Kaipara Concerns



I have always maintained that the way that the KDC snaffled the Mangawhai Endowment Fund and used it for unknown purposes would have landed a lawyer in jail.

Lawyer Gerald McKay has been jailed for 4 years and 6 months for monetary offences including breach of trust. He shifted monies held on trust for clients to pay for his day-to-day business expenses. The report can be seen here.

Judge Colin Doherty stated:

“You were using your client’s money as your banker.”

So what is the difference between that and what the KDC did?   Was it not using the Endowment Fund as a banker?

The audit rules allow local authorities to do just that provided that it is properly documented and that the money can be repaid. However, the KDC had no documentation (they just pilfered it).  Even Rodney Hide as Minister of Local Govern\ment was moved to issue a "Please explain".  The KDC cannot repay the monies taken without incurring further debt and the commissioners advised last year that they have no intention of repaying it anyway.

Under the audit rules the Council can also pull the wool over the eyes of ratepayers by pretending that is not a debt because it is not borrowed from an external source.

Smoke and mirrors, sleight of hand, jiggery-pokery, creative accountancy and all that.

Prominent New Zealander found not guilty.  See the NZ Herald report.  Monday's report here.  

Only 35% of New Zealanders have complete or lots of trust in judges and the courts, according to a new report which highlights some key trends in the way the judicial system is viewed by the public.

The full report in the NZ Lawyer can be seen here.

More questions for Honest John (see two posts below):

  • According to your comments the damages to be paid by the Auditor-General include "GST (if any)".  What precisely does that mean?  With all the legal expertise that you have used our money for you should know whether GST is payable or not.  So, is it or isn't it?  And, if it is payable, then on what basis?

  • Was the limitation period a factor in arriving at a settlement figure?

NZ Herald report for Friday

Honest John has a regular column in the Mangawhai Focus called Questions you have asked where he answers questions that no one has in fact asked. It is just an effective way of getting his propaganda across to ratepayers.

In the latest edition Christian Simon, a regular thorn in the side of Honest John, asks some real questions that do need answering. They can be seen here.

Christian makes some good points. Here are some additional questions.

Interest on the debt
Ratepayers have been advised that a large portion of the debt ($24-$26 million) has been set aside to be funded by future development. Only part of that interest is being paid and the rest is being capitalised. In other words the unpaid interest is added to the capital each year and interest is charged on the interest.

Is that correct? What are the figures? If some interest is not being paid then surely the Council is not meeting its interest bill? But Honest John says that the Council is meeting all the interest that is due. Or is this a technicality – because the bank agrees to the non-payment and capitalisation, the interest in question is not “due”?

If the future development contributions are needed to extend the EcoCare plant and disposal field and provide reticulation, how can it also be used to pay of the deferred debt and capitalised interest?

The auditor issued a warning that if that part of the debt could not be covered by development contributions then rates would have to increase substantially to meet the shortfall. When will that happen?

If the KDC cannot meet all of the interest on its debts then is it a “going concern”? All local authorities must meet the going concern test. “Going concern” is defined by the Auditor-General as being able to meet its debts for the foreseeable future without government intervention. But what of the interest that is not paid on the deferred part of the debt? Was the Validation Bill government intervention?

Retiring debt
Honest John advises that the pittance received from the Auditor-General is going to be used to reduce the general debt of the KDC. That is wrong. The monies must be used to pay off the EcoCare debt.

The commissioners have created such a massive smokescreen around the illegalities of EcoCare that many may have forgotten that the EcoCare debt was a segmented debt. That is a separate debt that stood apart from the general debts of the KDC.

It appears that monies received to pay down the EcoCare debt have in fact been used by the KDC for completely different purposes.

Take the total cost of EcoCare of $62.4 million and then deduct monies received by the KDC to repay capital.

The 2011/2012 annual report states that in the first four years of EcoCare rates from 2008/2009 to 2011/2012 the KDC collected $7,335,538 in annual and capital EcoCare rates.

For the same period the KDC collected $1.278 million in development contributions

It also received a Ministry of Health subsidy of $5.896 million.

That is a total of $14.0509 million that should have been paid off the EcoCare debt

Since then there have been several million in annual and capital EcoCare rates and development contributions.

How much of this money has actually been used to pay down the EcoCare debt? (Less of course operating costs and interest.)

Mangawhai Endowment Fund
All the monies held by the fund have been spent. Is that correct? What were they spent on? To replace those monies – held on trust for the people of Mangawhai - the KDC would have to borrow that money externally. Putting aside the accounting nonsense that is allowed to mislead ratepayers, would it not be more honest to show the true indebtedness of the Council including all internal borrowings?

Auditor-General damages
Were legal proceedings filed? 
What was the original claim for damages?

It will be interesting to see if Honest John will front up and answer REAL questions.

