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OPERATION ''DEWAR''

Kevin Pallier Complaint

TABLE OF CONTENTS

Page Executive Summary (i-iii)

Chapter I Introduction and General Background 1

Para 9 An Insight into Mr Pallier's Dilemma 3 16 ICAC's Investigation into theSES- Operation Dewar 4 18 Complaints Made by Kevin Pallier 5 20 Limits on Jurisdiction of the Inspector 6 21(1) Principal functions of Inspector 6 26 The Public Inquiry Investigates Four Allegations 7 32 Relevance ofMr Pallier's Employment Issues at the Public Inquiry 10 41 Pallier's Contacts with the ICAC 12 45 Review of Public Inquiry Oral Evidence referencing Pallier 13 59 The unfair dismissal proceedings 16 62 Other Witness's Evidence referencing Pallier 17 73 Kear's Evidence referencing Pallier 19 77 Some Documentary Exhibits Evidenced at the Public Inquiry-

'Operation Dewar' 22 82 The I.C.A.C. Report- Operation Dewar-

May 2014 and Relevant Findings 22 94 Pallier has an interview with the Inspector of the ICAC 25 108 Local Court Proceeding on One finding of Corrupt Conduct 28

Chapter II Examination of Mr Pallier's Complaints- Those rejected for want of jurisdiction or merit 29

113 The Illawarra Mercury Complaint 30 126 Re- Steven Pearce and Commissioner Kear- Complaints 32 132 Dealing with complaints of a failure by the ICAC to provide a response 34 137 Alleged" ICAC misconduct complaint(s)" 35 147 August/September 2013 Complaint re period of re-employment 37 150 The ICAC's Responses 37 162 A Complaint of Contrasting Fortunes 42 169 Complaint of Failure by ICAC to Act upon Kear's

alleged Failure to Comply with s.11 43 173 Complaint of Failure to comply with Public Service

183 Recruitment Protocols

Complaint ofiCAC's Failure to Act on Alleged Illegal Taping of Conversation

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196 Complaints of denial of natural justice, failure to call Pallier

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as a witness, failure to interview him in respect of post

Operation Dewar complaints, and Lost Opportunity to have

truthful evidence given in respect of testimony given by

Kear and Pearce

A Failure to Call a Witness of Truth

Chapter III Collateral Damage?

222 228

Privacy, Honour, Reputation

"Privacy" - a difficult concept

246 Mechanisms by which Privacy was Breached - Report,

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260 271

273

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Transcripts, and Exhibits

Privacy Act Provisions Considered

Removing Exhibits and Transcripts from Privacy Protection

No Need to Identify Pallier in the Public Inquiry

Invasion of Privacy- Reasonable or Unreasonable?

The Commission's Position

Chapter IV Conclusions and Recommendations

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60 61

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EXECUTIVE SUMMARY

In July 2015, Mr Kevin Pallier, a former public officer with the State Emergency Service (SES), lodged the first of several complaints with the then Inspector of the Independent Commission Against Corruption (the Commission) about the Commission's conduct in its investigation in Operation Dewar and particularly in its treatment of him in respect of the Operation Dewar public inquiry and other matters he raised with the Commission after the Operation Dewar Report had been published.

The public hearing in Operation Dewar ran for 4 days commencing on 3 December 2013. The then Commissioner, the Hon David Ipp AO QC, presided over the inquiry. Mr Pallier was not called as a witness and was never considered a person of interest in the Inquiry.

On 28 May 2014, the then Commissioner, the Hon Megan Latham, published a Report on its Investigation in Operation Dewar focused upon allegations that the then NSW State Emergency Service Commissioner, Murray Kear, took detrimental action against SES Deputy Commissioner Tara McCarthy, including dismissal from her position on 14 May 2013, in reprisal for her making allegations to Mr Kear that the other SES Deputy Commissioner Steven Pearce had engaged in corrupt conduct.

The Commission also examined allegations that Mr Kear improperly showed favour to Mr Pearce by failing to appropriately investigate allegations made by Ms McCmihy that Mr Pearce had engaged in corruption.

In its report on the investigation, the Commission made corrupt conduct findings against Mr Kear. Subsequently, Mr Kear was prosecuted by the Director of Public Prosecutions following a referral by the Commission for one offence pursuant to s.20 of the Public Interest Disclosures Act 1994. On 16 March 2016, Magistrate Grogin found Mr Kear not guilty and subsequently ordered costs against the DPP finding, inter alia, that the Commission failed to disclose exculpatory evidence; and in so doing failed to meet the optimum standards required in a criminal prosecution. The prosecution and subsequent acquittal of Mr Kear and the Magistrate's criticism of the Commission's investigation attracted much media attention and has also been the subject of recent scrutiny by the Parliamentary Joint Committee's Inquiry.

While Pallier was not called as a witness, his name and identity feature in the evidence in untested detail reflecting adversely upon matters personal to him including his reputation, his dignity, his work perfonnance and his privacy. This privacy intrusion continues into the Commission Report. The Operation Dewar Report mentions Mr Pallier about 33 times. Included in the Report is a paragraph, under the heading "Kevin Pallier", detailing several untested hearsay statements by Ms McCarthy about Mr Pallier and his work perfonnance. It also asserts claimed reasons for Mr Pallier's first dismissal from the SES. The circumstances and reasons of his dismissal as outlined in the Commission's report were disputed by Mr Pallier who at the time claimed to the Fair Work Commission, not unreasonably, that he was unfairly dismissed. Pallier's

sense of the passages dedicated to him in the Report, unfairly and inaccurately intrude into his privacy, character and work performance.

Pallier's approach to the Inspector was predicated upon a belief the Commission treated him unfairly and differently from others, such as Mr Pearce, particularly as he was never given the opportunity to give his version of events publically.

The Inspector's Report is divided into 4 Chapters as follows:

1. Introduction and General Background 2. Examination ofMr Pallier's complaints rejected for want of jurisdiction 3. Collateral Damage?- established- invasion of personal privacy 4. Conclusion and Recommendations.

Detailed in the Inspector's report are reasons for rejecting the bulk of Mr Pallier's complaints for want of jurisdiction. However, the Inspector does find that the Commission's flawed procedures, in which public interest criteria were considered, constituted maladministration resulting in an unreasonable invasions of Mr Pallier's privacy, dignity and reputation.

Of all the untested allegations made by McCarthy against Mr Pallier, only one played an indirect, and minor part in the Commission's finding of cotrupt conduct on the pati of Mr Kear. Given the precision of the tenns of the Commission's findings, it is difficult to understand why material adverse to Mr Pallier in the quantities supplied were necessary to the extent that occutTed in and through a public inquiry; why it was necessary in the public interest for the imputations and material to remain continuously on the the Commission's website, and why it was and still is necessary- in the public interest- for Mr Pallier's identification to have been and to remain associated with that material, when his right to privacy screams for some saner solution.

The Inspector makes the following recommendations for the consideration of the Commission and the Parliamentary Joint Committee on the Independent Commission Against Corruption (Parliamentary Joint Committee):

1. It is recommended that the the Commission issue an apology or statement of regret to Mr Kevin Pallier for unreasonable invasion of his privacy.

2. An endorsement by the Parliamentary Joint Committee of a recommendation that the Commission issue an apology or statement of regret to Pallier for the unreasonable invasion of his privacy.

3. It is recommended that the Commission remove from the Operation Dewar material appearing on its internet website any material identifying Mr Kevin Pallier or that may lead to his identification.

4. It is recommended the Parliamentary Joint Committee endorse a recommendation that the Commission remove from the Operation Dewar material appearing on its internet website any material that identifying Pallier, or that may lead to his identification.

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5. It is recommended that the Commission place a notification on the Commission's website forthwith containing an explanatory note referring to the Inspector's report and recommendations herein and indicating whether or not the Commission has accepted and acted upon the recommendations.

6. It is recommended that the Parliamentary Joint Committee endorse a recommendation that the Commission place a notification on the Commission's website forthwith containing an explanatory note referring to the Inspectors report and recommendations herein and indicating whether or not the Commission has accepted and acted upon the recommendations.

7. That the Parliamentary Joint Committee recommend to the Parliament an amendment to s.31 (2) by the inclusion of a sub-clause (e) in the following terms: Whether any adverse impact a person may experience arising from an internet site publishing information generated from the proposed public inquiry is outweighed by the public interest in such information being readily accessible to public through the internet site.

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Acting Inspector's Report- Dewar SES - Pallier

An Assessment of the Effectiveness and Appropriateness of the Procedures of the Independent Commission Against Corruption when Investigating the Conduct of the Commissioner of the NSW State Emergency Service insofar as those procedures related to Kevin Pallier and other complaints made by Mr Pallier.

CHAPTER I

INTRODUCTION AND GENERAL BACKGROUND

1. Kevin Pallier, would regard himself as a whistle-blower. Since at least 2012 he has contacted various bodies including the Independent Commission Against Corruption (ICAC), the Ombudsman and the hierarchy of the SES with dozens and dozens of what he believes are important Public Interest Disclosures (PIDs). He has spent hours of time and energy preparing and typing documents he calls PIDs- hundreds of pages of documentation as supplemented by further documentation and then further submissions or arguments in support of what he regards as significant whistle-blower activity.

2. As a last, or at least latest, resort, he has come to the Inspector of the ICAC with his complaints and allegations. So vast is this range of complaints and allegations that it would be impossible, given the resources afforded to this Office and the other legitimate expectations or tasks this Office must perfonn, to identify all complaints and allegations individually and to deal thoroughly with each. Doing the best that can be done, the complaints and allegations appear to fall into two groups albeit with some overlapping between these two groups.

• Complaints and allegations relating to work practices observed by various personnel who interacted with Kevin Pallier during his two or three years' employment with the SES.

• Claimed maladministration and/or flaws in the conduct of the ICAC arising out of its dealings with his Public Interest Disclosures (PIDs) related to the above; and the consequences of the conduct of the ICAC Public Inquiry arising out of Operation Dewar; and the ICAC's failure to respond adequately or appropriately to the many PIDs he claims to have forwarded to the ICAC since that public mqmry.

3. There is little doubt Mr Pallier sees himself as "collateral damage" of the public inquiry arising out of Operation Dewar. To the extent that he is a collateral damage victim - the damage was an unintended consequence of a decision to hold a public inquiry and decisions made and evidence tendered in the course of the public inquiry. That, of course, does not make the damage less real, the suffering more bearable, or the consequences less calamitous for him.

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4. It is not beyond the realms of possibility that some of the consequences of his terrier­like fixation on the personalities and issues referred to above include his inability to let them pass from his life; his sense of being a victim of injustice manifested time and time again in the past four years - particularly in terms of the intrusion into his privacy; a damaged personal character reputation, and his experience of real economic hardship as a consequence oflost employment opportunity.

5. Some things should come as no surprise in respect of the vast array of complaints and allegations lodged with the Inspector:

a) There is a degree of repetitiousness and overlapping. b) There is a tendency for Mr Pallier to make what could be described as

'uninformed pronouncements' of maladministration and/or misconduct without understanding the difference between a claim of maladministration/misconduct and a decision by a relevant authority that maladministration/misconduct has in fact occurred. A genuine belief (in this case held by him) in a state of facts amounting to an identifiable fault at law, does not mean a tribunal or authorised body with jurisdictional authority to identify such a fault, together with an understanding of what is required in terms of the statute law to sustain a finding of that identifiable fault, has or will necessarily endorse his belief. That is the difference between a claim and a decision 1•

c) The complaint or complaints having merit are more difficult to sift out, isolate, identify and deal with.

d) A number of Pallier's complaints are matters that neither the ICAC, nor the Inspector is capable of remedying - for one reason or another, including absence of jurisdiction.

e) Important issues offering an insight into the dilemma experienced by Kevin Pallier as a consequence of the public inquiry into Operation Dewar needs exposing in some detail. Those matters are dealt with towards the end of this report in Chapter III.

6. On 14 May 2013 SES Deputy Commissioner Tara McCarthy was summarily dismissed by the SES Commissioner Kear. This dismissal occurred in circumstances where McCarthy2 was claiming the other SES Deputy Commissioner, Steven Pearce, had, among other things, failed to supervise adequately an SES Director of Finance and Logistics, Pallier. The following day McCarthy lodged a Public Interest Disclosure (PID) with the ICAC detailing her concerns about Kear and Pearce.

1 In a useful overview of a chronologically arranged history of matters causing complaint prepared for the Assistant Inspector by Mr Pallier, he makes frequent references to propositions such as "ICAC became aware of the above issues in my PID to them and took no action re: same = maladministration" and " There was evidence of corruption on which ICAC could have taken more action than it did= maladministration" and "ICAC clearly knew the above at Operation Dewar and took no action to find the truth re: same= maladministration. 2 No disrespect is intended in the use of surnames only for all persons where his/her name is to be used frequently.

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7. The ICAC formed a view the matters raised by McCarthy were worthy of investigation. The investigation was given an operational name, Operation Dewar, appropriate resources and staff were assigned to it. Ultimately between 3 and 6 December 2013 a public inquiry was conducted with an intention it be a conclusion to the investigation of Operation Dewar. An ICAC Report was issued on the 28 May 2014. It contained corrupt conduct findings on two bases against Kear.

8. Pallier was never a person of interest in the Operation Dewar investigation. It focused in part upon Kear's responses to McCarthy's criticisms of Pearce. Some part of McCarthy's criticism of Pearce arose out of concerns she had about some aspect of Pallier's work practices. Her concerns about those aspects of Pallier's work practices were only significant in that they were said to demonstrate an oversight failure by Pearce, who at the relevant time had been Pallier's immediate supervisor.

An Insight into Mr Pallier's Dilemma

9. Pallier is a qualified accountant. He is not a lawyer. Legal concepts may be foreign to him. Particularly foreign to him (and separate from what has been identified in paragraph 5(b) above) is a concept that a belief held by a second person (McCarthy) about a first (initial) person's (Pallier's) earlier behaviour may be honestly and reasonably held - even if the belief may be factually inaccurate; and likewise a concept that proof of that same belief at an inquiry may be reasonably received by the tribunal, even though the belief may itself be inaccurate in fact, or its significance misconceived because of an absence of accurate context. A further difficult concept for him to grasp is proof that a reliance upon the second party's (McCarthy's) belief to establish, by way of explanation, a course of conduct embarked upon by that second party (McCarthy) because of that belief, does not require the first (initial) person in respect of whom the belief was formed, (Pallier) to give evidence (or even agree) that he actually performed the conduct as claimed by the second person (McCarthy). The evidential impact and relevance of a person's belief in a given fact- whether factually accurate or inaccurate - may have, when the person is not otherwise involved in the reality of its factual circumstances - is a difficult legal concept and one some lawyers have difficulty graspmg.

10. In this case, McCarthy during her period as Deputy Commissioner of theSES came to a belief that Pallier had done certain things which she regarded as inappropriate conduct in the workplace. She relied on infonnation she had received initially about Pallier whilst he was on holidays and documents that she was also shown. Her belief it would seem was honestly and reasonably held in light of the limited material upon which the belief was formed. In the light of that belief McCarthy undertook certain action (reporting matters to Kear) which in turn it was argued before the Commission exposed responses from Kear that were found to be corrupt.

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11. The ICAC public inquiry was premised upon these two propositions - that is the honesty and the reasonableness of McCarthy's beliefs and a claimed unsatisfactory response by Kear upon hearing of them. None of the parties involved in the public inquiry challenged either the honesty or the reasonableness of McCarthy having the adverse beliefs she held against Pallier, nor her genuinely feeling it was appropriate to report that believed adverse conduct of Pallier to her boss, Kear. Indeed the subsequent actions of Kear would make no sense if he too did not regard her beliefs in respect of Pallier as being honestly and reasonably held by her.

12. Nor would an objective observer regard the beliefs formed on what she heard from others about Pallier, or believed from documents shown to her, that she was acting other than honestly and reasonably in coming to the views she came to.

13. However, for one reason or another Pallier's position is that what she was told was inaccurate - and what the documents revealed, was for one reason or another, misconstrued by McCarthy, causing her to draw conclusions unfairly adverse to Pallier. In those circumstances her beliefs, at least from Pallier's perspective, were beliefs that were unreasonable in the light of explanations he can give now and unsuccessfully sought to give during the public inquiry.

14. But the fact is the inquiry was focused upon a question of whether Kear's response to McCarthy could only be explained as corrupt. While her Pallier-allegations were also adverse to Pearce, whose task it was to oversight Pallier, there were other linked allegations against Pearce (unconnected to Pallier) also passed on to Kear, implying a level of incompetence by Pearce. That was crucial to the question of whether Kear' s responses to the linked incompetence allegations against Pearce were corrupt.

15. Pallier claimed to the then Inspector and later to the then Assistant Inspector, now Acting Inspector, an eagerness to give evidence to set the record straight. Evidence from Pallier to the effect that the allegations being made against him had no merit, were misconstrued and false, would have constituted "red herring material" having no relevance to the focus of an inquiry seeking to detennine whether Kear' s responses to the allegations against Pearce were tainted with corruption. Given the first set of allegations, namely those against Pallier were being made in a public forum, and that he disputed the reasonableness of the allegations being made against him, it is little wonder Pallier felt impotent, frustrated and angry at being unable to give denials to them and advance explanations why they were unreasonable in the same public forum contemporaneously with their being made.

ICAC's Investigation into theSES- Operation Dewar

16. In May 2014, then ICAC Commissioner, the Hon. Megan Latham, delivered to the Presiding Officer of each Houses of the NSW Parliament the ICAC's Report on its investigation into the conduct of the then Commissioner of the State Emergency

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Service, Murray Kear. The Report was made public by the Presiding Officers at the time of delivery.

17. The former Commissioner, the Hon David Ipp AO QC, had presided at the public inquiry held in furtherance of the investigation. Although the ICAC investigation had been on-going at least since 15 May 2013, the public inquiry was conducted over four days including 3 to 6 December 2013. Commissioner Ipp's tenure as Commissioner expired 24 January 2014 - almost four months prior to release of the Report by the Presiding Officers of the Houses of Parliament.

Complaints Made by Kevin Pallier3

18. On the 16 July 2015, a year and three months after the Report was first published4,

Pallier wrote to the then Inspector of the ICAC, the Hon David Levine AO RFD QC giving voice to a number of complaints, which, at this initial stage of the report are distilled as:

• A failure by the ICAC to intervene or interview him ·regarding his complaints of reprisal actions directed against him as a consequence of his participation in Public Interest Disclosures (PIDs). Pallier argued it had the means and sufficient factual reasons (which he detailed) to do so. Pallier expressed a view the failure to do so had "shown significant maladministration".

• Pallier complained that unfavourable facts relating to his termination of employment with the SES by Kear had been aired in evidence given to the public inquiry; yet Pallier was not called as a witness to give his account, thereby, it is claimed, denying to him procedural fairness. The consequence for Pallier was, he wrote, significant "collateral damage", particularly in respect of his career opportunities and his personal psyche.

• Pallier complained, that notwithstanding he had sought the ICAC's intervention to set the public record straight without success. He regarded the failure to call him as a witness was unfair, unreasonable and unjust.

• Pallier complained that his rights were not protected in Operation Dewar, or subsequently in a PSC enquiry into the NSW SES. Pallier has requested that the Inspector "assess why [his] rights were not protected by ICAC"; and sourced that lack of protection as a cause of the "collateral damage" he has suffered.

• Pallier also alleged that Kear was in breach of a statutory duty imposed by s.11 of the ICAC Act, and in breach ofs.87 ofthe ICAC Act in respect ofthe veracity of the evidence he gave before the ICAC at the public inquiry.

3 Contained within the chronologically arranged history of matters, are at least 70 itimised instances of claimed maladministration or misconduct by ICAC or senior staff at the SES. At this point in the report, only a thematic synopsis of the complaints is offered. 4 A delay of this length is not unusual in making a complaint. There are several factors that may contribute to a delay of this length.

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19. On June 1st 2016, in the course of an interview with the then Assistant Inspector5,

Pallier amplified his earlier complaints by including:

• During his second employment period commencing in May 2013, when he was being bullied, he wrote numerous letters to the ICAC by way of PIDs and the ICAC didn't stop the inappropriate activity towards him. He referenced the ICAC's obligation to do so as s.20B of the ICAC Act (he may have meant s.20B of the PIDs Act.)

• A complaint alleging the ICAC had failed to avail itself of s.116 of the ICAC Act and prosecute Kear for the alleged breaches referred to above.

• A complaint that the ICAC knew that a meeting between him (Pallier) with Pearce had been recorded without his (Pallier's) pennission, thereby making it an illegal recording, but even though the ICAC knew it was illegal, no one did anything about it.

• A complaint of a conflict of interest conflicting the person engaged to investigate his work situation from the NSW Internal Audit Bureau (lAB) by the then SES Commissioner.

• A complaint that Exhibit 11 tendered in the December 2013 public inquiry contains material adverse to him, yet is part of the record of proceedings to be found on the ICAC internet website. (It was later removed from the Website).

Limits on Jurisdiction of the Inspector

20. Pallier's complaints are wide ranging. Some of them appear to arise out of circumstances directly or indirectly associated with Operation Dewar, while others do not. Almost all of his complaints arise directly or indirectly out of his employment circumstances with theSES.

21. The capacity of the Office of Inspector to ICAC to deal with them is confined by the tenns of s.57B Independent Commission Against Corruption Act 1988 (elsewhere referred to as the ICAC Act). Relevant provisions of s.57B of the ICAC Act are set out below.

Principal functions of Inspector

( 1) The principal functions of the Inspector are: (a) to audit the operations of the Commission (ICAC) for the purpose of

monitoring compliance with the law of the State, and (b) to deal with (by reports and recommendations) complaints of abuse of

power, impropriety and other forms of misconduct on the part of the Commission or officers of the Commission, and

5 Pallier's second interview at the Office of the Inspector to the Independent Commission Against Corruption.

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(2)

(c) to deal with (by reports and recommendations) conduct amounting to maladministration (including, without limitation, delay in the conduct of investigations and unreasonable invasions of privacy) by the Commission or officers of the Commission, and

(d) to assess the effectiveness and appropriateness of the procedures of the Commission relating to the legality or propriety of its activities.

22. A quick overview of the gravamen of Pallier's complaints appears to assert or imply maladministration, denial of procedural fairness, unfair, unreasonable and unjust conduct; non-protection (or perhaps non-upholding) of claimed rights; inappropriateness of the ICAC procedures relating to the legality or propriety of its conduct, and breaches of the ICAC Act by the then SES Commissioner. As will be seen later, many of the words found in the initial versions Pallier's complaints appear in the section of the ICAC Act setting out the Inspector's functions.

23. However, use of words in a complaint that may appear in sections of an Act of Parliament does not necessarily mean that the use of those words in a complaint equates to the meaning they carry when used in the ICAC Act or are supported by the provisions of the Act. Likewise, selecting words in a complaint (such as "denied natural justice", "denied right of reply") frequently associated with the procedural laws governing decision making judicial proceedings and inquiries does not necessarily mean the occasion complained of was one attracting the procedural law relied upon.

