Inner West Mayor’s property up for sale but questions remain

By WENDY BACON

Inner West Council Mayor Darcy Byrne has listed his property in East Balmain for auction in August.

On Monday last week, Domain.com published a photo of the house with inspection times and an advertised auction date of August 11. The house is promoted as “the ultimate blank canvas in a coveted location” ready to be transformed by “owners looking to capitalise on its considerable assets’. All of which is ‘property speak’ for saying that this is a  ‘renovator’s delight’ or a dilapidated house in a prime location. Properties in the area have rapidly increased in value so it should sell for at least $2 million. 

But with a number of questions about the accuracy of his annual disclosure of interests forms remaining unanswered, fellow councillors are concerned. The sale is unlikely to shut down the issue, especially while the Mayor refuses to answer questions or gives contradictory responses.

Independent Councillor John Stamolis and five Greens councillors expressed concerns this week about the lack of accountability and transparency raised by the Mayor’s handling of his interests. 

In response to questions from City Hub, Inner West Greens Councillors Liz Atkins, Kobi Shetty, Justine Langford, Marghanita Da Cruz and Dylan Griffiths acknowledged community concern around the recent reports in the media regarding an outstanding rate debt owed by Darcy Byrne, Mayor of the Inner West. They said, “We believe the Mayor should respond to these concerns. If someone is a public figure then they must expect to be subject to public scrutiny.” 

Concerns over the Mayor’s ability to deal with issues of accountability have arisen less than one year after the NSW Civil and Administrative Tribunal suspended him for three months from the previous Council for three misconduct breaches and two partial breaches of the NSW Local Government Act code of conduct. As a penalty NCAT suspended Byrne’s right to be paid any fee or other remuneration for his duties for three months.

Quick sale

The quick sale of the property is a surprise because only three weeks ago, Byrne told both The Daily Telegraph and City Hub that he was unable to sell the house because he did not have deeds to it.

But this explanation seemed odd. A property search showed that he has held a 100% title to the property since 2020. The title is ‘unfettered’ which means he could sell the house at a time of his choosing. He declared his 100% ownership of 9 Creek Street on his Annual Return in 2019/2020.

Once the house is sold and settled, the Mayor will finally be able to pay more than $15,000 plus interest in rates owed on the property. But this won’t remove questions about why he failed to declare the debt on previous annual declarations of interest.  Councillors are required to declare debts as well as assets in their annual return. Small debts of less than $500 are excluded. Debts need to be disclosed because they can influence a person’s conduct and decision making and so must be declared in the public interest. Last year, the Inner West Council debated and made decisions about raising rates. Byrne did not declare the debt during those debates and has not answered questions inviting him to explain on what basis he failed to do so. 

While other Councillors say they did not know about the debt, staff processing failure to pay rates must have always been aware of the Mayor’s debt. But by late 2020, at least some senior staff were concerned.

In October 2020, Brian Barrett joined the Council as its Acting General Manager after Byrne’s relationship with the previous General Manager Michael Deegan broke down. 

In March 2021, Barrett wrote an email to Byrne. He referred to an earlier briefing in which he had raised the debt with Byrne.  He refers to Byrne having told him he was ‘concluding the sale’ of his deceased parents’ house and that he would then pay the rates. Barrett refers to a more recent conversation in which he ‘believes’ Byrne said that he had a new solicitor and had not yet received the ‘proceeds of sale” or the “title deeds” (Byrne already had a title in his name by that date). Barrett concludes, “I have informed Finance not to take recovery action as the debt will be paid in the ‘foreseeable’ future.” 

But more than a year later the property has not been sold. In June, Byrne told The Daily Telegraph that “Given the delay in the processing of the deceased ­estate, I have entered into a payment plan with the ­council, which includes ­paying the historic rates debt plus interest when the property is sold”.

“This is a normal council process for dealing with ­deceased estates.”

Given that Barrett appears not to have been aware of any payment plan, when did Byrne arrange the payment plan and with whom? What ‘normal process’ is being followed?

