Canterbury City Council - allegations concerning former councillors and other public officials (Operation Dasha)

Findings of corrupt conduct

The Commission found that Mr Hawatt engaged in serious corrupt conduct by:

• on 16 November 2014, providing Mr Stavis with access to the “suggested interview questions” for the position of director of city planning, which Mr Hawatt had obtained in the course of his role as a councillor of the Canterbury City Council, and allowing Mr Stavis to photograph them, thereby improperly advantaging Mr Stavis in his application for the position  
• between about 24 December 2014 and 18 February 2015, misusing his position as a councillor of the Council to pressure improperly Mr Montague to appoint Mr Stavis as the director of city planning
• on 13 January 2015, misusing his position as a councillor of the Council by offering Mr Montague a gratuity payment of 20 weeks’ salary if he appointed Mr Stavis as director of city planning and retired early
• between about May 2015 and December 2015, misusing his position as a councillor of the Council to influence Mr Stavis to act favourably in relation to the development application for 51 Penshurst Road, Roselands, being property in which his daughter and son-in-law had a pecuniary interest
• between about December 2015 and February 2016, misusing his position as a councillor of the Council to influence Mr Stavis to act favourably in relation to the development application for 23 Willeroo Street, Lakemba, being property in which his daughter and son-in-law had a pecuniary interest
• on 3 December 2015, exercising his official functions as a councillor of the Council to vote in favour of a development application to add two additional storeys to a six-storey development at 548-568 Canterbury Road, Campsie, and an application to modify the existing development approval without disclosing his relationship with the development proponent, Mr Demian, which included the role that Mr Hawatt had begun to play in introducing potential purchasers to Mr Demian for the sale of that site
• failing to disclose his relationship with Jimmy Maroun, and proceeding to exercise his official functions as a councillor of the Council to vote on the development application with respect to Mr Maroun’s property at 538-546 Canterbury Road for six storeys on 4 December 2014, the planning proposal on 14 May 2015, and the modification under s 96 (“the s 96”) of the Environmental Planning and Assessment Act 1979 and development applications on 10 March 2016
• on 3 December 2015, failing to disclose his relationship with Marwan Chanine, and proceeding to exercise his official functions as a councillor of the Council to vote on the development applications with respect to the properties at 212-218 Canterbury Road, 220-222 Canterbury Road and 4 Close Street, Canterbury, being properties in which he knew Mr Chanine had an interest.

The Commission found that Mr Azzi engaged in serious corrupt conduct by:

• on 16 November 2014, allowing Mr Stavis to photograph Mr Hawatt’s copy of the “suggested interview questions” for the position of director of city planning, thereby improperly advantaging Mr Stavis in his application for that position
• between about 24 December 2014 and 18 February 2015, misusing his position as a councillor of the Council to improperly pressure Mr Montague to appoint Mr Stavis as director of city planning
• failing to disclose his relationship with Mr Maroun, and proceeding to exercise his official functions as a councillor of the Council to vote in favour of the development application with respect to Mr Maroun’s property at 538-546 Canterbury Road, Campsie, for six storeys on 4 December 2014, the planning proposal on 14 May 2015, and the s 96 and development applications on 10 March 2016
• in or around November 2015, misusing his position as a councillor of the Council by threatening Mr Stavis that he would be out of a job if he did not “fix” a deferred commencement condition requiring a three-metre setback from the rear boundary recommended in respect of development applications for 212-218 Canterbury Road, 220-222 Canterbury Road and 4 Close Street, Canterbury
• on 3 December 2015, failing to disclose his relationship with Mr Chanine, and proceeding to exercise his official functions as a councillor of the Council to vote on the development applications with respect to the properties at 212-218 Canterbury Road, 220-222 Canterbury Road and 4 Close Street, Canterbury, being properties in which he knew Mr Chanine had an interest.

The Commission found that Mr Montague engaged in serious corrupt conduct by:

• on or about 8 December 2014, appointing Mr Stavis as director of city planning believing that he was not the most meritorious candidate for that position because he improperly allowed himself to be influenced by pressure from Mr Hawatt and Mr Azzi to make the appointment.