24. Whether Pallier's complaints to the Inspector can be sustained very much depends, in the first instance, upon whether the words and their meaning as set out in the complaint invoke the Inspector's jurisdiction. Do the complaints, or any of them, enliven the Inspector's jurisdiction? If, the Inspector does have jurisdiction to entertain any or some of complaints, a second question then becomes: "Do any of those complaints have any merit?"

25. Any report and/or recommendations coming from the Inspector in response to an aggrieved person, must necessarily have regard to those two propositions.

The Public Inquiry Investigates Four Allegations

26. The public inquiry generated by Operation Dewar was concerned, in part, upon Kear's response toward McCarthy's performance of her role as SES Deputy Commissioner for Services and Planning. His ultimate response, of course, was to dismiss her summarily -but his motive for so doing, whilst claimed to have arisen out of her performance, was questioned. The question being, "Was it tainted with corruption for being a reprisal?" Also key to assessing Kear' s response to the performance of her role was his response to several allegations made by McCarthy that Pearce, may have been engaged in corrupt conduct, and poor or negligent management of a senior staff member (Pallier)

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and other matters set out in the opening remarks of Mr M. Fordham SC, Counsel assisting the Commission.

27. A question for the ICAC was whether Kear recognised any conflict of interest arising from his alleged friendship with Pearce, and if so was it appropriately handled. Set out below are parts of the opening by Counsel assisting the ICAC.

In her nine months as Deputy Commissioner Ms McCarthy accomplished a significant amount of change in the SES. However, it was in five key areas that she drew the attention and the ire of both Commissioner Kear and Deputy Commissioner

Pearce. Those areas were an investigation into the activities of Mr Kevin Pallier who

was terminated for amongst other things abuse of overtime, all of which had been authorised by Deputy Commissioner Pearce, Mr Pallier 's alleged insubordination

and his travel and working arrangements. In the course of this exercise Ms McCarthy formed the belief that Deputy Commissioner Pearce had not correctly supervised Mr

Pallier. It was then the compliance with procurement standards, and in particular

two consultancy contracts entered into by the SES with the parties that had been commissioned by Deputy Commissioner Pearce. Both contracts did not comply with relevant procurement guidelines established by the NSW government. The third issue

was the use of corporate credit cards by Deputy Commissioner Pearce for non­

approved expenditure. The fourth [issue} was the potential falsification of evidence by Deputy Commissioner Pearce that was used against Mr Pallier in support of his

termination. And the fifth were (sic) potential abuses of travel allowances by Deputy

Commissioner Pearce.

These [five] issues were uncovered by Ms McCarthy in the course of doing what she

was employed to do ... changes had been made that altered SES employees' rights to overtime, the use of motor vehicles, parking and travelling. Not surprisingly this

created some disquiet among the employed ranks of the SES ... 6

28. As a consequence of McCarthy's reports to Kear in respect of unflattering aspects of Pearce's job perfonnance, Kear's responses were crucial to the outcome of Operation Dewar. As Counsel Assisting said earlier in his opening:

The purpose of the Inquiry is to investigate whether Commissioner Kear has engaged in corrupt conduct for the purposes of ss 8 and 9 of the ICAC Act. The focus of this

inquiry will be the manner in which Commissioner Kear dealt with former Deputy

Commissioner McCarthy and the allegations she raised in relation to the performance,

governance and propriety of the SES. The scope of the Inquiry includes the following allegations: (1) that whether Murray Kear the Commissioner for the NSW SES took

detrimental action against Tara McCarthy including dismissing her from her position

of Deputy Commissioner SES in reprisal for [her} making allegations that Steven Pearce, a Deputy Commissioner of the State SES had engaged in corrupt conduct; (2)

whether Murray Kear . . . improperly showed favour to Steven Pearce by failing to appropriately investigate allegations made by [her} that Steven Pearce had engaged in

6 Operation Dewar- Transcript of Proceedings p. 7

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corrupt conduct; (3) in relation to allegations (1) and (2) whether Murray Kear made

false statements to or attempted to mislead an officer or officers of the ICAC ... in the exercise of their function pursuant to the Act and (4) whether Commissioner Kear

failed to recognise, disclose and manage the conflict of interest arising out of his friendship with Steven Pearce in connection with the hiring, managing, performance

management, and investigation of Deputy Commissioner Pearce and the dismissal of Tara McCarthy.

If Ms McCarthy was terminated as a reprisal then that will be corrupt conduct for the purpose of s.9 of the ICAC Act and it could constitute or involve a criminal offence, a

disciplinary offence or reasonable grounds for dismissal. . .. 7

29. The fourth allegation focused on whether Kear failed to recognise the conflict of interest was included in the Inquiry's investigative parameters after the summons were issued.

30. Coming to some specifics of McCarthy's allegations against Pearce, principal among them were allegations of conduct by Pearce concerning:

(a) His use of a corporate credit card; (b) Procurement practices as illustrated by two contracts; (c) Management supervision ofKevin Pallier.

Allegations (a) and (b) were put at a level where, each on its own or both together may have constituted corrupt conduct by Pearce and therefore warranted notification to and possible investigation by the ICAC.

31. To this point in time, the investigation was oversighted by an ICAC Strategic Investigation Group (SIG) comprised of senior people involved in the investigation. The SIG met numerous times between June 2013 and November 2013 to monitor and discuss investigation progress. At what was the fourth meeting of the SIG on 14 August 2013 significant decisions were made to upgrade the investigation. Both the then Commissioner and Deputy Commissioner were present. The meeting confinned an out-of-session decision to escalate the matter to a full investigation. The minutes note the opinion of two members of the SIG "that this investigation needs to be given priority. " The Minutes of this meeting also note, The SIG agree that if possible Dewar would go to public inquiry in January and ... " To this point the investigation had been handed from one case lawyer to another. Between the 8 August meeting and 28 August, the investigation was handed to a third lawyer Patrick Broad who was appointed Case Lawyer. Also within this time span Mr Fordham SC was engaged as Counsel Assisting the ICAC at a Public Inquiry to commence on 18111 November 2013. That earlier date had been picked because no hearing room was available in January or until May 2014.

7 Operation Dewar- Transcript of Proceedings p.3

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Relevance of Mr Pallier's Employment Issues at the Public Inquiry

32. The relevance of matters touching upon aspects of Pallier's employment performance was to give context (and in particular substance) to a single aspect of McCarthy's allegation - namely poor management supervision of Kevin Pallier by Pearce - that is, to give substance to several allegations (of which Pallier' s performance issues was but one) being made by one SES Deputy Commissioner against the other SES Deputy Commissioner. At the relevant time Pallier was SES Director of Finance, Fleet and Logistics. As such he was the Chief Financial Officer for the SES. Prior to the appointment of McCarthy, Pallier was responsible to and reported directly to Pearce, who at that time held the responsibilities McCarthy inherited from him upon her appointment.

33. It is worth noting evidence relied upon at the public inquiry to establish McCarthy's beliefs adverse to Pallier, save for one matter8

, never rose above hearsay or second hand hearsay. Indeed, there was no evidence that McCarthy ever spoke directly to Pallier in respect of claimed adverse information she had received about him. Any misconduct she or other witnesses alleged against Pallier never rose above a hearsay allegation that had never been conceded by him or proved before any tribunal, judicial or otherwise. In proceedings before the Fairwork Commission, the SES had an opportunity to prove any adverse allegation against Pallier it had relied upon to justify his first termination, but chose to avoid airings its claims; instead offering a down­graded reinstatement rather than standing by its termination of his employment.

34. There appear to have been four or five aspects of Pearce's Management Supervision of Pallier that, in McCarthy's view, required serious consideration of an appropriate oversight response from Kear; McCarthy made:

(a) a claim that Pearce was approving too much overtime being worked by Pallier - and perhaps that the overtime appears to have been worked off-site and at hours that were both unusual and extensive.

(b) (i) a claim that Pearce was lax in respect of an overdue reconciliation audit report of private and SES use of SES motor vehicles, said to have been generated three months earlier by Pallier, but not actioned by him; (ii) a possible motive explaining Pallier's apparent delay; i.e. that publishing the audit report would reveal Pallier's debit to the SES motor vehicle scheme for private use amounted to $10,000 and was said to be in excess of any other sums owing by an SES employee.

(c) a claim that Pallier was seeking to obtain a personal advantage from an upcoming regional trip, occurring during school holidays and involving Pallier taking his wife and children, a proposition he had failed to declare upfront and

8 A application to McCarthy made by Pallier for an inland SES business trip, which was rejected. See paragraph 54 post.

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there were potential costs to be incurred on the SES in association with taking his family9

;

(d) there were instances where to the knowledge of Pearce, Pallier had used unauthorised venues to hold SES meetings in circumstances where SES prescribed (and cheaper) venues should have been used.

35. Given the nature of issues cited to Kearby McCarthy concerning Pearce's management supervision ofPallier, Kear's response to her allegations was tantamount to a summary dismissal of them without proper or adequate investigation of the full merits of McCarthy's allegations.

36. Attention is now drawn to aspects of McCarthy's allegations, in which Pallier features that should be analysed. Firstly, none of the basic factual substance of her allegations appears to be in outright dispute by anyone, including Pallier. For example: the question of whether the quantum of overtime worked was a legitimate question to ask. It may be some dispute between the specific dollar value of the overtime worked is open - $59,000 is the position of those at the inquiry; $52,000 is the figure argued by Pallier. The timespan appearing in evidence was 12 or 13 months; Pallier asserts 16 months. There was never any allegation that the relevant overtime had not been worked by Pallier and approved by Pearce. So specific detail might be open to challenge - but that only goes to degree. The issue the ICAC was interested in was Kear' s response to the infonnation he received, and what, if anything, did that response represent in respect of an available finding of corrupt conduct by him. The basis upon which Pallier justified his use of the overtime was not a matter that needed to be featured in an inquiry focused on Kear's conduct in response to information supplied to him by senior management and which he accepted.

3 7. Detail in respect of the other three or four matters is likewise open to some minor dispute between those at the inquiry and Pallier - but given these reports were beliefs, in the circumstances in which she came to them, reasonably held by McCarthy and properly conveyed by her to Kear, the issues represented by these four or five matters were legitimately raised by her and required appropriate responses by Kear.

38. The question of whether McCarthy was justified in bringing employment events of Pallier to the attention of the SES Commissioner was never an issue in the ICAC inquiry. The inquiry seemed to proceed on an agreed understanding that her view, accurate or not, ofPallier's performance as an SES officer, once delivered and accepted by Kear as accurate, must have been a matter for Kear to investigate in a proper and thorough manner (including the supervision received from Pearce). The real argument was about whether Kear, in dealing with the allegations, had dealt with them in a proper, reasoned, and thorough enough manner, untouched by corruption in any form.

9 Although how that reflected on Pearce was at best tangential - see Paragraph 54 post.

11

That position was fortified by a concession from Pearce that his management and supervision of Pallier had been inadequate.

39. In those circumstances, the ICAC was not concerned with determining whether or not McCarthy's allegations were in fact true. ICAC was focused on investigating if Kear had determined for himself whether the allegations were true or not as part of his investigation into Pearce's oversight of Pallier. It was enough that the allegations were proved to have been made. The allegations being made by McCarthy may have concerned Pallier, but they were aimed at Pearce's work performance. ICAC's concern was presented by Counsel assisting, namely an alleged absence of serious steps taken by Kear to investigate her allegations for the purpose of detennining whether or not there was substance to her claim that Pearce was mismanaging a senior SES staff member. By contrast Kear claimed a proper consideration, based on sound reasons, absence of any conflict of interest or taint of corruption.

40. Pallier's opinion whether or not, on this or that aspect of his employment Pearce was adequately managing or supervising him was of no relevance to the impact McCarthy's allegations between September 2012 and May 2013 had upon the responses made by Kear. Given that situation, Pallier' s opinions were of no relevance to the investigative task the public inquiry was concerned with. Kear chose not to investigate the truth or otherwise of the allegations - he acted upon what he heard, apparently accepting it as factually correct. It was Kear's conduct that the ICAC public investigative inquiry was focused upon so that the ICAC could form a view as to whether it was tainted by corrupt purpose. What had triggered that inquiry was McCarthy's complaint of 15 May 2013 10 elevated to PID status 17 May 2013.

Pallier's Contacts with the ICA C

41. Prior to the public inquiry Pallier was well known to some of the investigative and other staff at the ICAC. On forty-one occasions between 17 March 2013 and 3 December 2013 he had contact, in one form or another, with one or more Commission staff. On 17 May 2013 he lodged a complaint to the ICAC which was accepted as being a PID three days later. On 9 August 2013 Investigative Officers from the ICAC recorded an interview him at his home. On the 26 August 2013 he made a further complaint to the ICAC in respect of conduct by officers of the SES that was raised to PID status the following day. An 18 September complaint regarding SES matters was registered as a further PID two days later. On the 18 October 2013 another complaint was made that was also registered as a PID four days later. The balance of the 41 contacts was located in one of twelve files the ICAC were then maintaining in respect of his contacts during the period May to December 2013. Even though some of Pallier's complaints and claimed PIDs may have covered the SES and other matters also commented on in McCarthy's complaint of 15 May 2013, he was never regarded

10 Report on Investigation Into the Conduct of the Commissioner of the NSW State Emergency Service; ICAC Report, May 2014 p.5.

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by the ICAC as having any interest in the outcome of the investigation initiated by her complaint.

42. Earlier reference has been made to a propensity to uninformed pronouncements by Pallier. Another instance of this is his propensity to ascribe the term PID to reports that may have been made by him of unfavourable financial outcomes as a consequence of practices and policies he regards as inappropriate. Frequently it rests with the receiver of the complaint or report to determine whether its contents constitute a PID. An example will be given later of what Pallier regarded as inappropriate allocation of overtime use, which he believed was a PID, but neither the receiver of the information or the ICAC regarded it as such.

43. Mention has been made of the Record of Interview between investigative officers and Pallier at his home on 9 August 2013. On 30 October 2013 the ICAC determined to require Pallier to participate in a compulsory examination in relation to Operation Dewar for the purposes of obtaining a sworn account of some of the material canvassed with him in the interview.

44. That he took part in a compulsory examination on 1 November was not to be taken as an indication that Pallier would be required as a witness at any public inquiry that might subsequently occur. What witnesses are required at a public inquiry is likely to be related to the identified public interest concerns and the unique focus required by the specific allegations to be ventilated at the likely final investigative stage of those allegations.

Review of Public Inquiry Oral Evidence referencing Pallier

45. The first witness to give evidence at the Public Inquiry was McCarthy. She commenced her evidence on the 3 of December 2013. Insofar as Pallier is concerned her evidence began at p.42 of the transcript. However, there is a hearsay reference adverse to Pallier on p.35/35-38 of the transcript of the public inquiry which discloses a s.11 ICAC Act notification against him existing late October 2012 11

•

46. The salient portions of McCarthy's evidence in respect of Mr Pallier are these: that he reported to her from the commencement of her employment until his suspension; when she commenced her employment with the SES Pallier was the Chief Financial Officer and the Director of Finance, Fleet and Logistics but by 3 December he had been reduced to a 9110 Clerk; in his earlier position he had reported to the Deputy Commissioner of Corporate Services. Prior to the arrival of McCarthy, that had been Pearce; once she began at the SES Pallier reported to her; a reconciliation audit of private usage of motor-vehicles was the first matter in respect of Pallier that came to her attention.

11 No action appears to have been taken by the ICAC in respect of that notification.

13

47. This matter came to her attention through a staff member who was acting in Pallier's position while he was on leave. That staff member brought the report raising concerns that it had not been actioned. McCarthy was also concerned about fringe benefit tax implications arising from private use of motor vehicles which was due apparently at the end of March and that because the report had not been tabled or given to a supervisor, no effort had been made, to that point, to recover debts owing to theSES.

48. On the second day, her evidence (cross-examination) was that the FLEET report was a reconciliation of various persons' private use of motor-vehicles versus their actual private use. It would seem she was also meaning to compare private usage to the use of each motor-vehicle allocated to a staff member from the FLEET in pursuit of work. The importance of private vehicle usage was that it had to be reconciled with payments being made to the FLEET supplier by the car's allocated user and then what amount of fringe benefit tax impost should theSES apply to each vehicle user in respect of his/her private usage. McCarthy gave evidence of a recollection that Pallier had provided an opposing view as to why he had not actioned the report; that opposing view related to his workload and other matters.

49. McCarthy's earlier evidence12 was that the FLEET report for which Pallier was given responsibility had been generated some three months before her arrival. It indicated Pallier' s actual private use of the motor-vehicle was to a point where debt in excess of $10,000 was owing to the SES; he was one of a number of people on the report who appeared to have debts to the agency from similar situations; that the debts of the others were less than that of Pallier's but reached up to $6,000 to $7,000 in some of the other cases. The total sum outstanding to the SES she estimated to be somewhere between $50,000 and $100,000. She spoke of the report as not being actioned, by which she meant that Pallier, and presumably the others, would have been required to repay the money before the report could be described as "actioned". She noted the report was three months non-actioned and at that time Pallier was being overseen by, or reporting to Steven Pearce. The tenor of her evidence put the failure to action the report more as a responsibility of Pearce's supervision and management than of Pallier's failure to circulate the report.

50. A second issue in relation to Pallier had also come to her attention - that was an issue in respect ofPallier's use of overtime. McCarthy's evidence was that Pallier had made a comment to her to the effect of "When I took this job, it was a lot less than I used to earn [but] at least the SES has overtime". As a result of hearing the comment, she asked for his overtime record to be pulled in respect of the overtime he had worked in the previous twelve months. Her evidence was a figure in the vicinity of $60,000 had been paid as overtime. She claimed that at the time she did not know, but after Pallier had been suspended she learnt, that all of his overtime had been approved by his then Supervisor, Pearce. In circumstances when overtime was supposed to be pre-approved

12 Operation Dewar- Public Inquiry; transcript p. 42 and following

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she learnt it had all been approved subsequent to the overtime being worked. She informed Kear of her concerns about the overtime, (at the initial stage not knowing it had been approved) and also about her concerns of the debt of $10,000. For her part, McCarthy formed a view that Pearce's management of Pallier's job performance was inadequate.

51. Kear then raised with her another issue concerning Pallier in relation to the gifts register and a further matter with the Audit Office. Kear told her he felt it was time to have a meeting with Pallier and that an independent investigation should be launched. The proposed meeting never occurred. On the scheduled meeting date, Kear informed her that he had changed his mind and was going to suspend Pallier. There was then a meeting in which Pallier was informed that an independent investigation was to be undertaken and that he was suspended.

52. McCarthy gave evidence that Kear did not share with her anything that caused him to change his mind between scheduling a meeting with Pallier and the decision to suspend him. At the time she had first reported her concerns about overtime, she had not found out and did not know the overtime had been approved. This was a matter that she learnt from Helen Colbey of the Independent Audit Bureau (lAB).

53. McCarthy gave hearsay evidence that Pallier, in his defence insisted he had performed all overtime; that he had completed the overtime because of the significant increase in work expected of him in moving the agency's finance towards a more robust system; that he had done so with the approval of Steven Pearce, and he had never been questioned in relation to the amount of overtime he was perfonning.

54. A third area of concern to McCarthy centred on some ten regional trips by Pallier, undertaken prior to her commencement, all of which were approved by Pearce. After she commenced employment with SES there was an upcoming regional trip that came to her attention that Pallier wanted to take. She did not approve of that trip because she wasn't satisfied that it had a benefit to the organisation. By this time Pallier would have been under her supervision. McCarthy also gave evidence that she was concerned that SES trip for which approval was being sought was occurring during school holidays, it involved Pallier taking his wife and children, and he had failed to be upfront and there was potential for cost to be incurred on the agency in association with him taking his family along. In respect of the ten earlier trips, her understanding was that Pallier reported to Pearce. She formed the view that Pearce's management ofPallier in this area was not appropriate; although it does not seem from the evidence that she noted any specific absence of benefit similarity between the trip she disapproved of, and the trips Pearce had approved.

55. In McCarthy's discussions with Ms Colbey, she (Colbey) raised concerns that the connection between Pallier and Pearce was going to jeopardise the strength of any case against disciplining or dismissing Pallier because he had undertaken all of the activities

15

he had with approval of his Supervisor Pearce. For the SES to take action against Pallier they would need to investigate Pearce's conduct in managing Pallier as well. After an lAB investigation, run by Colbey, dealing with Pallier and particularly his defence that all of what he had done had been authorised by his superior, he was terminated 13

.

56. Arguably, it would appear Colbey recognised exposing Pearce's supervising role over Pallier would likely present weakness in any case examining the disciplining or dismissal of Pallier.

57. The ICAC Commissioner asked McCarthy whether anybody ever suggested that Pallier had claimed or was claiming overtime in respect of which he had not received any approval from Pearce. The answer was "No". It seems that there were also allegations that Pallier had been disrespectful or insubordinate to managers within the SES. McCarthy makes the point that she was not aware of that at the time, but became aware later. By that answer it would seem she meant, that even at the time of Pallier's termination she was not aware of those claims. These bullying allegations did not constitute any allegation she made to Kear, but were a matter that Kear said he relied upon when terminating Pallier's SES employment in January 2014.

58. To put the significance of this evidence within a context, it may be useful to be given an insight into Pallier's position. Pallier's claim is that he was confronting, firmly but professionally, managers reluctant to change past inappropriate practices impacting on proper financial management of the SES and some of those managers felt uncomfortable with this position.

The unfair dismissal proceedings

59. After the luncheon adjournment McCarthy continued her evidence. She was asked questions about an unfair dismissal claim instigated by Pallier. She was involved in instructing counsel on behalf of the SES in respect of the unfair dismissal claim.

60. Her evidence was that on one occasion when she was meeting with counsel appearing for the SES, Ms Elaine Brus (Brus), that as a consequence of a conversation she had earlier had with Lorna Calder (Calder), the Manager of Human Resources at SES, she told Ms Brus "You are not going to believe this; Lorna has informed me that she believes that Steve Pearce has falsified evidence." (Calder later, when approached for confirmation by Kear and in evidence before the ICAC, disputed she had conveyed any such information to either Brus or McCarthy).

13 It can be noted, termination was not among Ms Colbey's recommendations to Mr Kear.

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61. That conversation with Brus came about as a consequence of the earlier conversation McCarthy had with Calder. McCarthy's evidence was that Calder said words to the effect of "I have concerns in relation to the evidence that Steve produced. I believe that

he falsified the diary notes." In respect of that conversation there is supporting evidence to which McCarthy was referred by Counsel Assisting. It comes in the form of a Memorandum from her to Kear on the 22nd of April 2013 - a date when her memory of the conversation was likely to qualify as recent. It is to be found in Exhibit 1 at p.436. The relevant passages are these:

Lorna Grange (nee Calder) disclosed to DC McCarthy that she believed that DC Steven Pearce had falsified the evidence he provided to the JAB Investigator Helen

Co/bey, who conducted the investigation into allegations of misconduct regarding Kevin Pallier. This specific evidence thought to have been falsified with his diary entries and a statement provided by DC Pearce through Helen Co/bey.

