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Rural council on administration after spending ‘excessive’ legal fees

After an investigation into how an outback rural council went into administration, it was revealed that the council had spent heavily on legal fees over the past four years.

user iconTony Zhang 03 April 2020 Big Law
Coober Pedy
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Coober Pedy is a town of 1,700 people and is known for its opal mining and underground homes.

However, Coober Pedy’s ratepayers may have seen more than their fair share of pay-ups after the legal bill had become “very significant” for the small town, current administrator for the local council Tim Jackson said.

Mr Jackson said the two most recent legal issues the council became involved in included a data breach row which ended up in the South Australian Supreme Court.

 
 

When a council goes into administration, the elected councillors are either suspended or sacked and a government-appointed administrator is installed to take over council operations and decisions.

The administrative investigation has revealed that the council had spent a substantial sum on legal fees.

“Our legal bills over the past four years have been close to $1 million, which is very significant for a small council like Coober Pedy,” Mr Jackson said.

He noted a planning-related matter went before the courts only a week prior to the administration beginning.

“In the second or third week I was here, we had a major data breach,” Mr Jackson said.

The breach meant classified documents were made available to all councillors, with some accessing them and the council then seeking assurances the documents would not be retained.

“One wasn’t prepared to give us that assurance and as a consequence, we ended up before the Supreme Court,” Mr Jackson said.

A permanent injunction has since been put in place and the council has been awarded legal costs.

Associate professor Bligh Grant, from the University of Technology Sydney’s Centre for Local Government who analysed the incident said that the council’s high legal fees were unfortunate.

“It’s unfortunate because due process has to be followed and sometimes that can be quite litigious,” Mr Grant said.

“It should be the goal of any local government to reduce as far as possible that expenditure.”

Mr Jackson said legal issues had been common at the Coober Pedy Council for years leading up to the administration.

“The council's just been embroiled in legal matters, as part of the councils operations over the past five years,” he said.

South Australian Local Government Minister Stephan Knoll said there was no firm date for Coober Pedy Council to come out of administration.

“My mind remains open on how long the administrator stays there,” he said.