The Commission found that Mr Stavis engaged in serious corrupt conduct by:

• misusing his position as director of city planning at the Council in relation to a development application lodged in respect of his neighbour’s property at Ridgewell Street, Roselands, by on:

- 4 March and 23 July 2015, requesting Council planning staff provide him with the amended plans for the development application

- 16 June 2015, attempting to have a Council planning officer arrange for the development assessment report for the development application to be finalised knowing that the finalisation of the report at that time would likely result in a recommendation that the development application be refused

- 16 June 2015, suggesting that a Council planning officer should send the applicant a final email giving the applicant 14 days to lodge amended plans for the development

• between 22 September and 8 October 2015, misusing his position as director of city planning to obtain an improper advantage when negotiating changes to the plans for a development application lodged in respect of his neighbour’s property at Ridgewell Street, Roselands, including by using Mr Hawatt as an intermediary with his neighbour
• misusing his position as director of city planning in relation to a development application lodged in respect of his neighbour’s property at Ridgewell Street, Roselands by:

- in or around October 2015, directing a Council planning officer that he be given access to the Council consultant’s draft assessment report for the development application

- on or after 16 November 2015, after having obtained the draft assessment report, marking up amendments to the report to favour his interests and directing a Council planning officer to make those changes

• on or about 20 April 2016, attempting to offer Russell Olsson inducements, being that he could charge the Council what he wanted for preparing a further report and by suggesting that he could be considered favourably for inclusion on an urban design panel that Mr Stavis was attempting to establish, in return for Mr Olsson preparing a favourable report with respect to the planning proposal for 15-23 Homer Street, Earlwood
• between about June 2015 and January 2016, improperly exercising his official functions as director of city planning by influencing Peter Annand to prepare a report with respect to a planning proposal for 998 Punchbowl Road, Punchbowl, to favour the developer’s interests
• in or around February 2016, improperly exercising his official functions as director of city planning by editing a draft report to the Council’s City Development Committee to remove material that was critical of the planning proposal for 998 Punchbowl Road, Punchbowl
• in or around March 2016, improperly exercising his official functions as director of city planning by allowing the report about the planning proposal for 998 Punchbowl Road, Punchbowl, to be put before the Council’s City Development Committee relying on what was said to be independent urban design advice, knowing that the advice was not independent, and overstating the conclusions of the advice to the developer’s advantage.

Recommendations for prosecutions

The Commission must seek the advice of the Director of Public Prosecutions (DPP) on whether any prosecution should be commenced. The DPP determines whether any criminal charges can be laid, and conducts all prosecutions. The Commission provides information on this website in relation to the status of prosecution recommendations and outcomes as advised by the DPP. The progress of matters is generally within the hands of the DPP. Accordingly, the Commission does not directly notify persons affected of advice received from the DPP or the progress of their matters generally.

The ICAC is of the opinion that the advice of the DPP should be obtained with respect to the prosecution of Michael Hawatt, Pierre Azzi, Spiro Stavis, Charbel Demian, Daryl Maguire and Marwan Chanine for offences as follows.

Michael Hawatt

• for the offence of blackmail under section 249K(1) of the Crimes Act 1900 and the common law offence misconduct in public office, in respect of his actions directed to achieving Mr Stavis’ appointment between 24 December 2014 and 18 February 2015
• for the offence of corruptly offer a benefit under section 249B(2)(a)(i) of the Crimes Act and the common law offence of misconduct in public office for offering Mr Montague a gratuity payment if he appointed Mr Stavis and retired early
• for three offences of giving false or misleading evidence in a compulsory examination under section 87 of the Independent Commission Against Corruption Act 1988 in respect of evidence given on 5 December 2016

Pierre Azzi

• for the offence of blackmail under section 249K(1) of the Crimes Act and the common law offence of misconduct in public office, in respect of his actions directed to achieving Mr Stavis’ appointment between 24 December 2014 and 18 February 2015

Spiro Stavis

• for the common law offence of misconduct in public office in relation to using his public office to negotiate changes to the plans for the Ridgewell Street development application between 22 September and 8 October 2015, and amending the consultant’s report on or after 16 November 2015

Charbel Demian

• for three offences under section 87 of the ICAC Act of giving false or misleading evidence in a compulsory examination in respect of evidence given on 30 November 2016

Daryl Maguire

• for two offences under section 87 of the ICAC Act of giving false or misleading evidence at the public inquiry on 13 July 2018

Marwan Chanine

• for one offence of giving false or misleading evidence in a compulsory examination under section 87 of the ICAC Act in respect of evidence given on 28 February 2018.