According to Lorna Grange (Calder) she alleges that when she requested documented evidence of actions DC Pearce had taken in relation to the excessive overtime claims and peiformance management of Kevin Pallier, DC Pearce indicted he had no written documentation. Lorna [Calder} advised DC Pearce of the importance to have documentation and a potential weakness in the case given there was no written documentation to support DC Pearce's claims. Shortly after this conversation DC Pearce produced diary notes and referred to these in his statement submitted in the investigation.

Other Witness's Evidence referencing Pallier

62. This evidence was challenged later by Calder. Counsel for Calder in cross-examination put to McCarthy: "Ms Calder made it very clear to you that she had never expressed a

view to you that Pearce had falsified the evidence, she talked to you about the

conversation that was had before the conciliation and she emphasised to you that what

she was doing in that conversation was speculating on possibilities". McCarthy did not agree with that proposition.

63. Brus was called on 3 December 2013. She gave evidence of her memory of the conversation at the coffee shop where both McCarthy and Calder were present. In cross-examination by Calder's counsel, Brus said:

I was stressing to both Ms Calder and Ms McCarthy that I believed that Pearce was going to be central to this case, if it were run, because his name and his role as Mr Pallier 's manager was critical, particularly given what I saw to be a major problem with the matter of overtime, and we would have to put Mr Pearce in the witness box. I recalled that there was a look of, what I suppose, dissatisfaction with that proposal from both Ms McCarthy and Ms Grange (Calder) [at] that suggestion. I asked them both why, "Is that a problem?" I recall either one or both of them, I don't know which said, "It could well be. " And there was [then} some comment, I believe by Ms McCarthy that Mr Pearce's management skill, management of Pallier left a lot to

17

be desired and I believe it was then, or around about then, that the comment was made about the fabrication of the diary or notations.

64. Of the allegations initially made against Pallier, which were apparently seven in number, Brus found that only three had been proven before lAB investigator Colbey and she (Brus) "was concerned that the three matters which had been found to be proven did not, on their face, appear to be so serious as to warrant a decision to dismiss 14

. Once the overtime had been approved it was very difficult and put an entirely different characterisation on it by virtue of the approval of the overtime by Pearce." (emphasis supplied)

65. On the second occasion that a Conciliation Conference was conducted, McCarthy gave instructions to settle the matter on terms where there was to be reinstatement to Grade 9110 offered to Pallier as the solution to his unfair dismissal claim. It would seem that he ultimately took advantage of that.

66. In answer to questions from the ICAC Commissioner, Calder, who had been called to give evidence, agreed she knew Pearce had signed off on Pallier's overtime claims and accepted that that was the basic problem that the SES had, because Pearce had approved the claims 15

. She agreed that it was difficult to dismiss a man taking overtime when his boss had approved. She agreed with the proposition that it was just about impossible to argue that Pallier had wrongly claimed overtime, because that overtime had been approved16

. She agreed with Counsel Assisting that she was aware that Pallier was saying the overtime had been authorised. She agreed that she had used the word equivalent to falsify in respect of the document produced to her by Pearce.

67. Pearce commenced his evidence on 5 December 2013. He accepted a proposition put by counsel assisting that Pallier was tenninated for a number of issues, one being use of excessive overtime in the sum of $50,000 worth of overtime, for which he, Pearce, had signed off. Pearce's evidence was that the majority of overtime signed off by him was pre-approved. He put the figure at about 80% of it being pre-approved and 20% of the overtime for which he signed off as being not pre-approved overtime. Pearce claimed that he had never made any complaint about Pallier' s overtime. He then gave evidence that Pallier had worked overtime that was not pre-approved, and there was a significant amount of overtime of that kind that he refused to sign off. Pearce's evidence was that he gave the claims, which he refused to sign, back to Pallier. Further he claimed that he had told Kear, about overtime that had been claimed which he, Pearce, had refused to sign off on.

14 Operation Dewar- Public Inquiry; transcript p. 96 15 Operation Dewar- Public Inquiry; transcript p. 131; 136. 16 Ibid p. 131.

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68. Pearce's evidence was: "I never made an allegation or complaint that Pallier's overtime was excessive, and I never made an allegation or complaint that I thought that Kevin was fraudulently claiming overtime. If there is one thing I thought Kevin was,

apart from everything else, was an honest guy. "

69. Pearce's evidence was that he told Mrs Colbey that he, Pearce had personal concerns about the extent of overtime being worked by Pallier and that he had raised that matter with Pallier.

70. Pearce agreed with the Counsel Assisting that Pallier was a frustrating employee and at times he (Pearce) made his view of Pallier clear to the [SES] Commissioner. There were documents in Exhibit 1 and 2 authored by Pearce that corroborated Pearce's unflattering assessment ofMr Pallier.

71. Counsel Assisting pursued a second matter for which Pallier had been investigated by the lAB, namely an issue in relation to a report Pallier had oversight of, on the private use of motor vehicles. Pearce's understanding was that a report was commissioned through himself and Pallier through the Audit Risk Committee (ARC). Once McCarthy had commenced as Deputy Commissioner she took over responsibility for tracking down usages of motor-vehicles. In respect of the report that had been commissioned the allegation was that Pallier had sat on it. That was a finding made by the lAB Investigator. Pearce denied that he had failed to follow up Pallier as to what was happening with the report. His position is: "We had that much business that Mr Pallier had carriage of that report."

72. There was no challenge to Pearce's evidence lead in chief in respect of Pallier, when time came for cross-examination, nor any attempt to supplement it.

Kear's Evidence referencing Pallier

73. Kear started his evidence on the 5 December 2013. He was asked a number of questions by Counsel Assisting. Well into his evidence he was asked questions about Pallier. The first of those questions related to whether Pallier owed money in relation to his motor vehicle. Kear' s evidence was that he thought that the sum of money started at $10,000 but it ended up being around $17,000. He agreed that the $10,000 figure was derived from an SES report whilst Pearce was the Deputy Commissioner of Corporate Services. He agreed the report had been commissioned by Pearce. He also agreed there were disciplinary issues with Pallier arising out of the fact that Pallier was alleged to have sat on the report. Kear claimed that he didn't know at the relevant time that a report had been commissioned. This would appear as something he subsequently learnt. He did agree that upon her arrival McCarthy was tasked with the matters in relation to the [private versus SES] use of motor-vehicles including Pallier's motor­vehicle. The cross-examination then focused on whether Kear had any reason to be critical of Pearce in respect ofhis oversight of the report.

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74. Kear agreed that Pallier was disciplined among other things for $59,000 of overtime because that was seen as an overuse of overtime. It would seem that in the course of the cross-examination he changed his position on that. Kear indicated in his evidence that he had asked Pearce about the overtime, how much Pallier had worked and Pearce identified that he had signed off on some overtime but had also knocked back a proportion of the overtime claimed. Kear's further evidence was that he was alarmed at the amount of overtime that Pallier had worked and asked Pearce why he had worked and approved that amount of overtime. Pearce had indicated that they were short­staffed in the area, there was a lot on, and he approved Pallier working overtime, whilst at other times he thought that Pallier should have done that work within the confines of the normal working day, and he (Pearce) had knocked some overtime back. The cross­examination then continued as to what responsibility, if any, Pearce had for the amount of overtime worked by Pallier. At the conclusion of the cross-examination these questions were asked and these answers were given:

Q. So if you were going to discipline Mr Pallier for doing such overtime then you should

discipline Mr Pearce for approving it?

A. I didn't discipline Mr Pallier over working overtime.

Q. You didn't?

A. No.

Q. Not at all?

A. Not at all.

But Kear went on: "But there were other matters within the report that I used to

ascertain the serious nature of Mr Pallier 's misconduct."

75. Kear was further cross-examined on the proposition that he had not relied upon excessive overtime worked by Pallier as a reason for dismissing Pallier. Cross­examination on that topic lasted for several pages. Kear was shown numerous documents that he had written and documents such as the lAB report that had been prepared by others establishing that excessive overtime to the tune of $59,000 had been worked. Nonetheless, throughout all of that Kear denied relying upon what was said to be excessive overtime as a reason for Pallier's dismissal. Kear continued to claim there were three other matters upon which he relied to dismiss Pallier.

76. Apart from counsel assisting the only other counsel who spent any time asking questions of Kear was Mr Oates, his own counsel. In the course of his examination numerous topics were covered. At one point the topic of reasons for dismissing Pallier became a theme of questioning. When asked why he dismissed Pallier, the reasons given in evidence to his own counsel's questions were:

One was that he had bullied; had attempted to take; bullied an officer of the Audit Office of

New South Wales in an attempt to have removed the management letter that they would send to

us referenced to a gift register as he had accepted gifts without approval. . .. [T] he second one

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was that he concealed ah, a report ah, where he owed um, a considerable amount of money for the use of his private vehicle that he had done, had JAB done and um given him that report three or four months ago.

Q. Breaches of trust. Oh absolutely. A.

Q. Did his position in the organisation have any bearing upon your consideration about whether he should be terminated?

A. Yes it did. Kevin was the Director of Finance and Logistics and all these areas apart from being an area that he had um, ... he, you know hid the letter and bullied the officer this was all within his portfolio.

Q. He also sat on the State Executive Group didn't he? A. Sat on the State Executive Group and the Audit Risk Committee in the organisation. Q. A person in whose integrity and upon his word you needed to rely. A. Oh absolutely.

The COMMISSIONER: Mr Oates, I've allowed you to ask a number of these

questions because the reason for dismissal on Mr Pallier did crop up earlier this

morning, but you've gone much further now and Mr Kear is making all kinds of

allegations against Mr Pallier who is not here, who has not been called as witness and

in circumstances where, where in {act the grounds on which he was dismissed have,

have a pretty remote connection with what we are talking about here. The relevance of

Mr Pallier 's position concerns the issue in substance of the overtime complaint - all

other grounds are not part of our consideration. (emphasis supplied) (a punctuation mark also supplied)

Then followed some further short submissions from Mr Oates:

The COMMISSIONER: Sorry to interrupt, it is the only issue because Pearce had

approved the overtime and it seemed an odd thing to do to take into account the

overtime claims in the dismissal proceedings which on the evidence of Ms Brus was the

case.

A further short submission by Mr Oates:

The COMMISSIONER: ... [It is] second part (sic) Mr Pallier 's evidence that is

relevant, or Mr Pallier 's position is relevant is Mr Kear 's conduct was regard (sic) to

allegations [reported by McCarthy} that were fraudulent diary entries [by Pearce}. It

is in those two areas that Mr Pallier 's name crops up as a relevant matter in this

inquiry. Why - all other matters that Mr Kear has referred to are not being

investigated and have not been investigated by the Commission and I do not regard it

as {air that these allegations go into, or gone into any depth because Mr Pallier 's not

here to answer them. (emphasis supplied)

Further submissions by Mr Oates:

The COMMISSIONER: For those reasons I've explained, I won't allow further

questioning designed to show why Mr Pallier was dismissed. "

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Some Documentary Exhibits Evidenced at the Public Inquiry- 'Operation Dewar'

77. The transcript of oral evidence ran to 300 pages. By contrast Exhibits 1 and 2 comprised 650 plus pages of evidence. There is no index to the combined exhibit. Thus it is impossible to determine with any real precision what percentage of exhibits 1 and 2 relate to Pallier directly or indirectly. What is more certain is that those that do would reflect upon him prejudicially and with pejorative effect. 48 pages of Exhibits 1 and 2 have been identified as containing such material. It is not claimed that these 48 pages represents the totality of material adverse to Mr Pallier's reputation.

78. The overwhelming bulk of documents exhibited in Exhibits 1 and 2 were not tested by way of analysis in or cross-examination of oral evidence. The mechanism by which these exhibits were assembled is not disclosed in the evidence. It would appear that they are all documents that were within the ICAC collection of documents assembled by the investigators and perhaps others. Whether they were personally selected by the case lawyer, counsel assisting, or other participating counsel or ICAC staff or some combination of two or more is unclear. The basis upon which selection into this anthology of documents was influenced by the doctrine of relevance is unclear. It is simply a mass of documents that presents some anthology of material that one or more persons apparently considered may be of value or disclosed some relevance when findings were ultimately to be made by the ICAC Commissioner or Commission.

79. Exhibits 1 and 2 together with the oral evidence transcripts have been available on the ICAC internet website probably since May of2014.

80. An analysis of the 48 pages selected from Exhibits 1 and 2 reveal more than 100 instances of unwelcomed allegations and imputations being made adverse to Pallier. It is not suggested that there are more than 100 different adverse imputations - the same imputation may be found to have been repeated over several different pages scattered through Exhibits 1 and 2. Why repetition to the extent it has occurred was necessary is unexplained - but each publication constitutes a prejudicial slur on Pallier's privacy and reputation. The ICAC have been advised by the Acting Inspector of the pagination of the relevant pages.

81. As far as can be determined the various authors of those documents carrying the prejudicial allegations and imputations include Kear, Pearce, McCarthy and perhaps some unidentified others.

The LC.A.C. Report- Operation Dewar-May 2014 and Relevant Findings

82. The ICAC Report was furnished to the presiding officers of each House of Parliament on the 28 May 2014. It is sometimes difficult to pinpoint the specific source material/evidence upon which the Commission relied to making findings. What is clear is there was a wealth of sources. Prior to the public hearing ICAC had conducted eight

22

compulsory examinations, including examinations of McCarthy, Pearce and Kear; had two dozen statements from other persons; had obtained documents from the SES through notices to produce and a search warrant executed upon the SES headquarters; and had interviews with a number of persons. Pallier was one of those who participated in a compulsory examination.

83. The Report proper was divided into three chapters. Chapter 1- Background Chapter 2 - Matters raised by Ms McCarthy Chapter 3- Termination of Deputy Commissioner McCarthy's employment

84. Chapter 2 - "Matters raised by McCarthy" deals with that topic under the following headings: Contracts Corporate Credit Cards Kevin Pallier Phil Schafer Favouritism and Conflict of Interest Corrupt Conduct s.74A(2) statement

85. The public inquiry was not the beginning of the investigation. Nor, as events turned out was it the end. Contained in Chapter 1 of the Operation Dewar Report was a short summary of the pre-public inquiry investigation.

86. The Background Chapter further noted that evidence obtained by the Commission suggested that Ms McCarthy had a proper basis for reporting these matters to Kear. There was material from Pearce conceding he and Kear were "very close mates" (corroborated in part by Kear). The Commission had come to a view that Kear had failed to undertake independent or appropriate enquiries into many (sic) of the allegations of misconduct. It also reported that Kear's view of Pearce's conduct was unduly favourable to Pearce and influenced by their mutual friendship.

87. Chapter 2 of the Report focused upon Ms McCarthy's contribution to the public inquiry. Set out in detail below are the findings made in respect of which Kevin Pallier features: 17

Kevin Pallier In or about late September 2012, Ms McCarthy became concerned about overtime and motor vehicle usage by Mr Pallier, then director of finance, fleet and logistics. Up until the appointment of Ms McCarthy in August 2012 Mr Pearce had supervised Mr Pallier.

Upon discovering what she thought were anomalies, Ms McCarthy brought her concerns to the attention of Commissioner Kear, who suspended Mr Pallier, pending a formal investigation. Helen Colbey, an investigator from the JAB was engaged by

17 The I.C.A.C. Report- Operation Dewar May 2014; pp 15-16.

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Commissioner Kear to undertake an investigation into Mr Pallier. Commissioner Kear appointed Ms McCarthy to manage the investigation.

During the course of the investigation into Mr Pallier, Ms McCarthy became concerned about a number of matters involving Mr Pearce's supervision of Mr Pallier. Principally, those concerns related to Mr Pearce's approval of overtime on the part of Mr Pallier in the amounts of nearly $60,000 and flexible working arrangements relating to him. Ms McCarthy's concern was that Mr Pearce had failed to appropriately supervise Mr Pallier.

Mr Pallier told Ms Colbey that he was obliged to work the excessive overtime, as there was a shortage of staff and the work urgently needed to be done. He pointed out that Mr Pearce had authorised his claim for overtime. Mr Pearce did not seriously challenge Mr Pallier's claim during his evidence before the Commission and conceded that he had failed to appropriately manage Mr Pallier (in the sense that he should not have allowed Mr Pallier to work overtime to that extent). The Commission, therefore accepts that Ms McCarthy was correct to be concerned.

Mr Pallier was found to have engaged in workplace misconduct. In or about January 2013, Commissioner Kear terminated Mr Pallier's employment with theSES. He was later reinstated at a lower grade (after commencing unfair dismissal proceedings).

The approach taken by Commissioner Kear towards Mr Pallier is to be differentiated from the performance review process put in place for Mr Pearce. Counsel for Commissioner Kear submitted that it was appropriate that Mr Pallier and Mr Pearce be treated differently because their actions demanded it. That submission has some force, nevertheless, their respective behaviour was not so different that one's employment deserved to be terminated while the other was barely given an admonishment. The vast difference between the measures demonstrates the partial treatment shown to Mr Pearce by Commissioner Kear.

88. A finding is made in Chapter 2 of the ICAC Report that Kear engaged in corrupt conduct by deliberately failing to investigate properly allegations against Pearce in relation to the entry into two contracts, the use of SES funds to purchase roof-racks and electrical brakes for his car, the obtaining of an SES-paid vehicle for an SES manager and the potential falsification of diary entries because of his friendship with Pearce.

89. Chapter 2 sets out with greater specificity the tenns of that finding. It is to be remembered the ICAC makes its findings on the civil standard - namely, balance of probabilities.

Commissioner Kear 's conduct in deliberately failing to properly investigate allegations against Mr Pearce in relation to the entry into the Karoshi and Performance Drivers contracts, the use of the SES funds to purchase roof-racks and electrical brakes, the obtaining of an SES-paid vehicle for Mr Shaefer and the potentia/falsification of diary entries in relation to Mr Pallier because of his friendship with Mr Pearce is corrupt conduct. (emphasis supplied)

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90. As mentioned earlier Chapter 3 dealt with the termination of McCarthy's employment with SES. The finding of corrupt conduct is set out on p.24 of the Report and set out below:

The Commission is satisfied that Commissioner Kear engaged in corrupt conduct in dismissing Ms McCarthy from her employment with theSES substantially in reprisal for her making allegations about the conduct of his friend Mr Pearce. This included the allegations concerning the circumstances in which the SES had entered into contract with Karoshi and performance drivers, Mr Pearce's misuse of SES funds to purchase roof-racks and electric brakes for his car, the alleged misuse by Mr Pearce of his SES credit card, and the alleged fabrication of diary notes. (emphasis supplied)

91. In respect of the finding stated in Chapter 2 the ICAC Commissioner opined that the Minister for Police and Emergency Services should give consideration to the taking of action against Commissioner Kear for the disciplinary offence of misconduct in relation to his (Kear's) failure to properly investigate allegations made against Pearce with a

view to his dismissal. That same recommendation was made in respect of the finding in Chapter 3.

92. One further matter needs to be identified and that is in respect of the finding in Chapter

3 the Commissioner opined that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Kear for an offence under s.20 of the Public Interest Disclosure Act 1994 of taking detrimental action in reprisal for a person making a public interest disclosure.

93. On 12 October 2015 the DPP brought a case alleging that Kear had taken detrimental action against McCarthy that was substantially in reprisal for her making a public interest disclosure pursuant to s.20 (1) of the Public Interests Disclosure Act 1994.

Evidence and submissions occurred on 15 days between 12 October and 19 February. Local Court Magistrate Grogin gave his reasons for verdict on 22 February 2015. The Local Court hearing and Grogin LCM's decision are referred to in more detail below.

Pallier has an interview with the Inspector of the ICAC

94. While the DDP v Kear matter was before the Local Court, on 12 January 2016, the

Inspector of the ICAC met with and interviewed Pallier. The Inspector opened the substantial part of the interview with the question "What has ICAC, do you say, done or failed to do in relation to your PID or PIDS."

95. By way of response, Pallier made reference to having made, back in May 2013 a PID

regarding Pearce and his conduct in relation to an investigation relating to Pallier. The PID referred to Pearce's claimed diary/file notes of counselling him (Pallier). The

thrust of Pallier' s response to the Inspector was that the creation of the notes by Pearce was a fabrication. He also complained that he (Pallier) was never asked by ICAC

whether the notes were a true and correct record. He made the point that ICAC had had

25

an opportunity so to do during a compulsory examination before Commissioner Ipp on 1 November 2013.

96. Pallier's point in respect of the notes was there was evidence available from him so that it could be established on their face that the notes were fabricated. An example claimed:- When the file notes and the diary notes were compared side by side they were clearly different. His complaint was that ICAC should have been aware of that alleged fabrication.

97. Pallier's complaint was that in the absence of any action by ICAC in respect of the diaries Pearce was allowed after Operation Dewar to get on with his life while he, Pallier was still suffering as a result of ICAC's maladministration. Pallier contrasted the two positions. He, Pallier, was unemployed for two years, Pearce on the other hand had returned to Deputy Commissioner.

98. Pallier complained that he had written to ICAC during the course of Operation Dewar complaining that a number of things were being said about him and he didn't have the right of reply. He claimed critical among the issues was the fabricated notes. Pallier reminded the Inspector that Kear was before the Local Court and he (Pallier) produced a table of dates to the Inspector which he (Pallier) said challenged the veracity of claims being made by Pearce in his notes or diary. He also produced a table of what he said were procedural unfairness issues in respect of the conduct by ICAC claiming such conduct amounted to maladministration.

99. Pallier told the Inspector of numerous occasions during the course of Pearce's evidence when Pearce had been untruthful. When asked by the Inspector what would have been the outcome of Dewar if he, Pallier had participated in it. Pallier answered:

Steve Pearce would have been found guilty of corruption - ... ICAC have allowed someone to get away with corruption. FalsifYing notes, Mr Levine (Inspector) is a very

serious offence as far as I'm concerned. 18

100. In respect of Kear, Pallier' s position appeared to be that Kear had abrogated his duties under s.l1 of ICAC in circumstances where Pallier had alleged to Kear that Pearce had committed corrupt conduct, and "he (Kear) just blew me away".

101. Pallier also complained that he had no counsel to defend his interest in the matter and no idea why he was not called as a witness. He rated himself as "more of a key witness than Tara [McCarthy]" because he had been there two years before her in tenns of what had transpired. He accepted that McCarthy had been treated poorly but claimed

18 Record of interview between the then Inspector and K. Pallier; 12 January 2016; p.19/12-16. See also p.5; p.15/14-27; p.15/34-34; p.24/24-27. The responses by Pallier ignore the parameters of Operation Dewar, in that the sole person of interest in this investigation was Kear. Pearce was never a person of interest, but summonsed to give evidence of the nature and extent of his relationship with Kear.

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there was a certain person (namely him) before McCarthy who was being treated very similarly in terms of bringing forward issues about senior officers and about the SES yet nothing was done about it.

102. His next complaint seemed to be that he has raised corrupt conduct by writing to ICAC some 17 times and felt that he was entitled to protection afforded under the Public Interests Disclosure Act 1994 (the PID Act) in terms of coming forward. His claim was that reprisal action was occurring against him, that Kear had bullied him as soon as he came back to work. He claimed that there was evidence before the ICAC that at a meeting on 29 April 2013 when he, Pallier came back to work. Kear said "I found you guilty. Pallier said "I am not guilty". Kear said "I found you guilty. Pallier also claims he was denied a support person, namely his father at a meeting - presumably the meeting of29 April2013. Pallier said his father had been forced to wait outside.