Barrett was always a temporary appointment and is currently acting as General Manager at Strathfield Council. In March 2021 he unexpectedly sent an email to council staff announcing  he would be leaving the role earlier than intended following difficulties dealing with the mayor. The new General Manager Peter Gainsford did not start until nearly a month later in May. He had a long term relationship with Byrne through many years at Leichhardt Council, where Byrne was a Councillor from 2008 onwards, until it was merged into the Inner West Council.  He also joined the Inner West Council when it first formed before becoming General Manager of Canada Bay Council. 

Gainsford is responsible for the governance of the Inner West Council. His LinkedIn profile highlights his proven ability in promoting “ trust, transparency, integrity and accountability.” He may not have been briefed about the debt. In any case, it was not included on Byrne’s annual return for 2020/2021 which Byrne signed in August 2021. Last week, City Hub sent the General Manager a series of questions:

Given that senior Council staff were well aware of Mr Byrne’s considerable rates debt over several years what explanation is there for it not being declared on his Annual Returns?

Since this matter first became public in June, have you discussed it with the Mayor?

Have you taken any action in relation to this matter, Including contacting the OLG?

Do you intend to take any action in relation to any of these matters, if so what?

These questions have not been answered. 

In response to questions from City Hub, Councillor John Stamolis said, “The NSW Local government code of conducts sets out Councillors reporting obligations. It is very clear that this outstanding debt to Council should have been reported. It is not just a matter of public interest, it is a breach of a public requirement.”

Mayor claims house that he hasn’t lived in for decades is his ‘residential address’.

The second issue is the Mayor’s declaration that 9 Creek Street is his ‘residential address’.

On Byrne’s Annual return for 2020/2021, he declared one property and the address of that is redacted because “residential address has been redacted as this is personal information.”  Knowing that 9 Creek Street is not his residential address, City Hub was initially unsure whether Byrne had declared the East Balmain property or not. 

So we asked some questions. On July 6, an Inner West Council spokesperson informed us that the unredacted entry on Byrne’s Declaration of Interest was 9 Creek Street. This raised new questions about the accuracy of the Annual Disclosure form because it is clear that 9 Creek Street is not Byrne’s residential address.

In mid-June, he told the Daily Telegraph reporter who broke the story, “The property is derelict and has remained empty since then. …I haven’t lived at my ­deceased parents’ home for about two decades.” So why did he describe it as his ‘residential address’? This question also remains unanswered. Although representing the Inner West ward of Balmain, Byrne has been living in the Lewisham/Summer Hill area since at least 2020.

City Hub also asked the General Manager: 

What oversight do Council staff including yourself have over annual returns? Do you check if the reasons for redactions are recorded correctly? Given that Council was aware that the Mayor was not living in Creek St, why was it described as his residential property in August 2021? 

Should Byrne have declared a conflict of interest in rates’ debates?

There is also the issue of whether Byrne should have declared his debt to council when rates were being discussed in early 2021. Councillors are supposed to declare conflicts at meetings when relevant issues are being debated. Interests do not have to be clear cut pecuniary conflicts but can be financial or non-financial interests that could be perceived by a reasonable person to impact on a Councillor’s vote. It is hard to see how a Councillor’s inability to pay rates would not be relevant to a discussion about the level of rates. 

It was a failure to understand conflicts of interest that brought Byrne undone in 2021. Having issued threatening defamation letters to two Councillors Col Hesse and Pauline Lockie, he failed to declare an interest in a possible legal action when he moved a motion calling on them to withdraw comments on social media, which he believed reflected unfairly on his actions in relation to a Marrickville property development.

In August last year at the Tribunal, NCAT Principal member Linda Pearson found Byrne’s code of conduct breaches were serious ones and that any “reasonable person” would have realised there was a conflict of interest. She found that a suspension of pay was appropriate rather than more lenient options of ‘counselling’ or ‘reprimand’ or a more serious one of ‘suspension from office’.  She found that Byrne’s experience as a Councillor and then Mayor meant that he had “an important role of leadership and responsibility towards other councillors and members of the community” which meant that his misconduct justified “a greater degree of censure”.

Until the Tribunal ruled against him, Byrne maintained that the Office of Local Government investigation was part of a conspiracy to stop him campaigning against NSW government rorts, or that if he had committed breaches they were ‘minor process issues’. 