Updates

A brief of evidence relating to the Crimes Act and common law offences for Michael Hawatt, Pierre Azzi and Spiro Stavis was provided to the DPP on 29 July 2021. A further brief of evidence relating to Michael Hawatt, Daryl Maguire, Charbel Demian and Marwan Chanine for offences contrary to section 87 of the ICAC Act was provided to the DPP on 16 November 2021.

On 19 April 2023, the DPP advised that there is sufficient evidence to charge Mr Demian and Mr Maguire with one count each, and Mr Hawatt with three counts, of giving false and misleading evidence pursuant to section 87 of the ICAC Act. The DPP advised that there is insufficient evidence to charge Mr Chanine with offences contrary to section 87 of the ICAC Act. The Commission accepts this advice.

The DPP also advised the Commission there is insufficient evidence to charge Mr Hawatt or Mr Azzi with Crimes Act or common law offences. The DPP advised it would not proceed with charges due to witness credibility issues, admissible evidence not meeting the requisite criminal standard of proof and additional discretionary factors. The Commission accepts this advice.

The DPP advised there is insufficient evidence to charge Mr Stavis with the common law offence of misconduct in public office as it is not sufficiently serious as to warrant criminal punishment. The Commission accepts this advice.

Daryl Maguire
A court attendance notice was served on Daryl Maguire on 2 June 2023 for one count of giving false and misleading evidence pursuant to section 87 of the ICAC Act. The matter was before the Downing Centre Local Court on 21 August 2023. Brief service orders were made for 18 September 2023 and the matter was adjourned to 12 October 2023 for reply to the brief. The matter was before the Downing Centre Local Court on 12 October 2023. Extended brief service orders were made to 16 November 2023 and the matter was adjourned to 23 November 2023 for reply to the brief.  On 23 November 2023, the matter was adjourned until 8 February 2024 for further negotiations.

On 8 February 2024, the matter was further adjourned to 21 March 2024. On 21 March 2024, the matter was further adjourned to 18 April 2024 at which time a hearing date would be set. On 18 April 2024, the matter was listed for trial on 17 January 2025 for 3 days. A readiness hearing was set down for 10 December 2024.

Charbel Demian
A court attendance notice was served on Charbel Demian on 2 June 2023 for one count of giving false and misleading evidence pursuant to section 87 of the ICAC Act. The matter was before the Downing Centre Local Court on 21 August 2023. Brief service orders were made for 18 September 2023 and the matter was adjourned to 12 October 2023 for reply to the brief. The matter was before the Downing Centre Local Court on 12 October 2023. Extended brief service orders were made to 16 November 2023 and the matter was adjourned to 23 November 2023 for reply to the brief.  On 23 November 2023, the matter was adjourned until 8 February 2024 for further negotiations.

On 8 February 2024, the matter was further adjourned to 21 March 2024. On 21 March 2024, the matter was listed for trial on 3 February 2025 for 3 days. A readiness hearing was set down for 25 November 2024.

Michael Hawatt
Three court attendance notices were served on Michael Hawatt on 30 June 2023 for three counts of giving false and misleading evidence pursuant to section 87 of the ICAC Act. 

The period of time between the Commission’s receipt of the DPP’s advice and service of the court attendance notices was attributable to the Commission seeking clarification of the advice from the DPP, other competing operational priorities, and issues encountered when attempting to locate Mr Hawatt.

The matter was before the Downing Centre Local Court on 21 August 2023. Brief service orders were made for 18 September 2023 and the matter was adjourned to 12 October 2023 for reply to the brief. The matter was before the Downing Centre Local Court on 12 October 2023. Extended brief service orders were made to 16 November 2023 and the matter was adjourned to 23 November 2023 for reply to the brief.  On 23 November 2023, the matter was adjourned until 8 February 2024 for further negotiations.