103. Pallier told the Inspector he had lodged a claim with Workers Compensation for anxiety and depression caused by this and they refused his claim.

104. Pallier referred to the two conciliation conferences in front of Commissioner Tab baa in Wollongong claiming that was where the fabrication of notes allegedly by Pearce came up. By this he means the issue of the fabrication came up in conversation with the people representing SES. It is unlikely to have come up in the conference before Commissioner Tabbaa because she was oversighting a conciliation proceeding in respect of a claimed unfair dismissal from employment rather than a formal hearing requiring sworn evidence to be given.

105. There was a complaint based, it seems, against Commissioner Latham, who when referring to the ICAC Report in a letter, made the point that the ICAC didn't set out to establish the truth of the allegations being made against Pallier by Senior SES Executives. Pallier also complained that in the Report ICAC did not go out to find the truth of the allegations against Kear (it may be that he meant Pearce) referring to fabricated notes as an example.

106. Pallier gave an account to the Inspector that he returned to work at a lower level on 29 April 2013, was bullied and left work on 10 May. He was off sick on sick-leave until 5 August 2013, returned to work, was bullied again straight away and then "they" raised new allegations against him. He put in a new PID directed against Kear on 13 September 2013, a copy of which appears in the Office of the Inspector to the ICAC file. It was also sent to Kear and to the relevant Minister, Michael Gallacher, then Minister for Emergency Services. The allegation was one of maladministration with regards to recruitment process. He claims that he was sacked twice for being a whistle­blower and has spent $100,000 on legal fees. Ultimately he settled with an offer of 9 months' payment.

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107. His next complaint was that ICAC had committed serious maladministration in its failure to act upon his PIDs. Pallier claims he had raised a series of PIDs about corruption it would seem in respect of Steve Pearce and that nothing had happened. One of the complaints would appear to be that the ICAC has allowed Pearce to get away with perjury, falsifying notes, and perverting the course of justice. Pallier also complained that Exhibit 10 of the ICAC Report was an investigation report conducted by the lAB. He asked for Exhibit 10 to be taken down from the website 19

.

Local Court Proceeding on One Finding of Corrupt Conduct.

108. As events turned out the DPP did conduct a prosecution arising out of Ms McCarthy's employment termination by Kear, which appears to have been the first such prosecution conducted in the State. It should be remembered the standard of proof in criminal prosecutions is proofbeyond reasonable doubt. On 16 March 2016 Magistrate Grogin found Kear, the defendant in these proceedings, not guilty of the offence. Magistrate Grogin said:

I found that there were many factors behind the dismissal of Ms McCarthy by the defendant. The inability of Ms McCarthy to assimilate into, co-operate with and lead the SES was, I find the primary and substantial reason for her dismissal by the defendant. I am satisfied that the defendant did not dismiss Ms McCarthy as a reprisal, substantial or otherwise, for her making public interest disclosures. I find there was no element of revenge, pay back or retaliation against Ms McCarthy by the defendant.

109. In an application for costs brought by the defendant, Kear, his Honour found in favour of Kear on that matter. Grogin LCM considered the question of whether the investigation into the original offence was conducted in an unreasonable or improper manner. It is to be remembered that the investigators in this matter were the ICAC investigators20

. In respect of that matter the learned Magistrate made the following findings:

• Investigators had obtained statements as a result of Search Warrant. The documents referred to witnesses who were called in the applicant's case namely Commissioner Greg Mullins, Chief Superintendent Malcolm Connellan, Mr Greg Farmer, Mr Scott Hankel, and Mr Greg Murphy.

• These witnesses provided evidence of a course of conduct by Ms McCarthy concerning not only the applicant but other senior officers within the SES.

• The ICAC investigators interviewed all of the above witnesses, however these interviews were not served on the applicant until a subpoena was issued on 18 November 2015.

19 On the ICAC website Exhibit 10 is nominated as one of the public inquiry's Exhibits. It has been programmed so that it does not open to reveal its contents. When that programming occurred is unclear from the material before the Inspector. Exhibit 11 is not nominated, but was referred to in Operation Dewar public inquiry transcripts on Day 3; 06112/2013; p. 275.

20 A function performed pursuant to s. 14 (1)(a) Independent Commission Against Corruption Act 1988.

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e I find there was no justifiable excuse for a failure to serve transcripts of evidence upon the applicant.

• The existence of the interview transcripts were (sic - read "was") not disclosed to the defence in the brief of evidence served on them by the ICAC.

• I find that investigators cannot simply choose not to serve such evidence from witnesses because they have provided evidence contrary to the prosecution case.

• The investigation did in fact fail to meet the optimum standards. • I am therefore of the opinion that the investigation into the alleged offence was

conducted in an unreasonable and improper manner.

CHAPTER II

EXAMINATION OF MR PALLIER'S COMPLAINTS-THOSE REJECTED FOR WANT OF JURISDICTION OR MERIT.

110. A passage of Brus's evidence, which may be thought to suggest a certain lack of disciplined legal focus by Mr Pallier is a useful starting point. Brus's view was that Pallier's approach to his re-instatement case was difficult to ascertain. Her difficulty was in detennining whether Pallier was asserting different facts, or whether he was adopting what she would characterise as "the best defence is offence". Her view was there seemed to be an element in the documentation along the lines of "if you think I'm bad for doing this, this is what [others} and in particular Mr Pearce has done."

This observation by Brus appears insightful. It may explain a certain lack of focus in the complaints, and perhaps the number of complaints made by Pallier. Where factual assertions have been made by Pallier, it is assumed for the purposes of this Report the assertions as given are accurate or true, or believed by Pallier to be accurate or true. To the extent, if it be the case, any assertion is neither accurate nor true, any opinion expressed in this Report will lose its potency to the extent of the inaccuracy or untruth.

111. One must also remember Pallier is not a lawyer, although he has sought to inform himself of the provisions of the ICAC Act, the Privacy Act and the PID Act. However there is a difference between infonning oneself of the contents of an Act of Parliament and understanding how that Act is to interpreted and applied - two very different skill sets are required. The absence of the second skill sets has been apparent in Pallier's approach to grievances arising out ofhis employment experiences with theSES and the impact of the ICAC's investigative procedures upon him.

112. Earlier reference was made to duplication and overlapping of complaints made to the Inspector by Pallier. The purpose of this section is to examine Pallier's complaints, which, for this purpose, have been grouped where possible in terms of personalities and/or subjects. Hopefully by following that procedure this Report may avoid, or at least minimise, the duplication and overlapping earlier noted; yet still deal fully and appropriately with the tenor and substance of all complaints.

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The lllawarra Mercury Complaint

113. On the first day of the public inquiry, 3 December 2013, counsel assisting opened, defining the focus of the investigation, names of witnesses to be called, and the nature of some of the evidence he anticipated would come to the Commission through those witnesses. On the same day the Illawarra Mercury reported in some 33 short paragraphs much of the context of the opening.

114. Some eighteen months later on 10 June 2015, Pallier wrote a three-page letter to the Commissioner seeking an urgent request for ICAC intervention to correct a media article. The article in question was the Illawarra Mercury article referred to above. That letter has been passed on to the Inspector by Pallier, and constitutes one of his complaints.

115. Pallier sought to put in context the complaint he was making to the Commissioner. He drew the attention to assistance he had given to ICAC as "a whistle-blower" in its 2013 Public Inquiry- Operation Dewar. It is true that in May 2013 he had a complaint made by him to ICAC elevated to PID status, as well as three others in August, September and October 2013. He also participated in an interview with ICAC investigators in November 2013, all in respect of complaints made to ICAC about the SES. Pallier noted that he had been unemployed for a substantial period of time, had applied for over 80 jobs - all of which had been without success. In that context he noted that the article written by the Illawarra Mercury was the first article displayed on Google in response to a search limited to the words "Kevin Pallier". He noted that the heading of the article was "SES Whistle-blower Sacked in 'pay-backs".

116. He itemised what were purported to be direct quotes from the article.

These areas include an investigation into the activities of former Chief Financial Officer, Kevin Pallier who was terminated for abuse of overtime.

117. Pallier claimed "that the facts [have not] been correctly presented in the media and I

believe I have suffered irreparable damage as a result." He requested an immediate intervention by the ICAC to set the public records straight. He noted he was not a person of interest in respect of the inquiry being conducted into Operation Dewar.

118. Solicitor for the ICAC responded 8 days later noting the article was based on Counsel Assisting's opening and that it was an accurate report of the opening. The solicitor noted there was no basis for the Commission to make representations to the newspaper on his behalf and suggested if Pallier remained concemed he should contact the Australian Press Council as the principal body to handle his complaint.

119. A fair reading of the article complained of shows Pallier's complaint to ICAC in respect of this article has no merit. The "whistle-blower" referred to in the headline

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could not have been Pallier, but was McCarthy. Pallier's tension with SES hierarchy leading to his dismissal had nothing to do with any complaint he had made to the ICAC. On the other hand McCarthy claimed - a claim that was later upheld by the ICAC - that her termination was reprisal for her whistle-blower activity. Thus an important issue in the ICAC inquiry was whether McCarthy's termination did in fact constitute a reprisal for her raising a PID with Kear21

. The Illawarra Mercury's heading for the article reflected that fact, and only that fact. The Illwara Mercury had no means ofknowing ofPallier's status as a whistle-blower.

120. Secondly, Pallier focused upon the passage "terminated ... for abuse of overtime" incorrectly and had taken from it a meaning far from the meaning intended by counsel assisting and the meaning reported by the IllawatTa Mercury. The relevant passage from the Report comprises two small paragraphs about a third of the way into the article.

Mr Fordham said during Ms McCarthy's nine months of employment she highlighted jive key areas which drew the attention and ire of Mr Kear and Mr Pearce.

Those areas included an investigation into the activities of former Chief Financial Officer Kevin Pallier, who was terminated in suspicious circumstances. Mr Kear terminated Mr Pallier 's employment for abuse of overtime - all of which had been authorised by Mr Pearce - .. . (the Inquiry heard that Mr Pallier undertook unfair dismissal proceedings and has since been reinstated to the SES). Mr Pallier was not named as a person of interest at the Inquiry, nor called as a witness.

The "suspicious circumstances" referred to in the article referenced the circumstances in which Kear came to terminate the CFO's employment -and were not intended to reference Pallier' s conduct.

121. Pallier' s complaint to then Assistant Inspector is that as a consequence of matters raised in the public inquiry he had been maligned and unfairly treated. As an example of that, he said he sought the ICAC's intervention to set the record straight. An instance of this, it was said, rose out of the Illawarra Mercury publication just reviewed. In the interview with the Assistant Inspector, Pallier said words to the effect: 'I went to the ICAC and said these references in the media with regard to myself- and they are not right." The ICAC solicitor on Pallier's version said words to the effect of 'It's the opinion of Counsel Assisting that at the time that was a true and accurate record -we're not going to do anything about it - if you want to do anything about it -go and complain to the media association'. " The letter from the ICAC Solicitor to Pallier is not quite in the terms Pallier remembers.

21 ICAC Report- Investigation into the Conduct of the Commissioner of the NSW State Emergency Service -May 2014; p.l2 and p.24

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122. The jurisdiction given to the Inspector by s.57B of the ICAC Act does not extend to dealing with this complaint.

123. Section 57B is concerned solely with the conduct of the ICAC (which includes its officers and staff); delay by the Commission in the conduct of investigation, unreasonable invasions of privacy caused by the Commission; conduct of the Commission that amounts to conduct contrary to law, unreasonable, unjust, oppressive, improperly discriminatory or, conduct based wholly or partly on improper motives. There is also a capacity for the Inspector to assess the effectiveness and appropriateness of the procedures of the Commission relating to the legality or propriety of its activities.

124. While it is accepted that a deliberate failure to act may in some circumstances amount to conduct captured by the caption "maladministration" or by the caption "effectiveness and appropriateness of procedures", the alleged failure to act as requested on this occasion, could not amount to either. As noted by the ICAC Solicitor, the Illawarra Mercury report was an accurate report. It was fair in all the circumstances. The preparation and publication of the report are not attributable to any conduct by the ICAC. Nor did the newspaper report form any part of their effectiveness or appropriateness of procedures of ICAC in relation to the legality or propriety of its (ICAC's) activities. Nor was the ICAC the appropriate body to institute proceedings­even if limited only to a request - for the withdrawal of public access to this publication.

125. This complaint did not qualify as a matter falling within the scope of s.57B (l)(a)- (d). The complaint falls outside any jurisdiction of the Inspector.

Re -Steven Pearce and Commissioner Kear - Complaints

126. Much of this section deals with claimed failures by Kear, Pearce and the ICAC to deal with PIDs initiated by Pallier. Statutory protection is offered by the State - see ss. 8 and 12 of the PID Act and its links to the Public Finance and Audit Act 1983 and the ICAC Act. Clearly the relevant agencies must be aware of the protection the State is extending and to whom it has been extended, and in respect of what PID or its equivalent, the protection is being extended.

127. Not every report of financial ineptitude or mismanagement made to a senior staff member of the Audit Office, or senior manager at SES or the ICAC will qualify as offering protection to the person who made it. Nor will every occasion that protection is available be known to all relevant persons who may be required to offer it. In order to offend against the protection provisions of the PID Act, there must be knowledge of an entitlement to protection in respect of a specified matter or matters. An insight into the way in which problems may develop is to be found in an ICAC Phone Call diary note compiled by Leonie White an ICAC staff member on 19 November 2013:

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I spoke with Kevin Pallier this morning. I question him about the report he alleges he provided to SEG and Ms Martin . . . . He clarified that when he refers to "reports" this does not necessarily mean a word document outlining corrupt conduct and serious and substantial waste. It instead could refer to a text, conversation or an email with a spreadsheet, the contents of which, if analysed would show inappropriate use of funds which may constitute corrupt conduct. However, Pallier has provided me with a spread-sheet of OT(overtime) data and the report ... he claims to have tabled at the SEG in July 2011 - a copy of which he claims was provided to Martin. It is a briefing paper which raises general issues in relation to overtime that Pallier suggest should be looked at by audit/management. I do not believe the Martin would have considered this a report relating to corrupt conduct and serious and substantial waste and one that should be escalated/considered a PID.

128. Thus there is a need for caution when considering the use of the PID term by Mr Pallier. No one doubts when he uses the term he genuinely believes PID is the appropriate term to be used. The question is whether others - and in particular whether the staff at the ICAC regarded the communication made to them as constituting a PID. It would seem there were only six occasions when it did so between May 2013 and September 2014.

129. Pallier prepared for the then Assistant Inspector a chronologically arranged history of important events including claims he made of maladministration/misconduct by the ICAC and/or senior SES staff. In respect of the claimed misconduct/maladministration by the senior SES staff, it would appear that he brought these to the attention of ICAC in numerous complaints that he regards as PIDs. He has detailed in excess of 70 claims of maladministration and misconduct to the Inspectorate.

130. Many of the claims identified to the Inspector were initially aimed at the ICAC, or were meant to be considered by the ICAC as PIDs in respect of which ICAC should have actioned. His complaint would appear to be: generally when he notified these matters, Pallier regarded them as matters requiring a more satisfactory investigative response than that given by the ICAC. Many of the complaints brought to the Inspector as itemised in this chronological history predate or postdate the inquiry associated with Operation Dewar. In other words Pallier seeks a report emanating from the Office of the Inspector that in some way holds the ICAC accountable for insufficiently investigating and failing to make adverse findings against senior office holders in the circumstances he has identified in this chronology that post-date the Operation Dewar ICAC Report by 14 months (23/6/1522

).

131. Pallier complains: "I never received a response from ICAC re my allegations of Pearce's corrupt conduct and/or Mr Kear 's misconduct in refusing to investigate the same" (complaint dated 1611/20 15) (underline supplied). This complaint and other similar complaints raise two issues:

22 Complaint relating to response by ICAC to complaint re the Illawarra Mercury report on the Opening Address by Counsel Assisting on 3/12/13.

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a) A complaint of a failure to receive a response from the ICAC, and b) A complaint of "misconduct [by the ICAC] in refusing to investigate" the

complaint.

These two aspects will be dealt with separately in the following few paragraphs.

It is difficult to determine with precision whether Pallier had a specific complaint in mind, or a series of complaints in respect of the same or similar subject matter in the complaint noted above.

Dealing with complaints of a failure by the ICA C to provide a response

132. Section 20 (5) of the ICAC Act provides that the Commission must inform a complainant in circumstances where it decides not to commence an investigation into a complaint and the reasons for the decision made. Its failure to do so may attract - at least in a technical sense- the audit functions of the Inspector pursuant to s. 57B (1) (audit for purpose of monitoring compliance with State law)- and provoke a report or recommendation. But a single episode is open to be regarded as a trivial oversight, unworthy of the necessary commitment of State resources simply to make a point. Likewise, episodes arising from a single complainer who has lodged several complaints on the same topic are open to be regarded as trivial oversight.

133. However, Pallier's complaint appears to be factually inaccurate. On the 8 September 2014 in a two-page letter the Commissioner noted among other things:

I refer to the online form you submitted via the Commission's website on 30 July 2014, and your email of 19 August 2014, concerning the NSW State Emergency Service (SES). I note we wrote to you on 8111 November 2013 and again in April2014.

134. There appears to be at least three letters23 to which this report will shortly come that support relevant responses satisfying s.20 of the ICAC Act.

135. In this letter the Commissioner notes the "similar vein" of Pallier's past correspondence, and sought to explain to him the specific focus of the ICAC's investigation into the "goings-on" at theSES. It can be assumed by the time the ICAC embarked upon a public inquiry it was well aware of allegations made - not only by Pallier but by McCarthy and Brus against Pearce in respect of the diary entries. It is also a given that it was aware of the denials by Pearce and Calder of the claimed forgeries. The Commission was able to assess for itself the strength, significance and value of the information it had received against Pearce.

136. It was a matter for the ICAC what it would do, if anything, with information available to it. The ICAC may use the information supplied to it by others - as is the case with

23 The three letters are examined in detail commencing at para 152 post.

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other investigative agencies - for any one of a number of purposes: for example: send material off for further forensic investigation and validation (which happened in this case); retain it for intelligence; to consider whether the material qualifies as a PID; to consider whether the material is sufficient to initiate an investigation; to assess the material for purposes of determining whether to refer it to another agency; or to advise the informants of another agency he or she could refer the information onto; to consider whether the informant had committed any breach of law himself/herself as a consequence of the information revealed; and if so, whether any response was required by the ICAC; to mention but a few.

Alleged "ICA C misconduct complaint(s)"

13 7. It would seem Pallier' s complaints to the Office of the Inspector are founded upon a requirement, as he understands, that is imposed upon the Commission as a consequence of s.13 (l)(a) ICAC Act. As he read the section the ICAC is required to conduct an investigation every time it receives a complaint. The section declares the "principal functions of the Commission are as follows": (and among others) identifies as a principal function, "investigation of any" (as distinct from 'every') "allegation or complaint that in the Commission's opinion implies that corrupt conduct may have occurred, may be occurring or may be about to occur"24

. (underlining supplied)

138. It would be better to understand this section as an enabling or empowering section rather than as a section making mandatory requirements. For starters, s.1 0 ICAC Act gives to the Commission a discretion by use of the word "any" as to whether or not to deal with any complaints it selects consistent with the tenns of the section that have been made to it. It may investigate a complaint or decide a complaint need not be investigated. Likewise s.13 (1)(a) also invests the Commission with a more limited discretion "in the Commission 's opinion implies ... "

139. The starting point is to consider whether the complaint lodged identifies "corrupt" conduct. In a recent High Court case 25 the High Court appears to read down the definition of "corrupt conduct" found in the ICAC Act.

140. Assuming that it does, s.20 ICAC Act bestows a discretion upon the ICAC in respect of whether or not it will conduct any investigation. Section 20(1) provides it "may

conduct an investigation ... on a complaint or report made to it ... ".

141. In making that determination the Commission may have regard to whether the subject matter is trivial, too remote in time to justify investigation; or whether the complaint was frivolous, vexatious or not in good faith, or such other matters as it thinks fit. 26

24 That provision - as will be explained later is an enabling or empowering provision and not a mandatory requirement to investigate each and every allegation or complaint made to it. The qualifying words "in the Commission's opinion" also support, or are indicative of enabling or empowering rather than mandatory performance. 25 The Independent Commission Against Corruption -v- Cunneen; [2015] HCA 14; 15111 April2015

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142. Also impacting upon any exercise of discretion by the Commission in considering whether to embark upon an investigation are the provisions of s.12A ICAC Act. That section provides that as far as is possible when exercising its functions the Commission is to direct its attention to serious corrupt conduct and to systemic corrupt conduct and to take into account the role other public authorities and officers have in the prevention of corrupt conduct. This section acts as a filter to provisions such as s.l3 (l)(a) by steering the Commission's consideration to "serious" and to "systemic" corrupt conduct. What constitutes "serious" or "systemic" corrupt conduct no doubt will depend to some extent upon the circumstances of the case, and to some extent the need raised by the allegations contained in the various complaints to bring into play all the extraordinary powers vested in the ICAC and the public expense involved in initiating and conducting an investigation.

143. Finally, s.12 ICAC Act mandates when exercising its discretion whether or not to investigate, the Commission have regard to the protection of the public interest and the prevention of breaches of public trust as its paramount concerns when exercising its various functions. Protection of the public interest may- or may not - depending upon the circumstances, require an investigation to be initiated and pursued. For example both s.30 (compulsory examinations) and s. 31 (public inquiries) have their own statutory requirement to consider the public interest as a pre-requisite to conducting one or other of those forms of investigation.

144. There may be other matters that may also be taken into account for example the Commission's current or projected workload; the availability of resources; and whether the issue raised by the PID has been the subject of public accountability by virtue of any settlement or resolution by another agency (both features of relevance in respect of some ofPallier's complaints).

145. Unless it can be shown in the complaints before the Inspector, there is some failure to exercise the grant of discretion at all in circumstances where such exercise was called for, or some failure in the exercise of discretion in accordance with the terms of the grant of the discretion, or failure to apply other established legal principles there is no maladministration or other failing identified in s.57B that provides jurisdiction to the Inspector.

146. Pallier's complaint of a failure to respond to his various complaints to ICAC by way of written response to him, is based upon an unwarranted assertion of fact. Further, even if this complaint was based upon a true assertion of fact, it did not qualify as a matter falling within the scope of s.57B (1)(a). The complaints of a failure to investigate matters raised in his various complaints, for reasons given above also fail. For the reasons given all complaints falling into these two categories must be rejected.

26 Independent Commission Against Corruption Act 1988 s.20 (3).

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August/September 2013 Complaint re period of re-employment

147. Pallier complains that two weeks after raising a PID, Kear and other senior officers launched a new disciplinary investigation into him and what he regards as false, vexatious and malicious allegations. He complains that Mr Kear (whose action initiated the investigation) represented premeditated and deliberate reprisals against him - noting he had dismissed another whistle-blower not four months earlier.

