Kiama Council CEO Jane Stroud has notified Councillors that the Notice of Motion (NoM) to pause the sale of Blue Haven Bonaira is considered unlawful, labelling its tabling as “intentionally politically motivated and not in the greater public interest.”

Questions were raised as to whether the tender to sell Blue Haven Bonaira should proceed following an open letter published by former Kiama Mayor Sandra McCarthy and former Councillor Howard R Jones, which called for Council to pass a motion to suspend all action on the tender of Blue Haven Bonaira and seek an intervention by NSW Minister for Local Government to independently review the entire sales process.

Councillor Kathy Rice submitted a NoM on 11 December 2023 with the exact wording included in the open letter that would suspend the Blue Haven Bonaira divestment and instigate an independent investigation. 

Legality of NoM

The NoM was submitted 25 minutes prior to the close of NoM’s, which although is in line with the Code of Meeting Practice, did not provide ample time for Stroud to provide advice or commentary before it was included in the Council business papers. After reviewing the NoM, Council were advised to defer the matter to the next ordinary meeting in February 2024.

Since then, Stroud has determined that the NoM as is cannot be considered lawful in a number of areas.

The Local Government Act does not allow for tenders to be paused, and doing so would “frustrate the process and expose Council to legal risks associated with entering into a commercial transaction in bad faith.” However, the wording could be adjusted to state “That Council cease the tender for the Blue Haven Bonaira divestment,” rather than pause it. 

The wording of the second recommendation would also need to be changed so Council advocates to the Minister of Local Government to issue an order to council or individual councillors or both to refrain from work on the divestment of Blue Haven, rather than seeking an outright intervention, which is not within the Minister’s powers.

Financial implications

Stroud also stated that the NoM does not satisfactorily take into account the significant financial implications that halting the Blue Haven Bonaira divestment would have on Council’s cash flow. Since Council resolved to sell Blue Haven Bonaira in October 2022, Councillors have resolved a number of motions relating to the sale that must be legally adhered to, such as repaying the loan from TCorp that was used to pay for Blue Haven’s construction. If the motion were to pass, Kiama Council would be in serious jeopardy of not being able to make its financial commitments, making its financial situation even worse.

The recommendation that the wording of the NoM should be changed to be lawful doesn’t necessarily mean it will be changed before Councillors vote on 1 February 2024. The NoM may not even be debated at all, as Stroud’s advice to Council is that the NoM should not be considered by Council at all due to it not being lawful.

However, Stroud has requested that Mayor Neil Reilly make a ruling on the NoM and that if debate is allowed to occur, that her response to the open letter be considered as part of the debate. You can read Stroud’s full response here.

“Intentionally disruptive”

Stroud stated that she believes the introduction of the NoM was “intentionally politically motivated and not in the greater public interest.”

“The tabling of this letter in the business paper as a NoM is disruptive, and an expression of dissatisfaction with Council’s democratically and lawfully made prior resolutions regarding Blue Haven Bonaira in October 2022 (by majority vote) and again February 2023 (by unanimous vote),” Stroud stated.

Stroud also stated that including the open letter resulted in an erosion of staff workplace rights, as parts of the letter interpreted as complaints and should have been accepted and handled as such, not through an open letter.

She also stated that there was a possibility that media coverage and political cycle would have an impact on the value of the tender.

“Any media that [negatively] detracts from the value captured at point of sale and offer is clearly not in the best interest of the community and is not in line with prior [decisions] ratified by Council. The value proposition of the asset reflects market confidence in decision making. Therefore this NoM carries financial risk.”

Kiama Council’s next meeting takes place on 1 February 2024 at 5pm, where Councillor Rice’s NoM to pause the sale of Blue Haven Bonaira will be tabled. Councillors will also receive a confidential report on the tender process for Blue Haven Bonaira.