CHAPTER 1
INTRODUCTION

In February 1994, the South Australian Soccer Federation prepared a submission for upgrading Hindmarsh Stadium to the Hon. John Oswald MP, then Minister for Recreation, Sport and Racing.  The proposal involved an estimated cost of $22.5 million and 22,000 fixed seats. In April 1995, a Cabinet Budget sub-committee approved a $6.5 million upgrade of the eastern grandstand at Hindmarsh Stadium. The redevelopment of Hindmarsh Stadium received bi-partisan support. 

In December 1995, the Hon. Graham Ingerson MP replaced Mr Oswald as Minister for Recreation, Sport and Racing. From then on, through a series of further Cabinet submissions, step by step, the scope of the construction works was increased. Under Minister Ingerson’s leadership that increase was pursued without proper or adequate due diligence. These failures are addressed in Chapters 18 to 26 of this Report.

The primary justification advanced for the redevelopment of Hindmarsh Stadium was the staging of preliminary matches in the Sydney 2000 Olympic Soccer Tournament. The upgrade of Hindmarsh Stadium was described as necessary to secure those matches. No alternative to that upgrading was given serious consideration.

On 17 November 1999, the Legislative Council passed a motion requesting the Treasurer under Section 32 of the Public Finance and Audit Act 1987 to request the Auditor-General to examine and report on dealings relating to the Hindmarsh Soccer Stadium Redevelopment Project. By letter dated 9 December 1999, the Treasurer conveyed that request to the Auditor-General with specific reference to the text of the Legislative Council’s motion.

The motion was:

"That the Legislative Council requests that the Treasurer, under section 32 of the Public Finance and Audit Act 1987, requests that the Auditor-General examines and reports on dealings related to the Hindmarsh Soccer Stadium Redevelopment Project and, in particular –

I. Whether there was due diligence by government representatives prior to the signing of agreements for construction of stages 1 and 2 of the project.

II. Whether due diligence was applied subsequent to the commitment to stages 1 and 2, including whether the Crown Solicitor’s advice as described on page 12 of the thirty-third report of the Public Works Committee, August 1996, was adhered to.

III.(a) Whether undue pressure was placed on individuals leading to legal commitment by them on behalf of sporting clubs or associations.

III.(b) The present status of all relevant deeds of guarantee or other legal documents, the financial status of the signatories and whether the legal agreements have created financial difficulty for any non-government persons or organisations.

IV. Whether there were any conflicts of interest or other imprudent or improper behaviour by any person or persons, government or non-government, involved with the project, and whether the appropriate processes were followed in relation to –

(a) the planning stages of the project;

(b) the awarding and monitoring of consultancies;

(c) the tendering process;

(d) the letting of contracts;

(e) the construction of the stadium; and

(f) the ongoing management of the stadium.

V. The Auditor-General be requested to include in his report recommendations for government and the parliament where appropriate."3

Section 32 of the Public Finance and Audit Act 1987 provides:

In 24 July 2001, I presented an Interim Report to the Parliament wherein I advised that representations had been made to me that challenged my authority to report in accordance with the Terms of Reference. In order that the matter be put beyond doubt, the Parliament enacted the Hindmarsh Soccer Stadium (Auditor-General's Report) Act 2001. This Act was stated to have come into operation on 17 November 1999, the date of the motion of the Legislative Council relating to Hindmarsh Stadium. Section 4 of this Act puts beyond doubt the matter of my legal authority to report upon each of the matters the subject of the Terms of Reference referred to me by the Treasurer.

Generally, the Government agencies and non-government organisations involved in the Hindmarsh Soccer Stadium Redevelopment Project willingly provided this Examination with access to relevant documents. Documents were obtained from a number of entities including the Office for Recreation and Sport,4 the Department of Treasury and Finance, the Crown Solicitor’s Office, the Department for Industry and Trade, the Department of Education, Training and Employment, the Department for Administrative and Information Services, the Department of Premier and Cabinet, the Soccer Federation, Woods Bagot and National Portfolio Strategies.

