Former Perth councillor has court win

A WA court has cleared former City of Perth councillor and lawyer Lily Chen of allegations of contempt, over her failure to provide full income information during the state government inquiry.

The Attorney General for Western Australia sought court orders to fine Ms Chen, claiming she failed to include her full income information during the inquiry into City of Perth.

Ms Chen was a City of Perth councillor from 2011 to 2019, but had been suspended from the position in March 2018.

The Supreme Court of Western Australia today dismissed the WA Attorney General’s application, finding Ms Chen was under no legal obligation to include the omitted payments.

In his judgment, WA Supreme Court Justice Matthew Howard said the disputed payments were excluded from the income information Ms Chen was required to give.

In 2018, the then-local government Minister David Templeman suspended the City of Perth council and conducted an inquiry into the city.

The report into the inquiry was published in mid-2020, finding the city had widespread cultural and systemic failings in both council and administration.

The inquiry panel issued Ms Chen a notice to provide a statement of information over income she received in the 2016 and 2017 financial years, according to the judgment.

The disputed omitted income related to seven payments made to Ms Chen from September 2015 to April 2017, totalling $133,200.

Justice Howard also focused on a $67,500 payment from Devwest, being a 5 per cent commission fee from a $1.35 million investment Ms Chen helped secure.

“It appears from the evidence Ms Chen gave to the Inquiry Panel that she did not include any of the omitted payments, and specifically had not included the $67,500, in any relevant tax return and had not included them in any primary or annual returns completed pursuant to … the Local Government Act,” he said in his judgment.

“While I have found the $67,500 not to be ‘income’ within the definition in the statement of information notice, Ms Chen's non-inclusion of, at least, the $67,500 in tax returns and local government returns does not, obviously, reflect well on her.”

It was alleged that Ms Chen failed to disclose the payments knowing it to be false and misleading, but Justice Howard, in his judgment, said there was more than one way to interpret the word “income” in the statement of information notice sent by the panel.

“As more than one reasonable reading is available here, that gives rise, in my view, to a reasonable hypothesis consistent with Ms Chen's innocence,” he said.

“Namely, that she inadvertently or accidentally, by a misunderstanding or a misreading, did not comply with the [statement of information] notice because she took it, reasonably, to mean something different from the 'true' construction I found as to her ‘occupation/s’.”

In his judgment, Justice Howard said neither counsel nor the inquiry panel helped Ms Chen understand the definition of “income” and the exemptions in the statement of information notice.