Top lawyer’s review fails to find Reading Cinemas leaker

Tuesday, 14 November 2023

A ratepayer-funded investigation into who leaked details about the secret Reading Cinemas sale has failed to find the source.

Wellington’s mayor Tory Whanau hired lawyer and ex-journalist Linda Clark to probe a complaint that five councillors breached a code of conduct by sharing information about a proposal to buy land under the vacant, quake-prone Courtenay Place complex.

The five – Diane Calvert, Ray Chung, Tony Randle, Nicola Young and Iona Pannett – refused to cooperate with the inquiry.

Clark’s draft report, leaked to The Post only hours after it was sent to councillors, said there was “insufficient evidence” to identify the leaker. But it does judge all five broke the code by talking to media once details of the deal were leaked – and it points to simmering tensions and a breakdown in trust among the elected representatives.

The quintet were accused of sharing information from a closed-door meeting about the sale on October 4. The council voted both to keep private the details and to proceed with due diligence on the purchase.

The cash-strapped council wants to buy the land under the vacant complex on Courtenay Place and lease it back to US entertainment empire Reading International for 21 years. Reading would then use funds from the sale to renovate the largely derelict building, which abruptly shut in 2019 after sustaining damage during the Kaikōura quake three years earlier.

“Councillors appear to have believed that once details of the…meeting were leaked and published in the media they could comment freely,” Clark wrote in the nearly 60-page report. “That is not the case.”

The draft report acknowledged there was public interest in the future of the site, but argued the information was commercially sensitive.

As such, councillors were required to keep quiet until the council passed a resolution to disclose the proposal or until chief executive Barbara McKerrow deemed information could be released, Clark said.

The way in which the five councillors criticised the proposal or confirmed details about it “has impacted on public confidence,” she said.

The inquiry concluded Calvert, Young, Chung and Pannett breached the code by failing to observe confidentiality when they responded to media inquiries.

Randle and Young failed to show respect to other councillors “who could not speak out in reply,” Clark said. This presented a one-sided view of the proposal, she said.

Chung, Calvert and Young also breached the code by publicly criticising officials, she also found.

The complaint was laid by deputy mayor Laurie Foon. Foon was interviewed, along with staff, but the accused councillors refused to meet with Clark. Only Pannett provided a written response.

Foon’s complaint was “a symptom of a breakdown in trust and confidence between councillors,” Clark said.

The Dentons Kensington Swan partner recommended all councillors review the code of conduct, receive training on the provisions of local government legislation that relate to confidential information. She also suggests a public-excluded workshop for all councillors to discuss the complaint “and all grievances about it aired” – and that the council speed up a planned review of the code.

Three councillors rejected the findings, pointing out it made assumptions made that councillors were commenting on the Reading deal, when they were making more general statements on the state of the city’s finances.

Young slammed the “costly legal exercise, funded by ratepayers” and the workshop recommendation. “Will we be asked to hold hands and sing Kumbaya? Let’s focus on the real issues: rocketing rates & our water woes,” she said.

Calvert said the findings were “as suspected ‘a stitch up’ with very weak opinion based conclusions”.

“Many of our comments referenced were unrelated to the investigation and were purely highlighting the precarious nature of the city finances,” she said. “Now they are being used as a weapon to silence us.”

Chung said comments he made did not share any confidential information – and he stood by what he said.

“I didn't say anything about the deal – I didn’t even name Reading. I just said that we shouldn’t be doing these commercial deals, because we're actually very bad at doing them.”

Randle declined to comment, and Pannett did not return a request.

Whanau was yet to receive the findings – which she will get when it is finalised. “I will make no comment until that point. What I can say is our council is working together effectively as recent decisions reflect…I remain committed to working collaboratively with all councillors for the betterment of Wellington.”

The council has yet to reveal the costs of the review.