A corruption inquiry in NSW has heard a council general manager was “blackmailed” into hiring a planning director.

The state’s Independent Commission Against Corruption (ICAC) is looking at planning and development applications linked to the recruitment of Spiro Stavis, the director of city planning at the former Canterbury council.

Canterbury amalgamated with Bankstown council in 2016.

Allegations have been raised that between 2014 and 2016, Jim Montague — Canterbury council general manager — “exercised his official functions dishonestly” by appointing Mr Stavis.

The counsel assisting, David Buchanan SC, claims Mr Montague was threatened with the sack by councillors who wanted Mr Stavis.

The inquiry was told those councillors were Liberal Michael Hawatt and Labor councillor Pierre Azzi.

Mr Buchanan said Mr Stavis replaced a predecessor who resigned in 2014 because of the same two councillors.

He also claimed that the councillors insisted they sit on his interview panel, which was highly unusual.

“The panel did not include a member with planning qualifications,” he said.

Mr Buchanan said “investigations have revealed photographs on Mr Stavis' mobile phone of the sheet of questions for candidates”.

“To have supplied copies of the questions in advance to one candidate would of course have been to subvert the interview panel process,” he said.

Recruiter Judith Carpenter allegedly advised Mr Montague that hiring Mr Stavis would “fly in the face of a merit selection process”.

Mr Buchanan said Mr Montague only caved in and hired Mr Stavis when he realised his job was on the line.

Further allegations are expected to be raised in evidence about major development decisions connected to Mr Stavis, including adding floors to buildings and breaching council planning policy.