Burnside rejects Chelsea mediation offer

Councillor Jim Jacobsen told the fiery meeting of the council, which has faced a year-long investigation into its operation, the sale was "illegal".

"The matter will never get through a judicial review process," Mr Jacbosen said.

Mr Jacobsen told the meeting an independent body appointed by council had received "insufficient evidence" to make a proper judgment.

Independent MLC, John Darley, called the decision to proceed with the sale of the historic Cinema as 'a scandal of the worst kind".

"It's been a shambles, a debacle right from the start when they failed to consult with residents further away than 500m of the Chelsea."

Mr Darley who is a Burnside resident lives at Toorak Gardens, outside of the precise area consulted.

"I go to the Chelsea regularly and just because I'm in Toorak I should have been asked about its future," he added.

The meeting was told the Save The Chelsea Action Group are the only bidders who have presented a formal complaint over the sale process.

But Councillor Joanne Howard told the meeting the STCAG, "must respect the umpire's decision."

"Councillors that want a different outcome to qualified lawyers are not listening," she said.

"Council will make a decision and let's hope the STCAG are listening."

Prominent property developer Theo Maras is believed to be the only other bidder for the Chelsea that had a reserve price understood to be $2.8 million.

A confidential motion, to be debated away from the gaze of the public gallery, is expected to "rescind" the reserve price.

A deputation by resident Rob Williams told Council it's records management systems was "totally inadequate."

Mr Williams' complaint to the State Records Department resulted in a report detailing a number of serious deficiencies in Burnside's Council records.

A deputation by Anne Monceaux called on the council to "voluntarily" enter caretaker mode until new council elections are decided.

A report by former State Auditor ken MacPherson in claims of bullying and undue influence over the Council is due to enter it's "natural justice phase" in the near future.