While we recognise the significance of ‘to the victor, the spoils’, in the case between the Mangawhai Residents and Ratepayers Association (MRRA) and the Kaipara District Council (KDC) there will not necessarily ever be a winner or loser, but the issue is at least working towards a conclusion.
Justice Paul Heath’s decision on the Mangawhai EcoCare wastewater system debacle was delivered last month. As expected, the Validation Act passed in December meant the MRRA were unlikely to win that particular argument, but the judge has proposed indemnifying the ratepayers for their costs. Any other outcome might have set a very dicey precedent within local government structures. While there are other councils also facing financial hardship at this time, an overhaul of said structures may not be a bad thing anyway.
In this case, by the time ratepayers were burdened with huge demands which resulted in them forcing the disbanding of the council, the proverbial horse had already bolted. That horse came in the form of a wastewater scheme mismanaged from the time of its inception, through to a poorly drafted contract and a badly executed and managed job which was acknowledged by the judge though was generally accepted to be the case anyway. The result being a huge debt for the council then commissioners to deal with and a debt laid at the feet of ratepayers.
The judge acknowledged this would be an incomplete decision with his full report coming in late July and after a conference with the representatives of both parties on June 20. He said that although he found inconsistencies, he had no basis to go behind parliament’s decision to validate the levies, and it wasn’t for the court to second-guess parliament’s political judgment. The charging of the rates was therefore legitimate and must be paid.
This was a view long held by the commissioners. However, the judge advised the council “should consider all available options in an endeavour to ascertain what approach to repayment will be in the best interests of its ratepayers. That includes evaluating the advantages and disadvantages of negotiating with existing creditors to ascertain whether there are means of restructuring debt arrangements that would place less of a burden on its ratepayers. The possibility of recovering some of the costs from third parties should also be considered. That type of analysis should enable the commissioners to make more informed decisions about its options.”
Indemnity costs awarded to the MRRA could be in the vicinity of $250,000.
The decisions to enter into the EcoCare contracts were judged illegal and there may be opportunity to pursue those considered responsible.
Until the final judgement is delivered and the small print analysed by both parties it is impossible to guage whether one or the other might then engage in any appeal process or whether the parties might then work closer together to get the Kaipara back on something of an even keel and moving forward. Should any appeal process be undertaken it will again involve considerable expense plus a long wait as the appeal court currently has a waiting list of cases to be heard.
In the meantime MRRA members are advised by their executive to continue withholding rates payments until the judgement becomes sealed, while the commissioners are urging non-payers to re-consider their stance.
Watch this space.