrent negotiation with the short-listed parties.
Two of the three parties submitted formal proposals, namely: the Gandel Retail
Trust and Harbour City. The offers were submitted on 20 August 2001.
63
~~c;ial Meetin_g__~~~-- - - - 2 - - - - ·
:Special Meeting
26 September 2001 (SPS~
300 car spaces (does not include replacement of ex:sting car parking)
Potential reliance on Council as major tenant
In accordance with the Concurrent Negotiation Process report (dated 29 March
2001) the Working Party guided the deveiop~ent of the proposals eventually
submitted, in order to provide the best outcome tor Counc:l.
This
process
was
PricewaterhouseCoopers.
overseen
by
Council's
Probity
Evaluation
The following Evaluation Criteria and weightings were approved by Council on 15
February 2001, having regard to the Development Imperatives outlined in the EOI
document
Auditors,
Discussion
Criterion 1 -Ability to deliver and sustain the developments (40% weighting)
This heading addressed the party's ability to finance and sustain the proposal
as well as their proven experience in delivering similar projects.
Proposals Submitted
The following is an outline of the primary proposals submitted.
Criterion 2- Strategic, Economic Community and Financial Contribution to
Franksion CAD and Frankston City (30% weighting)
Within this heading the Working Party assessed things such as:
demonstration of the economic multiplier effects which could be expected
from the redevelopment, ability to capture escape expenditure and level of
community benefits for the City.
The financial contnbution considered included the price offered for the
purchase of the Council~owned properties and value of any public assets
proposed.
Harbour City
North of Beach Street
$9.5 million offered for land including Eve!yn Street car park
Three storey shopping- 37,700 square metres
Big Wand Safeway, Dan Murphy, Dick Smith Electronics
Brand direct and substantial specialty shops
Fresh food market
Village 8-plex cinemas
High Street
Significant pedestrian precinct on Beach Street
2,141 car spaces (includes 1,217 replacement spaces)
Criterion 3 -Approach to use, form and design of developments (20%
weighting)
This heading focused on the design of the developments and their ability to
integrate with adjacent land uses and the CAD.
Criterion 4- Car parking and traffic (10% weighting)
Items assessed in this heading included: the integration of the replacement
car spaces with anc new spaces required, public accessibility of the
replacemant car spaces and traffic management issues.
Sherlock and Hay
•
$7 50,000 offered for !and
Aldi supermarket
Specia!ty Shops
293 car spaces (includes 161 replacement spaces)
After a detailed evaluation of the primary proposals submitted the final score (aut
of a possible ',000) received by both parties is as follows:
Gandel Retail Trust
North of Beach Street
•
3
Harbour City- 768.2
Gandel Retail Trust- 654.7
$5 million offered for land - including Home Street, less acquisition cost of
portion of Beach Street
Single level shopping - 15,200 square metres
K-Mart and Bi-lo
Specially shops
Traditional shopping centre
Indication of future growth outside sale process
1,900 car spaces (includes 1,217 replacement spaces)
Financial Implications
The financial implications for Council vary significantly in comparing the two key
proposals submitted.
Issues
As a result of a detailed evaluation of the proposals, and in order to achieve the
best possible overall result for the community, the Working Party is of the view that
a better outcome is achiev;3ble.
Central Park
Currently owned by the Gandel Retail Trust
Readings 10-plex cinemas- 5,500 square metres
Retail/cafe/restaurant- 2,500 square metres
3 level Civic office complex- 5,750 square metres
.;r:;
26 September 2001 (SP59)l
Special Meeting
Accordingly, the Working Party recommends that the Concurrent Negotiation
orocess be concluded and a separate process be entered into with Grocon Pty Ltd
(on the North of Beach Street site and Eveiyn Street site) and Proclan Ply Ltd (on
the Sherlock and Hay site).
F.
Consultation
That. as a separate process. Council enter into negotiations
with C)rocon Pty Ltd on the Ncrth of Beach Street site and
Eve,yn Street site and Proclan Pty Ltd on the Sherlock and Hay
site, 'or a thirty day exclusive period, and that the CEO be
autt-orised to negotiate with those parties to achieve
satisfactory contracts oi sale for Council's consideration.
The Working Party has been assisted by Pinnacle Property Group and Deloitte
Touche Tohmatsu throughout the concurrent negotiations.
Tha!: PricewaterhouseCoopers be retained as probity auditor of
the separate process.
Additional specialist advice and expertise was called upon to ensure that all
elements of the proposals were adequately analysed. This comprised:
Legal issues- Maddock Lonie & Chisholm
Architecture/urban design - Hames Sharley
Finance- Deloitte Touche Tohmatsu
Traffic/parking - Hyder Consulting
Retail/market sustainability - Tas Dally and Associates and The Alien
Consulting Group
Probity - PricewaterhouseCoopers
Aauatic centre- Michael King and Associates
Ci~ic centre- Sainsbery Reed
Quantity Surveying - Newton Kerr
Conclusion
it is appropriate that Council continues to pursue the achievement of the goals,
objectives and strategies, as outlined in the Community Plan, by concluding the
Concurrent Negotiation process and entering into a separate process with Grocon
Pty Ltd (on the North of Beach Street site and Evelyn Street site) and Proclan Pty
Ltd (on the Sherlock and Hay site).
Recommendation (CEO)
A.
That the report of the Working Party be received.
B.
That Council note that the Working Party evaluation scored
Harbour City Consortium at 768.2 and Gandel Retail Trust at
654.7 out of a potential score of 1,000 points_
C.
That Council note that the final proposals are not acceptable to
Council.
D.
That Council determine not to accept either short-listed parties'
offer and that the concurrent negotiation process be concluded
in accordance with the Terms of Engagement.
E.
That both short-listed parties be advised accordingly.
!-'.
That the CEO report to Council by the end of November 2001
en row to achieve opportunities for the provision of an Aquatic
Centre and the relocation of the Civic centre,
That the CEO report to Council by the end of November 2001
on systems for the more efficient management of car par'King
within the CAD.
J
That an appropriate press release be prepared on the decision
to award Grocon Pty Ltd and Proclan Ply Ltd exclusivity in
negotiations for a 30 day period.
Appendix C
al?peaL dlH_-i :he appe.d tribun;Jl made a. dcd:;ion that Harbour City lud t ...>
("Oe"'.LJ\':' by ;ddir.g- ~-m e:·~rra 500 to 700 GH ;:;-p<\tJ..'.S (rrumm:_nn cost: $6.COO,OOO.CO).
Harbour C:cy .,,_..._,uld ~tavc m do one of two things:
(i) cut ~:1.t: .:s::-.:e of t.~t:ir Jevdu;:nnenf lmck; or
~li) ;r:c·e ts~ thc~r car ?nkm;;.
;f the C.::n.:ncil takes up the n.~k ci>.e Couno! wouid S-tand ta be: expo.sed
tc
milblns of dvLLan; m Legal daml;!.
e.g. fi
Loss c{ GJ.r park that wa.s originally paid for by th~ owners of 3ayside
shoppmg centre in Beach Street.
Either ·-~,·ay their offe: oi $9,)00,000.88 would be rl'duced by 56,COO,OOC.CC.
The:-efo .. e, r:he.Jr ftna. offer wouid be in the vicintry of S 3 ,SOO,DOO,QC_ This 1.::..
their re:tl deaL
1 put i to you rha~: the Harbour Ciry de,.;elotnnenr is too bir.; ::o s,LStain and
their pl.ui. is to ge: ·h~ culltn.ct and ir. t:he end b~amc the App(:~ls Tribunal for
o;;f,_e chang-e to d-:.eir offer.
Loss of trade from
J:l the shop-keepers in Bz.ysdc- induding
Mye~s
:lnci other freeholders ln Beach St.
the tea.nns ::~t Saysidc shoppmg cc.nrre anC Beach St ail signed leases
wich ;)ersonai guarantee.s on the undersranding thdt che: north oi
B~ach St cJ.r park wtth !ts 1200 ...:ar spaces (apx) wa5 opposite ;md !:::._~
~4. d'.e or park be dimini.ihed in numbers with oG1c: new ie'Ail.
TI1t:::er.-)rc, they could claim losses.
iv)
lt the current tenants in Bay..5ide and Beach Se took legat .tction
3. Aqu:Hit.: Centre
4. Civic Cenc-e
lf tr~e (:ivic ee~rre w~~s dropped Gaad~l I.VOuld not have a Glt' parking proble:n
on Cer.rral Car Park. ln fact, with the extra cars on Poh:e and. Law Coun:s they
would ~;:xcced the re"C.uireJ numben oi c..1.r 5pot.s.
ct$f-1lnsr rhe current cwners then the curn:nt mvners (the Gandel Retail
Tru:5r) would h:1ve no choice but to take legal recourse aga.insr the-
5. Southent end of C.A. D and Council deciding not to have a new CLvic Cenne
CounciL
v)
<"")
'n1 e
Gandel Retail Trust would have to protect its invesunent in
Frank..; ten immediately by ( l) objecting against cite los.3 oi car park;
a.r. d (2) objecting agamst the ph.nning pcrr:tit.
