Regional council pleased with latest Kaipara rates ruling

Pleased with the latest ruling in council’s favour, but disappointed so much ratepayer money – which could have been better invested elsewhere – has had to be spent on the legal fight.

That’s the verdict from David Sinclair, Chairman of the Northland Regional Council’s Audit and Finance Working Party, after a Court of Appeal ruling dismissing the latest appeal in a long-running legal battle over rates collected in the Kaipara District.

Councillor Sinclair says since it was drawn into the long-running rates battle, the regional council has spent more than $450,000 on legal fees.

“That’s money which could have been better used to provide services that our communities have said they want us to provide.”

He says the exercise has been a frustrating one for councillors collectively.

“While there were some lessons to be learned on our part as a result of this process, overall our council’s position has been vindicated as the various judgements have come in.”

Over the past several years the case had played out, it had variously traversed issues via the District, High and Appeal Courts and even the Supreme Court, where the appellants were earlier this year denied leave to appeal.

“The higher courts commented on the cases being about the technical nature of the rating process and there was no disadvantage to the ratepayer,” Cr Sinclair says.

In the latest decision, issued 06 November, the Court of Appeal dismissed Richard Bruce Rogan and Heather Elizabeth Rogan’s latest appeal, ordering they pay costs to both the Kaipara District and Northland Regional Councils.

At issue was whether a ratepayer was entitled to withhold payment of rates where a rates assessment or rates invoice did not contain or accurately record all the specified information.

While the decision of the three judges who heard the latest case runs into 11 pages and traverses the case’s progression through various courts, ultimately they agreed with the conclusion those courts had reached; ”the answer is ‘no’”.

“…The Rogans were not entitled to refuse payment of the rates because of the asserted errors and omissions in the rates assessments and rates invoices.”

The latest Appeal Court decision noted the dispute “has its origins in the well-publicised problems stemming from major cost overruns associated with the construction of a new (Kaipara District Council) sewage and wastewater treatment scheme commissioned in 2010”.

“Borrowings for this project led to very substantial increases in (district council) rates.  Mr and Mrs Rogan, along with many other ratepayers in the district, refused to pay those rates which they regarded as having been levied unlawfully.” 

In December 2013 legislation was enacted validating specified rates for the financial years 01 July 2006 to 30 June 2013.

In August 2014, the Rogans tendered a cheque for the net amount of outstanding rates for the years ended 30 June 2012 to 30 June 2015 – excluding penalties – in full and final settlement of their obligations.

However, that offer was not acceptable to the KDC (Kaipara District Council) – which also collected rates on behalf of the regional council – and the KDC in October that year started court action to recover the outstanding money.

Councillor Sinclair says from the NRC’s standpoint, the regional council had had little choice but to embark on the legal action.

“From the regional council’s perspective, the heart of this wider case was our council’s use of the Kaipara District Council to collect rates on our behalf.”

Councillor Sinclair says the case had implications for local authorities nationally.

“Obviously that legal action has been time-consuming, expensive (expending money better spent elsewhere) but our collective position has always been that we had little choice given the importance of the issues at stake, both locally and nationally.”

Councillor Sinclair says if the regional council was forced to set up its own, stand-alone rate collection agency, the outlay would be many times the legal costs it had incurred in the court action.

“Our position in that regard has never changed; collection of rates on our behalf by district councils provides significant cost savings which benefit our shared ratepayer base.”

Download a copy of the Court of Appeal ruling (PDF, 335KB)