Neighbours allege ‘threats’ from Kornhauser family

Nicole and Eliezer Kornhauser (left) at home and (right) the Springfield Avenue building at the heart of the conflict. Photo: Ken Irwin

A property dispute in a sleepy corner of St Kilda East has spilled from the courts into the streets following allegations that members of one of the nation’s wealthiest families threatened their neighbours.

Police have received complaints about a death threat and abusive behaviour involving Nicole and Eliezer (Eric) Kornhauser, a scion of the Kornhauser business and property empire worth an estimated $430 million.

The couple have been locked in a protracted battle against more than a dozen neighbours and Glen Eira City Council over the future of the Orthodox Jewish school that operates out of a specially designed building attached to their mansion in Springfield Avenue.

Council and court records show complaints about noise, parking and traffic problems in the residential area associated with the ”education centre”, which provides gender-segregated religious instruction to more than 30 boys and young women.

The Kornhausers’ bid to receive retroactive planning permission for the growing ”home school” facility was denied by the council and rejected on appeal to the Victorian Civil and Administrative Tribunal last year.

But the stoush has now come to police attention amid claims of intimidation and threats of violence in the lead-up to a Supreme Court challenge to the VCAT ruling.

Springfield Avenue resident Jannine Gross has filed a complaint with police following an alleged confrontation with Ms Kornhauser after trying to visit a common neighbour.

”As we were walking through Max’s front gate, I noticed out of the corner of my eye one of Nicole’s young children who is five or six years old walking towards us. He saw us and turned around and ran back towards his house,” the statement said.

”All of a sudden Nicole [Kornhauser] rushed in the gate before we had even left. She put her face about one millimetre away from mine and was screaming into my face, ‘If you touch my children, I will kill you. I will kill you. I will kill you. I will kill you.”’

The complaint also described an incident a month earlier when Mr Kornhauser allegedly pushed Ms Gross’ husband and threatened to ”destroy him”.

Police have declined to comment because of the Supreme Court civil proceeding. But Fairfax Media understands no charges have been laid relating to the complaint.

A spokeswoman for the Kornhausers said: ”The Kornhausers continue to be committed to do what they can to bring about peaceful relations with their neighbours – an outcome recently encouraged among all the neighbours in that area by their ward councillors, at the conclusion of a planning matter involving the parties.”

But some residents are gearing up for a new fight after the council recently withdrew from the Supreme Court case and reversed its opposition to the school.

The council has now voted unanimously in favour of the project after the Kornhausers agreed to cap the number of students at 25, reduce its operating hours and incorporate a neighbouring property they own to provide off-street parking.

”We felt the second application was far better – especially relating to the car parking – and it allayed the concerns we had around the original proposal,” Glen Eira mayor Neil Pilling said.

Fairfax Media understands the council’s new decision will be contested by Springfield Avenue residents in VCAT.

■ cvedelago@theage.com.au

Twitter: @chrisvedelago

The above graphic derives from the South Australian Ombudsman’s audit of 2011 into local councils’ use of confidentiality clauses within their Act. Whilst slightly different to the Victorian Local Government Act, the overriding principles and objectives remain the same – ie. local government decision making must be transparent and accountable.

We have repeatedly commented on the secrecy which permeates much of what goes on in Glen Eira Council and our firm belief that countless decisions, or ‘straw votes’ which amount to the same thing, are made behind the closed doors of assembly meetings. Discussion of items in camera is another well used, and over used tactic by this council. An earlier post (https://gleneira.wordpress.com/2011/12/17/a-record-to-be-proud-of/) detailed how many agenda items were ‘relegated’ to back room discussions and the appallingly low number of council decisions which were then made public. Not much has changed with this new council. Of the 50 agenda items decided in camera since November 2012, council announced only 30 decisions – many of which were straight out tenders.

