Woollahra Council Loses Court Challenge Against Amalgamation

Monday 25 July 2016 @ 10.50 a.m. | Legal Research

Woollahra Council has failed in an attempt to challenge the Baird Government’s Council amalgamation process.  Last week, Chief Justice Preston of the New South Wales Land and Environment Court dismissed Woollahra’s case against the Minister for Local Government, finding that the Council had not successfully established any of its grounds of challenge.  According to a Sydney Morning Herald article, the Council are currently weighing up the benefits of an appeal, with Mayor of Woollahra Toni Zeltzer saying she was ‘mindful of the costs already borne by residents’.

The Minister for Local Government, Paul Toole, told the paper that ‘the legal win for the government showed that the government had followed the correct processes when merging NSW councils’.

The Council’s Arguments

Woollahra Council argued that several steps in the amalgamation process were not properly carried out as required by Chapter 1 Part 1 Division 2B of the Local Government Act 1993 (NSW) (“the Act”).  They sought to restrain the Minister for Local Government from recommending to the Government that the proposal for amalgamation be implemented.

Chief Justice Preston summarised their arguments at [5] – [7]:

“Woollahra Council claims that the Delegate:

a)      did not give reasonable public notice of the holding of the inquiry, as required by s 263(2B) of the Act;

b)      did not hold an inquiry into the proposal in accordance with s 263(2A) of the Act;

c)       did not examine the proposal in accordance with s 218F(1) and s 263(1) of the Act; and

d)      did not accord Woollahra Council procedural fairness in connection with the inquiry or examination.

Woollahra Council claims that the Boundaries Commission:

a)      did not accord Woollahra Council procedural fairness in connection with the Boundaries Commission’s review of the Delegate’s report; and

b)      did not conduct a review of the Delegate’s report in accordance with s 218F(6)(b) of the Act.

Woollahra Council claims that the statutory amalgamation process undertaken in respect of the proposal was invalidated because it was conducted on the misleading premise that KPMG had provided independent analysis of the proposal.”

However, Chief Justice Preston rejected all these arguments, concluding that the procedure followed by the Government had met the necessary requirements set out in the Act.  He did not accept any part of the Council’s challenge, dismissing their claims entirely and awarding the Government’s costs.

A number of other Sydney councils are planning to commence legal action against their amalgamation processes, including Strathfield, Mosman, Ku-ring-gai, North Sydney and Botany Bay.  These moves have meant some amalgamations have been delayed, although others have taken place.

While the Land and Environment Court’s decision will be a blow to the councils looking to undertake legal action, Greens MLC David Shoebridge told the Sydney Morning Herald that each council had “separate legal points and unique factual circumstances from other councils” which would differentiate the cases.

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Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 86 (20 July 2016)

Big victory for Baird mergers as Woollahra Council loses court challenge (James Robertson, The Sydney Morning Herald, 20 July 2016)

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