148. From the terms of this complaint it would appear the complaint focuses on conduct by Kear and others towards a 'whistle-blower" (Pallier) sourcing in Pallier's mind an expectation of action by the ICAC in and around August/September 2013. This complaint whilst somewhat different in subject matter from the last group of complaints, and somewhat differing in the time of its making, also raises issues of non­actioning by the ICAC not dissimilar to those contained in the last group of complaints. Thus propositions advanced in respect of those complaints have equal relevance in respect of this and other complaints noted below.

149. It should be obvious from what has been already noted in this Report: (a) that what presents as misconduct and/or maladministration to an employee

(such as Pallier) may not be regarded by the ICAC as misconduct and/or maladministration when reported to and examined by it;

(b) likewise what presents as a PID to an employee (such as Pallier) may not be regarded by the ICAC as a PID when the relevant conduct is reported to it;

(c) even in circumstances where the ICAC comes to a view that the reported conduct may qualify as misconduct and/or maladministration, such a view does not necessarily require the ICAC to take any action. There are discretionary matters, including public interest matters, that must be considered before a determination is made to use the extraordinary powers of the ICAC in respect of misconduct or maladministration;

(d) even if the ICAC did regard the relevant report as a PID, that does not necessarily mean that the ICAC will take action on the PID, or even offer necessarily the protection which the PID Act seems to suggest is required. There is a discretion to be exercised, and indeed was exercised in Operation Dewar which would take into account various considerations including public interest matters when determining whether it will action the PID or indeed offer the p1;otection normally required by the Public Interest Disclosures Act.

The ICA C's Responses

150. In the course of his dealings with the ICAC, it sent at least three letters which demonstrate the manner in which the ICAC exercised the discretion referred to above, and to the findings underpinning their approach to that discretion. At least one of those letters dealt with the complaints of bullying during the second period of employment. Before dealing with each of those letters it may be useful to background them into the

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context upon which the ICAC appears to have regarded most of the communications made by Pallier to it.

151. Since at least 17 September 201227- if not before - Pallier had workplace issues. The

significance of the 1 7 September date is that it marks an occasion, if not the first occasion, when it should have become obvious to Pallier that there were tensions between him and senior SES management over his approach to workplace issues. It

should also have become apparent that his approach to the various issues was not one endorsed by the SES senior management. The question of their motivation was a live issue with Pallier from the outset. Pallier was prepared to justify his conduct and if necessary to do so beyond the confines of the workplace. As noted elsewhere his defence was often supplemented by counter-attack. That strategy thus sought to capture the involvement of the ICAC into his workplace issues.

152. On 28 August 2013 28 the Commission notified Pallier that, on the material supplied by him it was not in the position to detennine whether the "workplace issues" as related by him to them could constitute reprisal/detrimental action as defined in the Public Interest Disclosures Act. This letter appeared to make two or three points. To constitute a relevant reprisal/detrimental action, that action needed to be, in the view of the Tribunal (as distinct from the employee) "substantially in reprisal for a person having made a PID". Secondly, any necessary precondition of "reprisal" requires the alleged perpetrator be aware of the existence of a relevant PID and the perpetrator knowing that fact, and substantially because of that fact taking the detrimental action.

153. As at August 2013 the Commission's position was simply that it was unable to make a determination of these necessary elements adverse to the SES senior management, or favourable to Pallier.

154. But the position changed. However, before the ICAC's changed position is disclosed, it is important to note Pallier's position, as best it may be determined from the material before the Inspector. Pallier appears to be relying upon emails he sent to Kear and Pearce on 17 July 2011 as a PID, and an overtime report he sent directly to Ms Michelle Martin, Manager of the Audit office circa 2012 as a protected disclosure to the Auditor Generaf9

. In respect of the emails sent to Kear and Pearce, Pallier believes he is entitled to protection against reprisal pursuant to s.8 (1 )(b) of the PID Act. In respect of the overtime report he sent to the Manager of the Audit Office, he relies upon s.l2 of the PID Act for protection against reprisal.

155. A further matter arose circa September 2012. The SES had access to a $30,000,000 fund known as the National Disaster Relief Account (NDRA). These funds were

27 Kevin Pallier's first meeting with the new SES Deputy Commissioner McCarthy. 28 During Pallier' s second period of employment. 29 This appears to be the document referred to by Leonie White- staff member of the ICAC referred to in para 127.

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available to the SES to spend, at least as Pallier understood it, in times of national or widespread State disaster. That account and money spent from it became subject of another email to Ms Martin from Pallier. That email, it would seem, drew the Audit

Office's attention to the accessing of money by the SES from that account to purchase items at a time when there was no national or widespread State disaster on foot (although it would appear the purchased items may be used in the course of a such disaster). Pallier claims this email was despatched on 6 September 2012. It was followed by phone calls and texts between him and Ms Martin. Pallier claims these constitute s.12 PID disclosures. The concerns raised by Pallier toMs Martin resulted in the NDRA being classified as "high risk" by the audit office. There does not appear to be any recording of them as PIDs by the ICAC.

156. The Audit Office, according to Pallier, obviously thought his concerns valid as they also placed overtime at the SES as a high risk in their NSW SES Audit Management letters in respect of both overtime and the NDRA. That course of conduct by the Audit Office does not mean that it regarded what was given to it in the relevant reports made by Pallier as an official complaint pursuant to s.57D (1) of the Public Finance and Audit Act (i.e. a PID). Thus the situation arises where it would appear, or may have appeared to the ICAC, that the Audit Office may not have recognised that any of the

emails or conversations and reports made to the Audit Office in these two areas merited the protection attracted by a PID. Further, it may have appeared to the ICAC that neither Kear nor Pearce understood that a s.8 (1)(b) Public Interest Disclosure was being made to either or both of them via the emails sent to Pallier on 17 July 2011. As

matters presently stand, but for the internal memo record of Leonie White dated 19 November 2013, it is impossible for the Acting Inspector to speculate upon what specific findings the ICAC made in respect of the correspondence trail initiated by

Pallier, or the material from the audit upon which they fmmed the view expressed in their subsequent letters.

157. Each of the two remaining letters referred to appears to review a longitudinal history of material being submitted by Pallier to the ICAC. The ICAC letter of 11 April 2014 commences:

I refer to iriformation you provided in various phone calls from about the 16 December 2013 onwards concerning theSES and a misconduct investigation against you.

It is to be remembered the Operation Dewar public inquiry had concluded on 6 December 2013 and Pallier's second period of suspension from SES employment began on 24 March 2014.

158. The 11 April2014letter continued:-

You have raised concerns about this misconduct investigation, including the credibility of evidence provided by various witnesses, the weight given to that evidence by the Investigator and the general matter in which the investigation is being conducted. You have also raised concerns about the findings made against you, and your current

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suspension from the SES. In addition you reiterated your belief that reprisal action has been, and continues to be, taken against you for having made public interest disclosures, and you have sought the Commission's intervention.

The Commission's Assessment Panel has considered the additional information and has decided that it will not be taking further action, including intervening on your behalf in the SES disciplinary process.

As noted in our letter to you of the 8 November 2013 following our initial assessment, we can only deal with corrupt conduct as defined under our governing legislation. Under the ICAC Act, conduct is corrupt when it does result, or could result, in a NSW public official or public sector authority exercising their functions in a partial or dishonest way, breaching public trust or misusing resources. It can also involve the conduct of non-public sector individuals or organisations where their conduct adversely affects the honest and impartial exercise of a NSW public official's or authority's functions. The conduct must be serious enough to constitute a criminal or disciplinary offence, or reasonable grounds for dismissing the services of a NSW public official. In short there needs to be an element of deliberate wrongdoing affecting public official (unctions.

In reaching its decision the Commission considered a number of factors, including whether the available information disclosed a reasonable likelihood of any person(s) within theSES breaching Section 20 of the Public Interest Disclosures (PID) Act 1994. The applicable test is whether the detrimental action was substantially in reprisal [or you having made a PID. In other words there needs to be both evidence of a causal relationship between the making of a PID and the decision to commence the misconduct investigation and the investigation's findings; and the absence of evidence that the investigation and its findings arose from circumstances not connected with the making o(a PID.

As explained in our previous letter, the Commission is of the view that the SES' decision to have the allegations against you investigated did not, of itself, constitute reprisal action. Where agencies receive allegations of bullying, harassment, intimidation and occupational violence they are entitled to investigate and it's not the role of the Commission to determine when or how this occurs.

Regarding the findings of the misconduct investigation, the Commission has not formed a view that the investigation and its findings were tainted by corrupt conduct. The Commission notes your concerns about the credibility of various witness statements and the weight given to them. However this is not necessarily indicative of corrupt conduct, particularly in circumstances where the investigator has obtained partial or complete corroboration from other witnesses sufficient to prove the elements of the misconduct offence(s).

The Commission cannot intervene in workplace related matters in the absence of a reasonable likelihood that corrupt conduct is occurring. Moreover, the Commission does not have power to merely review the merits of decisions made, in the absence of a reasonable likelihood that corrupt conduct may have occurred.

For all these reasons the Commission will not be investigating this matter. " (underlining emphasis supplied)

159. In the five months between the receipt of this letter and the ICAC despatch of another letter on 8 September 2014, Pallier continued to press his allegations to the ICAC. The September ICAC letter again presented a longitudinal view of the material sent to it by

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Pallier, and a reiteration of its decision, "that it will not be investigating this matter or taking any further action". Relevantly the letter stated:

The information you have provided is in a substantially similar vein to that which you have previouslv provided. In your most recent correspondence, you have reiterated your concerns relating to the SES and the conduct of various employees in relation to disciplinary proceedings against you. The first disciplinary proceedings resulted in your termination by Commissioner Kear, and subsequent reinstatement to a lower graded position resulting from the agreement in a Deed of Settlement. The second disciplinary proceedings were overseen by A/Commissioner Jim Smith, which again resulted in your termination. The Commission notes your indication that you have commenced industrial relations action against theSES.

The Commission's Assessment Panel has considered the additional information and has decided that it will not be investigating this matter or taking any further action.

You have again raised various concerns about the veracity of allegations and evidence relied upon to substantiate findings made against you, the general manner in which the investigations were conducted and handled, and your resulting termination from the SES. Having examined the most recent information you have provided, the Commission remains ofthe view that theSES' decisions to have the allegations against you investigated did not, of themselves, constitute reprisal action. The Commission also remains of the view that the findings substantiated in those investigations, which were relied upon in the decisions to terminate your employment, also did not constitute reprisal action.

You have made reference to content in the Commission's report relating to the "Investigation into the Conduct of the Commissioner of the NSW State Emergency Service" (report), and you appear to correlate the findings made in that report together with your particular circumstances. Please note that the Commission's investigation .focused on the manner in which Commissioner Kear dealt with Ms McCarthy, and in that regard examined (our specific allegations. The Commission's findings related to those specific allegations, and cannot be applied to other contexts.

You have also again raised concerns about the veracity of diary entries Mr Pearce relied upon during the first disciplinary proceedings against you. Please note that in its report, the Commission did not set out to establish the truth of the allegations concerning Mr Pearce. The Commission instead sought to establish that the evidence obtained by the Commission suggested that Ms McCarthy had a proper basis for reporting the allegations to Commissioner Kear. Moreover, in its report, the Commission compared your initial termination from the SES with the approach Commissioner Kear took against Mr Pearce, in order to demonstrate Commissioner Kear 's partial treatment towards Mr Pearce. The Commission did not make any findings relating to the merits ofyour initial termination tram the SES.

Your most recent material does not cause me to reconsider the Commission's previous decision in relation to this matter. Therefore, the Commission's decision not to investigate your allegations stands.

We will consider any further information you provide. However, unless it differs substantially from that already provided, we will not contact you again. " (underlining emphasis supplied)

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160. Each ofthe ICAC letters reviewed demonstrates a reasoned and thorough consideration of the material made available to it by Pallier. Each also demonstrates an awareness of the issues Pallier continually sought to persuade the ICAC to accept, including the alleged motives of and the alleged untruthfulness of the SES staff being targeted in that material.

161. The fact that the ICAC responded, the content of the responses, the time taken to complete responses for Pallier and its final determination of the issues adverse to Pallier either singularly or collectively do not provide any sustainable cause of complaint. There is nothing in the conduct of the ICAC in respect of all these matters that affords any opportunity for criticism of the ICAC.

A Complaint of Contrasting Fortunes

162. Another complaint from Pallier "was that in the absence of action by ICAC in respect of the diaries Mr Pearce was allowed after Operation Dewar to get on with his life, while he, Mr Pallier was still suffering as a result of ICAC's maladministration." (complaint made 12 January 2016). In sympathy with that complaint is a response noted earlier30 to a question by the Inspector: "Steve Pearce would have been found guilty of corruption - ... ICAC have allowed someone to get away with corruption. FalsifYing notes, Mr Levine is a very serious offence as far as I'm concerned"

163. From what was said in Mr Fordham's SC's opening it was plain that Pearce was not then in the ICAC's sights. The Operation Dewar public inquiry was now an investigation solely focused upon whether Kear as SES Commissioner had behaved conuptly.

164. Commissioner Latham explained the significance of Pearce and allegations made against him to the case against Kear in her letter of the 8 September 2014 31

. As is the case with Mr Pallier, the Commission was not so much interested in the truth of the allegations against Pearce, but whether they were honestly and reasonably made to Kear by McCarthy, and if so, what did Kear' s response to them indicate in terms of conupt behaviour.

165. Further, it is no task of the ICAC to find public officials "guilty" of an offence. The ICAC is not empowered to make any such binding legal determinations at law, let alone criminal findings of guilt. It is of course, empowered to make findings and fonn opinions on the basis ofthe results of its investigations32

.

166. From what is set out above in respect of the discretion vested in the ICAC in respect of complaints and reports it received from members of the public, it was a matter for the

30 See paragraph 99 ante. 31 See Paragraph 159 ante. 32 S. 13 (3) Independent Commission Against Corruption Act 1988.

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ICAC to determine whether the allegations against Pearce (whether made as part of McCarthy's PID or separately made by Pallier) warranted it taking any action against him, even if earlier it may have contemplated so doing. As events have turned out the ICAC has taken no action by way of initiating an investigation against him. In the absence of any direction from Parliament pursuant to s.13 (2) of the ICAC Act, the Commission cannot be compelled to conduct an inquiry. (see s.20 (3) of the ICAC Act). Certainly there is no power within s.57B that enables or authorises the Inspector to require the ICAC to conduct an investigation. Further, it is no function of the Inspector to determine when the ICAC should initiate an investigation and/or the level of investigation by making recommendations to Parliament to achieve such a result.

167. That the good fortune of Pearce can be juxtaposed against the unfortunate fate of Pallier as a consequence of the Operation Dewar public inquiry, provides no basis for the exercise of any remedial remedy to the Inspector. Nor does s.57B provide the basis for any adverse finding against the ICAC.

168. It cannot be shown there is a failure by the ICAC to exercise its discretion in accordance with the grant of discretions provided by the Statute or a failure to apply established legal principles. In those circumstances there is no maladministration or failure in respect of this complaint identified by s57B of the ICAC Act that provides jurisdiction to the Inspector. This complaint therefore does not fall within the scope of s.57B (1 )(a)-( d). This complaint must be regarded as offering no scope of response to the Inspector.

Complaint of Failure by ICAC to Act upon Kear's alleged Failure to Comply with s.ll

169. Pallier further complains: "Kear has abrogated his duties under s.ll of the ICAC Act in circumstances where Pallier has alleged to Mr Kear that Pearce has committed corrupt conduct and he (Kear) just blew me away [date of complaint 12 January 20 16]."

170. It should be understood the abrogation of duties alleged is said to be constituted by the failure of Kear to comply with s.11 of the ICAC Act. Among other things that section of the Act imposes upon the principal officer of a public authority a duty to report to the ICAC any matter he/she suspects on reasonable grounds concerns or may concern corrupt conduct.

171. What needs to be appreciated is that s.ll does not impose any duty upon the ICAC. The duty imposed in a relevant situation is upon the principal officer of a public authority. Nor does a failure to comply with the duty qualify as a criminal offence. Whether or not it constitutes a disciplinary matter may be moot. But even if it did, again that comes back to the discretion given to the ICAC to detennine whether or not it will conduct an investigation. Nor, if it be the case, does a failure by Kear to comply with s.ll of the ICAC Act provide the Inspector with any jurisdiction to cause either the ICAC or Kear to undertake any act to remedy that failure.

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172. It cannot be shown on the material before the Inspector that the decision (if there was such a decision) not to, or the failure to make a decision, constitutes a maladministration by the ICAC. This complaint has no merit and must be rejected.

Complaint of Failure to comply with Public Service Recruitment Protocols

173. In support of another complaint, the Inspector was supplied with a copy of a PID, raised by the ICAC, earlier contained in a letter sent to it by Pallier in September 2013. The allegation contained in the PID was one of maladministration by the SES hierarchy with regards to recruitment of staff process as set out in a relevant Public Service document [date of complaint 12/1116].

174. Firstly, it would seem to the extent that the alleged maladministration impacted upon Pallier, this matter was settled as an employment dispute with an acceptance by Pallier of an offer of nine months' payment. The nine months payment referred to is open to be viewed as some level of accountability by the SES. Assuming, only for the sake of argument, that the matter was one worthy of an investigation, the fact the matter was settled by nine months' payment to Pallier could have supplied reason enough for the ICAC to decline any further action on the matter.

175. Again, the complained failure to investigate this PID, would appear to be another complaint against ICAC for failing to pursue any investigation, or referral to another public agency as a consequence of a PID. As set out earlier, the ICAC's discretion to choose the matters it will investigate or otherwise deal with requires the discretion to be exercised in compliance with the ICAC Act and other legal principles.

176. Reference has already been made to the wide scope of the discretion as defined in the ICAC Act. In respect to this complaint, it cannot be shown that there is any failure by the ICAC to exercise its discretion in accordance with the grant of discretion provided by the statutes, or any failure to apply established legal principles. In those circumstances there is no maladministration or any other failure identified by s.57B of the ICAC Act that provides jurisdiction to the Inspector. Given that the complaint does not fall within the scope ofs.57B (l)(a)-(d) the complaint must be rejected.

Complaint of Failure by ICAC to prosecute breach ofs.116

177. Pallier complains: "That the ICA C failed to avail itself of the provisions of s.116 of the ICAC Act and prosecute Kear for alleged breaches of the Act. It is understood the alleged breach is particularised as giving perjured evidence before the Commission when questioned at the Operation Dewar public [inquiry]."

178. For the purposes of dealing with this complaint only it is assumed false or misleading evidence may have been knowingly given by one or more witnesses to the Operation Dewar public inquiry.

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179. The complaint misunderstands the functions of ICAC as bestowed by S.s 8, 9, 10. 12A and 13 of the ICAC Act. The ICAC is, for the purposes of resolving this complaint, an investigative body, its powers and functions as provided by the ICAC Act promote and enable its investigative role. It is not able to prosecute any alleged offender for any alleged offence. While s.87 of the ICAC Act creates an offence of knowingly giving false or misleading evidence, that does not mean that the ICAC prosecutes that offence.

180. Thirdly, s.116 ICAC Act does not create an offence enabling prosecution. Rather it requires that offences created elsewhere in the ICAC Act, such as the s.87 offence, are to be regarded as offences that are to be dealt with summarily in Local Court and not on an indictment before a jury in the District Court, unless expressly stated in the Act.

181. The Commission does have the power to refer a matter to a public authority33 (for example the DPP or the NSW Police) if it so chooses. However, there is no statutory requirement for it so to do - that is, in this case, to refer instances of suspected or established perjury to either body. Whether it does so is a matter for the Commission, bearing in mind staff workloads and the seriousness and consequences (if any) of the alleged offending conduct. No doubt in this case, assuming for the sake of argument, the Commission suspected/believed false or misleading evidence to have been knowingly given, it would likely need to consider proportionality since it was about to make two corrupt conduct findings against Kear.

182. This complaint is misconceived. It fails to demonstrate any maladministration or other failure nominated by s.57B of the ICAC Act. It also will be rejected.

Complaint of ICA C's Failure to Act on Alleged Illegal Taping of Conversation

183. Pallier complains that the ICAC knew that a meeting between Steven Pearce and him had been recorded by Pearce without permission thereby maldng it an illegal recording -yet despite that knowledge the ICA C did nothing about it. (dates of complaint 16 July 2015; 12 January 2016 (record of interview with the then Inspector) and 22 June 2016 (record of interview with the then Assistant Inspector)).

184. There appear to be three premises or assumptions upon which this complaint is founded. Yet it is far from clear whether any of the three premises or assumptions is well founded. These assumptions appear to be:

(a) that an offence was committed by Pearce in recording their conversation; and (b) that if this offence was committed it amounted to corrupt conduct within the meaning of Part 3 of the ICAC Act; and (c) if the ICAC had knowledge of this offence as a consequence of their investigation into matters related to the SES Operation Dewar Inquiry, that

33 Sees. 53 Independent Commission Against Corruption Act (see also sections 14; 16(3) and 18(b).

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was a sufficient basis requiring the ICAC to conduct an investigation into Pearce, or pass information on to another agency.

185. Pallier's account is he first learnt of the recording when the ICAC told him that a meeting was audio-recorded between he and Pearce without his (Pallier's) permission. Pallier claimed he wrote and told ICAC (presumably his version of events including an absence of permission and that he believed the recording was illegal).

186. Pallier told the then Inspector "[Steven Pearce} taped me on August 7 [2012} ... He

actually even says in the front of his dairy notes he got my permission to get taped. I

never knew he was taping me. He was trying to get me to confess or something ... "34.

But the ICAC found that [out] saying - "Were you aware that the meeting was

recorded? You brought it to me and I said 'No. That's an illegal act' so you know

that; and didn't do anything about Steven Pearce and allowed him to go back to work

187. His account to the then Assistant Inspector- albeit 5 months later: "When I got to the

compulsory hearing (sic - read "examination'), right- we're still dealing with, like,

actions -legal actions and all- ICAC came to me, they didn't mention anything about

legal [sic; read illegal] notes, but they said "did you have a meeting on this date?" ... because they are falsified and fabricated for a court to determine at some stage. The

ICAC Counsel Assisting then asked me "Did you know that meeting was recorded?"

And I was "What?". Pallier then continued speaking to ICAC counsel "It's illegal, you

can't and ... ". In the interview with the Assistant Inspector, he was interrupted, but later continued "so, section 7 [of the Surveillance Devices Act] says it's illegal to

secretly put an i-phone on and record something to get them unless it's a criminal

investigation".

188. It needs to be understood this complaint is dealt with, without checking versions from either the ICAC or Pearce. This complaint is evaluated upon an assumption, for the purposes of argument only, it is both honest and truthful, and therefore accurate. It should also be assumed, for the purposes of argument only, that the recording, if it occurred was illegal. To a defence lawyer, that proposition contained in the first premise would not necessarily be conceded in any trial upon the information currently before this Office.