Summonses pursuant to Section 34 of the Public Finance and Audit Act 1987 were prepared and served upon a number of departmental officers and individuals involved with non-government organisations. Over 15,500 documents were reviewed. Oral evidence was heard on oath from 39 different witnesses. The services of a firm of solicitors and counsel were retained to assist with the conduct of the Examination.

Legislative framework – Each step in the implementation of the redevelopment project was reviewed by reference to the relevant legislation applicable to capital works of a public nature.

Internal Governmental guidelines – Each step in the redevelopment was examined by reference to relevant Government guidelines.

Project documents – The formal agreements entered into between participants in the redevelopment were examined.7

In examining those legal documents the appropriateness of the structures and transactions effected by them were considered. The present status of the documents was considered. The adherence to the requirements of those documents was considered, including any waiver or dispensing with the requirements of those documents.

Undue influence – The circumstances surrounding the entry into of all of the legal documents relevant to the redevelopment were examined to determine whether undue pressure had been placed on any individual representing a sporting club or association. The circumstances were examined both from a legal perspective of "undue influence" in a sense which might give rise to a cause of action or a legitimate defence, as well as in a broader sense. The circumstances were examined to determine whether undue pressure was brought to bear on parties in a manner with which the Government, as the exemplar of proper behaviour in the community, should not be associated.

The Office for Recreation and Sport – The steps taken and methods used by this agency and its predecessors in promoting the redevelopment of Hindmarsh Stadium were examined closely. Internal minutes and submissions to Cabinet were examined closely.

The roles of the Department of Treasury and Finance, the Crown Solicitor’s Office and DAIS – The roles of the Department of Treasury and Finance, the Crown Solicitor’s Office and DAIS8 in protecting the Government’s interest in the project were examined.

Cabinet submissions – Submissions to Cabinet were examined and the information contained in them was compared with the actual facts and the project documents as executed.

Minutes of meetings – The minutes of various committees that had an involvement in the project were examined to identify the issues that had been addressed during all stages of the project. Those issues identified were compared with the steps taken by departmental officers and other representatives of Government.

Costs – The actual cost to Government of the project was examined. All monies spent on consultancy fees, actual construction and other associated expenses were identified and examined. The financial accounts of the Soccer Federation and the NSL Clubs were also reviewed.

This examination has applied the standard of proof to reasonable satisfaction, in the sense set out by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 (at 362) and as explained by the Supreme Court of South Australia:

"It is trite to say that, in Briginshaw v Briginshaw, the High Court made the point that, where the civil onus of proof on the balance of probabilities is applicable, nevertheless, as Dixon J put it, the weight of evidentiary material which will bring a Court to accept that the onus is discharged in a particular case will necessarily need to take into account the ‘seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding. 

As he so forcefully pointed out, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved."9

This Examination has had regard to the consequences of its findings, such as the effect that certain findings could have on the reputations of individuals. Those findings that are or might be seen as critical of individuals have been made having regard to the standard of proof referred to above.

ALLEGATION THAT DOCUMENTS WERE SHREDDED

Mr Ingerson gave evidence to this Examination that he had been told that documents relating to the Hindmarsh Stadium Redevelopment were shredded after the October 1997 election by Minister Ashenden’s ministerial staff. Mr Ingerson has submitted to me that I am unable to rely on the documents produced to me as presenting a full chronology of the relevant events because documents were shredded. Mr Ingerson has not identified any specific document that he says is now missing.

Mr Ashenden unambiguously denied the allegation. I have examined Mr Ashenden’s staff and satisfied myself that no documents were improperly shredded as alleged. Mr Ashenden’s staff did shred some of Mr Ashenden’s personal records. In the 1997 Christmas break, Mr Ingerson’s staff shredded obsolete duplicate records relating to Mr Ingerson’s other portfolios.

In light of the evidence I have obtained, I do not accept Mr Ingerson’s submission that I cannot legitimately rely on the documents produced to me as presenting a full chronology of the relevant events because documents were shredded.

Even if there were a suspicion that files or documents were missing, I do not accept that I would be precluded from making findings of fact. To do so would be to encourage Government officers who fear embarrassment to destroy documents knowing that those charged with investigating the conduct of Government could not make findings on the basis of inferences that are capable of being drawn from the available evidence.

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