NSW Minister for Local Government Ron Hoenig welcomed Monday’s ruling by the Land and Environment Court to continue to investigate Liverpool City Council over allegations of maladministration and corruption.

Justice John Robson said that, from 5 September, Mr Hoenig could continue to hold the public inquiry that Liverpool City Council had previously tried to block.

The ruling allows Mr Hoening to exercise his ministerial powers including suspending councillors, appointing an administrator, and delaying council’s upcoming election.

“The NSW Government welcomes Justice Robson’s ruling today in the Land and Environment Court,” Mr Hoenig said in a statement. “As per the undertakings agreed during the hearings, Liverpool City Council, who were largely unsuccessful in their legal challenge, will be required to respond to the initial notice of intention to defer the election and suspend the council by COB Thursday, 5 September.”

In response, Liverpool City Council issued a statement, saying: “Liverpool Council has been unsuccessful in its action in the Land and Environment Court. Council respects the decision by Justice John Robson and is considering its position.”

Liverpool City Council’s legal bid to stop Mr Hoenig’s investigation hinged on the legitimacy of an interim report from the Office of Local Government that detailed “serious concerns” about widespread dysfunction.

“It has become clear that … there is major dysfunction across the entire organisation,” Mr Hoenig said in July, when a public enquiry was initially ordered by the NSW Government.

The Office of Local Government’s interim report contained a number of allegations against Liverpool City Council relating to recruitment, procurement, financial management, and development applications. There was also widespread evidence of a toxic workplace culture.

Liverpool Mayor Ned Mannoun described the report as a “shopping list of unfounded allegations by unknown people who may hold a grudge against me and the council”.

However, on Monday, Justice Robson ruled that the interim report “was not an act of partiality”.

Mr Hoenig said the concerns listed in the report had been widely known by councillors, council employees, members of the community, and members of state and federal parliament. “These concerns remain and will be addressed in the public inquiry,” he said.

Liverpool City Council has until Thursday to review its options for appeal.