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AUBURN CITY COUNCIL PUBLIC INQUIRY REPORT TABLE OF CONTENTS Section 1: Introduction [1] to [29] Terms of Reference [6] to [8] What was inquired into? [9] to [20] Submissions [21] to [23] Hearings [24] to [29] Section 2: Statutory provisions [30] to [48] Section 438U and claims for privilege [30] to [34] Relevant provisions of LGA [35] to [39] Section 439 – honesty and reasonable care [40] to [43] Model Code [44] Administrative nature of the Inquiry [45] to [48] Section 3: Councillors, staff and other witnesses [49] to [76] Section 4: Mr Francis and Mr Oueik [77] to [106] Claim for privilege against self incrimination [77] to [78] Findings [103] to [106] Section 5: South Auburn Planning Proposal [107] to [197] Findings [173] to [197] Section 6: Berala Village Planning Proposal [198] to [301] Findings [265] to [301] Section 7: Grey Street Planning Proposal [302] to [376] 2 Findings [359] to [376] Section 8: Marsden Street Planning Proposal [377] to [445] Findings [415] to [445] Section 9: Sale of the John Street Car Park [446] to [541] Findings [506] to [541] Section 10: 40-46 Station Road Auburn [542] to [612] Findings [592] to [612] Section 11 14-22 Water Street Lidcombe [613] to [631] Findings [624] to [631] Section 12 Alleged falsification of BASIX certificate [632] to [639] Section 13: 1A Henry Street Lidcombe [640] to [689] Findings [675] to [689] Section 14: Parking related matters [690] to [732] Findings on Al Faisal [702] to [706] Findings on Park Road (Mr Soares) [714] to [719] Other findings [729] to [732] Section 15: Closure of Francis Street Lidcombe [733] to [758] Findings [752] to [758] Section 16: Mr Burgess and Mr Fitzgerald [759] to [772] 3 Section 17: Summary of Findings [773] to [838] Section 18: Recommendations [839] to [866] ISBN 978-1-922001-65-8 4 SECTION 1: INTRODUCTION (a) Public inquiry under s 438U of the Local Government Act 1993 1. The City of Auburn was a local government area in the West of Sydney. Its town centre was approximately twenty-two kilometres from the Sydney CBD. It had about eighty thousand residents, and as of 21 January 2016 ten persons filled the positions of Councillors on the Auburn City Council (the Council). 2. On that date, the then Minister for Local Government, the Honourable Paul Toole MP (the Minister), appointed me as Commissioner under s438U of the Local Government Act 1993 (the Act) to conduct a Public Inquiry (the Inquiry) into the Council. In generalised terms the purpose of the Inquiry was to inquire into, and subsequently report on, the existence of factual matters that largely, but not exclusively, related to the governance of the Council. 3. The use of the past tense in relation to the Council is deliberate. One curiosity concerning the Inquiry is that by the time public hearings commenced at the end of May 2016, the Council no longer existed. This requires a brief explanation. 4. Also on 21 January 2016, the Minister gave notice of his intention to suspend the Council under s.438K of the Act. Under the relevant legislative provisions, the Council was invited to make submissions concerning the proposed suspension. It did so, and opposed suspension. The Minister, however, determined to suspend the Council on 10 February. That decision had the effect of suspending the governing body of the Council – that is, its ten councillors – from their civic office. Mr Viv May was appointed Interim Administrator of the Council. Under the provisions of the Act, Mr May was granted all of the functions of the Council. 5. On Thursday 12 May 2016, a series of council amalgamations were proclaimed. Parts of the City of Auburn and the City of Holroyd were merged to become the Cumberland Council. Other parts of the City of Auburn were merged with the City of Parramatta Council. Mr May was appointed Administrator of the new City of 5 Cumberland. Despite these matters, pursuant to clause 7(3) of the Local Government (City of Parramatta and Cumberland) Proclamation 2016, the Inquiry was to continue as if the Council had not ceased to exist. (b) Terms of Reference 6. The Terms of Reference for the Inquiry were the following: To inquire and report on the following matters relating to Auburn City Council: 1 Whether the Council and its elected representatives have complied with applicable laws, Council’s adopted Code of Conduct, the procedures for the Administration of the Code of Conduct, relevant planning legislation and Council’s administrative rules and policies and have fulfilled its and their legislative duties, powers and functions; 2 Whether the relationships between councillors are conducted properly to ensure that individuals do not receive favourable treatment from decisions made by the elected Council or by Council staff; 3 Whether the governing body