According to Honest John the Auditor-General
argued that the KDC was responsible for the losses suffered in the EcoCare debacle because it signed compliance statements required by the LGA confirming that it had complied with the law, and that the auditor was allowed to rely on those statements.  In addition a local authority is primarily responsible for complying with the law.

It is a rubbish argument.  If that is the case then why bother having auditors?  An auditor is the cop whose job it is to ensure that the entity is obeying the rules.  Imagine the police relying on the word of a criminal that he had not broken the law.

If an auditor fails to pick up glaring and fundamental errors in the affairs of a local authority then that auditor is negligent irrespective of the fault of the local authority.

But what the argument does highlight is that the KDC itself was negligent in signing the statements and providing incorrect information to the auditor.

So who carries the can for that?

The chief executive, Jack McKerchar, and the Mayor signed the compliance statements.  They also provised the information to the auditor.  However, that was all approved by the councillors. 

So, are they responsible?

The extent of their negligence is evidenced far and wide in the report on the debacle issued by the OAG and in comments made by the courts. It is an open and shut case on the negligence of those who ran the KDC on behalf of ratepayers.

There is little doubt that if they had been brought to court, in the same way that directors of companies are held responsible, they would all be facing a massive award of damages.

However, that is an outcome that the government has worked hard to avoid.  The government decided long ago that the ratepayers were going to bear the burden of the EcoCare loss because any other solution would undermine the whole basis of local government in New Zealand.

Who would risk being a chief executive in future if there was a potential liability running into millions of dollars?  So, the commissioners, on the bidding of the puppet-masters in Wellington, allowed Jack McKerchar to escape without any claim against him for negligence.  Certainly they are pursuing in the employment court but that is a mere sop to the peasants and only deals with the golden handshake he received on departure.

Good councillors are hard to come by, especially given the mediocre pay that they receive.  If the KDC councillors, who were probably not insured, were sued for millions of dollars in damages for negligence, then it would not only destroy them, but more importantly ensure that no one would stand for election as a councillor in the future.

Suing the councillors was not therefore on the cards.  So, the Auditor-General, who has the power under the LGA to take action against councillors who cause loss to the Council, announced that there was insufficient evidence to bring an action against the KDC councillors.

Cute.  This is the same Auditor-General who argued that she should be let off the hook because it was the Council officers who were negligent.

And we all know that the commissioners announced that Beca and the Council lawyers would not be pursued for damages.   Heaven forbid that advisers should be held responsible for the actions that they advised on.  That would upset the local government gravy train.

So it all goes round in circles like some great circus, but with one consistent truth:  ratepayers alone must bear the brunt of all the financial imprudence, the negligence and the illegalities of its elected representatives and their professionsl advisers.

NZ Herald report for Thursday.

As a case progresses up through the hierarchy of the court system the legal issues become much simpler.

When the case against the KDC started in the High Court the commissioners were in complete denial, they dug in, and it cost the ratepayers vast sums of money to establish what everyone already knew, that the KDC had acted recklessly and outside the law in respect of virtually all aspects of EcoCare. It wasn’t the commissioners’ money and they thought they could overwhelm the MRRA with their firepower.

All the chaff has been blown away and we are now left with the kernel of two issues:

• Do the protected transaction provisions entitle a local authority to set a rate for an unlawful purpose?

• Does the Validation Act validate only those irregularities recited in the preamble to the Act, or does it validate the specified rates “for all purposes”?

Protected transaction provisions
The MRRA is of the view that the protected transaction provisions were only ever intended to prevent local authorities from pleading their own unlawful acts to wriggle out of loan contracts - following a spate of such cases in the UK in the 1990s. That is the clear meaning of the words in the LGA and the clear intention of Parliament as expressed in many places in the Parliamentary records.

Despite there being no evidence in the wording or the Parliamentary record of any broader meaning, the Court of Appeal was adamant that the enactment empowered local authorities to rate ratepayers to meet loan agreement commitments even though the courts had decided that those loan agreements were unlawful. Certainly, the provisions entitled the lender to take action against the local authority – that was the purpose of the provisions – but there was nothing in the legislation to suggest that the local authority could "reach out" and pursue ratepayers to meet its unlawful commitments.

The MRRA argues that if that was the intention of Parliament then it should have introduced clear legislation to that effect. The irony is that such legislation was in force until 1996, when it was repealed. Until then ratepayers could not challenge on any grounds rates raised to meet loan commitments.

Validation Act
A close examination of the wording of the Validation Act and its passage through the Parliamentary processes establish that the Act only validates those irregularities recited in the preamble and nothing more.

The MRRA argue that the fact that the rates were set for an unlawful purpose renders them invalid. As does the failure to consult with ratepayers on the rates through the annual and long term plans as required by the LGA. Neither of these defects were referred to in any way in the legislation.