\XId'l t.o Civic Cen:re on Harbour Ciry's proposal and the:r small supermarket
facing thE t:::'!St'ern end of Pl.ayne St, they havt:: offered nothing for m~ southern
~no. ln fa..:~ their rrnposal actively puts thl! main focus ou the northern end. l
cannot see how d1is :neers :he commitment by Council to nuiutain the viabtlity
of rhe .;ourhcrn end at alL
'X,·hy \V:Julli the Cuuncil e\'en want to t3.ke the risk
tat all? l put It to you tha:
rhe re;:;son th.at Harbout Ciry demands the indemniry is becau.se rhen legal
a.J.v 1scrs have told them that they must ha\'e an ~ndemnity because of rhe ri.sk
l have: sp-uken to B,ernard rl.nd the loading dock on the north of Beach St will
be add . . essed.
Hari:v 11 r Citv is somewh~!::: Decwecn SCO to 700 c;-ull on tb.c1r cievdopment shorr
<H Councd's own repl<Je:e;nelt cost of 512,000 per space at the lower end. This
Fir1ally, why did the Council officers and ±e stet:ring comrntrtee try to push this
matter through Council wtthout the Councillors having any time :u· all to
constdt:r the b1ggest deal in Franks:ton ever? There is only one :answer! the
officers md c0mmi.ttee have alre<Idy done the de".tl.
;;
~6,COO,OCO.CO.
l\Jl render.s were r.olJ that all the car spots that are currendy on the subject car
parb had to be replaced. Harbour City have not complied.
If Gan2d dwpped the GH:i back m the 3ame rarto as Harbour City t.~en their
biJ could_ b~ incease..:i by $6.000,000.00 which could put ir ·.vdl ahead of the
llarbour City oifc:.
One has to asK whar would Le che curcome of the Harbour Ctt}' offe~ if an
nbjo:ction was [odged at town planning stage and such objcctton ·.vas taken to an
AppendixD
2
2.
1 October, 2001 (OM76}
Frankston CAD Redevelopment Opportunities- Selection of Preferred
Developer
I
j Closed Council
---~3_ _ _ _ _ _ _ 1 October, 2001 (OM76[J
Discussion
Proposals Submitted
1216174 (LO:CEO)
Purpose
The following is an outline of the primary proposals submitted as at 20 August
2001.
To determine an outcome from the concurrent negotiations and to make
recommendations to Council on the Frankston CAD Redevelopment
Opportunities.
Harbour City
North of Beach S'ueet
Plan 2001-2004 Goals, Objectives and
In particular.
•
•
•
$9.5 million offered for land inducting Evelyn Street car park
Three stcrey
square metres
Big W and
Dick Smith Electronics
Brand direct
shops
Fresh food
Village
High
•
submitted, the substantial
generic sets of
solicitors advised
achieve Council's objectives. lt
was therefore agreed that
stage of the process be undertaken by
concurrent negotiation with the short-listed parties.
Two of the three parties submitted formal proposals, namely: the Gandel Retail
Trust and Harbour City. The offers were submitted on 20 August 2001.
In accordance with the Concurrent. Negotiation Process report (dated 29 March
2001) the Working Party guided the development of the proposals eventually
submitted, in order to provide the best outcome for Council.
This
process
was
PricewaterhouseCoopers.
overseen
by
Council's
Probity
Auditors,
Central Park
Currently owned by the Gandel Retall Trust
Readings 10-plex cinemas - 5,500 square metres
Retail/cafe/restaurant- 2,500 square metres
3 level Civic offia! complex- 5,750 square metres
300
spaces (does not lndude replacement of existing car parking)
Potential reliance on Council as major tenant
ear
1 October, 2001 (OM76)
I Closed Council
6
1 October, 200i(OM76)
Issues
E.
That both short-listed parties be advised accordingly.
As a result of a detailed evaluation of the proposals, and in order to achieve the
best possible overall result for the communiiy, the Working Party is of the view that
a better outcome is achievable.
F
That, as a separate process, Council enter into negotiations
with both short-listed parties, for a period concluding on Friday
26 October 2001, and that the CEO be authorised to negotiate
with those parties to achieve satisfactory contracts of sale for
Council's consideration.
Accordingly, the Working Pariy recommends that the Concurrent Negotiation
process be concluded and as a separate process Council enter into negotiations
with both short-listed parties.
Consultation
by Pinnacle Properiy Group and Deloitte
negotiations.
all
G.
That PricewaterhouseCoopers be invited to act as probity
\
auditor of the separate process.
~~-1--r.A-<-',P~-~~
H.
That;m
report to Council by the end oi November 2001
-1 on -flow
ve opportunities for the provision of an Aquatic
~ .
Centre
lion of the Civic Centre.
) ~;~ 4 -'"""~'"""'..!lioco"'r C..:.v:L
I.
the end of November 2001
!i~11f"ii11<!11l_a!lerner1t of car parking
A..
B.
That Council note that the Working Party's final evaluation
scored Harbour City Consortium at 768.2 and Gandel Retail
Trust at 681.1 out of a potential score of 1,000 points.
C.
That Council note that the final proposals are not acceptable to
Council.
D.
That Council determine not to accept either short-listed parties'
offer and that the concurrent negotiation process be concluded
in accordance with the Terms of Engagement.
j
~~
~~
s\~_._~ ..
Report of the Review !!"!to Possible Breaches of Section 77 of the
Lo_ca_~ ~cJv~r'!_m_e_nt_~ct !_2~9_-_fran~ston~ty Council__ ____ ___ _
Background
I.
~-Ir
Executive Summary
On ' October 200 l the Local Government Division received advice tfom the Chief Executive
Olticcr, Franks ton City Council in relation to a possible breach of section 77(2) of the Laud
<7ur•ermnent Act !989 (the Act). The basis for the alleged breach being an article that
appeared in the Frwzkston Independent of 2 October 2001 contained information confidential
to the Council relating to the Frankston Ccntwl Actives District (CAD) development.
S~ction 77(2) of the Local Guvernmem Ad I 989 provides that a person who is. m has
been. a Counctllor or a member of a Council committee must not release mfonnation
that the person bows, or should reasonably know, is information that is contidcntral to
the souncrl and :hat the Council wtshes to keep contidential. Section 29 (2) of the Act
prm td,es that a per:son who 1s convrcted ,of an offen~e against section 77 is not capable
ot becommg or contrnumg to be a (ouncrllor tor a period of 7 years after the
conviction
The Diviston's Mr Kelvin GoodaiL assisted by Mr Andrew Clegg, both having previously
been appointed Inspectors of Municipal Administration under section 223A of the Act
undertook the initial investigation under section 2238 into the relcC~se of the information.
Following: identification of additional possible breaches the Minister appointed 'vir Chris
Wren as an Inspector of Municipal Administration with the specitic terms of reference to
investigate these further possible breaches. Mr Wren's investigation is subject to a separate
report.
The Frankston independem <lll 2 October 200 I published an at1icle headed "('., .
ccntr'
· przrnc
·
· la ks reopen" which it is alleucd contained t·nl"om ·.. t.1\IL
·
c I lOil bt as
sue
1
fd . l
'
.
"'
le! 1011
con ~ entta to t.'le Councrl and which the Council wished to keep contldential (see
"4ttachment 1). The Chref Executive Ot11cer wrote to the Minister l(Jr Local
G?vernment on -~ October 201) 1 requesting that the matter be investil'ated as a matter
ot urgency (see .·lttachment :')
~
A prima facie case was established that information that v.as confidential to the Council and
that the Council\\ ishcd to keep contldemial was releC~sed. All Councillors. Council stall and
cxtemal members <lf the Cmmcils Working Party who were privy to the cnnfidential
infonn:.rtion have denied under oath or bv statutory declaration that they released the
information to the press or any other person not entitled to receive that infom1ation.
Mr TonJ Murrell. Managing Editor of the Fra11kston Independent. was formally requested to
provide the name of the person or persons who provided the Frmzksta11 Independent with the
information relating to the matter under investigation. "vir "vlurrell reti.Jsed to divulge his
sources both in writing and at a formal appearance before the Inspectors on the grounds that
to reveal a contidcntial source would breach the joumalists' Code a( Ethics.