commands the community’s confidence, and will continue to be in a position, to direct and control the affairs of Council in accordance with the Local Government Act 1993, so that Council may fulfil the charter, provisions and intent of the Local Government Act 1993 and otherwise fulfil its statutory functions; and 4 Any other matters that warrant inquiry, particularly those that may impact on the effective administration of Council’s functions and responsibilities or the community’s confidence in the Council being able to do so. 7. The Terms of Reference are broad, and not confined by time. People are, and it was not possible for the Inquiry to consider every matter that potentially fell within the Terms of Reference. Further, a proper construction of both s438U of the Act, and the Terms of Reference, did not allow an inquiry into every matter of public controversy that has surrounded the Council in recent years. This matter is discussed more fully in some of the sections of this Report that follow below, but in short, had the Inquiry attempted to inquire into certain matters that were raised peripherally with other matters more central to the Terms of Reference and the statutory scope of s438U of the Act, the Inquiry may have acted unlawfully. 8. Properly construed, the Terms of Reference have a direct link to many of the provisions of the Act and other relevant legislation, concerning both the role of the 6 governing body of the Council, and the role of the staff, including senior staff. These provisions, and the nature of the Inquiry, are discussed in Section 2 of this Report. For the moment though it is important to note some features of this Inquiry. (c) What was inquired into? 9. Of the four planning proposals that were the subject of evidence at the public hearing, there was evidence that one had increased the value of properties owned by companies controlled by a former Councillor by nearly twenty-five million dollars. Another of the planning proposals could also have resulted in a significant increase in the value of properties owned by another Councillor. A third planning proposal was persisted with by the Council against the strong recommendations of planning staff, and despite the proposal having failed to achieve “Gateway” approval from the Minister for Planning pursuant to s.56 of the Environmental Planning and Assessment Act 1979 (EP&A Act). The fourth planning proposal inquired into also had little support from the planning staff of the Council, and was described at the public hearing as lacking “sense”, amongst stronger criticisms. There was a perception that the Council voted in blocks, perhaps according to their business interests or backgrounds. There was a great deal of publicity over the closure of Frances Street for Mr Mehajer’s wedding, and in relation to the Contract for Sale of the Council car park at 13 John’s Street. 10. Against this background, the calling of this Inquiry was perhaps inevitable. It should be noted however that the Inquiry was not a “corruption” Inquiry. Its nature and scope comes from various statutory provisions. They are discussed in Section 2 of this report. 11. Much of the Inquiry was conducted by way of public hearings. Some private hearings were conducted pursuant to powers under the Royal Commissions Act 1923 (RCA). The transcript of all private hearings ultimately became exhibits at the public hearing. The Inquiry received evidence and examined witnesses in relation to the four following planning proposals: The South Auburn Planning Proposal (Section 5), the Berala Village Planning Proposal (Section 6), the Grey Street Planning Proposal (Section 7), and the Marsden Street Precinct Planning Proposal (Section 8). 7 12. The Inquiry received evidence and conducted a public hearing in relation to the “sale” of a Council owned car park at 13 Johns Street Lidcombe. The purchaser of this property was a company associated with Mr Salim Mehajer, the Deputy Mayor of Auburn at the time that the Council was suspended. The sale of this property was notable for extensions of time granted in relation to various terms of the Contract for Sale, and in relation to advice given by the Council’s solicitors but not followed by Council. This issue is dealt with in Section 9 of the Report. 13. The Inquiry also received evidence and conducted a public hearing in relation to the development of a residential flat building at 40-46 Station Road Auburn. This was a development of 12 x 3 bedroom and 29 x 2 bedroom units following a grant of development consent in June 2000. The developer was BBC Developments Pty Limited, a company owned and controlled by Mr Ronnie Oueik, a councillor at the time of the suspension of the Council (but not in June 2000), and a former Mayor.

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