189. The complaint, as it stands, misunderstands the function ofthe ICAC. The ICAC as set out above is an investigative body - it neither prosecutes - nor administers penalties. Nor is it under any mandatory obligation to report any allegedly potentially criminal wrong doing to any other agency. Of course, it may refer wrong doing that it is investigating to another agency whether that wrong doing is criminal or not. ICAC's investigations are confined to investigating "corrupt conduct". Thus there is no reason

34 See p27 record of interview 12/0 1116 Interview with Inspector.

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to look to the ICAC to prosecute for any alleged illegal use of a surveillance device; nor to look to the ICAC to administer a penalty- including dismissal from employment. Nor strictly speaking does ICAC declare conduct criminally illegal - although such a conclusion may be open on other findings or reasons following a finding made by the ICAC.

190. Reference has already been made in respect of the functions of the ICAC and they tend to centre around investigating and disseminating information in various ways and to other forums concerning corrupt conduct.

191. As recent cases (see JCAC v Cunneen35) and s.8 make clear, not all illegal conduct,

even if committed in the workplace will amount to conduct that the ICAC can label as "corrupt conduct". So far as this complaint is concerned, it may not be without significance that illegal recording of conversations is not mentioned in s.8 (2)(a)-(z) ICAC Act as examples of conduct that could constitute corrupt conduct.

192. In respect of the second premise and at risk of repetition, in the circumstances of this case the discretion operating in respect of investigation of corrupt conduct would seem to be confined to determining two propositions:

(a) whether an illegal recording taken in the circumstances in which it was said to be taken amounts to serious and/or systemic corrupt conduct, a proposition not established in the complaint; AND,

(b) also be conduct that adversely affects the honest or impartial functioning of the complainant in his role as a public official.

Again the evidence does not establish that such a situation occurred.

193. Indeed on the account he gives, it would seem that Mr Pallier continued on with his work unaware that the tape had been made, until informed of it by the ICAC. There does not seem to be any interference in his honest and impartial approach to work performance arising from the taping or his ignorance of it occurring. Nor does the material before the Inspector disclose the alleged taping as systemic corrupt conduct -and query whether the specific incident would qualify as serious corrupt conduct.

194. The proposition raised in the third premise has already been dealt with at length when discussing the nature of the discretion available to the ICAC to detennine what matters it will, and what matters it will not investigate.

195. Again, neither the Inspector, nor it would seem the ICAC, had jurisdiction to deal with this complaint. This complaint must be rejected.

35 See F.N. 25 ante.

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Complaints of denial of natural justice, failure to call Pallier as a witness, failure to interview him in respect of post Operation Dewar complaints, and Lost Opportunity to have truthful evidence given in respect of testimony given by Kear and Pearce

196. The administration of natural justice is encapsulated in the concept of procedural fairness. Recently, the Supreme Court of NSW reviewed legal principles applying to the ICAC in respect of procedural fairness in a way that is relevant to the resolution of Pallier's complaints. 36 It is argued in this Report, those relevant legal principles, properly understood, restrict the ICAC's procedural fairness obligations (including its administration of natural justice) to situations where the ICAC is exercising a power given to it by the ICAC Act (such as s.l3 (3)) going beyond its investigative function, to make an adverse finding, and/or form an adverse opinion or determination on the basis of the results of its investigations adverse to a participating person's interests. Clearly, that set of circumstances did not apply to Pallier.

197. The principal functions of the Commission include investigating allegations or complaints which in the Commission's opinion imply that corrupt conduct may have occurred, be occurring, or about to occur. (s.l3 (1) ICAC Act). That was the function it was performing during Operation Dewar. Clearly when conducting an investigation, authorised by Parliament, provided the powers used to advance the investigation are used within the grant of powers bestowed by the legislation, the method or methods of investigation adopted is the choice of the ICAC. The obligations imposed by natural justice have no part to play in the investigative method chosen or other steps taken to further the investigation (e.g. s.30 Compulsory Examinations and .31 Public Inquiries).

198. One of the means used by the Commission to further its investigation is the conduct of public inquiries. S.34 ofthe ICAC Act gives to the Commission and legal practitioners authorised by the Commission a power to examine or cross-examine any witness on any matter that the Commission considers relevant. One significance of this section is what it does not do. It does not grant to any person a right to be heard as, or call a witness in his/her own cause as a means of furthering the investigation required by s.31 of the ICAC Act. Nor is there any other section that makes such a right available. The determination ofwho is to be a witness is vested in the Commission and that witness's evidence is confined to matters that the Commission considers as relevant to its investigation. It is important to note the difference between an investigation and a judicial trial of the issue.

199. For reasons earlier set out in review of the Operation Dewar public inquiry, the beliefs of McCarthy in respect of Pallier's work practices were relevant matters. The issue of whether those beliefs were built upon a truthful or accurate factual foundation was not a relevant matter in the view of the Commission. The determination of relevance to the

36 Edward Moses Obeid v David Andrew Ipp [2016] NSWSC 1376 [83]- [99] per Hammerschlag J. It is to be remembered the Ron. Mr lpp Q.C. was the ICAC Commissioner who presided over Operation Jasper- out of which this litigation arose.

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investigation is an exclusive matter for the Commission. Nor was the fact that Pallier had a different explanation based upon the same facts that did not fit with McCarthy's belief regarded as a relevant matter by the Commission. Again determination of what is relevant is a Commission decision and no one else's. The investigation was focused on Kear's reactions to McCarthy's beliefs - not Kear's reactions to Pallier's explanations. The Commission was entitled to limit its focus to those issues.

200. Pallier believes he was denied natural justice in that facts (not actually disputed) as interpreted by Ms McCarthy and others placed him in a bad light, and damaged his reputation. Pallier's argument is that had he been called as a witness he could have given evidence that would have placed his explanations before the Commission. In so doing he would have been able to keep his reputation intact.

201. As has just been explained, the premise upon which Pallier's argument is based is flawed. In the circumstances of this case there was no obligation on the Commission to afford natural justice or procedural faimess to Pallier. This was an investigative exercise into a matter where his view or explanation of the undisputed facts had no relevance. From the Commission's perspective it did not advance the investigation into the allegations the ICAC was focused upon. He was not a party of interest to the inquiry or a witness with relevant evidence to offer to the inquiry. He had no entitlement to be represented at the inquiry. Nor was the Commission tasked with making findings that may have been detrimental in respect of Pallier after the public inquiry had closed, and the Commission was preparing its Report.

202. The application of the rules of natural justice, where they do apply, will depend among other things upon the circumstances of the case and the nature of the inquiry being conducted, the rules under which the Tribunal or decision-maker is acting and the nature of the subject matter. The occasions when the rules of natural justice apply are not a closed set. The occasions when natural justice applies to a person having no right of appearance at an investigative inquiry would be rare, and rarer still in circumstances where the inquiry had been finalised and the determinations of the investigation finalised or in the process of finalisation. There may be occasions when an investigative inquiry might need to be re-opened, but, for reasons given above and below this was not one of them. The rules of natural justice may vary from case to case even though each case is conducted before the same tribunal or decision-maker.

203. The purpose of the Operation Dewar public inquiry before the Commission was simply to have a limited range of relevant facts placed before it for the purpose of determining, upon the entirety of the material obtained throughout the whole investigation, whether any finding of corrupt conduct against Kear could be made. Pallier had no role in the Commission's conduct of the investigative case against Kear be that investigation via public inquiry, compulsory examination, or any other method. Pallier had no right, interest or legitimate expectation that could be affected - although he has complained -one might think reasonably- of damage to his reputation; but that damage did not come

49

about as a result of specific findings of the Commission in respect of Kear. However, Pallier did feature in the Commission's report- and more of that later. Suffice to say the reputational damage suffered by Pallier was not caused by any failure to observe the rules of natural justice or procedural fairness in the conduct of the inquiry or detrimental or other findings coming from untested allegations concerning him.

204. In respect of a slightly different situation one Chief Justice37 observed:

If the Commission were to accord to all the persons whose reputation might possibly be affected by the hearing, a right to cross-examine the witnesses and call evidence as though they were in a court of law, the hearing might become so protracted as to render it practically futile. In these circumstances, with all respect, I find it quite impossible to say that the rules of natural justice required the Commission to proceed as though it were conducting a trial.

This is a proposition that could apply with equal force to the Operation Dewar public mqmry.

A Failure to Call a Witness of Truth

205. Pallier claims to have been in a position to know the truth about aspects of evidence given by Pearce and Kear in circumstances where each was alleged by him to have given false evidence. Pallier's claim may well have been tested in cross-examination for example - in respect of a bias arising from entertaining feelings of resentment and ill-treatment at the hands ofPearce and Kear.

206. Section 34 of the ICAC Act makes clear the Commission is the sole arbiter of matters of relevance. Allied with that is the proposition that the Commission is also the sole arbiter of who will and will not be a witness. Further, the Commission has a discretion when considering evidence from any witness including Kear and Pearce, as to what evidence from that witness the Commission will accept or reject. The Commission may view and accept as advancing its investigation all of a witness's evidence, only part of a witness's evidence or none of that witness's evidence.

207. At any investigative inquiry, that another person on a topic may be available, or desire, to be called as a witness to give contradictory account to evidence given by a previous witness, does not bring about a state of affairs whereby that person must be called.

208. Section 32 of ICAC Act provides:- if it is shown to the satisfaction of the Commission that any person is substantially and directly interested in any subject-matter of a public inquiry, the Commission may authorise the person to appear at the public inquiry or a specified part of the public inquiry. This inquiry's purpose was whether Kear acted detrimentally towards McCarthy basically for doing her job. Neither Pearce

37 Gibbs CJ in National Companies and Securities Commission v Consolidated News Corporation Pty Ltd; [1984] HCA 29 at [18]

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(notwithstanding his role as a witness) nor Pallier had any interest in that outcome. "Interest" as used in the word "interested" in this section of the Act does not mean curiosity or desire. Its use here means right, claim, or privilege that an individual has towards property, compensation, or outcome. Pallier cannot point to any right, claim or privilege in respect of the outcome of the Commission's stated purpose.

209. Pallier's complaint is that he was substantially and directly interested in a subject­matter of the Operation Dewar inquiry. It is to be remembered there were four distinct matters identified in the Opening Address of Counsel Assisting that were at the heart of the public inquiry. Given that situation, the Commission was entitled to come to a view, which apparently it did, that there was no subject-matter of the inquiry upon which it needed Mr Pallier's evidence or that he had an interest in.

210. Turning to Pallier's complaints of not being interviewed by officers of the ICAC in respect of Operation Dewar matters (other than and subsequent to his Compulsory Examination 1 November 2013) and other complaints made by him:- The first thing to recognise is that where his complaints were written to the ICAC, it can be assumed that Pallier made his position perfectly clear, and the ICAC had a full understanding of his position. That proposition seems confirmed by reliance of Pallier as a Complainant/Notifier in the initial stages of the investigation. The proposition is also confinned in the three ICAC letters identified earlier38

. It need also be remembered that Pallier was not shy about contacting the ICAC staff by phone. Again, it can be assumed he made his position clear when communicating by phone and the ICAC fully understood his position. The question of whether, in those circumstances, the ICAC required further information was one for the ICAC. From the fact that Pallier was interviewed by officers of the ICAC on two occasions, it can be assumed the ICAC did not regard itself as deprived of Pallier's contribution to the issue at hand, or compromised as to their understanding of his position, or perhaps more importantly from ICAC's perspective, the state of its investigation into the four allegations it distilled against Kear.

211. None of the bases relied upon by Pallier for being called as a witness in the Operation Dewar public inquiry has been made out. His claims of maladministration, misconduct and denial of procedural fairness by the ICAC in respect of the Operation Dewar inquiry and other matters will be not made out and will be rejected.

212. In relation to each of the heads of compliant thus far considered the jurisdiction of the Inspector has not been activated to point to any maladministration or other misconduct on the part of the ICAC vis-a-vis Mr Pallier in the context of Operation Dewar as a whole. On all of these matters the Acting Inspector proposes to take no further action and will close the file, in so far as these matters are concerned.

38 See para. 150 - 160 ante.

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CHAPTER III COLLATERAL DAMAGE?

213. In addition to the complaints already considered Pallier, however, also complained that his rights were not protected in Operation Dewar or subsequently in any Public Service Commissioner (PSC) Inquiry into the SES which Pallier believes may have been conducted at the request, or upon a recommendation of the ICAC. He requested that the Inspector assess why his rights were not protected and sourced the lack of protection as a cause of the collateral damage he had suffered39

.

214. This report is not concerned with anything that occurred at a PSC Inquiry into the SES, even if that inquiry was in response to an ICAC request or recommendation40

. The Inspector's jurisdiction does not extend to any public agency other than the ICAC. That aspect of this complaint will not be further examined.

215. Thus far, this report has reviewed numerous specific complaints initiated by Pallier and found they and like complaints against the ICAC must be rejected. To the extent that Pallier may regard some or all of those complaints as symptoms or examples of "collateral damage", that would not be a view supported in this report.

216. However, in respect of whether Pallier' s rights were or were not protected, the issue of collateral damage offers a valid area of inquiry when the relevant rights are identified. It is to be noted that the protection of a right, as a concept, differs from an unlawful violation of that right. The first requires proactive action even if only limited to respecting or securing the right; the second requires action that accomplishes abuse or denigration of the right. A failure at very least, to respect or secure a right constitutes a failure to protect that right. The failure may be one lawfully undertaken, because it is in some way or other done in accordance with lawful use of authority. The failure, on the other hand, may come about as a consequence of some deliberate act which may or may not be deliberately unlawful.

217. The real complaint here is that Pallier's right to or interest in his privacy, honour and reputation have not been protected. The concept of "honour" invoked here is a right to be, or an interest in being treated with dignity and respect by virtue of being a human being. It is conceded Pallier's complaint was limited to a general complaint that "his rights were not protected in Operation Dewar .. "

218. The then Assistant Inspector sought to have Pallier identify the particular rights he felt were subject to an ICAC failure to protect. As noted earlier he is not a lawyer. Nor does this report concede that identifying the appropriate unprotected rights provides an

39 See paragraph 18 ante. 40 As appears may have been done circa 15 October 2013.

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easy task, especially in a country and State having no protection of rights through a Bill of Rights attached to its constitution. That he has not identified with precision the non­protected right that constitutes his sense of 'collateral damage', nor complained directly to the ICAC in respect of that right, should not disqualify him from proper consideration of whether any right, interest, privilege or entitlement has been intruded upon. Rights exist independently of a capacity to identify them, or an absence of complaining when they are trampled upon.

219. The word "unprotected" used above is not meant to connote any malicious or criminally unlawfully lack of protection, but simply that protection was not offered, or even considered, in circumstances where it could, or perhaps even, should have been. The questions raised by Pallier's complaint are: "Did the ICAC owe Pallier a duty, at very least, to consider whether any of Pallier's rights/interests should be protected or shielded in some way during the conduct of a public hearing?" Given the content of s.31 (2)( c) and (d), and 57B (1 )(c) ICAC Act, it is argued a statutory duty does exist for the ICAC to have considered Pallier' s rights and interests at least in respect of privacy, and to have undertaken that consideration at the time of determining whether to conduct a public inquiry. It is also argued other legislative provisions also impact upon the ICAC's obligations to respect the privacy.

220. The issue for the ICAC can be framed in this way: Was it really essential, in the public interest, to have freely available for public consumption, those allegations being made against Pallier 's reputation, honour and work practices, both orally and in Exhibits, linked to his identity and his senior position at the SES? Given he was neither a witness nor a target of the investigation pursued though the Operation Dewar public inquiry was he entitled to have any right to privacy protected?

221. The argument advanced in this report is he was entitled to have the existence of his right to privacy considered, and if possible, protected. The further argument is that neither of these things happened. A further question then arises whether the jurisdiction of S.57B of the ICAC Act is enlivened? There can be little doubt there has been an invasion of his privacy. The more difficult question to answer is whether that invasion was "unreasonable". If so does it amount to maladministration? If not, and in any event, the further question is whether the appropriateness of the procedures of the Commission, whereby it failed to protect Mr Pallier's privacy, constitute an impropriety of its activities. "Propriety" is not defined by the ICAC Act. Therefore it takes its ordinary meaning when considering its impact on s. 57B (l)(d). Two of its four meanings appear to have resonance: conformity to established standards of behaviour or manners; and conventional standards or requirements of proper behaviour.

Privacy, Honour, Reputation

222. It is acknowledged there is no specific statute imperative found in the ICAC Act specifically requiring the ICAC to protect privacy rights, although s.31 (2)( c) and (d)

53

would seem to imply that protection of reputation and privacy, where possible, was expected41

. Those subsections provide:

(2) Without limiting the factors it may take into account in determining whether or not it is in the public interest to conduct a public inquiry, the Commission is to consider the following:

(a) .... (c) any risk of undue prejudice to a person's reputation(. . .), (d) whether the public interest in exposing the matter is outweighed by the public interest in preserving the privacy of the persons concerned. (bold font supplied for emphasis)

223. Likewise, s.57B (1) (c) of the ICAC Act seemingly implies that protection of privacy where possible is expected. It provides:

57 B Principal functions of Inspector (I) The principal functions of the Inspector are:

(a) ...

(c) To deal with (by reports and recommendations) conduct amounting to maladministration

(including, without limitation, ... unreasonable invasions of privacy) by the Commission or officers

of the Commission, ... (bold font supplied for emphasis)

224. Other statutes such as the Privacy and Personal Information Act 1998 (elsewhere Privacy Act) would seem to be predicated upon the same proposition that where protection is possible it would be expected from a public agency. It is beyond contestation that an overwhelming majority of the general population would expect a public authority to take all reasonable and appropriate steps to protect any person's privacy, honour and reputation unless that person had, as a matter of public interest, lost or had abridged his or her right to privacy, honour or reputation.

225. Courts and parliamentary committees are sensitive to the damage unsavoury evidence and corrupt findings may have upon affected persons. S.31 (2)(c) requires consideration of any risk of undue prejudice to "a person's reputation". Clearly, such a person must be a person impacted by a determination to conduct a public inquiry. To understand the breadth of the noun "person" in s.31 (2)( c) and "persons" in s.31 (2)( d) it is important to recognise such a person is distinguished from an "affected" person. As set out below "affected" person is a phrase associated with of persons of interest in respect of whom a corrupt finding has been made or is the subject of a public inquiry 42

.

226. But, depending upon the role he/she is playing in a public inquiry, and the importance of that role in the inquiry, in reality any person, whether or not an "affected" person may be accurately described as a person affected by the inquiry. While Pallier was not

41 WhileS. 50 Independent Commission Against Corruption Act offers for those who assist the Commission protection in respect of safety and protection against intimidation or harassment arising out of the assistance given, there is no basis upon which Mr Pallier can claim access to the provisions of this section. 42 S,74A (3) Independent Commission Against Corruption Act 1988.

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a witness, a person of interest, or target of the stated purpose of the inquiry, he was a person who fell within the scope and purpose of s. 31 (2) (c) and (d) and s.57B (1) (c).

227. Pallier's role in the Public Inquiry, from the perspective of the ICAC, and certainly from his, cannot be described as non-existent. The public inquiry's purpose was focused upon four allegations honed from investigations conducted over seven months. Source material provided by Pallier at very least gave context to one or more of the allegations. Indeed, he was regarded for some period by the ICAC as one of the

Complainants/Notifiers. Material provided by him was referred to the PSC. His status as a person entitled, if possible, to protection (which obviously includes reputational

protection) was well known to the Commission.

"Privacy" a difficult concept

228. For the purposes of this report there is a distinction, which is an important distinction, to be made. The distinction sought to be made, highlights the difference between the absence of any right of a would-be witness to be heard in his own defence, or to explain, or place into some favourable context, matters adverse to him presented in his absence at a hearing or inquiry conducted by a public authority on the one hand; and on the other hand, the presence of an obligation by the public authority when gaining advantage by ventilating matters adverse to the would-be witness, to recognise a need

where possible for protection of the rights or interests of his privacy being free of any challenge to his honour or reputation. Indeed, it is argued the absence of an appearance right makes more compelling the need for protection of his rights and

interests.

229. A useful starting point in respect of standards that one might expect to be maintained in

NSW is found in Article 17 of the International Covenant on Civil and Political Rights (hereafter ICCPR), which it is acknowledged does not apply as statute law in New South Wales. However, it is important to recognise that the international community accords to privacy, human rights status through inter alia the ICCPR. The ICCPR was

signed by the Australian Government in December 1972 and ratified in August 1980. While its rights and obligations, including the rights to privacy, honour and reputation, have not been incorporated in Australian law, both the ACT 43 and Victorian 44

governments have incorporated a right to privacy into their legislative framework and

jurisprudence.

230. The Australian Law Reform Commission45 makes an interesting observation touching upon the status-value of privacy which may also shed some light on the meaning of the

concept:

43 The Human Rights Act 2004 s.l2. 44 Charter of Human Rights and Responsibilities Act 2006; (Vic) s.l3. 45 Australian Privacy Law and Practice (ALCR Report 1 08)

55

... American privacy law is a body caught in the gravitational orbit of liberty values, while European law is caught in the orbit of dignity. There are certainly times when the two bodies of law approach each other more or less nearly ... Whitman46 argues that the core of the European approach to privacy law is 'the right to control your public image - rights to guarantee that people see you the way you want to be seen. ' By contrast, the conceptual core of the American right to privacy is ... the 'right to freedom from intrusion by the state, especially in one's own home. 47

231. Article 17 of The ICCPR may be thought to take a little from both camps. It provides that:

(1) No one shall be subject to arbitrary or unlawful interference with his privacy, family, home, correspondence, nor to unlawful attacks on his honour and reputation;

(2) Everyone has the right to the protection of the law against such interference or attacks.

232. "Privacy" is an elusive concept to define. One definition offered by the internet says:

"privacy" is freedom from damaging publicity, public scrutiny, secret surveillance, or unauthorised disclosure of one's personal data or information, as by a government, corporation or individual.

Great Britain (as is also the case in NSW and Australian federal law) has no Bill of Rights other than the Magna Carta and Bill of Rights 1688, (to the extent their provisions have not been superseded by subsequent legislation) neither of which offers privacy protection. Lord Mustill in describing privacy does not refer to it as a right, but thus:

To my mind the privacy of a human being denotes at the same time the personal 'space' in which the individual is free to be itself, and also the carapace, or shell, or umbrella, or whatever other metaphor is preferred, which protects that space from intrusion. An infringement of privacy is an affront to the personality, which is damaged both by the violation and by the demonstration that the personal space is not inviolate48

.

The ACLR noted in respect of Lord Mustill's description:

.. .[P]rivacy may be viewed as the bundle of interests that individuals have in their personal sphere free from interference from others. In this formulation, the use of the term 'interest' rather than 'right' is intentional and important. While privacy is a 'right' in the legal sense, for definitional purposes, the word 'interest' may be more accurate. A right is always an interest, even if not all interests are accorded the status of legal rights. 49

233. The Privacy Act does not define "privacy". But it does define "personal information" as meaning "information or an opinion about an individual whose

identity is apparent or can reasonably be ascertained from the information or

46 James Q Whitman, Ford Foundation Professor of Comparative and Foreign Law; Yale Law School 47 Citations from J. Whitman, "Two Western Cultures of Privacy: Dignity v Liberty (2004) 113 Yale Law Review 1151,1161, 1212. 48 R v Broadcasting Standards Commission ex parte BBC [2001} QB 885 [48] 49 ACLR Report 108 -Introduction to the inquiry.

