Major holes as property developer crackdown left to members of the public

Peter Grippaudo is the CEO of Fowler Homes.  Photo: Mags King
Peter Grippaudo is the CEO of Fowler Homes. Photo: Mags King

A much-trumpeted state government crackdown on property developers on councils has been described as unenforceable after a councillor was able to declare he was not a developer, despite running a company that had made nearly 100 development applications in three years.  

Weeks before declaring he was not a developer on nomination forms for council elections, Fairfield Liberal Peter Grippaudo (also known as Fowler) lodged plans to develop Grippaudo Glade, a private street with five accompanying homes in Minchinbury.

Fairfax Media can reveal that Fowler Homes, a company of which Cr Grippaudo is chief executive and jointly owns with his wife, has lodged more than 90 other recent development applications.

Councillors have been required to declare if they are developers since September, as part of reforms to "restore community confidence" in local government with measures such as forcing developer-councillors to disclose their income sources.

But no government body has claimed responsibility for checking councillors' declarations.

Fairfield Council and the state government regulator said checking candidate declarations was the Electoral Commission's responsibility. But a spokesman for the commission said it had "no role to play" in checking councillor statements.

"A law without a penalty or any viable enforcement measure isn't worth the paper it's written on," said Greens MLC David Shoebridge. "This case is so poor it's almost comical".

The Office of Local Government later said that members of the public and other councillors were "often best placed to monitor [councillors'] prior and ongoing activities". 

Fowler Homes bought 16 plots of land from the state government at Edmondson Park in 2015, offloaded them to buyers months later for a profit of up to 30 per cent, then applied to build homes on the land.

Documents released under freedom of information laws reveal that, in addition to 35 development applications at Liverpool Council since 2014, the company has lodged another 60 at a string of other Sydney councils.

"I maintain my position that I am not a property developer and neither is Fowler Homes," Cr Grippaudo said.

NSW law defines a property developer as a person, company or close associate of a company who regularly submits development applications with the ultimate purpose of selling or leasing land for profit.

Cr Grippaudo said because Fowler Homes only submitted development applications after land was sold it could not be considered a developer.

"The land is always re-sold to a third party before any construction work begins," he said. "Fowler Homes builds for third parties on land owned by the third parties".

He said his company rarely sold development land and specialised in house and land packages. Those deals have buyers concurrently purchase land from another company and Fowler Homes' services to build plans developed prior to sale and submitted soon after. 

Dean of the University of NSW law school George Williams said the definition of property development would be considered to extend to builders on house and land packages. 

"Whether a person is a builder, or has some other additional role, is immaterial to the definition," Professor Williams said. "The person would be considered a property developer for the purposes of NSW electoral funding and disclosure law."

Cr Grippaudo denied being a beneficial owner of Fowler Homes and said the company was held as part of a family trust.

When presented with ASIC documents showing a company owned jointly by Cr Grippaudo and his wife, Great Western Property Holdings, held all 400,000 beneficial shares in Fowler Homes, he said: "The information on ASIC's records is wrong."

The Independent Commission Against Corruption found in 2005 that Cr Grippaudo used fake qualifications to obtain a building licence.

Cr Grippaudo said the development applications at Minchinbury and Edmondson Park pre-dated his election to council last September and were therefore "historical". (The Grippaudo Glade application is still under consideration by Blacktown Council.)

The definition of a property developer under state law has often been contested since laws banning developer donations were passed by the Rees government and critics say it is easily circumvented.

Last year the NSW Liberal party was forced to forfeit $600,000 in public funding after a number of donors to its 2011 election were found to have been property developers.