Local Governments undergoing amalgamation that are members of Regional Local Governments are going to have to look at the consequences the amalgamation will have on the Regional Local Government and its operation.
The term Commencement in this update means the day of commencement of any amalgamation order made by the Governor on the recommendation of the Minister pursuant to section 2.1 of the Local Government Act 1995 (WA) (the Act).
References to an Establishment Agreement in this paper are a reference to an establishment agreement made pursuant to Part 3, Division 4 of the Act.
The position of a Local Government and its status as a member of a Regional Local Government is going to depend on the nature of the order made under section 2.1 of the Act. We have set out below some scenarios.
Where a Local Government takes over the whole of the area of an abolished District
This scenario is where the order has the effect of a Local Government remaining but taking over the whole of the area of an abolished District by boundary change. Alternatively it will also apply where a new District is created that takes over the whole of the area of an abolished District.
In this case the rights and liabilities under a section 3.64 Establishment Agreement entered into by the abolished Local Government will likely become rights and liabilities of the remaining or newly created Local Government pursuant to Regulation 6 (4) (a) of the Local Government (Constitution ) Regulations 1998 (WA) (the Constitution Regulations).
However, it would be advisable for the new or reformed Local Government to review the appropriateness of continuing to be a member of the Regional Local Government given the new or changed environment it finds itself in.
The terms of the Establishment Agreement itself may provide some guidance on these issues. There may also be terms contained in the Establishment Agreement that trigger rights by reason of the amalgamation. These rights will be effective and may bind the new Local Government.
Where a Local Government takes over part only of the area of an abolished District
This scenario is where the order has the effect of abolishing a Local Government with 2 or more other Local Governments each taking over parts of the area either by boundary change or the creation of a new Local Government.
In this scenario the Constitution Regulations do not alter any rights including rights under an Establishment Agreement.
However, there is an obligation under clause 11 (2) of Schedule 2.1 to the Act on all Local Governments affected by an amalgamation to negotiate as to any adjustment or transfer of rights. If the Local Governments do not agree on what should happen and they cannot resolve the matter by negotiation then the Minister has power to resolve those disputes under section 9.63 of the Act.
Consequently the Governor has power under clause 11 (3) of Schedule 2.1 to the Act to give effect to the Minister’s decision.
Where a Local Government is not abolished but loses area
Where a Local Government, let’s call them (A) is not abolished but say loses part of its area to another local government, let’s call them (B) then rights and liabilities as a member of a Regional Local Government will still remain with Local Government (A) after Commencement.
Care will need to be taken as it may no longer be appropriate for Local Government A to remain a member of its Regional Local Government given the area that it has now lost.
In any event it will be important for the affected Local Government to carefully review the terms of the Establishment Agreement as this should contain procedures for the winding up of the Regional Local Government and for the division of its assets.
If you have any questions about Amalgamation and Regional Local Governments or the process to be followed, please contact Brenton Oakley or Philip Mavor on (08) 9321 3755.
The information published in this paper is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.