The court found on Monday that the process used ahead of a proposed merger between Ku-ring-gai and Hornsby Councils did not accord with procedural fairness after failing to properly consider the financial implications of the merger.

Spokesman Rob Lenehan said it confirmed what the ANTY had been disputing since Guyra Shire merged with Armidale Dumaresq last year.

“It proves that the fit for the future process was flawed from its inception,” he said.

At the heart of the case was a report by consultancy KPMG, which the government refused to release in its entirety, claiming it was subject to “public interest immunity”.

Judges Robert Macfarlan and John Basten ruled that the delegate appointed to assess the proposed merger could not have properly carried out his assessment without access to the KPMG report.

They also found that the public interest in keeping the report secret was outweighed by the public interest in making the information available.

Judge Macfarlan found the delegate, Garry West, “did not form his own judgment about the financial advantages or disadvantages of the proposed merger but instead adopted, uncritically, the results of the undisclosed KPMG analysis”.

As a result, Mr West had “constructively failed” in his statutory duty of examining the merger proposal.

“Release of the material was also necessary for public participation in the public inquiry to be meaningful,’ Judge Basten ruled.

“It gives us a lot of hope,” Black Mountain resident Gordon Youman said.

But while the result might not put a stop to the merge, it does confirm that it cannot proceed in its current form – and has thrown the Berejiklian government’s remaining merger plans into upheaval.