Request for information about former CEO’s exit payments

Request for information regarding exit payments made to a local body chief executive - ss 7(2)(a) and 7(2)(c)(ii) of the Local Government Official Information and Meetings Act 1987 (LGOIMA) applied—however, the public interest required the release of a statement which included the total amount of the severance payment and the reason for the payment 

Background

In November 2023, the Chief Executive of Christchurch City Council (the Council) tendered their resignation. Two requesters subsequently asked the Council for details, including a breakdown of the (now former) CEO’s exit payment. Another requester asked whether a payment had been made and, if so, how much and why.

The Council refused all three requests under sections 7(2)(a) and 7(2)(c)(ii) of the Local Government Official Information and Meetings Act 1987 (LGOIMA).

In late 2023 and March 2024, all the requesters complained to the Chief Ombudsman about the decisions to refuse their requests in full.

Investigation

Privacy and obligation of confidence

Subject to any stronger public interest in release, section 7(2)(a) of LGOIMA applies where withholding is necessary to ‘protect the privacy of natural persons’. 

Subject to any stronger public interest in release, section 7(2)(c)(ii) of LGOIMA applies where withholding is necessary to ‘protect information which is subject to an obligation of confidence…where the making available of the information would be likely otherwise to damage the public interest’.

The Ombudsman accepted that the former CEO had a strong privacy interest in the requested information (which related to employment and personal financial information), with the exception of the information that the Local Government Act 2002 (LGA) obliges the Council to disclose. [1] In respect of the information required to be disclosed under the LGA, the Ombudsman considered there was a lower privacy interest and that this related primarily to the timing of the release of the information.

In accordance with section 29A of the LGOIMA, the Ombudsman consulted the Privacy Commissioner about the merits of refusing the request in reliance on s 7(2)(a). The Privacy Commissioner noted that ‘while there is generally a high privacy interest in this kind of information…this is lowered where employment related payments are made to a public sector chief executive due to the statutory requirement to publish information as part of Council’s annual reporting’. 

The information was also subject to an obligation of confidence due to a settlement between the parties. The Ombudsmen accepted that there was a public interest in a local government agency being able to maintain promises of confidentiality in appropriate cases, where that has been a necessary part of reaching settlement of a dispute. Releasing information relating to settlements could discourage these sorts of processes and there is a public interest in local government agencies being able to negotiate and reach settlements in order to avoid protracted disputes and litigation. However, the requirements of the LGOIMA and the LGA clearly affect the extent to which the information is considered confidential. [2]

Public interest

Sections 7(2)(a) and 7(2)(c)(ii) are subject to the public interest test. The Ombudsman considered whether the identified need to withhold the information was ‘outweighed by other considerations which render it desirable, in the public interest, to make that information available’. [3]

The Council advised the Ombudsman that it would be disclosing the total amount of the remuneration payment and the total amount of the severance payment in its Annual Report for 2023/24. The Council considered that ‘any public interest in expenditure of public money and sound employment practices engaged by Council will be met by disclosure of [these] payments in the Annual Report’. 

The Ombudsman emphasised that promoting the accountability of local authority officials is fundamental to the purposes of the LGOIMA. [4]

The Ombudsman noted that the Council’s planned release of the total severance payment a number of months later as part of its Annual Report to be published in November 2024, was not sufficient. There was a public interest in the Council being accountable for and transparent about such payments, in a timely manner. 

There was a significant public interest in the disclosure of information that fosters transparency and accountability when it comes to spending ratepayer money. There is also a public interest in the transparency of local government affairs concerning the handling of employment issues, particularly in the case of senior employees. The disclosure requirements in the LGA expressly reflect this.

The Ombudsman noted that the resignation generated speculation about the former CEO’s departure, particularly in circumstances where a Council spokesperson said that the number of senior staff departures in 2023 was concerning. [5] It was also publicly available that the Council was in the early stages of conducting a statutory review into the former CEO’s performance. These circumstances, added to a public interest in providing a fuller picture to give the public assurance around accountability and bolster the relationship between the Council and its community. 

Outcome

In light of the above, the Ombudsman formed the opinion that the Council had good reason to withhold most of the requested information under sections 7(2)(a) and 7(2)(c)(ii) of the LGOIMA, but the public interest required the release of some information. 

The Ombudsman recommended that the Council release a statement to the requesters advising that there had been an agreed settlement between the former CEO and the Council, both parties received separate legal advice, the total amount of the severance payment, and the reasons for the payment (a high level description). The statement was also to note that the contractual payments made would form part of the disclosed annual remuneration payment in the Annual Report for 2023/24.

The Council accepted and implemented the Ombudsman’s recommendation.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

Footnotes

1. Under clause 32 of schedule 10 of the LGA, Councils’ annual reports must include a report on the remuneration that, in the year to which the report relates, was received by, or payable to the chief executive. 
   
   Under clause 33 of schedule 10 of the LGA the annual report must also state ‘the amount of any severance payments made in the year to any person who vacated office as the chief executive of the local authority’. ‘In this clause, severance payment means ‘any consideration that a local authority has agreed to provide to an employee in respect of that employee’s agreement to the termination of his or her employment, being consideration, whether of a monetary nature or otherwise, additional to any entitlement of that employee to (a) any final payment of salary; or (b) any holiday pay; or (c) any superannuation contributions.’ Return to text
2. The Wyatt Co (NZ) Ltd v Queenstown Lakes District Council [1991] 2 NZLR 180, at 191: ‘Confidentiality is not an absolute concept admitting of no exceptions… It is an implied term of any contract between individuals that the promises of their contract will be subject to statutory obligations.’ Return to text
3. Section 7(1) of the LGOIMA. Return to text
4. Section 4. Return to text
5. The Press 22 August 2024. Also on 24 November 2023, RNZ reported on another executive leadership resignation, that of the chief financial officer. RNZ noted that ‘it was the latest in a string of high-profile resignations at the council’. Return to text