An independent report recommends Wellington's mayor be formally censured after he shared potentially defamatory and previously discredited information before a controversial Shelly Bay vote.
Councillor Jenny Condie made a code of conduct complaint against mayor Andy Foster six months ago.
The report into the matter is yet to be publicly released but the Herald has learned of the investigation's findings.
Susan Hornsby-Geluk, of Dundas Street Employment Lawyers, found Foster's behaviour was capable of undermining public confidence in the office to which he has been elected.
Condie's complaint related to the morning of a meeting about whether to sell and lease council-owned land at Shelly Bay to make way for a $500 million development.
She said Foster called her to his office on November 11 to show her information that would change her mind about Shelly Bay.
The information was some notes Foster made from a phone call alleging a former council manager put pressure on staff over their position on Shelly Bay roading issues.
Condie raised concerns Foster did not have permission to share the information, that the notes were potentially defamatory to the former council employee, and the mayor's conduct was improper.
Hornsby-Geluke found Foster breached the council's code of conduct in regards to the need to maintain public confidence.
Her report recommended the mayor should privately apologise and a letter be written to formally censure Foster.
Hornsby-Geluk did not believe Foster intended to act improperly, but instead failed to fully consider his actions and their implications. The code of conduct breach was considered to be material but at the lower end of the scale.
In the report, Foster argued the complaint was frivolous and should be dismissed.
He suggested the complaint was driven by a political motive due to the way it was publicised at the beginning of the council meeting to vote on Shelly Bay.
One of the report's key findings was the mayor should have taken more care to ensure the information he was passing to other councillors was fair and accurate.
The allegation of staff being inappropriately pressured to "soften" their position on roading requirements was considered and discredited by the High Court in one of many Shelly Bay legal cases.
Hornsby-Geluk said this should have been, at the very least, enough to cast significant doubt over the reliability of the material.
Her report accepted Foster did not intentionally disparage the former council manager or damage his reputation however, Hornsby-Geluk said, the way he used the information was capable of having that effect.
Furthermore, elected members received legal advice ahead of the meeting saying roading issues at Shelly Bay were not relevant to the decision to sell and lease council land.
Hornsby-Geluk said Foster's actions exposed the council to legal risk, being judicial review, because of the perception irrelevant information was considered in decision making.
"Relying on a file note that contained irrelevant, inaccurate and discredited information to lobby other councillors on an important council decision is likely to undermine public confidence", she said.
Lobbying colleagues ahead of a vote was part and parcel of Local Government politics and there was no requirement for the mayor to share all information he came into possession of with councillors, Hornsby-Geluk said.
"However, care needs to be taken to ensure that the mayor is not seen to use the fact that he may have privileged access to information as a means of influence itself, if he is not able to share or disclose that information."
The report's findings and recommendations are not binding, it is up to elected members to make their own decision as to the breach, its materiality, and any consequences.
It will be considered at a council meeting next week.
Condie said in a statement she was glad the investigation has been finalised after an unexpectedly long process.
She said the report resolved any need for a further review of Wellington City Council's handling of Shelly Bay.
"WCC's processes and decisions have been reviewed by three court cases and independent commissioners without any serious issues being uncovered. It is time for us to move on from this issue as a Council and a city."
Foster's office has been approached for comment.
How councillors voted on whether to sell and lease land at Shelly Bay
In favour: Laurie Foon, Tamatha Paul, Nicola Young, Rebecca Matthews, Diane Calvert, Jenny Condie, Jill Day, Fleur Fitzsimons, Teri O'Neill
Not in favour: Sarah Free, Iona Pannett, Sean Rush, Malcolm Sparrow, Simon Woolf, Andy Foster