Inner West Mayor acknowledges failure to declare debt

By WENDY BACON

Inner West Mayor Darcy Byrne has acknowledged that he failed to declare a financial debt of unpaid Council rates in his annual disclosure of interests. 

Local councillors are required to lodge an annual return of their pecuniary interests including debts. Byrne’s explanation for his failure to disclose the debt is attached to his 2022 Disclosure of Interests that was tabled at a Council meeting on October 25.

Byrne declares the debt in his 2022 return but his explanation raises further questions about his understanding and approach towards accountability measures.  

According to an ‘IWC spokesperson’, Byrne has sent his new disclosure to the NSW Office of Local Government (OLG). Complaints about the contents of disclosures are handled by the OLG. Its first task is to assess whether there is a need for a more formal investigation.

The OLG has received complaints from residents concerning Byrne’s failure to declare the debt, and whether he received any special treatment in relation to rates’ debt and other matters. The Minister for Local Government Wendy Tuckerman has also received complaints that she has forwarded to the OLG for independent assessment.

Tuckerman’s announcement in August that a “team of investigators” will review disclosures of interests submitted by councillors and senior council staff across NSW has focused more attention on disclosures of interest this year. According to the Minister, the purpose of the ‘random audit’ will be to “ensure transparency” and “increase public confidence in the local government”.

“Checks will be conducted randomly after 30 September so councillors and council staff have more than two months to ensure all the information they’ve provided in their return is accurate and complete” Tuckerman said. 

It is possible that complaints about the Inner West Council are one of the reasons for this review.

However Independent Inner West Councillor John Stamolis is sceptical about the review. He told City Hub that “there seems little point in OLG conducting a broader review of disclosures across NSW if it is unable to deal with complaints about disclosures occurring at Inner West Council in relation to the Mayor in a timely way.” 

Before publishing this story, City Hub sent questions to Byrne and gave him an opportunity to comment on any aspect of the issue. As with previous stories in this investigation, he has neither acknowledged or answered questions.

Background of Byrne’s rate debt

City Hub revealed in June that Byrne had failed to declare a $15,000 rates debt owed to Council for a Balmain property that he inherited in 2017. 

The title of the property and its rates debt was transferred to Byrne in September 2018 (Rates debts always transfer with property). 

On December 2 2020, the Inner West Council received a transfer notice showing that the Balmain property had been transferred to Byrne on September 11, 2018. From this point on, Byrne owned the property. Byrne states that he was not informed by his solicitor that the property had transferred to him.

Rates notices were sent but apparently not received

In his recent disclosure, Byrne explains that he now understands that the Inner West Council has been issuing rate notices to his unoccupied property since December 2020, but that he didn’t receive the notices and therefore was not aware of them. He doesn’t explain why as owner he didn’t take steps to receive the correspondence.

On March 10 2021, Byrne states that he wrote to the Inner West Council General Manager, who at the time was Brian Barrett, informing him that he was not in possession of the deeds to the property. Given that deeds only apply to very old title properties and ownership of this property could be proved by an electronic search of the title, the significance of his reference to “deeds” is not clear. 

Byrne does not explain what motivated him to write that letter to Barrett. The fact that he did write it suggests that he had been told his ownership of the property was an issue of interest to Council staff.

Byrne then states, “On February 3, Peter Gainsford, the general manager of Inner West council sent me a copy of the most recent rates notice. This was the first time I had seen a rates notice for the property.” 

“Mr Gainsford advised me that I needed to enter a repayment arrangement with the council to commence paying the rates debt and to pay the outstanding rates and interest once the property was sold. That arrangement is in place, and with the property selling in September 2022, I will pay the total amount due when the property settlement occurs on 20 October 2022.”

According to Domain.com, the two bedroom property was sold for $1.65 million in October, and the debt has been paid.

In his statement, Byrne explains that he didn’t understand that the debt of his mothers’s estate would transfer to him. A substantial part of the debt, however, accrued after his mother died. 

He states that it didn’t occur to him that a rates debt needed to be disclosed. He thought it was covered by other exemptions in the Local Government Model Code of Conduct.

So is this  the end of the matter?

Byrne’s explanation opens up more questions including his approach to transparency.

There is one glaring omission in Bryne’s account of why he failed to declare the debt.

He fails to mention that he received an email on official Inner West Council letterhead from the then Acting General manager Brian Barrett in March 2021. Byrne omits to mention Barrett’s letter. City Hub has previously reported on this email which is part of official Council records.