The Local Government Act sets out the broad parameters for when a council may CHOOSE to exclude the public. Please note – this is not mandatory, but optional. The Act also requires councils to provide reasons for their barring of the public. In Glen Eira this requirement has reached the state of sheer farce. Time and again the ‘reasons’ provided are nothing more than tautologies designed to keep the masses ignorant – ie under s89 (2)(d) “contractual” which relates to a contractual matter. (in the minutes of 3^rd September and 15^th October 2013. Please note that neither outcome was reported upon.) Other in camera items not reported upon and which we believe have major import for the expenditure of council funds included: 

• 9^th April – 12.2 under s89 (2)(a) “personnel” and s89 (2)(d) “contractual” which relates to compliance with the Local Government Act. (More lawyer fees, we wonder?)
• 2^nd July – which relates to the contract for internal audit services (Given the jobs for the boys approach of this Audit Committee, we wonder which company was ‘rewarded’ with another contract and how much this cost ratepayers?
• 13^th August – under s89(2)(d) “contractual” which relates to completed capital works approved by Council. (Another stuff up? – GESAC, Duncan Mackinnon perhaps?)
• 6^th November – An item of Urgent Business under s89(2)(a) personnel and 89(2)(f) legal advice which relates to a personnel matter. (More lawyers, councillor code of conduct panels and more witch hunts? Our bet is Lobo!)
• 17^th December – under s89 (2)(d) “contractual” which relates to the contract for the Duncan Mackinnon Pavilion (Has Maxtra gone? Is this a new contract to fix up the problems? How much is this costing ratepayers?)

All of the above have remained ‘secret’. Yet they undoubtedly involve hundreds of thousands of ratepayer funds and residents are no wiser as to why this money is being spent, and whether or not, it is money spent wisely. A culture of secrecy does not serve the public interest and neither does it serve sound financial management.

In conclusion here are some extracts from the South Australian Ombudsman’s findings. (full report uploaded here).  We believe that they are most relevant to the situation in Glen Eira and probably many other councils in this state.

Audit opinion

The evidence from this audit indicates that councils commonly use the confidentiality provisions of the Local Government Act without fully considering or explaining the reasons for excluding members of the public from council meetings. This also results in too many meeting and document confidentiality orders being issued.

Some councils incorrectly believe that they are required to close meetings when they consider certain topics. It also appears that the special circumstances intended in the Act are being misinterpreted by some as a shield to protect their council from ‘pressure from the public’ when debating sensitive topics.

Other councils are misunderstanding or misinterpreting specific provisions in the Act when making an order to close a meeting to the public. They are consequently making orders which would be unlikely to withstand legal challenge.

I formed the view that councils are sometimes moving into confidence over matters of local sensitivity or controversy in an attempt to debate issues without pressure from the public. Such intent is contrary to the democratic objects of the Act.

Consideration should be given to amending the Local Government (Procedures at Meetings) Regulations to specify that the minutes of a council or key committee meeting must include a record of any document tabled at the meeting and/or any verbal briefing given to the meeting on a matter of council business. 

A commitment to compliance with the Local Government Act is essential to accountable administration and sound governance. It is important that councils are sensitive to the public’s demand for the open and transparent exercise of municipal power. As such, attention to both the letter and the spirit of the Act is a means of strengthening and improving relations with the community. This builds public confidence in local government.

In my view councils must, after identifying the relevant paragraph of section 90(3) of the Act, then articulate the reasoning behind the order. Details of the reasons for relying on the particular paragraphs in section 90(3) must be provided in order to allow the public to better understand the council’s decision for moving into confidence. This is part of good administrative decision-making. Further, articulating reasons would also help both the administrative staff and councillors to think more carefully about why the public should be excluded from the meeting. In the latter case, this may also help add an appropriate measure of caution to weighing up recommendations for secrecy.

As shown in Figure 3, I found that for 45 of the 80 agenda items examined there were no valid grounds for the council to exclude members of the public. On many other occasions I made the judgement that the order to invoke section 90(2) had been too broad and that many of the details of the discussion could have been held in public. The effect of this would be to limit the in camera deliberations to only those items which were properly the subject of a valid confidentiality order.  A recurring example of this is the issue of CEO performance reviews conducted regularly by councils. I advised councils that I could see no good reason to exclude the public from discussions and, consequently, from access to documentation, which covered, inter alia, the key performance indicators established for the CEO position and the criteria for assessing performance. I made the observation on a number of occasions that I can find no compelling reason for considering the matter of CEO performance reviews exclusively in confidence.

