NSW rural councils lose merger case, pay costs

Is Oberon Council about to disappear?



NSW rural councils have been dealt a serious blow to their hopes of preventing the state government forcibly merging them with their neighbours and they have been ordered to pay the state government’s court costs.

Justice Brian Preston, Chief Judge of the NSW Land and Environment Court, dismissed Oberon, Gundagai and Cabonne Shire’s case today (Friday) and ordered the council to pick up the state government’s bill. The councils have until Friday next week to appeal. You can read the judgement here.

The outcome is a potentially expensive one for the three councils.

When Shellharbour lost its court case to merge with neighbouring Wollongong in September the Illawarra Mercury reported that the government was understood to be seeking about $65,000 in costs, a figure which a spokesperson for Local Government Minister Paul Toole said he would not dispute.

During their case, the three rural councils had argued that Mr Toole misused Sections 218F of the Local Government Act to push through forced amalgamations and that the subsequent Boundaries Commission process was procedurally unfair.

The councils also questioned the independence of consultants KPMG and their report which analysed the costs and benefits of mergers, a report which remains substantially unreleased.

But Justice Preston praised KPMG’s work and said the firm’s expertise and experience grew with each piece of work it did for the government.

“KPMG developed a special understanding of and insights into the Government’s local government reform project, which enabled KPMG to better provide the contracted services to the Government,” he said.

Handing down his judgement, Justice Preston said that there was no requirement to seek the views of ratepayers on council mergers, for example through public meetings, polls or surveys, when merger proposals were put forward by the Local Government Minister. This was only mandated when a two or more councils initiated a merger.

He concluded:  “The applicants have not established any of the grounds of challenge to the administrative decisions and actions in relation to the Oberon proposal, the Cabonne proposal or the Gundagai proposal. Each of the proceedings should be dismissed. The usual order for costs in judicial review proceedings, namely that costs follow the event, should apply.”

The merger proposals the councils were fighting included Oberon with Bathurst, Cabonne with Blayney and Orange.

Gundagai Council was merged on May 12 with Cootamundra to form Cootamundra-Gundagai Regional Council. Gundagai was fighting another proposal to merge it with Harden Shire, as well as Cootamundra.

While Oberon, Gundagai and Cabonne objected to their mergers the councils they are slated to merge with support them.

A member of Anti Amalgamation Oberon posted an early reaction to the news on the group’s Facebook page.

“Can you believe this? All of the housing developments going ahead in Oberon, yet we are not fit for the future. What can I say but ‘bugger’. At least impartial. Bathurst will be happy to accept the verdict of the court!”

The group had argued that a merger with Bathurst would double the size of the local government area and the road network and that there would be only 3550 more ratepayers to pay for the maintenance of the additional roads. Much of Oberon – around 42 per cent – is unrateable because of the high proportion of national parks and forestry.

The group said achieving the predicted savings from the merger would will mean job losses, possibly for the staff of both councils.

Meanwhile, Mr Toole welcomed the court’s decision.

“All 10 grounds upon which the councils were relying for their cases were rejected,” Mr Toole said.

“Claims that I, the delegates and the Boundaries Commission had acted in such a way to make the proposals invalid were dismissed entirely.”

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