The mayor and general manager of the Northern Midlands Council have been reprimanded by the Supreme Court for using ratepayers’ funds to cover their own legal costs in a defamation case.
Acting Justice Shane Marshall ruled that the council’s resolution to fund the legal battle of Mayor Mary Knowles and general manager Des Jennings against then-ratepayer and now councillor Andrew McCullagh was unlawful.
“They should have understood that payment out of council funds for private purposes of councillors and council staff, is illegal and arguably corrupt conduct,” he said in findings delivered on Monday.
“As not unsophisticated people engaged in local government, each of them should have been aware that the expenditure that they were requesting was made not to assist the ratepayers of the local government area, but to assist them personally in taking private legal action against the applicant.”
Knowles and Jennings had initiated the lawsuit over allegedly defamatory social media posts and emails from 2019 and 2020.
McCullagh at the time said his comments were honest opinion that he should be free to express.
“The emails, post and comment were each published in the context of a democracy where citizens are encouraged to express their criticisms, even their wrong-headed criticisms, of elected governmental institutions and politicians … in the expectation that this process will improve the quality of government, including local government,” a statement of defence read.
Knowles declared in an affidavit to have spent $15,500 in legal fees, while Jennings reported spending over $10,000.
Both argued that the council should cover the costs to protect them, believing the allegedly defamatory comments related to their roles on the council.
However, Justice Marshall stated that the pair “should have known better” and that taking defamation action against another citizen is a “private matter”.
“It is not action taken in the interests of the council and it is clearly not authorised by the council,” he said.
He ruled the council’s decision was void and ordered Knowles and Jennings to repay the money and cover McCullagh’s legal costs or have the defamation cases dismissed.
The defamation cases have been temporarily paused and are only expected to continue if Knowles and Jennings fund them personally.
Both are yet to make any public comments, while the council has ‘acknowledged and accepted’ the findings.