On another level, a common risk encountered by many councils during informal gatherings is the building of consensus. I note the advice on this prepared by the Queensland government for its local government sector:29

Building consensus, even in an informal manner, can effectively result in the ‘rubber stamping’ of decisions during subsequent council meetings.

Councillors are required to attend meetings with an open mind and without having predetermined the outcome under consideration. As such, avoiding situations where debate and discussion result in consensus building is imperative. 

In my view there can be neither public nor council benefit in suppressing knowledge of how a council is providing its ratepayers with value for money in a tender process. As suggested, a redacted report or ‘blind bidder’ approach can be used if names and amounts are a sensitive issue. My preference is for councils to consider these decisions in public with appropriately modified or redacted reports which can also be made public promptly when the decisions are made and the contract is awarded.

Second, there is a discrete issue with regard to the tabling of documents in confidential meetings. The concern I have is that sometimes documents which are part of the material considered by council in making a decision are not referred to in the minutes. As such, people wishing to understand a particular council decision, or the basis upon which it was made, may have difficulty following the logic and authority of the decision. I found records of meetings where a document has been considered by the council but no reference note or copy made of the material for the minutes.

One component of this strategy has been the review of the current open space contributions program. Areas for improvement that have been addressed in the review include simplifying the schedule of rates, broadening the contribution requirement to all development in the City of Glen Eira, providing direction on when a land contribution should be required, and re-calculating the rate based on the projects included in this strategy and linked to population change in the municipality during the strategy planning period. The strategy establishes the need for all subdivisions to contribute to open space and the type of contribution required, whether as land or equivalent value in cash.

A new schedule is proposed for Clause 52.01 of the Glen Eira Planning Scheme An averaged rate to apply across the municipality would replace the schedule of multiple rates currently in the planning scheme. This would simplify the percentage rate calculation for open space contributions and link the funds collected to the open space projects contained in this strategy. Based on the projects recommended in this draft strategy, it is anticipated that this rate will be in the order of 4 to 5 per cent.

Thus sayeth the consultants in the draft Glen Eira Open Space Strategy. How they justify the recommended 4 to 5% flat rate is anybody’s guess given that:

• No figures are provided on anticipated costs of acquiring new open space
• No figures are provided on anticipated necessary expenditure  – for example on pavilion ‘improvements’
• No figures are provided on what income is expected from a 4 to 5% increase and to what extent this meets the anticipated costs.

More important is the fact that this draft strategy TOTALLY IGNORES the possibility of levies higher than 5%. Stonnington for example is currently seeking an 8% levy across its municipality largely based on the fact that it has the second lowest amount of public open space in the state. If Glen Eira has the lowest, and is facing major residential development everywhere, then even a 5% levy is a joke!

We cite the following from the Stonnington review of its open space levy strategy and have uploaded the full document HERE. What is most impressive is the detail, the financial analysis, and the correlation between all of Stonnington’s policies – ie Public Realm, Pavilion Strategy, etc.

For starters, here’s what is not revealed in the Glen Eira version –

Clause 52.01 of the VPPs expressly recognises the power of councils to obtain open space contributions under the Subdivision Act, and provides a mechanism for councils to amend the provisions to suit local circumstances.

The Schedule enables a council to set its own contribution rate(s) subject to strategic justification. This can exceed the 5% limit of the Subdivision Act. The percent contribution can be tailored to meet the specific needs of areas and sub-areas, subdivision types (i.e. residential, commercial and industrial) and method of contribution (i.e. cash, land or both). Details of liability can be more clearly defined to suit local conditions. Councils are effectively immune from challenge to the contribution if a Schedule to Clause 52.01 is incorporated into the Planning Scheme and it is unambiguous and applied appropriately. Implementation of a Schedule to Clause 52.01 requires a Planning Scheme amendment. (page 4)

There is then an overview of the various levy approaches that could be taken by councils. For example:

The main advantage of this is its simplicity, clarity and certainty for subdivision proponents and council. A rate around 5% can deliver a significant income stream to council for open space.

