A former deputy mayor of a Sydney council vilified a gay neighbour during a row about a rainbow flag that she allegedly declared "as offensive as the flag of ISIS", a tribunal has found.

Key points: Julie Passas made the comments following the result of the same-sex marriage vote

Julie Passas made the comments following the result of the same-sex marriage vote Ms Passas told the tribunal the flag was offensive and "against what I believe in"

Ms Passas told the tribunal the flag was offensive and "against what I believe in" She's been ordered to pay $2,500 and publish an apology in the Inner West Courier

The Civil and Administrative Tribunal upheld a complaint against Julie Passas, a Liberal Councillor of Sydney's Inner West Council, over the dispute that arose on November 15, 2017, the day that the same-sex marriage vote result was announced.

The tribunal heard Ms Passas asked her neighbour Daniel Comensoli to remove a rainbow flag he had hung from his balcony in celebration of the "yes" vote at the Ashfield complex, where they both lived.

Mr Comensoli claimed Ms Passas said the flag was "offensive to my culture and religion" and that he should not have the right to marry "until you could breastfeed and have children".

Councillor Julie Passas said the matter was about strata rules not "a gay issue". ( Inner West Council )

He claimed Ms Passas continued the next day to harass and yell at his housemate and was later overheard instructing another neighbour to tell the apartment's owners that the tenants were "disgusting people".

He also claimed Ms Passas began lobbying among others in the building to have Mr Comensoli and his housemate evicted.

When police visited the home of Ms Passas after Mr Comensoli made a formal complaint, she was reportedly overheard saying "the rainbow flag was as offensive as the flag of ISIS".

Ms Passas told the tribunal Mr Comensoli "made the whole thing up" and had "turned it into a gay issue" when it was about strata rules regarding hanging items off balconies.

She denied telling police the rainbow flag was similar to the ISIS flag, but she said she had referred to it as "an analogy".

Under cross examination Ms Passas said the rainbow flag was "against what I believe in" and was "offensive to people because of what it stands for".

Mr Comensoli, who has since moved from the unit block, documented the incident at the time on Facebook.

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The Civil and Administrative Tribunal on Monday ruled that the complaint of "unlawful homosexual vilification" had been substantiated.

Ms Passas has been ordered to pay $2,500 in compensation — less than the $10,000 compensation sought by Mr Comensoli.

She is also required to publish an apology in the Inner West Courier newspaper which includes the wording that on "the day of the historic 'Yes vote' … I publicly yelled abuse at Mr Comensoli, which has been determined by the NSW Civil and Administration Tribunal to amount to homosexual vilification".

Ms Passas remains a current Inner West Councillor. She served as deputy mayor from September 2017 to September 2018.

At the time of the incident she had been a councillor for 11 years.

Inner West Council said it had taken no action in regards to Ms Passas, as a Code of Conduct finding had ruled she was acting as a private citizen at the time of the incident.