At the National Gallery of Victoria it seems there is a wrong way and a right way for a curator to engage in extra-curricula activities.

One curator admits to “working assiduously” for 14 years building the reputation of his boyfriend’s art business, and the revelation prompts a conflict-of-interest investigation that leads to the curator being suspended from duty.

Another curator spends 20 years advising Melbourne’s richest couple on the restoration and decoration of their historic mansion, and the gallery declares that it’s entirely above board.

The two curators are the NGV’s leading experts on Australian art, Geoffrey Smith and Terence Lane. They were both working on a blockbuster exhibition scheduled for next March of artists from the famed Heidelberg school but Smith has been stood down after a preliminary investigation into his conduct.

Smith has been at the centre of controversy since early July, when it was revealed that he had made admissions in a Supreme Court affidavit about his involvement in the South Yarra gallery owned by his ex-partner Robert Gould.

Now Crikey can reveal that the gallery’s Senior curator of Australian art, Terence Lane, has also had an after-hours gig, advising multibillionaire Richard Pratt and wife Jeanne on the make-over and ongoing decoration of their rambling 19th-century pile Raheen, in Kew, once the home of Archbishop Daniel Mannix.

We’ve received several anonymous tip-offs alerting us to Lane’s work for the Pratts, with our tipsters seeing it as yet another example of conflict of interest at the gallery.

Absolutely not, insists the NGV. In a statement released late yesterday — three days after we first put questions about Lane to the gallery — a spokeswoman said: “There was no conflict of interest with his work at the NGV, and Terence undertook this role (with the Pratts) with the full approval of government and his employer the NGV.”

According to the statement, Lane’s working relationship with the Pratts dates back to 1986. He was invited to be involved in the restoration of Raheen because of his “outstanding expertise in this area, and the importance of Raheen to the nation as an historic mansion”. Lane had previously worked on the restoration of the state-owned Werribee Park Mansion west of Melbourne.

“Permission was received from the Public Service Board through the Victorian Ministry for the Arts and the NGV for Terence’s involvement outside working hours on the project,” the statement said. “His role was to provide advice on the décor and furnishings to ensure historical integrity of the restoration.”

The NGV says the restoration work was largely completed by the mid 1990s but Lane has continued to provide “occasional advice” to the Pratts.

While the gallery insists that the government gave its approval for Lane to work for the Pratts, that approval would have been granted back in the days of John Cain’s administration, so news of the relationship came as a complete surprise to a government adviser Crikey spoke to this week. Also, in the light of the NGV’s insistence that there was nothing controversial about Lane’s moonlighting for the Pratts, it’s puzzling that it took the gallery so long to answer our questions.

Nevertheless, by seeking and being granted permission to work outside the gallery, it would seem that Lane did act in accordance with the public service code of conduct, although it might have been prudent for the NGV to have made a more public declaration of Lane’s involvement with the Pratts to avoid the whispered suggestions of something being amiss about the relationship.

As for Geoffrey Smith, it’s not known what, if anything, he told the NGV about his involvement with Gould Galleries. The matter is now tied up in the Federal Court where Smith is seeking to be reinstated to his job and challenging the gallery’s authority to investigate his conduct. A confidential mediation is due to be held some time over the next week, with the NGV’s ex-spinner Corrie Perkin reporting in The Oz today that the mediation may be held as early as this weekend.

Meanwhile, the NGV has rightly ticked me off for incorrectly reporting on Tuesday that the NGV’s head of finance Liz Grainger conducted the initial investigation that led to Smith’s suspension from duty. Grainger was supposed to have conducted the follow-up inquiry which has been halted by Smith’s Federal Court action. In an effort to set the record straight, I asked who conducted the initial investigation but the gallery never got back to me.