While there has been no direct evidence as to who may have provided the information to the
Frankston Independem. certain circumstantial evidence was obtained that idcntitied the
former Mayor. Councillor Mark Conroy. as a possible source of all or part of the infommtion.
Of the eight items identified by the Counctl as contldential information, four could have been
sourced from the organisations bidding in the process and four could only have been sourced
trom one of the persons attending a confidential briding for the Councillors on 26 September
200 I.
The circumstanttal evidence may enable a conclusion that Councillor Conroy was the source
of the information contained in the newspaper article. However the evidence falls short of
being able to prove that he was in fact that source.
On 3_ October 2001 John \Vatson, Acting Fxecuti\e Director Local Govemment
Dt\ tston and Kdvm (Joodall. Governance and Legislation Analvst, met with \1r Jo
Edwards, Chrcf Exccutrve Officer. Frankston Citv Council and
(' 1,, ()'('
nt_
]\;[· dd k
·
- .
·
,v
Jt ~
on nor 0
~~\ oc_, Lome and Chrsholm, Lawyers. in rebtion to the possible breaches of section
1 •(-) ot theLaca/ Government Act 1989 (the Act). The basis for the alleged breach
bemg an artrcle that appear,;d on page I of the Franks ton IndC'pendent of~ 2 October
2yo 1 contamed
contidential to the Council rclatinoeo to the IL'r"un k St On
·
")"mlormatton
.
C en t ra l 1\ ctJ\es ·' rstnct !CAD) development.
~ det~ile~
..j
background on the Frank:ston CAD and the bid process is provided in Mr
ren s r~port. 1)n 26 September 2001 a confidential brietlng of Councillors was
pronded by the, Working Party established by Council to manage the process of
engagmg a deve:oper for the CAD. At that briefing an assessment of each of the bids
for the proJect, one by the Ciandel Group of Companies (Gandels) and one bv the
Harbour Crty consortmm consisting of two companies Grocon and Proclan 1Ha;bour
Ct~), was prov1ded. On 1 October 2001 the Council gave formal consideration to
recommendatJons of the Workmg Party. In its edition the next day, 2 October 2001
the Frankston Jn,iepende/11 pu!JIJshed the contidential information.
5.
Foll~wing a reqL~est for claritication of the conticlentiality of infonnation contained in
the article the C hrct Executrve Ol1icer advised by letter to the Local Government
Dtvrswn dated 18 October 2001 of eight specific items of information related t\l the
Coun~rl consrderatJO~ ot the Frank:ston CAD development that was contidential to the
Councrl at the trme ot pubhcatton. The eight confidential items are as follows:
•
The cost L•f proposed :1cw council offices (paragraph 21
The Working Party's advice to reject the offers of both developers and begin a
new process (paragraph 5).
~
ln the absence of an admission by Councillor Conroy. Mr Murrell. as the author of the article.
remains the only person who can identify the source of the infonnation which appeared in the
newspaper and which was contidential to the Council. In order to pursue the source. it is open
for the Inspector to certify 'vir Murrell' s failure to the Supreme Court under section 132 of the
Act. The effectiveness and worth of this approach in obtaining the source of the information
needs to be considered in light of the likelihood of Mr Murrell continuing to refuse to divulge
•
his source.
•
The initial recommendation of the Working party to enter into an exclusive 30
day ncgocatwn penod with Grocon and Proclan (paragraph 6).
The Working Party's
,~\aluation
scores (paragraph 7).
The commercial offers to both parties. (paragraph 7) .
Page 2 oJ 17
, a) produce wn· documenr !whether or nor specijicallv identijied m the
notice) in the person's custodr or cumrol that relates town· matter
tlzal the inspector mav examine or investigate'; and
.
The Working Party's recommendation to deell with both parties for one month
(paragraph
9).
T'hat Gandcl subsequently indicelted an increelsed c:.~sh offer could be m:.~de
1"b; give all reasonable a.Y5.'L\'fance in t'onnection
or iJzves/(r;ation, and
(paragraph 10).
The indemnitics requested bv Harbour Citv (parelgraphs 12 and 13).
h.
(J!
article on 2 October 200 l:
!.
A •z inspccwr ,1wv administt>r an oath.
I-I! A;z inspector mav take possession ofanv documt>nl produced under suh';(::_·ction 0) fhr so long a,.; she or he considers nece.';sa0·-
Jon Edwards. CEO, Frankston City Council
Stevc Dalton. Stall member. Frankston City Council
Peter Fitchctt, Stall member, Frankston City Council
lidia Orsini, Staff member, Frankston City Council
Bill Kerr. Consultant, Deloitte Touche Tohmatsu
Andrcw Scamer, Consultant, Dcloitte Touche Tohmatsu
Graemc Polrton, Consultant, Pinnacle Property Group
Andrew Williams. Consultant, Pinnacle Property Group
Guv O'Connor, Solicitor. Maddock lonic & Chisholm
M;rine ;'\!incevic, Solicitor, Maddock Lonie & Chisholm
lames Woodburn, Consultant.
Peter l!unkin. Consultant, Hydcr Consulting
Michael Shatter, Probity auditor, PricewatcrhouseCoopers
Mark Conroy. Councillor.
Cathy Vv ilson, Councillor.
Dianne Fuller. Councillor.
Vicki McC!elhlnd. Councillor
Bill Parkin. Councillor.
[)avid :\sker, Councillor.
15J
However, whz/c an inspector retains possession ofsuch a documem. she
or he must permit any person who would be entitled 10 inspect thl'
documem ifiz were not in the impector's possession /o inspect 1/zc
document at am· reasonable time.
(61 A person appearing bejiJre an inspector is entitled to he represf'nted hv
anorher person
9.
Section 132 of the Act further provides as follows:
132, Offences relating to investigations
(I! A person m us' !WI(a) rej!Jse or fail to comply with a requirement ot an inspector of
municipal administration to the exrent to which that person fs able
to comp/v or
I b; git·e
injiJrznation which he or she knows isjiz/st> or misleadinp to an
inspector ofmzmicipal administration; or
,,
{c) when appearing hejore an inspector ofmunictpal administration--·
(iJ rejitse to take an oath or ajjirmation; or
The Division's :'vlr Kelvin Cioodall and :'vlr Andrew Clegg, having previously been
appointed as Inspectors of Municipal Administration under secti:m 223A of the Act,
undertook the investigation under section 223B into the release ot the mtormatton as tt
related to the Council-; s operations and possible breach of the Act.
(ii)
Penalty:
make a false or misleading statement.
100 penalty units or imprisonment jar 2 vears.
CJ !fa personjatls to complv with a retfuiremt>nt made bv an inspector of
mitnicipal admmistration and does not prove that he or she had a lawjit!
excusejor the jai/ure, the inspector of municipal administration ma1·
certijj• thejailure in writing to the Supreme Courr
.
S..:ction 2::'38 provides the powers of an Inspector of Municipal Administration as
follows.
2238. Powers ofin>pectors of municipal administration
(3; The Supreme Court may inquire izzto thefailure and may-
r 1) An im-,pector of municipal administration ma_v exanzine or inve.\'tigateraj
an ex(Jtnination
·c; appear hcfore the inspectorjiJr examination on oath and to answer
questions
The CFO subsequently advised that to the best of his kno\\ ledge the following people
were privv to the eontidential information prior to the publication of the ne\\ spapcr
•
•
lvilh
(1)
anv matter relating to a Council's operations or to Council
el~crions or elecroral mallers; and
make an order requiring the person to eomplv with the requirement
made hv the inspector of municipal administration within the
periodji.red by the Supreme Court; or
(b) instead ulor in addition to w1 order under paragraph (a), if the
Supreme Court is satiojied tlzal the personj(tiled without /awju/
excuse I" c·omply >vith the requirement of the inspector of municipal
administration punish the person as if he or she had been guiltv of
contenzpl <>f court.
rb; anv possible breaches of this Act.
(}) An inspector mav, bv notice in writing, require a person to-
Page 3 o! li
Possible
Brew.cbc~
of SectiOn
7-~ofthe
1 ucat Gu V< ·rnmem Jet 198Y
Frankston Ctty Council
P:1ge 4 or' 17
10.
11.
.-\ prima tcrcic ca:;c was established that informauon that was confidential to the
c,m1rcil and that the Council wished to keep confidential vv·a,; released to persons who
were not entitled to that information. A number of Councillors were privY to that
information. The Chief Executive Officer had not indicated who may have been
n::;pon:;iblc for the rdease of the information. I Jowcver. should i: be established that
the information was released by a Councillor or a member ot a louncrl commrttec a
case l(>r ,m otlencc under section 71(2) of the .\et may be made out.