On March 31 2021 Barrett wrote,

“ I advised you in one of our briefings that you will be receiving an outstanding rates notice for the property you own at nine Creek Street Balmain. You informed me it was your parents’ home and you will be concluding at sale and which time you will be clearing the rates outstanding. I believe you advise me recently you were dealing with a new solicitor who had taken over your old solicitor’s practice and you have not received a property sale or title deeds as yet. I have informed financial not to take recovery action as your debt will be cleared in the foreseeable future. If you could deal with this matter soon as you can that would be appreciated.“ 

This suggests that Byrne was aware of the debt because he had conversations with Barrett in which it was mentioned. It is clear to that ‘financials’ meaning financial staff had raised it with the Acting General Manager and there was a risk of debt recovery proceedings against the Mayor unless payment was made promptly.

Despite this email, it took Byrne more than a year to put the property on the market so that he could pay his debts.

So why does he state, “On Feb 3 …the general manager of Inner West council sent me a copy of the most recent rates notice.

“This was the first time I had seen a rates notice for the property.” 

Is his choice of words important here?  He may not have literally seen the rates notice but he was aware of it.

His statement may be technically correct but fails to meet high standards of transparency expected of Councillors. 

Byrne’s explanation raises the issue again of the Mayor’s grasp of accountability issues. In 2021 he told the New South Wales Civil and Administrative Tribunal that he had struggled to understand some aspects of conflict-of-interest and blamed this on a lack of training.

Cr Stamolis told City Hub that “Mayor Byrne has a duty to explain what has been going on.  Councillors have asked questions about how the Mayor was able to build up such a debt despite efforts to ask him to pay it.  We still don’t know what policy or arrangements the Mayor was covered by and the General Manager has failed any transparency on this.”

Cr Stamolis has expressed concerns about accountability at the Inner West Council on several occasions this year. Greens Councillors have also stated that they believe that all Councillors should be held to high standards of accountability and transparency. 

Under the code of conduct, Councillors must not be treated in any preferential way compared to any other ratepayer. However exactly how Council approaches other ratepayers who fail to pay their debts for years is not clear.

In August, Acting Mayor Labor Councillor Jess D’Arienzo used her casting vote to defeat a motion supported by Independent and Greens Councillors that would have enabled Councillors to be briefed on this matter. Labor councillors gave no explanation for shutting down the motion without giving any reason. (Read more about this here.)

City Hub submitted questions to the General Manager about what actions he had taken to address questions raised about Byrne’s disclosures. We received a response from a spokesperson. It stated: 

“Disclosures of interest operate as a transparency mechanism regarding council decision making and similar to conflicts of interest are the responsibility of the individuals required to lodge them under the Model Code of Conduct, in accordance with the Local Government Act 1993.”

“Any Complaints about breaches of these requirements are to be referred to the Office of Local Government (OLG). Designated officers’ personal interests are known by the individuals and the Council officers’ role is to ensure all designated officers have returned their forms to Council by the required due date and that they are tabled at the subsequent Council meeting. Council officers rely on the designated officers completing the returns to disclose their personal interests accurately, as we do with conflicts of interest.”

In other words, the only role of Council staff is to make sure the disclosures are lodged, not to inquire into whether they are accurate or not. If residents do make complaints, they are expected to keep them confidential.

This makes the attitude of Councillors to transparency an even more important matter of public interest. Restrictions imposed by the Model Code of Conduct that are supposed to guide councillors in their approach to public debate may be designed to discourage spurious allegations being made publicly, but they also tend to discourage open discussion of public interest matters.

In 2018, Byrne threatened to sue then Greens Councillor Colin Hesse and Independent Councillor Pauline Lockie for critical comments they made about his approach to a controversial development in Marrickville. Although ultimately, NSW Civil and Administrative Tribunal found Byrne himself guilty of breaches of the code of conduct and and suspended his Councillor allowance for three months, the incident caused Councillors a lot of stress and imposed a chill on free speech in the Inner West.

The Inner West spokesperson also said, “As you can appreciate all conversations regarding a person’s Council debts, be it residents, staff or Councillors will not be disclosed unless Council is obligated to do so and as such I will not be discussing any person’s personal debt information, conversations had or actions taken.”

So unless there is an OLG investigation, many questions raised by City Hub and other Councillors cannot be answered.

Other matters 

Bryne has also now declared a 50% interest in a property in Leichhardt that he has owned for some years but did not appear on his 2021 annual return.

Some residents are also concerned about this possible failure to declare other debts. For example, City Hub has also seen a copy of a Water NSW bill addressed to the Mayor in January 2022 for $5000 that was also overdue. This large water bill would suggest that he might also not have been collecting other correspondence from property.

This series will continue. If you have any information, please contact the author. Wendy Bacon who was previously the Professor of Journalism at UTS.