"The notice for applications was aimed at residents of the Swanbourne community and it is considered that DHA does not satisfy the intent of council's resolution," Nedlands Mayor Max Hipkins said.
Mr Hipkins said while it would be inappropriate for a DHA representative to be in the working group, DHA could be invited to attend "from time to time".
In June, Nedlands councillors concerned about DHA bypassing planning laws for the village's proposed $165 million redevelopment decided the group should comprise Mr Hipkins, a council planning officer, two Swanbourne councillors and two residents.
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READ NOWAfter recent advertising, DHA applied for its Melbourne-based regional development manager James Wallace to join, prompting community concern about DHA's role. A female DHA staffer was also seen at a Department of Defence briefing for villagers and residents about the separate proposed $230 million refurbishment of neighbouring Campbell Barracks on June 10.
Morton MHR Graham Perrett questioned residents about the staffer at a Parliamentary Public Works Committee hearing in Scarborough on August 6 but residents said they were uncertain about her role.
Outside the hearing, Mr Wallace said his nomination was not intended to replace a resident and DHA had wanted an extra seat.
DHA managing director Peter Howman said DHA would continue to work with the State Government about a development application for the village, including that residents' access to the village runs through an A-Class reserve that could be closed to stop the development.
Mr Howman said the village's protective covenant from 1991, which development critics called a "mockery" at the hearing, existed so any sale of the village's land could only occur with the agreement of DHA and the Department of Defence.