No amalgamation. Yet?

The NSW Land and Environment Court has handed down its decision in relation to the proposed merger of Willoughby, North Sydney and Mosman Councils.

The Commissioner found:

The proposed Mosman, North Sydney and Willoughby amalgamation

I have concluded that only one of the specific complaints raised by the Councils which challenged this amalgamation is valid. This means that the Delegate who had been assigned the task of inquiring into, and reporting on, this proposed amalgamation had failed, adequately, to have regard to one aspect of the elements mandated by s 263(3) of the Local Government Act 1993 (the Local Government Act) as part of his inquiring into and reporting upon this proposed amalgamation.

The consequence of this failure is that the report prepared by the Delegate, and provided by him to the Local Government Boundaries Commission (Boundaries Commission) and the Minister, does not constitute a report, in this regard, in satisfaction of the statutory requirements of the Local Government Act.

The outcome is that the Delegate has not completed the task for which he was appointed and thus, at the present time, there is no proper statutory foundation for this proposed amalgamation. This means that this proposed amalgamation remains in the hands of the Delegate.

In making this determination, the Commissioner found:

Provision of adequate, equitable and appropriate services and facilities

As earlier set out, the Councils’ complaint on this point is that the Delegate failed to give any adequate consideration to “the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities”.

The Councils’ written submissions addressed this point as follows:

75. The next error committed by the Second Delegate was to fail to consider factor (e1) relating to the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities. As such, the Delegate was required to consider the impact of the Second Proposal on the provision of adequate, equitable and appropriate services and facilities.

76. The Second Delegate’s consideration of this issue is contained in section 5.6 of his report. After summarising submissions made concerning likely levels of service under the proposed new entity, the Delegate concluded (as p.33) that under the merger proposal, and pursuant to Government policy, the service level trajectory was fixed for 4 years, and that beyond that time, service levels would be a matter for any new merged to determine. The Delegate comprehensively failed to consider the fundamental issue, namely whether service levels would be likely to decline or not. That was the conclusion reached by the Boundaries Commission.

To give a context to the above, I reproduce the relevant extract from the Boundaries Commission’s comments on the s 263(3)(e1) aspect of the Delegate’s report. The Commission said:

[5.2.6] – Service delivery and facilities

Section 263(3)(e1) of the Act requires the Delegate to have regard to:

“the impact of any relevant proposal on the ability of the councils of the areas concerned to provide adequate, equitable and appropriate services and facilities”.

The Delegate stated that service delivery received a large level of interest with around half of written submissions identifying service factors. He noted the themes presented in this factor included differing levels of satisfaction with current service delivery, concerns over loss of services in a merged entity, local community service involvement (“volunteerism”) and the different needs of the different council areas.

The Delegate stated that under Government policy for merged entities, the service level trajectory would be fixed for four years. Beyond that time, the Delegate considered that service levels would be a matter for any new merged Council to determine in consultation with its community as part of the Integrated Planning and Reporting process including consideration of the maintenance of an administrative presence at North Sydney, Chatswood and Mosman. The Delegate also concluded that volunteering would not be expected to decrease in the event of a merger.

The Commission’s view is that the Delegate did not adequately consider the issues under this factor.

In conclusion the Commissioner found:

Mosman and North Sydney Councils

(Note: Willoughby Council had been ‘joined’ to the case’)

I have concluded that none of the general complaints concerning the proposed amalgamation process for these Councils are well founded and those complaints provide no basis to prevent this amalgamation from proceeding.

However, for the reasons earlier set out, I have concluded that the Delegate’s functions pursuant to s 263(3) have miscarried in that the Delegate constructively failed to address one of the provision’s mandatory requirements, that being the requirement to have regard “to the need to ensure that the opinions of each of the diverse communities of the resulting area or areas are effectively represented” (s 263(3)(e5)).

On the other hand, I am satisfied that the Delegate’s exercise of his functions with respect to any of the other elements of s 263(3) did not miscarry.
These findings mean that the Delegate has not yet completed the task delegated to him by the Acting Chief Executive.

For the reasons earlier discussed, the appropriate outcome in each of the Mosman Municipal and North Sydney Council proceedings is the making of a bare declaration that the report furnished by the Delegate to the Boundaries Commission is not a valid report in satisfaction of the requirements of s 218F(6)(a) of the Local Government Act.

Costs

(Note that because Willoughby City Council had been “joined’ to the case and was not a Respondent in the case, there was no costs to be levied from them).

Mosman Municipal Council matter

In Matter No 155301 of 2016, the orders of the Court are:
Declares that the report furnished by the Delegate to the Boundaries Commission is not a valid report in satisfaction of the requirements of s 218F(6)(a) of the Act; and

Unless a party files a Notice of Motion proposing an alternative order on the question of costs by the close of business on Tuesday 4 October 2016, I will, on the day after that date, order that the First to Fourth and Seventh Respondents are to pay the Applicant’s costs as agreed or assessed.

North Sydney Council matter

In Matter No 158919 of 2016, the orders of the Court are:
Declares that the report furnished by the Delegate to the Boundaries Commission is not a valid report in satisfaction of the requirements of s 218F(6)(a) of the Act; and
Unless a party files a Notice of Motion proposing an alternative order on the question of costs by the close of business on Tuseday 4 October 2016, I will, on the day after that date, order that the First to Fourth Respondents are to pay the Applicant’s costs as agreed or assessed.

Commentary

What does this mean? The Government cannot forcibly amalgamate Willoughby, North Sydney and Mosman Councils at this time because the report submitted by the Delegate to assess the amalgamation proposal was deficient in one aspect. The Commissioner found that the proposed amalgamation lies in the hands of the Delegate.

The Government might reappoint the Delegate (or another Delegate to provide a complete report. Whether such a report would come to the same conclusion (recommending amalgamation) would be open to conjecture.

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