3.12 Liability and protections

Indemnity of members

Auckland Council protects its members including local board members [1] and appointees to council committees or other subordinate decision-making bodies from the following [2]: 

• costs and damages for any civil liability, if the member was acting in good faith and carrying out the responsibilities or powers of: 
  • Auckland Council  
  • relevant committee  
  • other subordinate decision-making body 
• costs from any successfully defended criminal actions related to the member’s duties. 

Personal liability for losses

Elected members may be liable jointly and separately for the losses of Auckland Council where [3]:  

• council money has been unlawfully spent 
• an asset has been unlawfully sold or otherwise disposed of by the council 
• a liability has been unlawfully incurred by the council 
• the council has intentionally or negligently failed to enforce the collection of money it is lawfully entitled to receive. 

Members are only responsible for such losses if the Auditor-General reports them to the Minister of Local Government [4]. Since the Local Government Act came into effect in 2002, the Auditor-General has not issued any such report (although the possibility has been considered) [5]. 

If the Auditor-General issues such a report and members do not repay the amount within a reasonable time, the Crown may take legal action to recover the amount [6]. The Crown will return any money it recovers to Auckland Council, after deducting the cost of recovery. [7]. 

However, individual members are not liable for the loss if they prove the act or failure to act happened: [8] 

• without their knowledge 
• with their knowledge, but they had formally objected before or at the time it happened 
• against their vote on the issue 
• in situations where they acted in good faith and relied on reports, information, or expert advice given by: 
  • an Auckland Council employee whom they trusted to be reliable and competent in the relevant areas 
  • a professional or expert they believed had the necessary expertise for the matter.  

A local board member can be liable only in matters that are the responsibility of their local board [9]. 

Personal liability for costs 

Members may also be liable for costs and expenses if the Attorney-General starts a proceeding and Auckland Council is found to have:  

• wrongfully or illegally disposed of or dealt with property 
• used its property for an unlawful purpose 
• allowed the reserves it manages to be used for unlawful purposes [10]. 

If the court orders, members who agreed to these acts by voting or otherwise must pay the costs [11]. 

A member will not be liable where they prove that, in doing the act concerned, they [12]: 

• acted in good faith based on written legal advice from a lawyer acting for Auckland Council or 
• acted honestly and reasonably, and it would be fair to excuse them given all the circumstances of the case.  

Insurance

Elected members are covered under the council’s insurance policies when performing their official roles.  

Some of the policies include: 

• Public liability insurance which protects elected members against claims from third parties for personal injury and / or property damage. 
• Professional indemnity insurance which protects elected members against claims of breaching professional duty (legal duty of care owed by the elected member) due to negligent acts, error or omissions related to:  
  • local authority meetings 
  • resolutions arising from local authority meetings  
  • any matter where the elected member has a statutory duty or power to provide information, advice, approval or perform any duties 
• Business travel insurance covers overseas and domestic travel within New Zealand involving more than 50 kilometres radius other than commuting. 

Qualified privilege

Auckland Council meetings must generally be held in public [13]. To ensure free and open discussion, oral statements and matters published in meeting agendas and minutes are covered by qualified privilege [14]. These documents are supplied to members of the public.  

Qualified privilege is a legal defence against defamation claims, where statements are made in public about a person that are claimed to be false and have caused injury to their reputation. It allows certain people in a position of authority or trust to make, communicate or publish statements that would otherwise be considered defamatory. 

Statements made or matters published will only be protected from liability for defamation if they meet the following conditions [15]:  

• they follow the relevant standing orders 
• the speaker is not predominantly motivated by ill will 
• the speaker does not personally gain from the opportunity to publish the matter.  

Footnotes

[1] Local Government Auckland Council Act 2009 s 11A(1). 

[2] Local Government Act 2002 s 43(1). 

[3] Local Government Act 2002 ss 44(1) and 46(1), LGACA09 s 11A(1). 

[4] Local Government Act 2002 ss 44 and 46(1). 

[5] Auditor-General Kaipara District Council: The Auditor-General’s decision on requests to make a report under section 44 of the Local Government Act 2002 (19 August 2015) at 1. 

[6] Local Government Act 2002 s 46(2). 

[7] Local Government Act 2002 s 46(3). 

[8] Local Government Act 2002 s 46(4). 

[9] Local Government Auckland Council Act 2009 s 11A(2). 

[10] Local Government Act 2002 s 47(1). 

[11] Local Government Act 2002 s 47(2). 

[12] Local Government Act 2002 s 47(3). 

[13] Local Government Official Information Meetings Act 1987 ss47. 

[14] Local Government Official Information Meetings Act 1987 ss 52 and 53; Standing Order 1.3.9 of the Standing Orders of the Governing Body; and Standing Order 3.16 of the Local Board Standing Orders. 

[15] Local Government Official Information Meetings Act 1987 ss 52 and 53; Standing Order 1.3.9 of the Standing Orders of the Governing Body; and Standing Order 3.16 of the Local Board Standing Orders.