56

opinion. "5° For the purposes of this report if "personal information" is considered the hand, "privacy" is the glove that both protects and secludes the hand from the intrusion of scrutiny by others, unless otherwise required by operation of the law.

234. The Australian Law Refonn Commission recognised four discreet concepts of privacl1

:

• Information privacy • Bodily privacy • Privacy of communication • Territorial privacy.

The concepts of privacy that Pallier is concerned with - if they be different, are information privacy - and (depending upon the extent to which the meaning of "communication" differs from "infonnation being transferred from one person to another") communication privacy. In the course of this report both concepts are simply referred to as "privacy".

235. In one of its earlier Reports the ALCR referred to three chief threats to privacy in Australia. The first nominated was "Growing Otficial Powers": The power of increasing numbers of public officials to intrude into the lives and property of Australians are growing."52 It is certain the ICAC fits into the description of a public agency staffed by public officials with capacity to intrude into the lives and property of others, including some who are not even persons of interest to the ICAC.

236. In the case of ICAC, however, the Parliament has given extraordinary powers and capacity to facilitate ICAC's intrusion into the lives and property of Australians - at least that group of New South Welshmen caught within the net of the ICAC Act. It behoves ICAC to be ever conscious that intrusion arising from its deliberate acts does not occur as an unintended consequence into the privacy of a person in respect of whom there was no occasion to exercise the extraordinary power that ICAC has been endowed with. If that is so, one of the issue arising out of consideration of Pallier' s complaint is whether the impact of the internet and social media should be a required inclusion into s.32 (2) of the ICAC Act. In Operation Dewar it is clear: "When considering whether or not it was in the public interest to hold a public inquiry, there was a failure by ICAC to consider the impact the internet may have upon significant others, including Pallier, when making available to the wider public information personal to him arising out of a public inquiry proceedings and findings? "

237. Regardless of what answer is given to the public interest issue stated above, this is a case where there has been interference with Pallier' s privacy and attacks upon his honour and reputation in circumstances where the Commission has not even turned its mind to the issue. The acts undertaken by the ICAC whereby that was achieved, were

50 Section 4 (1) Privacy and Personal Information Protection Act 1998 51 ACLR Report 108- Introduction to the Inquiry. 52 ACLR Report 22.

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willed and deliberate acts. It is acknowledged there is a distinction between a willed and deliberate act, and the motivation prompting the act. It is conceded, in the context of a public inquiry determined by the ICAC to be in the public interest, it could hardly be said that the interference or attacks referred to were unlawful in the sense of amounting to malicious or criminal conduct. Indeed, it is overwhelming likely the consequences of the acts - insofar as they relate to Pallier were unintended. They were certainly unfortunate; it is argued they were also foreseeable; avoidable and unnecessary.

238. Once it is determined the acts leading to the intrusion were willed and deliberately undertaken, other measures indicating the seriousness of the lack of protection of privacy include, whether the privacy intrusion was confined to a single instance or more than one instance, and whether the content and/or manner of the intrusion would be considered highly offensive to a reasonable person of ordinary sensibilities, and whether (and if so the degree to which) the intrusion(s) caused him detriment in the fonn of mental, physiological or emotional harm and other loss for example financial loss. Finally, of relevance to seriousness are the questions of malice towards Pallier (unintentional has already been conceded); or in its absence, a recklessness or cavalier approach; the ignoring of protocols designed to create awareness of the likelihood of Pallier adverse related material being ventilated at the public inquiry; and in the absence of specific intent the obviousness, or otherwise of foreseeability, having regard to the test posed in Article 17 of the ICCPR: Was the interference [an} arbitrary or unlawful interference?

239. Of relevance, by way of a defence, to any claim of unlawfulness posed in this test would be the question of whether it was in the public interest for the protection of his privacy to be ignored or put aside53

. As noted above, and argued below that question was never considered or resolved, and a proper consideration of the public interest issues would, among other things, surely have thrown up this question.

240. The determination of these questions centres, it is argued, on whether there was just cause for the dissemination of personal information complained of in such a way as to identify Pallier. If his identity, by virtue of his name or senior position within theSES, was an essential component of this dissemination; that is, was his identification (however achieved) a necessary or essential factor in the public interest, then it is conceded that ''just cause" would be established. For reasons set out in the following paragraphs, it is argued, based on the answers to the questions just posed, the identification of Pallier was not an essential factor in promoting the public interest; flowing from that, on the material before the Inspector there was no other just cause ICAC could rely upon for traducing his reputation, honour or privacy.

53 See Grose v Purvis (2003) Aust. Torts Reports 81-706. [442]- [444].

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241. "Maladministration" is one concept this report must be concerned with. The ICAC Act, without placing limits on the forms of "maladministration" includes within that concept "unreasonable invasions of privacy"; conduct that is "contrary to law" and "unreasonable" conduct. The conduct must also qualify as conduct "of a serious nature"54

. Unreasonable invasion of privacy, it is argued can constitute conduct of a serious nature. S. 57B (l)(c) surely secures that argument as established.

242. There was included in the Operation Dewar ICAC Public Inquiry Hearing Plan prepared on 6 November 2013, the Case Lawyer's provision of a series of public interest criteria supporting the issue of summons, which required a determination that the public interest would be served by holding a public inquiry in Operation Dewar. Accepting for the purposes of detennining questions of whether arbitrary or unlawful interference arises, it is accepted that a public inquiry in Operation Dewar may well have been in the public interest.

243. Clearly a prime purpose of the public inquiry as recommended by the August 14 SIG meeting must have been the dissemination of personal infonnation beyond the walls of the inquiry room out into the public arena. If other purposes were in the mind of the ICAC, they do not appear to be identified among the public interest criteria settled on by the Case Lawyer, nor the three (at that stage) focus-purposes (allegations against Kear) of the public inquiry identified by the ICAC in the Public Inquiry Hearing Plan. Thus, the principal purpose of this public dissemination was, it would seem, to satisfy both the stated public interest criteria (at least in the mind of the Case Lawyer), and the four focus-purposes raised by Counsel Assisting the ICAC in his opening55

. They can be identified in summary form as:

• Had Kear taken detrimental action against D.C. McCarthy, including summary dismissal, on account of her raising allegations to him touching upon D.C Pearce's supervision of Pallier (against whom other inappropriate workplace allegations had been made). (Note: this identified purpose was also reflected as one ofthe case lawyer's criterion item of public interest).

• Did Kear show improper favouritism to Pearce inter alia, by failing to properly investigate McCarthy's allegations against Pallier (identified purpose).

• Did Kear make false statements or attempt to mislead the ICAC or its officers re the first two bullet points above (identified purpose).

• Did Kear fail to recognise, disclose and manage the conflict of interest arising out of the closeness ofhis relationship with Pearce (identified purpose).

• Allegations against Kear being made by the ICAC, although raising issues concerning protection and management of whistle-blowers, at least in respect of privacy preservation, and reputational damage, were outweighed by the public interest served by exposing the ICAC's allegations. (By this time

54 SeeS. 57B (l)(c) and (4) (b) Independent Commission Against Corruption Act 1988. 55 See paragraph 28 ante.

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McCarthy; possibly Kear and Pearce had all made PIDs to ICAC) (case lawyer's public interest criteria).

• Public disclosure to the general public was an important deterrent to similar corrupt conduct by others (case lawyer's public interest criteria).

244. On analysis it is conceded in this report the allegations being made concerning Pallier, although not consuming much evidence time, were an integral part of the narrative of McCarthy's allegations being developed through the public inquiry. By contrast, what were not integral were Pallier's identification, nor his job title. Neither added any essential gravitas to any of the identified purposes or claimed public interest criteria identified above. 99% of the questions asked and answers given would have been identical without the need to mention Pallier's name or job title. It would have been simple enough to ascribe the letters, say S.E (senior employee), to any evidence referring to him or the position he held at the SES.

245. Such a course would have taken nothing away from any of the declared purposes or declared public interest, but could have achieved as much as possible to mitigate, and probably enough to preserve Pallier's privacy, honour and reputation. A second option would also have been simple- namely:- to have taken Pallier-related evidence at the inquiry in private . Finally, consideration could have been given to the making of a Pallier-related evidence non-publication order56

.

Mechanisms by which Privacy was Breached- Report, Transcripts, and Exhibits

246. At the time conduct of the public inquiry was determined it was well known: (a) That Pallier was not to be a witness at the public inquiry; (b) That complaints made by McCarthy involved hearsay critical and highly critical

adverse assessments of some aspects of Pallier' s work practices; (c) That both Kear and Pearce entertained a known and previously published

hostility towards Pallier that was likely to be revealed in their evidence and exhibited in the Exhibits; and

(d) therefore there was a real risk of unfair prejudice arising from their testimony and exhibits- including prejudice, but for any privilege that may apply to ICAC public inquiry publication, that would otherwise qualify as defamatory to his reputation;

It has already been postulated above that no consideration was given to preserving Pallier's privacy, reputation or honour. Failure to consider, at the time of the determination, or at all (save and except for the last day of the public inquiry hearing), his privacy needs in the circumstances stated, Pallier claims, contributed to his difficulties in securing a position equivalent to the ones lost, or indeed any position at all, for some very significant time after his second dismissal from the SES. He claims consequential financial loss that was substantial and that he measures in a six figure

56 As was done by the presiding Commissioner at the public inquiry in respect ofPallier's address.

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sum. He also points to emotional and psychological stress that he puts down to the consequences of widespread adverse publication emanating from the ICAC and its Report. His second dismissal from SES occurred within months of the conclusion of the Operation Dewar public hearing and on the very date of the publication of the ICAC Operation Dewar report.

Privacy Act Provisions Considered

24 7. The long title to the Privacy Act describes it as "An Act to provide for the protection of personal information and for the protection of the privacy of the individuals generally;

and to provide for the appointment of a Privacy Commissioner ... ".

248. Of importance in understanding the scope of the Privacy Act and the part it played as a consequence of ICAC's decision making, is the limiting definition of "personal information" contained in section 4:

4. Definition of "personal information". In this Act "personal information" means information or an opinion (. . .) about an individual whose identity is apparent or can reasonably be ascertained from the information or opinion.

(I) ... (2) Personal information does not include any of the following:

(a) ... (b) Information about an individual that is contained in a publicly available

bl. . 57 pu zcatwn.

249. On the one hand, the Privacy Act defines "personal information" to include "information or an opinion ... about an individual whose identity is apparent and can

be reasonably ascertained from the information or opinion." But, on the other hand s.4 (2)(b) excludes as "personal infonnation" the same information about an individual contained in a publicly available publication. Any public authority interested in protecting a person's privacy (say for example privacy of a whistle-blower) would need to avoid circumstances (say an opening address or recorded evidence) whereby infonnation about that person including his identity became publically available (say in a newspaper report).

250. The effect of that exclusion created by s.4 (2)(b) to the instant case, is that information or an opinion about an individual (Pallier) whose identity is apparent and can reasonably be ascertained from the information or opinion contained in an Illawara Mercury report, or an ICAC report published, (in hard copy and also published on the internet, in transcripts of inquiry evidence and/or in exhibits published on the internet) ceases to be "personal information" as defined by s.4 of the Privacy Act and as a consequence ceases to be subject to any protection offered under the Privacy Act.

57 It is noted that s.3 of the Privacy and Personal Information Act 1998 also excludes as 'personal information' information contained in a P.I.D. (ss. (3) (e)); and information or opinion about a person's suitability for appointment or employment as a public sector official (ss. (3) (j)). However, there is no suggestion the ICAC was relying upon either of those sub sections as justifying publication of material adversely impacting upon Pallier's privacy.

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251. Most of the ICAC reports, including the report of the ICAC into Operation Dewar are published by order of a Presiding Officer of either House of the Parliament 58

. The ICAC requested the publication of the Report at the time of its handover to the Presiding Officers. That request was made, knowing full well the contents, earlier referred to, of the section in Chapter 3 of the Report59 on Kevin Pallier. There was no attempt by those preparing the report to hide or disguise his identity. As published documents, created by and sourced from the ICAC, the information and opinions relating to an identifiable person (in this case Pallier) fall outside the definition of personal information, and are not caught by any of the other provisions of the Privacy Act. As such the contents of the various ICAC reports as published on the ICAC website contained - for the purposes of the Privacy Act - no s. 4(1) personal information to which the Privacy Act provides protection. It is argued this is an important example of failing to protect, by deliberate and willed actions, Pallier's pnvacy.

252. It is argued an analysis of the "Kevin Pallier" non-personal information matters60 (by virtue of the Privacy Act), contained in the ICAC Report61 as being raised by McCarthy were matters detrimentally touching the privacy, honour and reputation of Pallier qualify as matters the ICAC failed to protect. They include:

(a) Concern [by McCarthy] about "Kevin Pallier's overtime" as an "anomaly" apparently warranting suspension;

(b) Concern [by McCarthy] about "Kevin Pallier's motor vehicle usage" as an "anomaly" apparently warranting suspension;

(c) Commissioner Kear's suspension of "Pallier pending formal investigation";

(d) Questionable approval of Pallier' s overtime by Pearce; (e) Pearce's failure to supervise Pallier appropriately - apparently because

Pallier was behaving inappropriately; (f) Although Pallier gave explanations, which McCatihy knew about, for

working overtime, which on their face appear valid, and were never challenged in the evidence before the Commission, Pearce conceded he should not have allowed Pallier to work the overtime he did - suggesting Pallier was taking an unfair advantage of Pearce and of the SES; (the inference from the report being Pearce was right in making such concession).

(g) "Pallier was found to have engaged in workplace misconduct" -apparently which required his dismissal (two issues from that finding are referred to below);

58 See sections 74(4) and 78 (3) of the Independent Commission Against Corruption Act 1988. 59 See paragraphs 82 to 87 ante. 60 By virtue of s. 4 (3 )(b) The Privacy Act 61 See paragraph 87 ante.

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(h) Different treatment (in terms of dismissal in the workplace) between Pearce and Pallier had some force in the eyes of the ICAC decision maker -consistent with a view available to a reader of the Report that Pallier may have deserved the dismissal he received.

253. Apart from being detrimentally adverse to Pallier's privacy, honour and reputation, item (b) as it stands in the Report is factually incorrect. McCarthy never expressed herself as being concerned about Pallier's motor vehicle usage62

. Her concern related to a Fleet Report remaining non-actioned. The failure to action the Fleet Report raised reconciliation issues of private usage and SES usage of motor vehicles by various SES staff including Pallier. There was no complaint made by anyone in respect of Pallier' s use of the motor vehicle. Indeed, Pearce's evidence was " .. apart from everything else, [Kevin} was an honest guy. "63 He was entitled to use the Fleet vehicle allocated to him for private purposes. But a stranger, or worse a potential employer, reading the ICAC Operation Dewar report may well have reasonably inferred otherwise.

254. Item (g), it is argued, was unhappily expressed and therefore capable of ambiguous meanings. At first blush - bearing in mind the report is documenting the ICAC findings - the sentence "Mr Pallier was found to have engaged in workplace misconduct" could be understood by a stranger to these proceedings to have been a statement by the ICAC of its finding against Pallier. That is particularly so in the light of the previous sentence - clearly expressed as an ICAC finding "The Commission therefore accepts that Ms McCarthy was correct to be concerned".

255. In fact what the Commission meant, which is not really clear at a first reading, is that Pallier was found by Colbey to have engaged in some workplace misconduct. Unmentioned was the absence of any recommendation for dismissal by her (the first of the two issues related to paragraph 252 (g) above). On either reading, of course, the sentence taken from the Report constitutes an unwelcomed and probably inaccurate assessment of the true state of affairs - a matter that the SES avoided having determined by the Fair Work Commission. But what is clear from Brus's evidence64 is that she was seriously lacking confidence in securing a favourable outcome for the SES before the Fairwork Commission. The better inference from all the investigative evidence before the ICAC is that the first dismissal was an unfair dismissal (the second of the two issues related to paragraph 252 (g) above). That appeared to be the expressed view of the ICAC Commissioner presiding over the public inquiry.

256. The ICAC's position always was that it was not concerned with whether the beliefs formed by McCarthy were based upon a true and accurate factual analysis of Pallier's workplace practices and their propriety - a proposition never explained by way of

62 The concept may have come from Mr Fordham S.C. who referred in his Opening to McCarthy's "concern about Pallier's motor vehicle usage" but her evidence focused upon the failure to action a FLEET report. 63 See paragraph 68 ante. 64 See paragraph 64 ante.

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lessening the adverse impact upon him, in that section of the Report referring to "Kevin Pallier". That it did so for Karoshi Pty Ltd, Performance Drivers and a Mr Eggert65

, but not for Pallier (whose position raised similar considerations) leaves open a strong inference of a deliberate discrimination against Pallier on an assumed basis his situation was unworthy of such a disclaimer. The issue for the ICAC was whether McCarthy's concerns in relation to the consultancy contracts were honest and reasonable and therefore a matter requiring appropriate investigation by Kear - again a similar situation applied equally to Pallier.

257. The issue of reasonableness of her beliefs in respect of Pallier was, from the point of view of McCarthy, based upon hearsay - either from others, or perhaps from business records. The only exception appears to be concerns she formed in respect of her dealings with Pallier regarding an inland work trip on SES business that Pallier was seeking. In this case she formed a view that the inland trip was designed to serve a purpose beyond SES business and rejected his application for the trip. To what extent, if at all, that view was fonned on hearsay infonnation she had received in respect of other SES intra-state trips made by Pallier is not evidenced. That event, though, appears to have played little or no part in the industrial law matters arising from Pallier's suspension. Its importance to the inquiry was that it coloured (and therefor contextualised) Ms McCatihy's view ofPallier and the significance of other matters she had heard about him. Thus, there was focus upon beliefs founded on hearsay evidence regardless of whether the beliefs were factually correct or accurately placed in context, relevantly related to Pearce's oversight ofPallier, or indeed accurately expressed by the patiies. Inappropriately, however, that was all done with no focus on the impact on the primary subject of the allegations (Pallier) in circumstances where one or both of the factual or contextual factors was or could have been inaccurate or misunderstood and, as has been noted several times, in circumstances where (albeit for understandable reason) Pallier was given no opportunity to place his version before the public inquiry.

258. All in all, from a perspective of protection of Pallier's privacy, references made about Pallier in the ICAC Report have the effect of lifting the Commission's observations from 'personal information' to which the Privacy Act may apply to public document status. Further the tone and content of the remarks contained in the Report section of "Kevin Pallier" amount to a series of disparaging intrusions into his privacy, honour and reputation, for the purpose of proving allegations that were reasonably made against him by McCarthy. Finally, as set out in paragraphs 254 -257 ante, the representations of the allegations in the ICAC Report, may not have reflected accurately the beliefs of McCarthy- or the reality of the events.

65 Two companies holding consulting contracts with SES, Eggert being the principal of one of them, that did not comply with relevant procurement guidelines. In respect of these contracts the I CAC found the SES (per Pearce) had not followed the competitive procurement process mandated. It continued, "In making these finding the Commission makes no adverse finding in relation to Karas hi, Performance Drivers or Mr Eggert. They were not represented at the public inquiry and were not the focus of the inquily. Rather the commission looks to these circumstances to analyse whether or not Ms McCarthy had grounds to raise concerns and to evaluate Commissioner Kear's responses." See ICAC's Operation Dewar Report; May 2014 p. 12.

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259. Thus the inclusion of a section of the ICAC Report into the Operation Dewar, setting out a role Pallier was alleged to have played in matters raised by McCarthy, guaranteed those alleged matters would be exempt from the provisions of the Privacy Act by virtue of the publication of the Operation Dewar Report on the command of the Presiding Officer of either House ofParliament66

. These allegations were never tested; nor to the extent they may have been true, they were never permitted to be the subject of any available exculpatory explanations by virtue of ICAC's decision (acknowledged as understandable) not to call him. By virtue of the fact he was not to be called, it is argued his rights to privacy, honour and reputation should have been seriously considered.

Removing Exhibits and Transcripts from Privacy Protection

260. Whether or not there is a perception at ICAC that the Privacy Act does not apply at all to ICAC is unknown. Certainly, in some circumstances it is exempt. However, in exercising two important functions, the information protection principles of the Privacy Act do apply to the ICAC. The particular function this report is concerned with is the administrative function of the ICAC. Section 27 (2) of the Privacy Act provides:

27 (2) However the information protection principles do apply to the Independent Commission Against Corruption, the Inspector of the Independent Commission Against Corruption, the staff of the Inspector of the Independent Commission Against Corruption, ... in connection with the exercise of their administrative and educative functions. (underlining added)

261. When the word "administrative" is used in s.27 (2), in the absence of any defined meaning given to it in the Privacy Act, it would take its ordinary daily meaning -namely "the arrangements and tasks needed to control and/or facilitate the operation"

ofthe ICAC. S. 57B (l)(c) includes as one ofthe principal functions of the Inspector to the ICAC the function of dealing with conduct amounting to mal-administration (hyphen

deliberately inserted), including unreasonable invasions of privacy by the Commission or officers of the Commission.

262. Many of the administrative functions of the ICAC would be completed internally and in that sense not normally the subject of public notice or observation. Any review of the statutory functions given to the ICAC will reveal that there is no designated "administrative" function. However, aspects of most, if not all, designated functions of ICAC would require some administrative component. Some of the administrative functions would require interaction with the public - media, lawyers, witnesses, the publishing general notices for public consideration and the like.

66 see s.4 (3)(b) of the Privacy and Personal Information Protection Act 1998; and s.74 (4) Independent Commission Against Corruption Act 1988.

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263. It is argued the production and publication of transcripts is an administrative function whereby the record of proceeding is recorded, secured and made available to ICAC officers, members of the legal profession and others interested in the public inquiry proceedings. Publication of witness lists, inquiry dates, venues, media releases of findings and reports are all part of the administration ofthe ICAC functions. In respect of these administrative actions, many of which may be accomplished through use of the internet website, and media houses, it is argued s.27 (2) of the Privacy Act has work to do, that is, requiring ICAC's implementation of the protection provisions of the Privacy Act. But, of course, in much of that routine administration personal information is not a consideration.

264. Nonetheless, 'personal information' as defined by the Privacy Act, when it does arise, is entitled to the respect as intended to be provided by that Act, unless there is just cause (e.g. the public interest notwithstanding the provisions of the Privacy Act) to do otherwise.

265. Attention has already been drawn to the Exhibits tendered at the inquiry67• Exhibits 1

and 2 comprised 48 pages containing substantial written material that impugned Pallier's privacy, honour and/or reputation. About one hundred occasions have been noted, in which one or more than one of his personal characteristics were slighted -although some of those slights were repetition of a primary slight found elsewhere among the one hundred occasions spread across 48 pages. This report has already questioned why repetition of slights was considered necessary.

