Favourable ruling for rates crusaders
A group of local ratepayers’ enduring fight against council rate charges in relation to the troubled Mangawhai Wastewater System has finally been met with some success.
On deliberating Mangawhai Ratepayers and Residents Association (MRRA) judicial review against Northern Regional Council (NRC) and Kaipara District Council (KDC), High Court judge, Justice Ailsa Duffy found for the plaintiffs, MRRA and Chair Bruce Rogan and wife Heather Rogan.
The judge declared on August 17 that the NRC rates for the Kaipara district and penalties incurred through the rating years 2011 to 2016, were invalid.
“Judge Duffy ruled that all the NRC rates… were defective and has quashed them,” Bruce Rogan says. “The finding of invalidity… means that all the invoices sent to people by KDC were wrong because they contained amounts illegally demanded by NRC. These errors were then compounded by the addition of penalties to amounts that were illegally billed.”
The judge was not able to rule on a request by the MRRA for a restitution of rates as such a claim ‘goes beyond the bounds of the present judicial review proceedings’.
“However the judgment ensures that anyone who has not paid the rates does not have to and anyone who has paid them and wants them back can apply to the court for an order to that effect,” Rogan says.
“Work is also under way to bring a ‘class action’ where one person’s case will be heard as representative of many others and the result of the one case will automatically apply to all the related cases.”
During the judicial review, the High Court also considered the Rogan’s appeal against a District Court decision which states the couple have to pay the alleged arrears of rates. At time of print, the verdict was still pending.
“Judge Duffy said the appeal does not affect the judicial review but the judicial review outcome can have a significant effect on the appeal,” Rogan says.
“There are a number of possible ways matters could proceed, ranging from a straightforward dismissal of the KDC case, through to returning the whole thing to the District Court for it to be re-heard under different parameters. We know what we would prefer of course but we must abide by the decision of the court.”
Rogan says the High Court’s decision is a ‘major landmark’ as it signals to local government that it has to comply with the written law.
“The District Court essentially rejected all the arguments we put up in defence of our position on the grounds that we were barred by statute from raising them. This decision… will go a very long way to establish beyond any doubt that citizens have the right to challenge administrative decisions and to defend themselves against proceedings brought against them by councils,” he says. “It is vindication for all of us who have fought for some fairness and justice.”
However despite the success, Rogan says he has no sense of euphoria as he believes both the NRC and KDC have ‘huge amounts of money at their disposal to continue to persecute those who object to their conduct.’
In a press release issued on August 18, NRC Chairman Bill Shepherd says the High Court decision potentially has implications for all councils nationwide.
“Council is already seeking a change to the Rating Act to clarify the rating activities that can be undertaken on its behalf by a district council,” he says. “We take all legal responsibilities very seriously and naturally we are concerned to comply with these. There are definitely a number of important issues… and lessons to be learned from this case and council is now very carefully considering both High Court judgments and our options, including whether to appeal.”
In the High Court’s final decision, the judge stated that the NRC had acted in good faith but “may have fallen victim to legislation that was less precise than it needed to be”.
Shepherd said ratepayers who had paid the invalid rates would not be refunded and would have to seek a separate court ruling if they wanted it back and an appeal to the High Court's ruling was still being considered.
However, for the New Zealand Taxpayers' Union, executive director Jordan Williams said Kaipara ratepayers would score an own goal if they forced NRC through court to refund the rates and penalties.
"The costs involved in going to court aren't worth pursuing a refund,” he said. “Even if a refund is ordered, the council can raise rates the following year and recoup its cost."
Should Kaipara ratepayers decide on a class action to recover the rates, the union would consider joining as a party Mr Williams said.