The Chamber is fighting claims that it owes the money.
Its staff say the Shire’s former chief executive, James Trail, waived the debt years ago.
It is understood the Shire loaned the money interest-free to the Chamber in 2009 to help it fund the establishment of the Kalamunda Farmer’s Market, under the condition that it be repaid by 2010.
A recent audit of the Shire’s finances revealed the $10,000 was still outstanding, which prompted the Shire to approach the Chamber for repayment.
The Chamber told the Shire Mr Trail had waived the debt.
It submitted an unsigned letter, which it said was sent to it by Mr Trail, to the council in support of the claim.
The letter, dated September 3 of this year, was tabled at the Shire’s meeting on September 23.
Mr Trail has since provided the Chamber with a second letter, which is signed, dated September 24 and addressed to the council, confirming he had authorised the transaction.
‘I wish to confirm that the $10,000 loan initially provided to the Chamber was to be offset against savings in discretionary expenditure in the Governance area,’ the letter states.
However, Shire President Sue Bilich said Mr Trail was not authorised to waive the loan.
‘Waiving any debt over $1000 needs to go through the council,’ she said.
Chamber executive officer Karen Stevens said the business group should not be responsible for the debt.
‘The Chamber was operating under the belief that the previous CEO had waived the debt in 2010,’ she said.
‘The Chamber has sought legal advice and informed the Shire they are not responsible for the repayment of this debt.’
Mr Trail was stood down with pay in September last year pending an independent financial audit at the Shire. He was dismissed in December.
The Shire has not released to the public any detailed reason for his dismissal or any information about the financial audit.