On 8 February 2024, the matter was further adjourned to 21 March 2024. On 21 March 2024, the matter was further adjourned to 18 April 2024 at which time a hearing date would be set. On 18 April 2024, the matter was listed for trial on 3 March 2025 for 5 days. A readiness hearing was set down for 10 December 2024.

Recommendations for disciplinary action

Michael Hawatt and Pierre Azzi are no longer councillors, and Jim Montague and Spiro Stavis are no longer council officers. Therefore, the question of taking disciplinary action against them for any specified disciplinary offence does not arise.

Recommendations for corruption prevention

The Commission makes 23 corruption prevention recommendations as follows:

Recommendation 1

That the NSW Department of Planning, Industry and Environment (DPIE) amends the Guidelines for the Appointment and Oversight of General Managers to recommend that the performance agreements of general managers include performance indicators related to ethical culture. Specific measures that could be promoted include the conduct and measurement of outcomes from staff surveys and the promotion of whistleblowing procedures. 

Recommendation 2

That the DPIE conducts a review into the “no reason” termination provision in the Standard Contract, which should canvass options such as requiring a two-thirds majority vote of a council, an absolute majority vote or the availability of mediation.

Recommendation 3

That the City of Canterbury Bankstown Council ensures that it has a recruitment policy that applies to the appointment of senior staff, which is consistent with the relevant provisions of the Local Government Act 1993 (“the LGA”).

Recommendation 4

That the DPIE clarifies what constitutes “consultation” with council by the general manager for the purpose of appointment and dismissal of senior staff as required by section 337 of the LGA. The clarification should:

• detail acceptable consultation processes and procedures
• in the absence of compelling reasons to the contrary, recommend restricting or, preferably, prohibiting councillor-dominated interview panels.

Recommendation 5

That the DPIE introduces guidelines under section 23A of the LGA concerning the appointment of senior staff. The guidelines should address the following:

• that a senior human resources manager, or external recruitment consultant, be involved in recruitment processes, and have a role in verifying that council processes and procedures were followed in the appointment of senior staff
• the inclusion of subject matter experts on interview panels for the appointment of senior staff, especially for high-risk positions that require specialised technical knowledge
• the provision of independent assurance through the involvement of internal audit in conducting periodic reviews into senior staff recruitment processes
• the appropriate avenues for reporting concerns about process or complaints about suspected corrupt conduct.

Recommendation 6

That the DPIE amends the Model Code of Meeting Practice for Local Councils in NSW to require that council business and briefing papers include a reminder to councillors of their oath or affirmation, and their conflict of interest disclosure obligations.

Recommendation 7

That the NSW Government amends the Lobbying of Government Officials Act 2011 to ensure all provisions apply to local government.

Recommendation 8

That the DPIE, following a reasonable period of consultation, issues guidelines under section 23A of the LGA to introduce measures to enhance transparency around the lobbying of councillors. The guidelines should require that:

• councils provide meeting facilities to councillors (where practical) so that they may meet in a formal setting with parties who have an interest in a development matter
• councils make available a member of council staff to be present at such a meeting and to prepare an official file note of that meeting to be kept on the council’s files (any additional notes made by the member of council staff and/or the councillor should also be kept as part of the council’s records)
• all councillors be invited when a council conducts formal onsite meetings for controversial re-zonings and developments
• council officers disclose in writing to the general manager any attempts by councillors to influence them over the contents or recommendations contained in any report to council and/or relating to planning and development in the local government area.

Recommendation 9

That, where there has been corrupt conduct as defined in the Independent Commission Against Corruption Act 1988, the NSW Government reviews the State Records Act 1998 in relation to the appropriateness of:

• offence provisions, including where there has been a wilful failure to keep records required by the State Records Act 1998
• time limitation for the commencement of a prosecution for an offence
• penalties for offences.

Recommendation 10

That the DPIE reviews the concept of “assumed concurrence”, including the avenues that exist for clause 4.6 in each council’s local environmental plan (LEP), to be used as a de facto plan-making device when concurrence is assumed.

Recommendation 11

That the DPIE identifies the circumstances and establishes criteria to determine when the secretary’s assumed concurrence will be granted and when it will be withdrawn from councils, which takes into account:

• the potential for clause 4.6 to be used as a de facto plan-making device
• that the risk of the improper use of clause 4.6 extends to all local government areas in NSW.