~lr Tonv \lum:IL \!anaging Editor of the Fmnkswn Independent. was formally
requestc:l w provide the n:1me of the person or persons who provided the Franks1011
fndepewlent all or any of the information relating to the matter under mv~sngatwn. In
a letter dated 5 '.ovemhcr 200 l i\lr :'vlunell responded to Mr Goodall s request as
Circumscances sunmmding the scheduling of .r meeting(s) between c,mncillor
iV!J.rk C\~!~roy ~1nd od1cr Cou!!cillors to b<~ held i!! the office of the Nk·rnhcr f4)r
Frankston East Mr Matt Viney. may also giw rise to an allegation that Mr
Viney \V as privy to the confidential infcmmltion prior to consideration of the
matter h:; the Council on 2 October 200 I.
15.
It >vas considered th~t in c,r,Jer for the addition~] matters to he aJdresscJ. a broader
investigation \\ ould need to be undertaken, lead by an Inspector of Municipal
Administration with particuLn· legal and probity e:-..periencc.
I6.
Consequently be Minister appointed Mr Chris Wren as an Inspector of :'vlunicipal
,\dministration .vith the following Terms of Reference:
t(J!!ows:
To ad1·ise regurding issu~?s identijied h}'· !nspeclor of Jlzuucipa! Adrnini...,·trution
.Hr Kelvin Gooda/1 during enquiries in relation to al/egations of a hreach of
y 7 7 (2) o(th: Local Gmemment A er 1989 !the Act) wlwrein injiJrmalion
considered :onjidential /''the Franksto11 Cirv Council was released /u !hi' prns
and reporre1 in the Frankston Independenlof2 October 2001. nwnelv
'"Pmji·ssin 11 al;ouma/isrs commit themselvl's to a code ofl'thics. parr o(which
,·ratf.!S that ·vvhcre conjldence.v are accepted fron? a source seekiilf!, anon_vnuty,
rhar L·un!idence is ro he respected in all circumsra!lces.
The inliwmauon 1vas gi\'en to Tlu.! lndepend('!lf on tllf' under.\·tnnding that
aJlfHI)Hltty H'US
Tlu:n.:f(Jrc
\::'.
H'C
guaranteed
The Local Government Drvision subsequently sought advice of the Victorian
G,wcrnment Solicitor (VGS) in relation to the powers of an Inspector of Municipal
Administration to compel Mr Murrell and! or his reporter reveal the name of the person
or persons who released the information to the press. what possible actions are open to
the Division in seeking this information and the possible legal conseqnences ot such
actions. The VGS prc;vided advice as to what further options are available to the
lbi
JV/zerher conjidenlial injimnarion concerning rhe Frankswn Central
Acrh·ities District Dl'velopment Project >ms provided to the 1Hemher for
Frm1ksron East. jfr .Hatt Vinev JIP on (}f·prior to_, Octoher 2001 and i/
so. bv whom.
Whether the circumslanees conszdered in relation to items 1(a! and [( h; indicatl!
that
All Councillors and Council statf identified by the Council as being privy to the
inl(mnation published in the Frankston Independent were interviewe~ by the
Inspectors and provided information under oath. The other persons rdentrfted by the
Council as being privy to the information were asked to provtde Stannory Declaratwns
as to whether chcv were privy to the information before 2 October 200 L whether they
released this into~ation to the Franks ton Independent or any person not authorised by
the Frankston Citv Council to be privy to this information and whether thev had any
evidence as to wl;o may have released this information to the press. They were also
given the opportunity to appear before the Inspectors and provide any information by
interview under oath. All provided declarations and none took the opportumty to
there have heen anv and what hreaclws ofs77(l) or am· otho
section of the Local Govcrnment.·lcl 1989. and i(so. h.1· whom
3
P:.~g:e
5 of J'";
the above und anv other issues wluch nun· arise as a ri'sulr of rhis
On the recommendation of the Victorian Government Solicitor. to require Mr Tony
Murrell, Managing Editor of the Franks/on Independent. to appear before the Inspector
to answer questi,Jns under oath as provided for in section 2238 of the Act. Mr Munell
A late amendment to the tender bid bv the G,mdel Group may giv-e rise to an
allegation that that organisation was privy to confidential information in late
--------·
011
18.
During the course of the review further possible breaches of section 77(2) were
f'o~s 1 bk: B--;:-~-;j~l'~ ot'S~~77~;frht: Local (Jun::mmen£ -Jet 198()- Frankston City Counctl
there are an_r and H·hat matters arising under other legislation
'vvhic/7 1·equire jltrther inve.\·tigation.
Interviews of all Franks ton Crty Councillors. members of the Council's Working Party
for the Frankswn CAD Development those associated with the bid by the Gandcl
Group ofComp<•nies Messn; Rogan Ward, Bernard McNamara, Neville Beer and Tony
Gandel. Mr Tony Munell c.nd Mr :Vlatt Viney were conducted by :vtr Wren and Mr
Goodall in relation to the above Terms of Reference and in relation to the original
complaint. Mr \Vren is reporting separately to this report m relation the matters
refencd to in his specific Terms of Reference.
identified.
September 200 l.
To report
inquin·.
i :_
17.
appear.
I .f.
Whetht:r conjiduztial injiJrmarion concerning the Frankswn Ci!ntral
Acri",·iries Distric"l De>-ciopment Project >vas provided to rhc Gandc/ Group
on or ubour 26 September 201!1 and if"so. In· whom
are not in a posit lOll to identify our .Yource or source.\·. ··
])i,ision.
13.
la!
Possible BrcJ.che; of Secthm
;~of the
- · · - - - - - - - - - ---· - - - - - - Locui (;r'\'( rnmem .-lcr 19X9 - Franks ton Citv Counc:l
Page 6 ot ]7
also obtained and kept :.1 copy of notes prepared by Councillor Cathy \Vrlson which
C8ntJ.incd dd 1ils of the pqints scored by the n~spectjve bids a;-. at the tirne of the
briefing. .-\11 other person:, who had been given copies of the recommendations had
retumed them to the care of the Project Manager, Ms Lidia Orsini, :1t the close of the
briet!ng session. Councillor 'vVilson had alsu given Ms Orsini her original notes and
had advised h<cr that Counc:llor Conroy had retained a copy of them.
was interviewed bv tvlr Wren and Mr Goodall on -i April 2002. Again 'v"!r :Vlurrell
refused to provide ihe name or names of his source of the confiJ.cntial information.
19.
20.
On 23 April 2002 :Vlr Goodall wrote to :VIr Murrcll advising that he was considering
whether to ccrtih Mr Murrcll"s failure to comply with a requirement of an Inspector to
the Supreme Co~l11 as envisaged by section 132(2) of the Act. l\lr Murrell was given
an opportunitv to prove that he had a lawful excuse for his non-comphance. Mr
Murrdl responded by faxed letter on S :Vlay 2002.
In his response :\lr MurTell ,;tated "'!am stating ror the record that I willingly appeared
bdorc vour inquiry and answered the inquiry's questions and provided requested
docume-nts. l!owcvcr, 1 was unable to name the source;s of certain infonnatwn
bcoccrusc of thco journalists. Code of Ethics vv hi eh states in part 'Where contldences arc
accepkd, resp-ect them in all circumstances'." l'v!r Murrcll also questions the
justification for contidentiality of the information and whether the mformatron was,
imkcd confidentral ~ive that much was publicly known. H.: advocates the role ot
newspapers as vigih~ll observers and protectors of the public interest. The issue of
obtaining :VIr Murrell's sources is discussed in Ojj"ences relating to investzgatzons
below.
2:5.
The newspaper article in the Frankston Independent on 2 October 200 I contained
details of the initial recommendation of the Working Party to enter into an exclusive
30 day negotiation period with Harbour City and the Working Party's evaluation
scores. Both these item, of contldential information were contained in the
recommendations and notes retained by Councillor Conroy. However, between the
close of the briefing session on 26 September 200 I :1nd the Ordinarv Meeting of the
Council on I October :'00 I both the scores for each of the bids and the
recommendation that only one bid, that or Harbour City, be part on the ongoing
negotiations c'1anged due W late information being provided by the Gandcl Group.
:26.
It would apperr that the article was, in part, based on detailed infom1ation that was in
Councillor Cconroy's possession at the close of the brieting on 26 September 200 L
including the initial score>, which, by the time of publication were no longer accurate.
