The Berejiklian government’s remaining council merger plans have been thrown into upheaval after the NSW Supreme Court ruled the process used ahead of a proposed merger between Ku-ring-gai and Hornsby Councils did not accord with procedural fairness.
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Kur-ing-gai won in the Court of Appeal on five of its six arguments mounted against the process used to justify its proposed amalgamation with Hornsby.
On Monday, apanel of three Court of Appeal judges ruled that the plan to forcibly merge Kur-ing-gai and Hornsby councils cannot proceed in its current form.
The court found the Department of Local Government had failed to take into account the impacts of excising a portion of the Hornsby Council area and found the department failed to properly consider the financial advantages and disadvantages resulting from the merger.
Black Mountain resident Gordon Youman said the result was good news for the Guyra ANTY group, who have been fighting a similar battle since Guyra Shire Council forcibly amalgamated with Armidale last year.
“We are all quite excited about it,” he said.
“It gives us confidence that democracy might have returned and it also shows us how it has been pushed through.
“It gives us a lot of hope.”
At the heart of its challenge was a report by consultancy KPMG, which recommended council mergers and which the government refused to release in its entirety, claiming it was subject to “public interest immunity”.
Based on KPMG’s analysis and modelling, the Government’s merger proposal stated that “around $70 million in net financial savings over 20 years” would be achieved through the amalgamation of Ku-ring-gai with part of Horsby Shire.
Judges Robert Macfarlan and John Basten ruled that the delegate appointed to assess the proposed merger could not have properly carried out his assessment without access to the KPMG report.
They also found that the public interest in keeping the report secret was outweighed by the public interest in making the information available.
Judge Ronald Sackville dissented on these points.
Judge Macfarlan found the delegate, Garry West, “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.”
Judge Basten found that the financial advantages identified by KPMG for the government were a critical element in favour of the merger, but this analysis was not provided to the delegate or public.
As a result, Mr West had "constructively failed" is his statutory duty of examining the government's merger proposal.
“The Council was right to assert that the delegate could not properly carry out his function of examination without having access to that material,” Judge Basten ruled.
“Release of the material was also necessary for public participation in the public inquiry to be meaningful.”
The ruling could affect other councils fighting their proposed mergers, because similar processes were used ahead across the state.
Mr Youman said, while Guyra was already merged, it gave the ANTY group a better understanding of the process – and possible ways forward.
“It gives us an idea about how to properly go about things,” Mr Youman said.
Ku-ring-gai mayor Jennifer Anderson said she believed the court’s decision signals a turning point for Berejiklian government.
“If they continue with the merger process they will be flying in the face of our community and the court,” Cr Anderson said.
The decision could have ramifications for other Sydney councils challenging their proposed mergers in the courts, and mean that uncertainty around council mergers will continue for months or years to come.