After the Tribunal made its findings, Byrne said he was sorry. But in acknowledging his weakness, he also blamed others. He told the Tribunal  that “he has repeatedly requested training in Councillors’ legal and regulatory obligations from multiple managers”. Last year, City Hub’s reporter commented, “Assuming this is true, were these requests in writing or if they were verbal are they recorded in filenotes? To ignore requests that indicate a Mayor does not understand regulatory and legal obligations is a serious matter. …What other issues did Byrne feel uncertain about that led him to request training? What steps did he himself take to sort out his uncertainties?” 

Byrne’s criticism of previous managers was part of a public legal judgement and one would assume they would be known to senior Council officers. Given Byrne’s  acknowledgement of his previous struggles with conflict of interest, how much extra training or support has Byrne and other Councillors been given?

Publication of ‘redacted’ information

Councils are required to publish Annual Disclosures of interest on their website in an accessible way. When City Hub first went looking for the Disclosures, they were nowhere to be found. After we contacted Council media, a page ‘Annual Returns’ appeared on the website. When we asked Council about why they were missing, a spokesperson informed us that, “There was a short period where a clerical error was detected in relation to 2021 disclosures which resulted in unredacted information being uploaded to the website. The information was unavailable online for a short period of time while the error was corrected.”

Redactions are made to protect privacy. It may be that the gap in publishing Disclosures was brief. In order to further clarify, we asked the General Manager Peter Gainsford: how long the annual returns were off line and for what dates? Did anyone from Inner West Council inform any government agency about the breach of privacy and were the Councillors notified?

On Friday, an Inner West Council external communications officer sent us a statement stating that the Annual Returns are published in “accordance with Office of Local Government requirements” and “Redactions are made in accordance with the Privacy Act by Council’s Governance Staff.” These statements do not answer City Hub’s questions.

Independent Councillor John Stamolis told City Hub that in his opinion anything that could affect Councillors’ responsibilities to “complete and publish required information” should be brought to the immediate attention of Councillors and that he was concerned that Council could be taking action “without advising Councillors”. The Inner West Greens also told City Hub that they are seeking clarification and that “Councillors should have been informed if personal information about them was mistakenly published.”

Stamolis is also concerned that there is a lack of consistency in relation to the amount of information revealed across the Inner West Councillors’ disclosures of interest and with the practices of other Councils. Some Inner West Councillors reveal the identity of their employers for instance, some do not. He would like the IWC to seek guidance from the Office of Local Government. He asked, “Who is making these decisions about reporting requirements and redaction of information.  We need to know!”

Stamolis, who had a career as a statistician and public servant, links the issues that have arisen in relation to Byrne’s house with a broader lack of confidence in the Council. He referred us to a survey that showed 1 in 5 people across the Inner West are not satisfied with Councils integrity and decision-making. “This is something Council needs to get on top of,” he says. “I have spent 25 years around the Council scene and, as a Councillor since 2008. The lack of accountability and transparency are now the worst I have seen. The level of bureaucracy is overwhelming.  Our people don’t have a LOCAL Council any more, nor a voice.”  

Stamolis told City Hub that he is aware that a number of residents have written to the Minister for Local Government Wendy Tuckerman about their concerns.

The Greens are also concerned about the unanswered questions and the accuracy of Byrne’s declaration of interest. “We believe that annual declarations of interest completed by councillors are an important mechanism to ensure transparency and integrity in local government, and as such, must include complete and accurate information. It is incumbent on all Councillors to ensure that their declarations are accurate and up to date.”

Under the NSW Local Government Act, Councillors have a statutory duty to act honestly and exercise a reasonable degree of care and diligence and in a “way that enhances public confidence in local government”. One of the ways in which they exercise this duty is by signing disclosures of their interests. They are prohibited from including false or misleading information, which could include omissions.  

It is possible for honest errors to be made in declarations. In such circumstances, Councillors can consider making an explanation and  updating their annual returns. Darcy Byrne has both refused to provide explanations and chosen not to correct the published record. 

Wendy Bacon was previously the Professor of Journalism at UTS. She is not a member of any political party. She supported Greens Councillor Sylvie Ellsmore in her City of Sydney campaign in 2021.