The Chief Executive Officer had sought legal advice on the evening of 26 September
200 I following receipt o,' amended documentation from the Gamic! Group late that
afternoon, etiectivcly after the briet!ng session had ended and the Councillors had lefi
the building. The Gandel bid was rescored in light of this new information on the
morning of l October 2001. As a result it was agreed to recommend that the Council
continue negotiations with both parties. Councillor Conroy was advised of the later by
the Chief Executive Otliccr during a phon.: call taken at Councillor McClelland's
home at around 10.30 on the morning of I October 2001. However, the Councillors
were only advised of the details of the rescoring and the proposed amended
recommendation bv fax on ihe afternoon of I October 200 l.
Issues
Offence Against Section 77(2) Local Government Act 1989
21.
For an offence auorinst section 77(2) of the Act to be prosecuted it would need to be
costablished that ; Councillor or member of a Council committee had released the
confidential infonnation to the press. Of the eight items identified by the Chief
Executive Oftlcer as being contldential to the Council, four items. the cost of the
proposed Council oftices, ;he commercial offers of both parties, the changed offer by
Gandcls and the indemnities requested by Harbour City could have been sourced from
outside the Working Party. There is evidence that some or all of this information was
known to Mr Rogan Ward, Mr Matt Viney and possibly Mr :Vlurre!L prior to the
Working Party J'vlceting on 26 September 200 l. However. the remaining items in
relation to the Working Party's recommendations, the evaluation scores and changes to
the initial recommendatio;s would have only been known to the Working Party
members and those Councillors who attended the brict!ng and were privy to
subsequent information provided to Councillors.
28.
Telephone records obtained from the Council and by his own admission at interview.
show that Cot:ncillor Conroy had a number of telephone conversations with the editor
and author of the article in the Franks ton Independent of 2 October 200 I, Mr Tony
Murrell, between 27 September 2002 and I October 2002. Those phone calls made to
Mr Murrell on the mobik phone provided to Councillor Conroy by the Council arc
listed in the taole below:
~-----------~---
22.
All Councillors interviewed who were privy to the information have denied under oath
that thev released the information to the Frankston Independent or any other person
outside ihc Frankston City Council not authorised to be privy to that inforn1ation.
23.
Information provided by Councillors, Council staff and the various other persons privy
to the information were unable to provide any direct evidence as to who may have
released the information to the press. However, Councillors and staff provided
circumstantial evidence implicating Councillor Mark Comoy as the possible source of
the information that appeared in the newspaper article.
24.
Councillor Conroy retained a copy of the recommendations of the \Vorking Party
which contained much of the contldential information which appeared in the press. He
~--
--------·---
------ --·
p~~~Jblelli~~l~he~--;:;-Tsc~t~-~r-f the Lucal Guvcrnment ...Jo 1989- Frankston City Council
1
-- -
----~---,
87 _
Th~~September.WO\
Fridav 2s
-~-----~--r-
_;_:rim~--~-----~,__!>u_ra!~OIJ _ _____
i 12.0;o_ ______
~·· ----~
Date
1
sc;te~r-ioc~==--=-~- -~~2------ tU~~==~-=---=~
~-------------
~--~T2.54--------;-3i~44-
I MondaY l o~:lober 20()].
110.45 --
__ _:_±.23
--
~---
-----1
----=~
_ _L_l:_::l.29
29.
It would app ;ar from tire list above that Councillor Conroy had two telephone
conversations with Mr .\1urrell around the time, or shortly after he received advice
from the Chief Executive Ofticer that the Working Party was to recommend dealing
Poss1bl~
Breaches ofSecnor T'ofthe Local (;,wernmem.lcr
-----·---
Page-; of 17
]1)~9
·- Frankston City Conned
Page X of 17
"ith both parties but before details of the recommendation and the revised scores were
kmm n to him. It mC~v explain why the article referred to the changed process but also
contained inaccurate scores if Councillor Conroy was the source of the infomntron.
ThctT is no rcconl of anv conversation between Councillor Conroy and Mr I\lurrell
a tier \1.29 in the morni 1{,_, of I October 2001 and when 1vlr :Vlurrell sa vs the article
went to the ptinter betwee~ -+pm and 7pm that d'-ly.
30.
.ll
A further inaccuracv in the newspaper arttcle was that the final decision of the Council
was the result of the then Mavor. Councillor Conroy. exercising his casting vote to
deC~l with the two bids for an,;ther month. There is some conjecture exactly which
meeting this refers to. the briefing session on 26 September 200 l or the Council
Meetinl!. of 1 October 2001. Mr Murrell at interview was uncertain "'Last night would
have reterrcd to in the paper -when the council meeting was being held. Thursday.
Monday, I am not quite sure .. , In the tirst instance a vote was not taken_ in the second
the majority of Cuuncillors supported the revised recommendation of the workmg
party.
If the article refers to the l October Meeting it can be argued that Councillor Conroy,
as a result of a series of discussions between himself and Councillors \Vilson,
MeC\clland and Asker on 27 and 28 September and I October 2001 would have
expected that the matter "ould be eqmlly divided between himself and Councillors
Asker and I\\cCklland on one hand and Councillors Wilson, Fuller and Parkm on the
other (Councillor Priest Icy being absent in Perth). He \Vould therefore be expected to
use his casting vote to determine the matter. l-k would not have expected anything
ditlcrent. it is ;rgucd, until immcdiatelv before the meeting in the evening of 1 October
2001 when Cou~1cillors Asker and :-icClelland advised Councillor Conroy that they
were going to support the revised recommendation and were not going to support his
proposed amendments. This scenario gives rise to further speculation that Councrllor
Conroy may have been the source of the information published in the Frankston
independent.
At interview. Councillor Conrov stated that he had spoken to Mr Murrell seeking
details of infonnation that had previously appeared in the Frankston Independent on
the Frankston CAD Project. He had not provided :Vlr 1vlurrell with any information
that was cLmtldential to the Council. Councillor Conroy agreed that Mr :Vlurrcll is a
prokssional ami skilled journalist who has the ability to subtly obtain information
trom people he talks to. Councillor Conroy agreed that he had had lengthy telephone
conversations vvith Mr Murrell during the period in question, that these involved the
J-rankston CAD project and its consideration by the Council and that :VIr Murrell
would have sought further infonnation from Councillor Conroy. However he denied
that he; would h;ve given confidential infonnation. even inadvertently to the journalist
during these com er:ations. He ti.rrther stated that in his opinion Mr Murrell already
knew~ more about the project than he. Councillor Conroy, did. Councillor Conroy
advised that in a subsequent conversation with \llr :Vlurrell, Mr Murrell had said that
bv the time of the briefing session on 26 September 200 l the only thing he had not
k;1own was the tlnal score:. Councillor Conroy denied providing Mr Murrell with the
scores.
.J.J.
Councillor Conrov 's recollection of his conversations with Mr Murrcll may be open to
question in light- of his evidence in :vir Wren·s inquiry into his recollection of
conversations with Mr 'Vl.att Viney. At interview he had at first denied telling :VIr
---- -----p~~tb!;fi-te-;-:hc~l's~~~n 7-=:;-,~fthe Local Governm,'nt .!et J98Y- Frankston Ctty Counctl
Page Y oft 7
Viney certain int(1rmatiun in relation to the brieting session. This contradicted the
~videncc of ~.lr Vincv. Whc!l confnmted with \;[r Vin~v' s evidence he admitted that he
may have been wrong and that durmg the course of a n~rmber of conversations with 'vlr
Viney may have provided the information. During the period in question Councillor
Conroy vvas 'Jery concemed at what he perceived to be the endangenng of the future of
the central area of Franbt<m due to inadequate and possibly erro;cous~clecisions by the
Working Party. It would be understandable that in these circumstances Councillor
Conrov·s recollections a·; to the details of what was actuallv discussed during lcngthv
and it is assumed highly charged conversations with a prote.ssional journalist ~vcre ~les.s
than I 00° o accurate.
3-+
:Vlr Bernard McNamara of Gandels C~nd :VIr Rogan Ward stated at interview that a
document was provided to Mr Ward, who had fonvarded it to Mr McNamara, on the
morning of 28 September 2001, which appeared to contain the Council's Working
Party recommendations ot similar and hand written notes containing some or all of the
Working Pany·s scores t;Jr the Gandcl and Harbour City bids. Mr Ward advised he
received the document an<mymously on his front door step when he went to cnllcct his
morning paper. Both \!lr 'vlcNamara and Mr Ward advised that they recalled the typed
portion of the document being similar to the recommendations contained in the
Working Party report but were not the same being a different format. The hand written
notes were not the same as those provided to Councillor Conroy by Councillor Wilson.
Councillor Wilson·s not'~ were printed on A3 size paper and the docmncnt in question
was on A-+ paper.
35.
