A detective concluded no Dunedin City Council employees were involved in, or knew about, the sale of items from the Chinese Garden to Shaw's Yard owner Andy McColm.
But the demolition contractor foreman, who police said sold the items without permission, has denied receiving $700 cash from the yard's owner, saying he was only given "a couple of boxes of Speight's" in return.
New details of the now-concluded investigation came to light yesterday following the release of a police file under the Official Information Act.
The council asked police to investigate after several of the items were found on sale at the Dunedin demolition yard in December 2017.
The items, left over to be used as spares after the garden was completed in 2008,
were stored in a council-owned shed at Tahuna Park alongside equipment from other council projects.
When asbestos was discovered in the roof of the sheds, Christchurch demolition firm Ceres was contracted to remove the roof, clear the sheds and dispose of the contents, because they were deemed to be contaminated.
However, some items from the Chinese Garden were stored in a separate lean-to attached to the main shed.
In a letter from the investigating detective to police, the detective said arrangements were made to decontaminate items from the Chinese Garden which were later transferred to other council sites, while other items were to be destroyed.
The discovery of some Chinese Garden items by a member of the public at Shaw's Yard showed that was not the case, the detective wrote.
The detective found there was either confusion as to what was to be saved, or it was not known some of the items were from the Chinese Garden project.
"The contractor decided that instead of dumping everything he would sell what he could salvage to make some money for their social club," he wrote.
Police believed it would be hard to prove criminal intent on the facts known, but the detective said the council might look at the matter as a breach of contract.
But in the detective's view the conduct fell short of the threshold for criminal offending.
Police concluded Mr McColm, of Shaw's Yard, acted in good faith when he bought items from Ceres demolition foreman Phil Robertson, who he believed was acting with the consent of the council.
Partly redacted notes in the police file show a detective was told Mr Robertson was paid about $700 cash along with "a quantity of beer" for the items.
But Mr Robertson bluntly denied receiving cash for the items when contacted by the Otago Daily Times yesterday.
"It was a couple of boxes of Speight's.
"I did nothing wrong. It's just the [council] should have been more clear with what we were allowed to keep."
Mr McColm told police he sold about 20% of what he obtained, most of which was building material and not related to the garden.
He did not respond to requests for comment yesterday.
Police concluded the case did not warrant further inquiries, while photos of the lean-to shed showed most of the items had been recovered from the demolition yard.
Council community services general manager Simon Pickford said the investigation highlighted some areas for improvement, including inventory control, fraud awareness, contractor management, whistleblower protections and investigation processes.
"Since the time the incident occurred early in 2017, the [council] has implemented the police recommendations and significant improvements have been made in this area."
