A Corporation of Hamilton application for a judicial review of Government’s temporary takeover of the municipality has been rejected.

And City Hall has come under fire by Chief Justice Ian Kawaley for continuing to pursue its case through the courts even after it was handed back financial control.

In December, Home Affairs Minister Michael Fahy announced this his Ministry would take over stewardship of the Corporation’s purse strings following concerns of financial mismanagement under Mayor Graeme Outerbridge’s Team Hamilton administration. Earlier that month Ombudsman Arlene Brock claimed to have unearthed evidence of widespread maladministration within the municipality, including questionable expenditures, potential conflicts of interest, secret caucus meetings, technical expert advice being ignored, and an increase in retroactive and unsigned resolutions.

At the time of the announcement, the Minister pointed out that the move would be temporary, and that Government planned to step aside within three months once satisfied that a number of financial procedures and good governance measures were in place and being observed.

In February the Corporation applied for a judicial review of the takeover, claiming that it was unlawful and “draconian”.

And it rejected an invitation by Sen Fahy to drop the review application once the stewardship notice was withdrawn by Government on March 13.

At a hearing earlier this month, Government sought to have the application thrown out. Lawyer Alan Dunch argued that, because Government had already handed back financial control to the Corporation — albeit after imposing a set of Financial Instructions on the municipality — a judicial review would be an academic exercise only and “a complete waste of judicial time and the public’s money”.

Eugene Johnston, acting for the Corporation, disputed that argument, claiming that his client was now subjected to a set of Financial Instructions which were effectively an extension of the stewardship notice. Therefore the dispute was still a “live” issue. He also argued that it was in the public interest to establish if Government had acted within the law.

In his ruling, Mr Justice Kawaley concluded that the Corporation should have withdrawn its application once the stewardship notice had been withdrawn.

“The Corporation’s judicial review application must be dismissed,” the Chief Justice wrote, adding that it would be “improper ... for this Court to compel the Minister to defend the validity of a decision he has already revoked”.

“I find the central controversy between the parties — the validity of the stewardship decision — has been resolved through the Minister’s decision to revoke the decision on March 13, 2014,” Mr Justice Kawaley continued.

“This was an active dispute when leave was granted but it is no longer active. A fundamental element of the present application was the contention that the stewardship decision, a decision with continuing legal effects, was unlawful and should be quashed.

“It is no longer possible for this Court to quash the decision because the decision-maker has himself revoked it.

“As a matter of substance and practicality, the real dispute which formed the basis of the present judicial review application has become academic since leave was granted.”

The Chief Justice noted that, because Sen Fahy had “sidestepped” the need for a judicial review, the Corporation “can claim a victory of sorts and seek to be compensated in costs”.

But he added: “Analysing the course of the present proceedings in a straightforward way, the Minister elected to revoke the Stewardship Decision rather than contest its legality before this Court.

“Appraised of this significant development, the Corporation ought to have agreed to discontinue the present proceedings, but failed to do. The Minister was thus compelled to apply for their dismissal.”

Mr Justice Kawaley awarded the Corporation legal costs incurred up to March 13 “when the Minister invited it to discontinue the proceedings”.

Minister Fahy was awarded the costs of bringing the dismissal summons in addition to costs incurred during an earlier, unsuccessful application by the Corporation for a stay of the stewardship notice.