Mr Ward demed providing a copy of the document received on 28 September to Mr
'viurrell at the Franksron Independent. It is open to conjecture that the mysterious
source of the document ,:(JU]d also have provided a copy to Mr Murrcll. If this was the
case it may account for the source of the information that appeared in the paper on 2
October 200 l.
36.
Councillor C:onroy has denied that he provrcled the document to Mr Ward. Councillor
Conroy stated that he was unable to locate the copy of the recommendations or
Councillor Wilson's notes which he retained after the Working Party briefing on 26
September :2001. He stated that he cannot recall seeing Councillor Wilson·s notes
since he obtained then lrom her at the photocopier at the Council otliccs on the
afternoon ni" 26 September 200 l. He believes that the documents were left m his car
after the briefing and destroyed along with an amount of other material trorn his car
which related to he campaign for the scat of Dunklcy in the Federal election.
Alternativelv he believed he may have left them at the Council ottlces although he was
of the opinion that they were most likely left in his car.
37.
Councillor Conroy also could not recall with certainty that he had made any notes after
the briefing session on 26 September 200 I. However he doubted he did so as it was
not his styk to take notes himself. This is borne out by his behaviour during the
briefing session where he did not take any notes but rather had asked for Councillor
Wilson's nctes, to which he bad made an annotation, instead.
38.
In summa!), the evidence available indicates that Councillor Mark Conroy rs a prime
candidate f,>r being the 'iource of the information that appeared in the article in the
Franks ton independent on l October 200 I It must be acknowledged that this evidence
is circumstantial at best. If this were to be pro,ed it would constitute the basis of an
Possible Breaches or' SectiOn 7'7ofthe Locui Government .1ct 1989--- Franks ton Citv Counctl
Page I 0 of 17
olkncc under section 77(2) of the Act. However. Councillor Conroy has, under oath,
strenuouslY denied releasing the infonnation to the press. Mr Murrell. the author of
the a11ick .and editor c1f the Franks ton Independl'nt has refused to divulge his source or
sources of the information and has stated that he knew much of it before 26 September
.2001 In the absence of an admission by Councillor Conroy or evidence from Mr
l'vlurrcll as to whu released the confidential infonnation to him there is insufficient
evidence Ill prO\·e. beyond reasonable doubt. an offence against section 77(2) of the
Act.
obtwn the name(.\) of the source(s), I recommend that the Inspecror send a
notice ras described above) requiring Jfr Jfurreil lo appear beji;re him Jor
e.wminarion on outh and ro answer quesrions. 1/ Jlr ivlurre/1. rlzcn reji1ses to
ansncr questions regarding his sources, then (ajier giving him an opportunin
to pr•J\·e that he has a lal'-jid excuse for non-compliance) the jcJi!ure can he
certi} ied by the lmpector to rhe Supreme Courl.
-+2.
Offences relating to investigations.
39.
40.
As Mr Murrcll had refused to re,eal his sourceiS of the contidential infi.mnation that
appeared in the a11icle of I October 2001 The Local Government Division sought
advice of the VGS in relation to the powers of an Inspector of Municipal
Adrnmistration to compel :V!r Murrell and! or his reponcr reveal the name of the person
or persons who released the infonnation to the press. what possible actions are open to
the Division m seeking this information and the possible legal consequences of such
actiuns.
The \/(iS advisL·d in relation to journalistic privilege
:J.S
l'vlr Murrcll. -vas formally required to appear before the Inspector to answer questions
under oath a> provided l(Jr in section 2238 ufthc Act_ he was int..:rviewcd by Mr Wren
and Mr Gocdall on -+ April 2002. At interview Mr MurreJJ refused to reveal his
sources. clai,ning in each case journalistic privilege as provided by the journalists'
Code o(Ethi,·s.
In relation t<l a possible offence under section 132 of the Act the VGS provided
detailed advi,:e as to whether an otfence could be made uut, the procedure for pursuing
such an offer;ce and possible outcomes of such a course of- action.
-+4.
The VGS found that the following evidence provided at interview by Mr Murrcll was
particularly r':levant:
follov,s:
Were you the awhur of that article 0
The r·ourrs lzm'c rcpearedll· affirmed that a ;ournalist is nor privil<'ged ji-om
disclosing the sources of Ius or her in.formation, whether or not he or she has
undertaken no! ro disclose the source'l· identit:v. Thev lun·e no immunitr not
availahli' to other citi:::ens.
"The law has been so clear .for so long that ir is a reasonable
assumption that potential sources of injormation alreadv realise that
am· such underraking must yield lo the requirements of the interests ol
justice where those interests are regarded bv the courts as
paramount.
You are aware o( the provisions of s 132 ol the Local Guvernmenl '1ct:'
Whicn!'ve worn/or 37 years, along with manv other journalists.
The onlv restriction on an illlerrogawr's right mav be that a question is 10 be
rclc>vani and must serve a usl'jid purpose in relation to the proceedings at
hand. In the context of a statu/on· po>ver to provide inji;rmation this restriClion
can be explained by the principle that a statutorv power mav onlv be exercised
in goodj(uthjor the purposesjiJr which it was conferred.
Can }OU name the c'Oimcillors" -·- Jfv recollection is that I would have vpoken
lo all olthem.
Po~:.,Ibk Brc:Ichc~ ofSectwn 7~oftbc
Loud Go\'Crnmcnr Act !989
frankston City Councrl
Did any of rhese councillors provide vou with or confirm in anv wav anv of the
in(ormarion that ,·V<IS conjidential to the council:' --- .~gain I am in a position
'1-tll1ere l have giYen my undertaking not to reveal mv sources and 1 am not
prepared to name them or reallv narrow thefield
45.
The obligation of confidence claimed bv .'vir :'vlurre/1 is not a lawjid excuse j(Jr
ji1iling to comph with a lawfid request of an inspec/Or of municipal
administration. As things are. an action }or an offence against s I 32( !)(a) of
the LG.-i could be brought in the ,'v/agisrrates' Court. However, ifvou wish to
Page 11 of 17
~-­
In re,'atiun tt! the matter then - berween the 26' 11 of Octoher fsicf and 2""
October 200 I did you have wn· com·ersarion with anv councillors of' the
Fran!.ston Citv Cmncil in relarion to the matter:' --- Yes
Furrher. rlu: courts hm·e disringuished bcrween a refusal to answer a qucsrion
in private litigation between citi:::ens. reji1.wl in the course of a public
prosf'cution and a re(i1.wl in the course of an investigation authorised h1·
statute in the public interest. The latter has been considered the more serious.
The VGS concluded and recommended as follows:
Yes.
Tt7wt was the name of the person or the persons who provided you with the
infiJnnation 10 either yourself the Frwzkston Independent, the lndependelll
.Veil'S Room, its stoJ.l and/or the cmplovees or any other
o/ an_1· of the
informarion detnils under the matter under investigation° --- As you
understand I 'm u journalist. I've got ~ I operate under a code of ethics. I
have given an undertaking to the sources who provided this injiJrmation ro
prote,·t those sources and it is m_v projiessional dutv to do so.
I11 f(u:t. in ilu: South Australian case of.Yicho/ls DPP(SA!. Peny J noted:
41.
---
At th' time of publication were vou aware that the inji;rmatiun contained 1n
that article was contidelllial to the Frankston Cit1· Council:' ---I suspected it
would have been but I mean I am not- I won't denv it.
On 23 April c002 .'v!r Goodall wrote to Mr Murrcll giving him an opportunity to prove
that he had 1 lawful excuse for his non-compliance with the requirement of an
Inspector of Municipal Administration as required by section 132(2) of the Act. Mr
Goodall identtficd the non-compliance as follows
- - - - - - c c -----Possible Brcach~s of Secno 1 /~of the Lucm (·ovcrnnu;nt .let 1989 Frankston City Councd
---~-~-----~
Page 1:2 of 17
'vlurre!L that infonnation m relation to each of the bids had been leaked to third parties
prior to the bri~fing on 26 >)ept~ntbcr 2()0]. Huvv\.":VCL the cvid(:ncc is c!car that the
information id~ntified by the Chief Executive Officer in his kttcr to the local
Government Dtvision of I g October 2001 was information that was confidential to the
Council and information that the Council wished to keep contidcntial at the time of
publication. That other persons may have known some of the infonnation released
does not alter the fact that the infmmation was infmmation that the Council wished to
As noted above, information in relation to the scores and
keep confrden'ial.
recommendations of the Working Party were only known to the members ami
Councillors present at the bncfing on 26 September 200 I.
