Bella Vista: Five revelations from the damning internal Tauranga City Council report

The report by retired judge Graeme Colgan is the last official report expected to come out about Bella Vista Homes and the Tauranga City Council. Image / Phil Welch

For the best part of a year, an internal Tauranga City Council employment investigation has been in the works. Reporter Scott Yeoman has checked in every few months, asking the city council for updates, only to be told "it hasn't been completed yet" or "we don't have a date for the completion" or "there is no update" or "still ongoing" or "we have not received the report yet".
Last Friday that changed when a section of the long-awaited Colgan Report was finally released. These are some of the more interesting findings that were included.

COMMENT & ANALYSIS:

About 4.15pm last Friday, an email landed in my inbox. Most people are getting ready to knock off for the week, but we couldn't ignore it.

It was the Tauranga City Council responding to a Local Government Official Information and Meetings Act (LGOIMA) request. Exactly 20 working days earlier, I had asked for the Bella Vista report by retired judge Graeme Colgan.

Colgan began his investigation in October last year; he was asked to look into the role of city council staff in the failure of Bella Vista Homes in Tauranga.

It was to be an internal employment investigation, addressing the activities of individuals directly or indirectly involved with the consenting and monitoring of the Bella Vista subdivision and building activity on the lots created.

Colgan has more than 40 years' experience in the field of employment law as both a lawyer and former judge (he was the Chief Judge of the Employment Court for 12 years) and last year, was elected by the General Assembly of the United Nations as a UN Appeals Tribunal judge for a term of seven years.

His words carry weight.

A photo taken at the Bella Vista Homes development site on March 9, 2018, the day the 21 houses were suddenly evacuated. Photo / File

Judging by the time it took to deliver the Colgan Report (the longest of any of the reports so far), it is bound to be in-depth and detailed and it is also the last official report expected to come out about Bella Vista Homes and the council.

So far there has been:

•A review by accounting and consultancy firm BDO (published in June 2017).
•A report by former High Court judge Paul Heath QC (released in June last year).
•An investigation by the Ministry of Business, Innovation and Employment (released in March this year).

The council said early last month that it had received the Colgan Report but that it would not be publicly releasing it. Last Friday, it released the 9-page executive summary under the LGOIMA.

A major finding by Colgan, in the summary, was that the Bella Vista subdivision "threw up a particularly egregious conflict of interest that was identified late, treated too lightly (if not ignored) and was poorly managed, if managed at all".

He says of that conflict: "It was, albeit subconsciously, probably a factor in the unwarranted passing of a number of building inspections of Bella Vista Homes."

We singled out that paragraph in our first article online last Friday night, and in print on Monday, because it had some of the most damning and clearly-worded language found in any of the official Bella Vista reports and investigations.

Bella Vista development aerial photo. Image / Ministry of Business, Innovation and Employment report

However, because the full Colgan Report has been withheld, it is impossible for the Bay of Plenty Times to now report on the wider context of that particular conclusion, or expand further on Colgan's other conclusions outlined in the executive summary – some of them equally as damning.

It is impossible because we cannot read the evidence, explanation, and commentary provided by Colgan in the subsequent pages of the report to back up his findings.

A complaint has been laid with the Office of the Ombudsman to try and change that and the Times has again requested the full report.

The Ombudsman acts as an independent authority that helps the community in its dealings with government agencies.

In the meantime, while we wait for the full report, here are five other revelations that stood out in the summary.

1. The relationship between elected members/council staff/citizens

Colgan says in his executive summary that the report deals with the "proper constitutional relationships" between elected councillors and staff, and that it also examines the "problematic area of relationships" between citizens (especially as consumers of council's user-pays services), and council officers and staff.

He then says: "Bella Vista has provided a glaring and unfortunate example of attempts by a developer to expedite its commercial project by threats and other inappropriate conduct and of council's acquiescence in the face of these pressures."

2. The inspections

Colgan says two council staff members failed to perform their employment and statutory obligations by conducting "inadequate inspections of buildings being constructed and by-passing inspections".

He says this was in circumstances where such inspections, had they been carried out properly, would have failed numerous elements of the work, and so the continued construction of the buildings would not have been allowed unless and until those issues were rectified.

Colgan then says: "I have concluded that despite the existence of influential external factors, their failures were both negligent and inexcusable."

3. The senior manager

In his summary, Colgan says a senior manager at the council participated centrally in the allocation to another staff member of a role "in which he/she had a clear and unacceptable conflict of interest" between the council as the employer and Bella Vista Homes.

Colgan says: "That senior manager, aware of that conflict of interest, failed to warn more senior management of the risks associated with that appointment and participated actively in its implementation."

He says the senior manager also belatedly required the conflicted staff member to complete the council's paperwork identifying the conflict of interest. The manager then "wrongly and inadequately" filled out their own part of the paperwork.

Colgan says: "This contributed to the continuation of the conflict of interest and, thereby, enabled the conflicted staff member's inadequate inspection of Bella Vista houses to continue."

4. The senior council official

Colgan says a senior council official "abandoned or at least decided unilaterally not to follow" the strategic advice of his/her senior managers on December 21, 2016 – with which he/she had very recently agreed – about how to deal with Bella Vista Homes at the meeting with its representatives on that day.

He says that official failed in the performance of his/her duty to the council by participating "or at least acquiescing" in the appointment of the conflicted staff member to the role referred to above.

Colgan says the official failed to enquire further into that known conflict of interest that had been drawn to his/her attention in circumstances in which "I am satisfied proper enquiry by him/her would have revealed the existence of a serious conflict of interest and the untenability of that appointment".

Colgan also says the senior official allowed the continuation of a culture of reticence among staff to "speak up" including where this was statutorily mandated, "for fear of loss of, or other disadvantage to, their employment".

He says the official, by his/her conduct, allowed the development and persistence of a culture of "undue and unwarranted deference" to Bella Vista Homes as a major housing developer in Tauranga.

Colgan concludes: "This both compromised its statutory obligations to enforce building standards and was a factor that contributed, albeit indirectly, to the failure of the Bella Vista subdivision."

5. The cost

There was an extra revelation last Friday – the cost of the Colgan Report. This was not included in the executive summary, but was requested by the Bay of Plenty Times under the LGOIMA.

Remember, this investigation started in October last year and was received by the council early last month.

"The cost of the Colgan report as at 10 July 2019 was $395,319.06 (excluding GST)."