The Ku-ring-gai council has won its appeal against a proposed merger with Hornsby Council, with the court criticising the secrecy of the process. The ruling casts a shadow of doubt on the legality of council other mergers.
At the heart of the challenge by Ku-ring-gai was a report by consultancy firm KPMG, which recommended the council mergers. The report could not be scrutinised as the government claimed it was subject to “public interest immunity.”
The KPMG report found that the proposed amalgamation of Ku-ring-gai and Hornsby Shire would result in “around $70 in net financial financial savings over 20 years.”
Judges Robert Macfarlan and John Basten ruled that these claims could not be properly assessed by the government delegate without accessing the KPMG report. As a result, the delegate, Garry West, had “constructively failed in “his his statutory duty of examining the government’s merger proposal.
Judge Macfarlan found that the delegate, “did not form his own judgment about the financial advantages or disadvantages of the proposed merger but instead adopted, uncritically, the results of the undisclosed KPMG analysis.”
The Court also found that the public interest in keeping the report secret was outweighed by the public interest in making the information available. Judge Basten ruled that, “Release of the material was also necessary for public participation in the public inquiry to be meaningful.”
The Supreme Court decision is vindication for critics of the amalgamation process, who have questioned the sincerity of the “consultation” being undertaken by the government.
Under the merger process, the NSW government is required to “seek the views of electors” under the Local Government Act. That Act requires the government to seek the views of electors through public meetings and submissions, or through holding a formal poll.
All 28 delegates acting for the government this year opted to hold public meetings instead of a poll.
The government has also been accused of “going through the motions” in respect of due diligence. Indeed, government representatives previously conceded that the report into the proposed merger of Strathfield, Canada Bay and Burwood Councils written by delegate, Richard Colley, needs to be redrafted because it was based upon insufficient information.
Strathfield Council’s lawyer, Tim Robertson QC, criticised the inclusion of KPMG in the merger process. Although the accounting firm claims to be ‘independent’, it was retained by the government as far back as July 2015 to develop merger reform options for former Premier Mike Baird. This was before the Independent Pricing and Regulatory Tribunal ruled that many of the councils were unfit, and also prior to the government announcing its plans to force mergers.
David Shoebridge, the Greens’ spokesman on local government, said KPMG’s role as both advisers to the government and assessor of the financial benefits of each merger was equivalent to marking their own homework.
Future of Mergers
Current NSW Premier, Gladys Berejiklian, says she will seriously consider the views of affected communities.
The Sydney councils scheduled for merger are: Burwood, Canada Bay and Strathfield; Hornsby and Ku-ring-Gai; Hunters Hill, Lane Cove and Ryde; Mosman, North Sydney and Willoughby; and Randwick, Waverley and Woollahra.
Mr Shoebridge made his views of the court decision abundantly clear: “Today the Court of Appeal has said the obvious, that it is blatantly unfair to forcibly amalgamate a local council on the basis of a secret report.”
Opposition spokesman, Peter Primrose, called on the Berejiklian government to hold plebiscites in councils already through the amalgamation process. “The same issue about procedural fairness applies to all 14 councils,” he remarked.
Ku-ring-gai mayor Jennifer Anderson stated: “We believe the court’s decision signals a turning point for Premier Berejiklian’s government,” adding, “If they continue with the merger process they will be flying in the face of our community and the court.”