On page I oj tft,u transcnpt a/ /in!! :; 7 I askr>d you. in ejfecl. /0 disclose your
source or sources ofspccijied ,·onjiclenlial inj(Jmwlion You did not disclose
mur sourccls!. On page 2 a/ line 7 of that transcript. I askedrou whether any
.o{ the , ounci//ors of !he Franks ton Cirv Council provided YOU wilh or
confirmed in wn· wcn: Ll/1\' of 1he i1ijiJrma1ion tha! was cr)lijzdcnlial to the
Council. You r~plie;l "/;,Jgain 1 am in u position where I hare gil·en m_v
undcrtukinr,; not to reveal my sources and I am nor prepared ro name them or
rcallr narrow !he jield ·
:VIr (ioodall provided Mr Murrell \\ith the oppornmity to prove he had a lawful excuse
not to complv with the requirements of the Inspector and adYised :Vlr Murrell of the
Inspector's upinion a' follows:
!t is mv opinion that in each ,·use you jailed 10 compl_v with a requiremem
made br· me. name!v. r·ou ({1iled to answer !hose two qucslions. As _vou are
c~ww·c ..ij'u personfiril.~ to complv wilh a requirement made b\· an inspector of
municipal adminislration and does not prove 1ha1 he or she had a lawfid
c>xcuse /or the failure. section 132!2! of the Local Governmenl Act 1989
prol·ides thal the inspector muv cerrifv the jirilure in writing to the Supreme
Courl. flu~ Supreme Court mav then. under section 132!3). inquire into the
fciilure and mm· make an order requiring 1he person to complv with the
inspector's req;1irement and or. if certain condirions are jidtilled. punish the
person us ij'he or she had heen guiltv of contempt of court.
.+f.
-tx.
In hi' response :\[r Murrell stated "/am stating for the record that I \Vil!inglv appeared
hcjim· \'OUr inquirv and answered thl' inquin- 's questions and provided requested
d(~cum~nts. However. 1 was unahle to name rhe source's of certain inj(Jnnation
!J<xause ofthcjoumalists. Code of Ethics which sates in part 'Where confidences are
accl'pted. respc·cr them in all circumstances·. " He also advocates the role ot
newspapers as vigilant observers and protectors of the public interest. Given the advi~c
of the VGS in relation to journalistic privilege this would not appear to be a lawful
excuse within the meaning of the Act.
Mr Murrell questioned the justification for confidentiality of the information. He
claims "\'o indir·iduul or organisalion "as harmed or disadvanruged in anv war·.
There was no victim as a r<!sult of the published material. Seither council nor
ralepavers arc disadnmtaged and !he two bidders remained umij}ixred " This
argument does not appear to provide a lawful excuse and is on the facts erroneous.
Tl~c publication or the information breached the confidentiality clauses of the Tenns of
Engagement of the parties (Gandels. Harbour City and the Council) in the negotiation
process and potentially exposed the Frankston City Council to legal action. The
Council has had to engage further legal advice and costs in relation to this
investigation as a direct consequence of the publication of the confidential information
in the Franks ton Independent. Considerable extra effort and additional costs have been
expended by all parties to ensure progress of the CAD development. The publication
has placed in jeopardy the reputation of the Frankston City Council in its ability to
keep commercral in confidence information contidential as part of a negotiation
process for major development within the City.
50.
The VGS had previously advised that it is appropriate for Mr Murrcll to be given the
opportunity to prove that h.~ had a lawful excuse for non-compliance. That being done
it was the VGS opinion that the preconditions have been fultilled that an otlence by
:VIr Murrell uncer section 132 of the Act had been established.
51.
The VGS has provided dt:tails as to the process required to certify a failure to the
Supreme c,mrt under secti<)f\ 132(2) of the Act. It is envisaged that the VGS would be
engaged by the Local Government Division to manage this process should ,uch a
certification proceed.
52.
The VGS has advised that the basic mechanics of the procedure are that the Inspector
must provide a certit!catc to the Supreme Court and the proceeding must commence by
originating motion. An originating motion must specify the relief sought and the Act
if any. under which the claim is made. In such a case. evidence is generally gi\en by
at1ida vit. In tl1is case the matter could be initiated by the tiling of an originating
motion. Under those circumstances, the originating motion would make reference to
the Act and sel'k the orders crvailable under section 132(3) of the Act. A '"certilicatc"
would be attached. That ,;,·rtificare would be si;,'lled by the Inspector and probably
state:
The qua'i fications o t' the Inspector and the Inspector's appointment;
The ternrs of referenc8 of the investigation, in this case the letter to the M mister
of -+ October 200 I from the Chief Executive Office and subsequent
correspondence:
Enough factual ma 1.enal to establish that the identity of the source \\ill be
relevant and will s'~rve a useful purpose in relation to the investigation, in
particular that in the ,rbsence of any admissions Mr Murrcll is the only person
with din·ct evidence as to whu released the confidential information;
That Mr Murrcll was required to attend under s 223B(2)(c) of the Act for
examination on oath in relation to specified matters and that the time and place
of the examination was agreed;
That an ,lath was administered and an examination took place on 4 April 2002:
That, in that examination. Mr Murrell admitted to being the author of the
relevant article:
The partrcular questions asked about the source and the replies:
-t9.
Mr 'vlurrcll also questions whether the information \\aS indeed confidential given that
much was publicly known. lt has been alleged by a number of people. including Mr
·--------·
- - - - - - - - - - - - - - - - -- -
-~--
----
Page I) of 1--:
Posstble Breaches of Section- '7o! the IAJcal Government Act 19R9
Frankston C1ty Counnl
P:1ge
1~
of 17
[hat an opportunity was given to :VIr 'vlurrell to pmve that he bad a lawful
-;-
Once certification of failure i, made the outcome would be placed in the hands of the
Coun. Cenifyin~'. lvir Y1unel1's failure to the Suprcrne Co:xrt ni~l'.' also send a rnc~saQ(~
to Councillors ard the press Lhat the publication of confidential i~fom1ation is regard~d
as a serious matt·~r and that where an otlence against the Act is t(mnd it will be pursued
to its logical con:lusion.
5~.
The VGS has e.timated that the costs of the proceeding, if It goes for one day. arc
likely to be sign:ficmt. If the VGS is instructed to commence proceedings by wav of
originating moti•m. the relief specified in the originating motion will also includ~ an
order that the journalist pay the Department~s cos\;; of this proceeding on a
solicitouclient basis. Costs .Lre in the discretion of the cou11 and the court will be
invited bv counsel briefed to make such a costs order. Costs usuallv follow the event
and, if th~ court senerally finds the case made out. the court would g~nerallv also order
that the journali,.t pay costs. The majority of costs then incurred by the De-partment in
this proceeding arc potentially recoverable from the journalist. Actual recovcr-v of
those costs from the journalist might require consideration of whether the journalist's
employer shoulc' completely mdemnify the journalist for those costs or, in the event
that the court or the employer consider such indemnity is not available, whether the
journalist himself has sufficie:rt financial resources to pay the costs.
excuse for non-compliance:
His response to that opportunitv:
That in failing to disclose his sources, the Inspector has dctermmed that \lr
l\lu~cll has faikd to comply with his requirement and does not have a lawful
excuse for that failure.
)3.
54.
The prime purpose for certifying a failure is to have :Vlr Murrell_ reve:ll hrs sources.
However it would be a matter for the Supreme Court to mqmre mto the ±arlure and
deal with the matter in accordance with section 132(3) of the Act.
The VCiS has provided detailed advice Cls to the possible consequences _of an action to
certifv failure in the Supreme Court including citing a number o± related cases
previ~uslv considered by the Courts. ln summary the VGS advised as follows:
fo'ach of these cases refer to l'arious decisions in which the courts hm·e
punished journalists jiJr contempt jiJr rejitsing to disclose their sources. As
contempl is a common law ojJ"ence and the punishment is ejjecti1·elJ· at large.
the punishment has variedji·omjines. w.fixed terms (imposed or suspended) ro
indeterminate terms (pending the purging o( the contempt!. The term wz/1
depend o11 the individual circumstances. Some o( the mallers taken inw
UCL'ount are:
Conclusion
59.
The evidence anilable indicates that Councillor :Vlark Conroy is a prime candidate for
being the sourc~ of the information that appeared in the article in the Frankston
Independent on 1 October 2001 This evidence is circumstantial and Councillor
Conroy has, under oath. strenuously denied releasing the mformation to the press.
60.
In the absence of any direct evidence, an adm1ssion hv a Councillor or evidence from
Mr Murrcll as to who r,;leased the confidential information to the Frank,ton
Independent thtre is insutlicient evidence to prove, bevond reasonable doubt. an
offence against :.ection 77(2) nf the Act.
.