266. The overwhelming bulk of material labelled slights and impugning contained in the 48 pages referred to above, goes well beyond any adverse disclosures made by the Illawarra Mercury, and also by the ICAC Report into Operation Dewar68

. It is argued, all of the material contained in the 48 pages labelled slights and impugning of Pallier, amounts to information of a personal nature that would nonnally qualify as "personal information" for the purposes of the Privacy Act.

267. Phrases in the Exhibited documents make references in respect of Pallier such as: "found guilty"; "your acceptance of penalty/guilt"; " not acting professionally/obstruction/may be fraud";" not enjoyable for us/on top of other issues"; " performance management of Kevin"; "a very low performing team"; "turned up late".

268. Exhibit 11 tendered on the final day of the public inquiry contained 5 letters being correspondence between Kear and Pallier69 in the period 20 September 21 02 to 24 January 2013. Counsel Assisting claimed their relevancy included "not the final basis

67 See paragraphs 77 - 81 ante. 68 Although if a pseudonym for Pallier had been used, those disclosures would not have qualified as "personal information" because his identity would have been hidden. 69 ICAC Inquiry into Operation Dewar transcript p.275/l-40; 6/12/2013

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for dismissal, it is disciplinary action that took place, ... and discussion in the evidence

by Ms Brus that in the IRC proceedings the issue of overtime was still live and the

relevance of Mr Pearce's notes was relevant [to} ... whether or not she could call him.

Earlier Counsel Assisting had identified the letter of 24 January 2013 as the "dismissal

letter" The presiding Commissioner, shortly after the tender was made, pursuant to s.l12 ICAC Act directed that Pallier's home address not be published. Subsequently, Exhibit 11 was removed from the ICAC website.

269. There was no specific reference to any of these documents highlighted in the oral evidence, nor in the ICAC Report. The bulk would have been challenged (as factually incorrect or contextually inaccurate) by Pallier had he been called as a witness. All were hearsay; some were incorrect: eg. finding guilt, accepting penalty/guilt; others speculative and baseless: "may be fraud". All related to his privacy, to his reputation and many to his honour. Again, these are facts that should have been well known to the ICAC.

270. It is further argued the content of the infonnation, detailed in pmi above, of a personal nature relating to Pallier published via a Report, transcripts and Exhibits was powerful in its adverse imputations, likely to be recognised as such, by others, especially potential employers and others whose role it is to make character assessments.

No Need to Identify Pallier in the Public Inquiry

271. Pallier was never a person of interest in respect of Operation Dewar. Pallier was never intended to be a witness at the ICAC public inquiry. The Commission was aware always of the unsavoury allegations being made against him- which were central to the issue of Ms McCarthy's beliefs and conduct founded on those beliefs. His identity and position at SES were not integral to the honesty or reasonableness of her holding the relevant beliefs. Evidence of his personal identification and his particular status within the SES added no gravitas to the allegations relied upon by McCarthy or the investigation of Kear arising from them. Simply put the identification of Pallier by name or position was never an essential factor going to the integrity of findings that subsequently could be made by the Commission. Nor was the identification of Pallier crucial, or of any discernible value in advancing the three specified public interest criteria settled on only for the issue of summons. There was no need for the name "Kevin Pallier" to be placed before the Commission. The ICAC had no interest in bruising or bashing Pallier's privacy, honour or reputation. Nor was there any gain to the ICAC investigation by its so doing. Arguably its own reputation for even handed fairness would be tarnished. Nor was there any compelling need for any other identifying feature to be placed before the Commission.

272. Everyone present and participating in the public inquiry at the Commission knew his identity and his status in the SES. For the purposes of conducting the inquiry, producing a transcription of the record of the proceedings and tendering the exhibits'

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contents, it was enough for Pallier to be identified by a pseudonym and his position likewise to be identified as an employee at the SES perhaps with a letter of the alphabet such as "X" or as earlier mentioned SE, or "XYZ". In respect of the exhibits - his name and other identifYing features could have been and should have been redacted. An alternative approach could have been to hear the evidence touching upon McCarthy's and others dealings with Pallier in private and an order that such evidence not be made public. When reviewing Pallier's impact to proceedings in the Operation Dewar Report, a more sensitive approach could have been taken to delineating what had been stressed in subsequent correspondence between Pallier and the ICAC, namely, that when evaluating McCarthy's reporting of allegations, the ICAC was not concerned with their truthfulness or whether accurate consideration of the contextual setting had occurred, but was solely interested in Kear's response to them.

Invasion of Privacy- Reasonable or Unreasonable?

273. Making public, sworn evidence and exhibited evidence adverse to a non-witness, is part ofthe extensive powers given to the ICAC by the NSW Parliament. The effect of such a power is to deny to persons who suffer adverse public humiliation at the hands of ICAC, protections offered by the Privacy Act because of the exclusion of information about an individual that is in a publicly available publication being excluded from the definition of "personal information" in the Privacy Act. This is a power the ICAC should be well aware of and one it relies upon as one of its tools of deterrence, namely personal shame through public exposure of wrong doing. The ICAC should be astute to use this extraordinary power with some sensitivity towards the inherent importance of privacy rights/interests of those who are neither persons of interest to the ICAC; nor witnesses before the Commission in public inquiry having an opportunity to contest allegations, or place those allegations into a less damaging or innocent context. In the case of Pallier it would appear the ICAC failed to consider his situation and the unintended consequence of its cavalier, if not arbitrary use of the power granted to it by the Parliament.

274. Also of relevance to this issue regarding the grant of powers by Parliament to the ICAC, is that the ICAC has also been granted powers to avoid the very intrusions Pallier complains of into the privacy of a person who, although playing a Subramaniam 70 role in the evidence before the inquiry does not participate in it as a witness, or person of interest. There were mechanisms at the disposal of the ICAC whereby Pallier's privacy could have been protected. Sections 31 (9) and 112 are clearly designed to keep evidence, when appropriate, out of public circulation. The first of those sections pennits the Commission to decide to conduct part of the inquiry in private if it considers the public interest is served by so doing. The second of the sections permits the Commission to direct restrictions on the publication of evidence

70 Subramaniam v Public Prosecutor [of Malaya] [1956] 1 WLR 965 Held that evidence of a previous representation made by a person is admissible, not to prove any fact contained in that representation, but to prove that the factual representation was made - and in this case acted upon by Ms McCarthy.

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given in the public inquiry - for example the name or identity of a given person. The Acting Inspector has been informed that among the consideration taken into account by the Commission when exercising a discretion invoked by s.112 is "whether disclosure might involve serious financial or property loss". A well-known consequence arising from adverse publicity coming out of the ICAC is loss of employment opportunity. The constant companion of lost employment opportunity is serious financial loss. So it was for Pallier.

275. In summary then, on the basis of material canvassed elsewhere in this report, but particularly in paragraphs 247-271 it is argued the report demonstrates there were two occasions (the conduct of the public inquiry, including internet publication of transcripts and Exhibits, and the request by Commissioner Latham for publication of the ICAC Operation Dewar Report), which brought about intrusions upon Pallier's privacy, honour and reputation 71

.

276. The intrusions arising from these occasions were, it is argued, of a nature and quality such that reasonable persons of ordinary sensibilities would consider the material complained of by Pallier- some of which has been referred to in this report- as highly offensive and personally destructive. The intrusions caused detriment to Pallier in the form of mental, physiological and emotional harm, and contributed to financial detriment subsequently experienced by him. All intrusions complained of, came about directly as a consequence of decisions and actions undertaken by officers of the ICAC, and non-action by officers of the ICAC in circumstances where specified action was indicated.

277. The report argues the failure to consider Pallier's privacy constitutes a serious flaw in the effectiveness of the ICAC procedures at a time of determining to conduct a public inquiry and/or during its preparation for the public inquiry, and/or in the conduct of the public inquiry.

278. This report further argues the failure to consider the impact of publications of transcripts and material on the internet containing material adverse to Pallier constitutes a serious flaw in the appropriateness of the procedures at the time of detennining to conduct a public inquiry, and/or during its preparation for the public inquiry, and/or in the conduct of the public inquiry.

279. Accepting an argument earlier advanced, that there was a statutory duty to consider Pallier's reputation and privacy, it is now argued the failure to do so was unreasonable and brought about, therefore, an unreasonable invasions ofPallier's privacy.

71 See also paragraph 71 as a good example of an unnecessary instance of identifying Pallier and thereby intruding adversely into his privacy.

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280. If it be accepted as earlier argued the intrusion into his privacy was foreseeable, avoidable and unnecessary such an acceptance would support that argument of "unreasonable" invasion of privacy.

281. To those criteria might be added the duration of the exposure of the adverse material on the ICAC website; the quantum of that material so exposed, and the adverse references to Pallier in the Commission's Operation Dewar report. All in all, it is argued the case of an unreasonable invasion ofPallier's privacy is overwhelming.

282. Sub-sections (1) (c) and (4) (b) of 57B make clear that "unreasonable" invasions of privacy can amount to maladministration. While sub-section (1) (c) does not, and 4 (c) does require the action or inaction to reach a point of seriousness, it is conceded "seriousness" is a requirement of maladministration. What, it is argued, elevates this unreasonable invasion of privacy to a level of seriousness is:- the performance failure of a statutory duty, Pallier's status as a whistle-blower, and the matters set out in paragraphs 280 and 281 above. It should also be noted that the ICAC facilitated media access to all transcripts and exhibits.

The Commission's Position

283. The ICAC Act gives to the Commission in s.13 (3) a principal function to make findings and form opinions on the basis of the results of its investigations in respect of any conduct, circumstances or events, including corrupt conduct findings. By contrast there is no section giving the Inspector equivalent power to make findings or fonn opinions- including findings or fonning opinions of maladministration72

. Hence, this report has sought not to express opinions or findings, but rather to advance arguments.

284. On 4 November 2016 the Acting Inspector advised the Commission in a 2 page letter of its concern there were numerous adverse references to Pallier arising out of Exhibits 1 and 2, transcripts of evidence and the ICAC Operation Dewar report all available on the Commission's website. A number of specific questions were directed to the Commission - focusing upon the possible use of pseudonym; whether publication of Exhibits 1, 2 and 11; publication of transcripts of sworn evidence; and adverse references to Pallier in the report published to the Presiding Officers of the Houses of the Parliament constituted unreasonable invasions of Pallier's privacy. The Acting Inspector also drew the Commission's attention to the Inspector's functions set out in s.57B (IO(c) and (d) ofthe ICAC Act.

285. The Commission through its then Commissioner sensed the Inspector was considering whether to make findings of maladministration on the bases that publication of "adverse" reference to Mr Pallier constituted "unreasonable invasions of privacy". It

72 There are now provisions in the recent amendments to the Independent Commission Against Corruption Act 1988 that will now comfortably permit an expanded interpretation of the construction ofS. 57B allowing for such findings and opinions to be made. At time of writing this Report, the amending legislation had been Assented to, but not yet Proclaimed.

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argued that the statutory context of maladministration dictates that "maladministration must be deliberate or wilful or, at the very least, recklessly indifferent." On that score the Commission is correct. But it should also be noted that issue has been well addressed in this report 73

. The argument has been advance that all three forms of publications have been deliberately, wilfully undertaken.

286. What does not appear to be disputed is that there were numerous "adverse" references to Mr Pallier.

287. It would appear the Commission takes a different view of what constitutes its "administrative" functions than the view earlier argued for in this report. The then Commissioner argued in her letter of 16 November 2016: It is not clear in what way you consider s.27 of the PPIP Act could aggravate any finding. That section provides that the Commission is not required to comply with the information protection principles except in connection with the exercise of its administrative and educative functions. The conduct of the public inquiry and the furnishing of the Commission's report concerned the Commission 's investigative and reporting functions. Clearly, the information protection principles do not apply. " The Commission position seems to suggest "administration" plays no part in the Commission's investigative function. That position is seriously disputed by this Office.

288. Part 4 Division 1, S.13 of the ICAC Act sets out in detail the various functions of the Commission. Nowhere is the Commission given the specific functions of administration or of reporting 74

. The functions given to the Commission include investigative functions as well as communicate, examine, instruct, advise, assist, cooperate, educate, disseminate infmmation, enlist, foster, develop, arrange and supervise75

• It also has as functions the power to make findings and form opinions and formulate recommendations76

. However, if proof were need of the Commission having a "reporting" function one would only need to look at s.74, 74A, 74B, 74C and 74D of the ICAC Act. If proof were needed of the Commission having extensive "administrative" functions one only needs to go to s57B of the ICAC Act to observe that the Inspector's functions include dealing with mal-administration by ICAC in the conduct of investigations, which can include conduct based on improper motives, contrary to law, etc. As argued at paragraphs 261 - 263 "administrative" has its part to play throughout all of the functions where "arrangements and task are needed to control and/or facilitate the operation of' an investigation, and the reporting of findings arising from an investigation.

73 See paragraphs 238 240 ante. 74 By contrast the Inspector (S.57B (1) (b) and (d)) and the Parliamentary Joint Committee (s. 64 (l)(b) are given a reporting function. 75 S.13 (l)(a)- (k) Independent Commission Against Corruption Act 1988. 76 S.l3 (3) Independent Commission Against Corruption Act 1988.

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289. The Commission argues before a finding ofmaladministration under s.57B (4) can be made procedural fairness must be extended to the then presiding Commissioner the Hon. David Ipp AO QC. With respect that proposition is disputed77

. The Hon. David Ipp is no longer the Commissioner of the ICAC. In that capacity he is functus. It is sufficient if there is a contester - namely the present presiding Commissioner or the Commission Solicitor. In the justice system, when conduct of a judicial decision maker is being reviewed it is often the case that the relevant judicial officer is named as a respondent party to proceedings. But the judicial officer does not appear - he/she files a submitting appearance, and some other contester usually argues as a respondent to the proceedings. In this case it was always open to the current Commissioner to ascertain what, if anything, the Hon. David Ipp wished to advance to assist the ICAC, and choose if she wished to submit that for the Acting Inspector's consideration.

290. The Commission has stated it does not consider there was any unreasonable invasion of Mr Pallier 's privacy in relation to the conduct of the public inquiry or furnishing of the Report. " It relies upon the transcripts of evidence, the contents of the exhibits and the contents of the report as being accurate representations of the evidence before the Commission. Apart from the matters earlier referred to in paragraphs 253-255, it is agreed all else is an accurate representation of the evidence. Indeed, the accuracy of the production of the evidence given in the public inquiry is at the very hub of the arguments advance by the Inspectorate of wilful and deliberate publication of adverse material.

291. The Commission acknowledged its capacity to rely upon s.ll2 restrictions to publications provided to do so was in the public interest. But the Commission argues: There is no record of any one, including Mr Pallier, seeldng such a direction with respect to any evidence concerning Mr Pallier. " The Commission makes the further point: At the conclusion of the first day of the public inquiry, Mr Pallier sent an email to the Commission referring to four references to him in the transcript of Ms McCarthy's evidence. It is apparent from this email that Mr Pallier was present at the hearing ... [but} did not ask that any part of the evidence be suppressed either during the course of that day's public inquiry or in his email. The point is made earlier in this report that Pallier was not a witness, had no right of appearance, had no right to be heard. Nor did he have any prior knowledge of the evidential material to be adduced or sought to be adduced by any of the parties to the public inquiry. Nor is there any suggestion Pallier then knew there was capacity to suppress evidence- or how he could conceivably go about making known his desire, (assuming at that time he contemporaneously had the presence of mind to have identified his rights and know (on the Commission's case) he could, and should seek to preserve them) engage upon an argument as to why references to his name and identity be excluded from evidence. Further, the Inspector's understanding is that Pallier was concerned at that time with the factual accuracy of Ms McCarthy's and other's references to his alleged conduct. (A

77 See paragraphs 260- 263 ante.

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fact, it is conceded is of no great relevance to the allegations being investigated - but may explain the absence of the presence of mind the Commission seeks to rely upon).

292. Putting, what appears to be an unrealistic suggestion, unsupported by any legal principle, that Pallier could have intervened in proceedings to one side, the Inspector agrees with the proposition that no one sought any direction with respect to evidence concerning Mr Pallier. That is the nub or the argument - someone attached to the Commission should have made such an argument before the evidence taking even began! All other principal parties were relying upon every, and any, available adverse inference against Pallier.

293. The conclusion the Commission argues for flowing from the absence of any application for a restricted publication direction is that the presiding Commissioner, the Hon David Ipp AO QC, did not consider that it was necessary or desirable in the public interest to make such a direction. That would appear to be a reasonable conclusion of the then Commissioner's position - but it ignores the fundamental proposition - no consideration was apparently made by him, or requested of him by Commission staff in circumstances where an invasion of Pallier's privacy and demeaning of his reputation were foreseeable, unnecessary and avoidable. Frankly, the Commission's position would have been stronger qua the non-availability of a maladministration finding, if there had been an application and a detennination of the public interest question contrary to arguments advanced in this report on behalf of Pallier. Given the case lawyer was the one who determined the public interest criteria, it would seem he would have been a suitable person to have made such an application in the public interest, consistent with the provisions of s.31 (2)( c), although, frankly, the potential maker of the application is hardly a relevant matter.

294. The Commission sought to argue that section 8 of the Court Suppression and Non­publication Orders Act 2010 could be called in aid of the Commission's position. Based on that, the Commission's position is that it "does not consider that any court would have made a suppression order in relation to the references in the evidence to Mr Pallier. " At the outset it should be noted this is not a proposition conceded, or indeed, that the Acting Inspector would agree with. Be that as it may. Of course, what is ignored in the Commission's position, is that the Commission is involved primarily in investigation, and limited findings arising from its investigation. Its position and attitudes as an investigator will be a far cry from those of a judicial officer. Commission findings are frequently followed by court proceedings either in conformity with those findings (e.g prosecutions), or by way of challenge to the findings. Courts on the other hand are involved with the administration of justice including the determination of disputes and finalisation of matters, which may follow upon an investigation. The Commission is favoured with the provision of extra-ordinary powers to assist in its investigations of "affected" persons. On the other hand courts, administering justice are confined to powers engaged in ensuring fairness to the parties before it. These considerations will inform the lawmakers of relevant suppression and

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non-publication powers to be given to each. The use of pseudonyms is frequent within various areas of administration of justice. Witnesses, victims, third parties are often favoured or sometimes required to be identified by pseudonym.

295. In respect of references to Pallier contained in Exhibits 1 and 2, the Commission notes Pallier had never made an application to the Commission to have any of the information suppressed. Nor has the Commission ever informed Pallier that he is entitled to do so. The fundamental issue is whether the information should have been published in the first place! The argument in this report is that even if the information was published, the identity ofPallier should have been redacted or otherwise excluded.

296. It is argued the Commission's response fails to dispel or answer the argument that a finding of maladministration on the basis of an unreasonable invasion of Pallier's privacy has occurred in circumstances where it was unfortunate, unnecessary and foreseeable.

297. It is also argued the procedures in which public interest criteria were considered were conducted in circumstances whereby the provisions of s.31 (2) of the ICAC Act were not properly complied with.

CHAPTER IV CONCLUSIONS AND RECOMMENDATIONS.

298. If one reduces Kevin Pallier's complaints to the Inspector to their simplest terms the intrusion into Pallier's privacy becomes bleedingly obvious, and bleedingly unnecessary. The starting point is an overview, best provided in the wording of the ICAC Operation Dewar Report. Some insight into the importance McCarthy's allegations played in the findings of corrupt conduct by Kear can be succinctly gleaned from two portions of the Report.

299. Firstly Chapter I "Conduct of the investigation " 78 sets out a short synopsis of Ms McCarthy's allegations:

Evidence obtained from Ms McCarthy and the SES indicated that between October 2012 and April 2013, she had reported to Commissioner Kear that Mr Pearce had:

• failed to correctly supervise Kevin Pallier, an SES employee who was dismissed by Commissioner Kear for misconduct

• potentially falsified evidence that was relevant to unfair dismissal proceedings brought by Mr Pallier before the Industrial Relations Commission

• used his corporate credit card for non-approved expenditure

78 ICAC Report- Investigation into the Conduct of the Commissioner of the State Emergency Services; May 2014 p.8.

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• failed to comply with relevant procurement guidelines in the awarding of two SES contacts

• was involved in offering an SES paid motor vehicle contrary to the relevant guidelines in the course of recruiting a person to a senior position within the SES.

300. Then follows Chapter II "Matters Raised by McCarthy". As earlier noted that Chapter deals under the heading Kevin Pallier with several hearsay allegations made by her against Pallier. It also deals in more detail with each of the allegations referred to above. Importantly the Commission makes a finding in the following terms:

Commissioner Kear 's conduct in deliberately failing to properly investigate allegations against Mr Pearce in relation to the entry into the Karoshi and Peiformance Drivers contracts, the use of the SES funds to purchase roof racks and electric brakes, the obtaining of an SES-paid vehicle for [the senior employee} and the potential falsification of diary entries in relation to Mr Pallier because of his friendship with Mr Pearce is corrupt conduct.

301. The point to be made is that of all allegations made by McCarthy against Pallier, only one played an indirect part in the Commission's finding of conupt conduct on the part of Kear. Indeed, an analysis of that particular Pallier related conduct, does not rely upon Pallier as the principal actor as an alleged abuser of overtime, but rather Pearce as the "potential" fabricator of diarised meeting dates with Pallier at which overtime was allegedly discussed.

302. Given the precision of the tenns of the ICAC findings, it is difficult to understand why adverse material in the quantities supplied were necessary to the extent that occurred in and through the public inquiry, why it is necessary in the public interest for the imputations and material to remain on the ICAC website, and why it was and still is necessary - in the public interest - for Pallier's identification to have been and to remain associated with that material, when his right to privacy screams for some saner solution.

303. Set out for the consideration of the ICAC and the Parliamentary Joint Committee on the Independent Commission Against Conuption (Parliamentary Joint Committee) are the following:

1. It is recommended that the ICAC issue an apology or statement of regret to Mr Kevin Pallier for unreasonable invasion of his privacy.

2. An endorsement by the Parliamentary Joint Committee of a recommendation that the ICAC issue an apology or statement of regret to Pallier for unreasonable invasion ofMr Kevin Pallier's privacy.

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3. It is recommended that the ICAC remove from the Operation Dewar material appearing on its internet website any material identifying Mr Kevin Pallier or that may lead to his identification.

4. It is recommended the Parliamentary Joint Committee endorse a recommendation that the ICAC remove from the Operation Dewar material appearing on its internet website any material that identifying Pallier, or that may lead to his identification.

5. It is recommended that the Commission place a notification on the Commission's website forthwith containing an explanatory note referring to the Inspector's report and recommendations herein and indicating whether or not the Commission has accepted and acted upon the recommendations.

6. It is recommended that the Parliamentary Joint Committee endorse a recommendation that the Commission place a notification on the Commission's website forthwith containing an explanatory note referring to the Inspectors report and recommendations herein and indicating whether or not the Commission has accepted and acted upon the recommendations.

7. That the Parliamentary Joint Committee recommend to the Parliament an amendment to s.31 (2) by the inclusion of a sub-clause (e) in the following tenns: Whether any adverse impact a person may experience arising from an internet

site publishing information generated from the proposed public inquiry is outweighed by the public interest in such information being readily accessible to public through the internet site.

!!::~:~· Acting Inspector: ICAC tif. December 2016

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