Ku-ring-gai Council on Sydney’s North Shore has won its appeal against a forced merger and the NSW government has been ordered to pay the council’s cost.

The Court of Appeal ruled in favour of Ku-ring-gai Council in a decision handed down today (Monday) and ordered the NSW government to pick up the council’s tab in the Court of Appeal and the bill from earlier cases in the Land and Environment Court.  

But despite the panel of three judges ruling that the merger should not proceed in its current form, i.e. merging Ku-ring-gai Council with part of Hornsby Shire Council (the section north of the M2 Motorway); there is no guarantee that Premier Gladys Berejiklian will abandon the idea entirely.

The government may appeal the decision or instead opt to restart the Boundary Commission review and release the full KPMG report, a report which the state government has continually argued contained the numbers to back up its financial case for mergers, despite refusing to release the full version while repeatedly insisting it had done so.

Delegate Garry West filed a report to the Boundaries Commission recommending the merger go ahead after a public inquiry but the judges concluded that Mr West could not properly assess the financial impact of the merger without access to the full KPMG report, which in turn meant the council had been denied procedural fairness.

“The appellant was denied procedural fairness as the delegate chose to rely on the KPMG analysis, rather than conducting his own assessment of the merger, when the appellant was not in possession of the document in which the analysis was contained,” the judgement said.

The government had argued that releasing the entire report was contrary to public interest because of concerns over confidentiality but the court disagreed and said public interest was better served by releasing the whole report.

The panel said that Mr West had also failed to consider the impact of the merger on the 20,000 Hornsby Shire Council residents south of the M2 Motorway who would not be part of the new council.

But the council is not out of the woods yet. The possibility of starting the merger process again for Ku-ring-gai, rather than abandoning it, was flagged in the court’s judgement.

 “Although, if the decision were to be remade by the same delegate, it is likely that the same result would be reached, that conclusion does not follow as a matter of law,” the judges said.

“It cannot be assumed that the Minister would elect to refer the unchanged proposal for further examination or, if he did, that the process would necessarily produce the same recommendation. If the flawed examination can be redone properly, relief allowing that to happen should be granted.”

Despite the warning signs, Ku-ring-gai Mayor Jennifer Anderson said she was ‘heartened’ by the court’s decision.

“The very real concerns of our council and residents over this merger have been ignored by the government and we feel vindicated by today’s decision,” Ms Anderson said.

 “We believe the court’s decision signals a turning point for Premier Berejiklian’s government. If they continue with the merger process they will be flying in the face of our community and the court.”

She said the merger should not proceed because Ku-ring-gai ratepayers would be robbed of any real say in how the area was managed and how rates were spent.

The Mayor said the council would wait to see what the state government would do after the court’s decision.

“We will continue to seek meetings with Premier Berejiklian and the Minister for Local Government Gabrielle Upton to press our case against being forcibly merged with Hornsby,” she added.

Greens Local Government spokesman David Shoebridge called the judgement “an embarrassing blow” for the Berejiklian Government’s forced amalgamation plans, which he said were unravelling, a particular danger with the North Shore by-election so close.

“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,” Mr Shoebridge said.

“This decision doesn’t just affect Ku-ring-gai Council, it could dismantle every single outstanding amalgamation proposal.                                                                                                                                                 

He said the case was a precedent for ‘pretty much every’ forced amalgamation proposal because they were all based on the partially suppressed KPMG report.

“The delegates who have recommended forced amalgamations have all relied on summaries from KPMG that allege savings will occur. The Court has now said that these summaries aren’t good enough and they need to see the actual evidence.”

A spokesperson for NSW Local Government Minister Gabrielle Upton said: “While we are considering the implications of today’s judgement, the NSW Government is committed to the merger of Hornsby and Ku-Ring-Gai councils given the clear benefits it will have for the local communities.”