61
Mr Murrcll is the person best placed to provide direct evidence as to who mav have
released the int(,rn1ation to him. l\lr Murrell, the author of the article and editor. of the
Franks ton Independent has refused to divulge his source or sources of the information
and has stated that he knew much of it before 26 September 200 l. Bv his failure to
answer questions of the inspector the preconditions have been fulfilled .that an offence
by Mr 'Ylurrell under section 132 of the Act had been established.
62.
The prime purpose for certifying a failure is to have Mr MuiTell reveal his sources.
However. it is uncertain whether such action would result in Mr Murrell revealing who
provided him with the information given his stated commitment to the journ;lists'
Code of Ethics ~md protection of his confidential sources.
63.
Section I32 of the Act places the responsibility for certifying a failure on the Inspector
of Municipal Administration before whom the failure occurred. The Inspector may
choose to do so, or not to do so, at his or her discretion based presumably of the
Inspector's findmg and on advice received. Before taking any such action the Inspector
will need to be advised as to the e±Ticacy of certification of Mr MurTell under section
132 of the Act in light of the conclusions to this report.
7'/u.! >eriousness of the conrempt proved:
Whether the contemnor was mvare of the consequences to himself" or
herself" of what he or she did:
The act!lal consequence.\· o/the contempt
011
the rdevant trial or inquir1';
Whether the contempt was committed in the cunlf.!xt ufserious crime:
The rc-wNm jiJr the c·ontempt:
Whether there has been wn· apolog:v or public expression ofcuntrition:
[he character and antecedents of the conremnor;
Gc'neral and personal deterrence:
•
55.
Sh.
Denunciation of" the contempt.
lt is uncertain that faced \vith a possible contempt of the Supreme Court :Vlr :V!urrcll
would continue to refuse to reveal his sources, or faced with that difficulty that hrs
sources would hold him to that confidentiality. However, it would appear that
certification of a hlilure is the only avenue remaining open in seeking to have Mr
:Vlurrcll reveal who provided him with the confidential information.
Jt is also cnvisa~ed that certification of a journalist and possible contempt proceedings
bv the wurt will generate considerable publicity, possibly originated by Mr l'v~urrell
himself It could also provide an opportunity for Mr :'v1urrell to play the martyr tor the
cause of freedom of the press. In any event there can be little confidence m Mr
Murrell ever revealing his sources.
Page 15 of 1'7
Attachment 1
6---l-.
In the case uf ,, ccrtilicat!un the VCiS would be reque,;ted to mitiate to the process with
the view ofcer1itving a taiiure by I\lr I\lurreii under section 13:::'(:2) of the Act and that
the Department
-ail necessary cost associated with the certification subject to the
relief spccitiecl in the originating motion will also include an order that the JOumahst
pa! the Department's costs of this proceeding on a sohcrtor·clrent basrs.
pay
Frankston Independenr
Tuesday October 2, 2DOJ
Vo/17 No40
Page 1
Civic centre doubt cls
Prime site talks reopen
Kelvin Goodall
Inspector of Municipal .\dministration
Wednesday. 2:2 M::rv 200:2
FRANKSTON mayor Cr Mark
Comcy [ast night (II,fo~day} was
expected to try to jetison expensive nevr council om~ from
tl1e shopping centre redevelopment plans.
·rm not gotng to support a $15m.
Tal Mahal for council officers. It
wis not part of the original brief
anyway.- CL Cnnroy said yertertiay.
The ;:>rocess for th.e multl-mill1on
dollar redevelopment of prime
FrankS..nn sites appeared to go hayWire as coundllors were brtefed for
the first Ume at a spectal meeting
last Wednesday.
The dlsarrav became evident at
the meeting Which was suggested
. · the worldng party appOinted by
· illtdl to apprn!Se offers by developers Grocon-Pmcl.an and Gandcl
Retail Trust.
re.rusei
Cound!lors
m fullow the
wor.dng party'!l ad<.riee to reject the
offe:-s of both developers and begin
a new proeess.
Till5 !'Jeparnie pl'Oefss would ha~
fnvulved th~ working party enterL.,g
intc exclusive negotiations for 30
days wtth Grornn for the redevelopment of the North of Bl!'!ach St
and Evelyn St sites and Proclan on
the Sherlock and Hay site. on the"
corner of Young Stand :Playne SL
Tills e!fectivley froze out Gandcl
Retail Trust. the bt€tgr.st .inVestor
1n the central bustness dleutct,
after the working pa:rty told counelllors the Grocon sdJ.eme scored,
g:-Jef.~~~~tG~~:~~r:::
the North of Beach St was $9.5 m
comoared with Gandcl'3 $5m.
Ciundllors were ~roilt three-all
and the recommendation wa5lusl
on the casting vote of the mayor.
One coundllor, Barry Prtestley,
was interstate durtng la&t w~k'"
and last nlght's meetings. er Prieot-
ley represents Ollver \Vard where
:ill the redew:!opment will take place.
Late la5t week the~ party.
tnrlicated to councillors that it had
a new reconu:nendatton which was
basically to resume t:aik3 with both
developers for one month.
At week's end Gandel had returned to the working party with
an increased cash offer. said to be
better than Grocon's when based
. on the c:!ty'.s parldng formula.
Yesterday {Monday), Cr Conroy
said he would :rtlCM!! tD dttch the COl!&
ct1 alfu:es from both plans. saylng
bo wasn'thappywtth dtber proposal. •
·Also I want coundllor3 to direct
that !]() legal lndemniUes be g!v.n to
either party. th~ the developments
Poss1ble BreJ.chcs of Section 77oftht! Load Guvemment Act 1989- Fr::mk!,·ton Cit}r Councii
Page 1-: of 17
:=:rrev::::~=~
return With just one proposal~
It ts understood that Gromn requested indemntty against any costs
if Gandel Trust or Beacb. St freeholders or tenants took. legal action.
Doubts e:<presst!d by tile Gandcl
~~~~~~~~u~~~
the Grocon plan for North of.Beach
St prompted Cr Cnnroy to lnslst
on planptng scheme compliance.
"There are more pressing need::~
In the Fran.kston community than
new counCil cfllces." Cr Cooroy snid.
~It was never council's intention
to build a civic centre In assodatlon
with the redevelopment oi the comrnerctal centre af the city.
~!~:=dt~:t~:~~~
a. centrepiece of develope~' plans ...
Attachment 2
Reference:
Enquiries:
Telephone:
Facsimile:
12-6-91
Jon
Edwarcs
97841800
9784 1845
4 October, 2001
The Honourable Rcbert Cameron MP
Minister for LocaJ Government
Department of Infrastructure
Nauru House
80 Collins Street
MELBOURNE VIC 3000
By Facsimile No. 9651 8998
Dear Minister
Possible breaches· of sectiol15 77(1) and 77(2) of the Local Government Act 1989 ("the
Actj
I refer for your consideration a matter I have brought to the attention of John Watscn of your
Department at a meeting on 3 October 2001.
My concern relates to an artide published in the Frankston Independent newspaper on
2 October 2001 regarding the consideration by Coundl of short-listed parties' bids for the
proposed re-<levelopment of the Frankston Central Ac!lvfl!es Dlstrtct (CAD). A copy of the
article is attached for your Information.
The artide is of serious concern because it could only have been written if the author had
access to Information that was confidential to Council. Publication of this infrnmatlon (in
some parts Inaccurately) has caused embarrassment to Council and other parties named in
it, has the potential to seriously undermine the proposed qKJevelapment and potentially
exposes Caimc!l to a ctalm for damages from the sllart~lsted parties.
Council has obtained advice from Its lawyers, Maddock Lonle & Chisholm, that the article
raises the prospect of a potential breach of sections 77(1) and n(2) of the Act, a breach of
tile terms of engagement governing the CAD bidding process, and a breach of Council's
Good Governance Local Law.
In light of the potential breach of the Act, Councirs lawyers are of the view that I should refer
tile matter to you far investigation pursuant to the Acl .
Having regard to the current status of negatlalions with the short-listed par'Jes, and the
potential for a damages claim against Council by one of ihe short-listed parties, I respectfully
request that an investigation be instigated as a matter of urgency.
Yours faithfully
L----;/
tnEdwards
CHIEF EXECUTIVE OFFICER
Ci11tc Centre Davey
...\11
Stte~t
Fo:wk.stan Vktona Australia 3199 TeltlphontJ {03)97IM Hlll8 !.Y (03) 3784 1951 i'<>csJmila (03} 9731 3117
Corre~pond~rtnl!
to Chief Exacut1Ve Otficar PO Elox 490 Fr.ilnkstof\ VIctor!• 31!}9 DX 1991.3 Franiaton
Po~stble Breucht:s of Sectton 77of the Lvr:al GoYern~ent Act 1989- franks ton Cicy Council