Recommendation 12

That the DPIE prepares and, following a period of public consultation, makes public new guidelines on varying development standards for councils that consider the criteria for assessing variations to development standards that are applicable to clause 4.6.

Recommendation 13

That the DPIE establishes a clear process to ensure that guidelines for councils on varying development standards are subject to regular review and can accommodate advice or changes arising from decisions of the NSW courts.

Recommendation 14

That the DPIE prepares and publicises guidelines that establish a framework for conducting risk-based audits on the use of clause 4.6 by consent authorities. These guidelines should include:

• the scope and frequency of audits conducted to monitor the use of clause 4.6, including the circumstances for conducting any special audits
• a requirement that the matters to be examined in an audit reinforce the objectives of conducting the audit
• an outline of the audit methodology
• clear instructions for the staff undertaking the audit
• a requirement to publish ongoing records of the audits and their results, observations and recommendations
• the necessary skills required by staff conducting the audits.

Recommendation 15

That the DPIE provides advice to councils regarding the inclusion of clause 4.6 in the cycle of audits conducted by the audit and risk committees of councils.

Recommendation 16

That the DPIE:

• considers the circumstances in which the application of both maximum height of building development standards and maximum floor space ratio (FSR) development standards should be mandatory in LEPs
• establishes clear, robust and objective criteria to determine when it is impractical to pair maximum height of building development standards with maximum FSR development standards in LEPs.

Recommendation 17

That the DPIE:

• applies a risk-based assessment that considers corruption risks prior to the drafting of Gateway Determinations authorising councils to make LEPs
• takes measures to verify that councils have complied with Gateway Determination conditions
• establishes a program of regular risk-based auditing of council processes relating to the making of LEP amendments to help provide assurance over systems and to establish whether gateway conditions were met (the outcome of audits should inform future Gateway Determinations authorising councils to make LEPs).

Recommendation 18

That the method for calculating fees associated with local development applications be reviewed by the DPIE with the aim that estimated cost of works is no longer relied on. Instead fees should be:

• determined by criteria that are clear, robust and objective
• capable of easy verification by consent authorities.

Recommendation 19

That the DPIE considers a clear, robust and verifiable alternative to capital investment value as a jurisdictional threshold for planning panels.

Recommendation 20

That the DPIE strengthens guidance for councils and planning panels to help ensure development applications are not split by development proponents into multiple applications to avoid referrals to planning panels.

Recommendation 21

That the City of Canterbury Bankstown Council develops standardised provisions for consultancy services agreements and a statement of business ethics for suppliers. The agreements and statement of business ethics should advise consultants about:

• how to make disclosures under the Public Interest Disclosures Act 1994
• the City of Canterbury Bankstown Council’s ethical obligations
• their ethical responsibilities
• the jurisdiction of the ICAC Act.

Recommendation 22

That the DPIE issues a practice note, or other similar guidance, on the topic of local councils obtaining specialist advice about planning matters, including obtaining urban design studies. The practice note should address:

• what constitutes proper interactions between councils and consultants engaged to provide advice
• when specialist advice, independent of a development proponent, should be requested and relied on.

Recommendation 23

That the City of Canterbury Bankstown Council ensures that its development assessment procedures assess and verify compliance with design requirements for residential apartment developments, including provisions relating to design verification statements.

Responses to ICAC recommendations

The action plans posted below have been provided by Canterbury Bankstown City Council, the Department of Planning, Industry and Environment, and the Department of Premier and Cabinet in response to the ICAC’s recommendations. Their publication here is to show the status of the responses. It does not constitute approval or endorsement by the Commission.

ICAC letter response re 24 month final report to The Cabinet Office

ICAC letter response re 24 month final report to Department of Planning and Environment (DPE)

24 month final report letter - Department of Planning and Environment (DPE)

24 month final report - Department of Planning and Environment (DPE)

24 month final report letter - The Cabinet Office

12 month progress report - Department of Premier and Cabinet

12 month progress report - Department of Planning and Environment (DPE)

Clarifications on recommendations - Department of Planning and Environment (DPE) - Feb 23

Plan of Action - Canterbury Bankstown City Council

Plan of Action - Department of Premier and Cabinet

Plan of Action - Department of Planning, Industry and Environment