The main weakness or disadvantage of this approach is that the nexus between who pays and who receives open space investment benefit – by area – can be weak. As such, it may be difficult to justify a rate higher than the Subdivision Act benchmark of 5% in using a flat rate even if some parts of a municipality would justify this due to high development pressure and open space need. (page 7)

Precinct Based Fixed Rate

The precinct based levy approach differs from the flat rate in that it seeks to provide a stronger nexus between developments that pay open space contributions and areas that receive benefit from planned open space investment. The upshot is that areas with more open space investment will pay a higher contribution, all other things being equal.

The approach links planned investments in an area to the contribution requirement. If an area is to receive no open space investment, the contribution in the area will be zero. The basis for the levy is therefore the planned investment as follows:

Strategic planning work is undertaken and this identifies infrastructure and open space projects that are required or desired for the planning area. This can be documented in a specific open space strategy or plan or a structure plan

The open space projects are identified and costed from this strategic base. The cost of each project is apportioned to subdivision over the life of the funding plan.

The strength of the precinct based approach is that it provides a stronger nexus between developments that pay open space contributions and areas that receive benefit from planned open space investment

The main weakness of the approach is that more justification may be required to support the Planning Scheme amendment process compared to a simple model. The validity of the approach may be based on the rigour of the supporting strategy and information inputs. (page 8)

The report then goes on to provide the necessary financial framework for the final recommendations-

Across the City as a whole, the current levy schedule has delivered about $3.3m per annum on average over the last four years and $6.2m in the latest full financial year.

If a 5% flat rate levy was used instead of the sliding scale over the last four years of levy operation, the income to Council would have been $15.0m over four years at an annual average of $3.8m (instead of the actual $13.2m at $3.3m).

The 5% flat rate would have delivered $6.8m in the 2011/12 financial year (instead of the actual $6.3m). This marginal change is explained by the fact that in that year most subdivisions applied a rate at or near 5%.

Various scenarios using 5% to 10% flat rate levies are shown in Figure 19 below. These levy rates are applied to:

The four years of levy collection from 2008/09 with an average per annum figure produced

The last financial year of levy collection 2011/12

The figures are extrapolated over 20 years to gauge what might be required to achieve approximately $314m in income to cover the cost of proposed open space works via this tool.

The four year data suggests that a flat rate of well over 10% would be needed if planned open space expenditure were to be fully funded from this levy over 20 years. Using the latest year data, projected revenues would be significantly greater, but even at a 10% levy rate, this mechanism would only collect 87% of projected expenditure.

In terms of the Chapel reVision area the levy would need to be set at 8% to fully recover the cost of acquisition and works planned for the area.

CONCLUSIONS?

• Stonnington has decided that 5% is far from adequate. We suggest that the same holds true for Glen Eira.
• Is Glen Eira Council capable, and/or willing, to do the necessary analysis that will provide the detail for any amendment that has a chance of getting up? Or is it easier to take the simple path and just pluck a figure from the air without really knowing how far this will advance the acquisition of more open space in the municipality?
• Is 4 to 5% seen as the secret threshold that will not put off too many developers – even though these extra costs will undoubtedly be passed on to eventual purchasers.
• And the perennial question is: why can one council do all this work, be upfront with their strategic planning, and our glorious council persists in waffle, lack of detail and financial justifications, and misinformation!?

Featured above is an item from a recent Melbourne City Council agenda. (We’ve also uploaded the full document here). What caught our eye was:

• The existence of a ‘Delegations Policy’ – which of course is non-existent, or secret in Glen Eira.
• The limitations put on officers
• The clear role of Council and committees to decide important issues that affect the community – again entirely ‘verboten’ in Glen Eira.

If such a policy were to exist in Glen Eira, then the included ‘criteria’ would have ensured that ALL of the following controversies would have been the domain of councillors and not unelected officials.

• The surreptitious removal of trees in Caulfield Park
• The GESAC basketball allocations fiasco
• The introduction of the Residential Zones
• Countless Planning decisions decided exclusively by the Delegated Planning Committee (ie officers)
• Lawyer fees that are astronomical and we believe unnecessary.

Under the present regime at Glen Eira, the community is basically disenfranchised since councillors have willingly ceded all control to the unelected, faceless and extremely well-paid public servants. Councillors have been willing accomplices in their own emasculation to the detriment of residents.