The Court of Appeal did not go into any great detail and adopted the view of Heath J in the High Court that the Act validated the rates “for all purposes” – a suggestion raised by David Goddard QC for the KDC, which Heath J accepted with some alacrity.

The MRRA‘s stance is that the clear meaning and intention of the enactment should be adopted. If Parliament intended the Act to validate the rates for all purposes then why did Parliament not include a simple clause to that effect rather than going through the details of irregularities under the LGRA in 73 clauses in the preamble?

KDC response
The KDC has responded to the application for an appeal to the Supreme Court through David Goddard QC. We were expecting some legal fireworks. Some obscure aspect of the law that we had missed. But no, there is nothing. The KDC states that it is a simple matter of whether the Supreme Court accepts the decisions of the Court of Appeal without any further enquiry, or whether it wants re-examine the interpretation of the two enactments as requested by the MRRA.

The KDC concedes that the first question involving the meaning of the protected transaction provisions is certainly a matter of broad public interest. We now have to wait and see what the Supreme Court thinks.

The trial of the Prominent New Zealander has been going on for the last three days in the Whangarei High Court before Justice Venning and a jury.

Whilst a broad suppression order is in force in respect of names and relationships, that has not stopped the NZ Herald reporting full details of the allegations, the evidence presented, and the rebuttals for the defence.

For those who missed the reports they can be seen here: Monday, Tuesday and Wednesday.

Honest John, the spinmeister of the occupying forces, has excelled himself in justifying the pathetic settlement with the Auditor-General.

As predicted on this website, the dispute never came to court and was settled behind closed doors by agreement without any admission of liability and, no doubt, with a confidentiality clause.

It smacks of a pre-ordained cosy arrangement to let the OAG, the Auditor-General and Audit New Zealand off a hook that they should never have escaped from.

This was rampant negligence of a magnitude unheard of in local government and yet the Auditor-General and her bunch of incompetents walked away from this sordid affair, like all the other guilty parties, with smiles on their faces.

The slap on the wrist for the Auditor-General must have been ear-shattering.

All that was needed was for Honest John to wrap it all up with a large dose of smoke and mirrors and tell the victims in Kaipara how lucky they were to have such a wonderful settlement. Read his simpering justification in the Kaipara Lifestyler, the Mangawhai Focus and the Northern Advocate.

Lawyers are keenly aware of negligence claims and the amount of damages that are awarded. Winston Peters is no fool, and commented that there was nothing positive in the settlement with the OAG:

“In reality, the Auditor-General’s office failed to do its job and as a result the Kaipara sewerage scheme’s $30 million blowout costs landed firmly on the backs of ratepayers. This miniscule settlement will do little to alleviate their burden.”  (Source:  Kaipara Lifestyler.  See above)

Compare the OAG settlement with other settlements in recent years.

Credit Sails was a debt security that turned out to be a dog. The Commerce Commission pursued those responsible and achieved an out of court settlement (with no admission of liability) of $60 million for the 3,000 investors. The fear of a court hearing pressured the guilty parties into settling. They could not risk the damage to their reputation by having their dirty linen aired in public.

BDO Spicers, auditors of the failed Capital and Merchant Finance, settled out of court for $18.5 million.

It is ironic that in the Focus report on the settlement Honest John rejects using the courts to pursue claims because of the risks involved.  He showed no such compunction in setting all sorts of records in issuing legal proceedings against innocent ratepayers.

One cannot help believing that the real reason was to ensure that Parliament's own Officer, Lyn Provost, was not dragged through the mud.  A discreet arrangement with a modest token thrown to the baying wolves in Kaiprara was deemed sufficent to shut them up, with an overlay of spin from Honest John.  And that is a token that was paid by the insurers, not the OAG.

Note also the comments about the silence over the last two years on the basis that informing ratepayers would have breached mediation protocol and risked Council’s ability to secure a monetary settlement.  Baloney.  The commissioners are the representatives of the ratepayers and there is no legal reason why the broad sweep of the legal action could not have been revealed.  Again, we have Honest John covering up for two years and then entering into a confidential settlement. 

Only six months to go before a democratic council can open the books and the records and reveal what really went on.

HOW MUCH DID KDC CLAIM?    06.04.2016
According to Honest John legal proceedings were filed against the OAG in December 2014 in the High Court in Wellington.  It will be interesting to see what amount was claimed in damages in the statement of claim.

The NZ Herald reports on the trial of the "prominent New Zealander" which starts on Monday.

OAG DAMAGES   02.04.2016
$5.3 million sounds like an appropriate amount to repay what is owed to the Endowment Fund.

Now there’s an idea for the Commisars!


Doug Bone

The Crown Law Office has indicated that the Attorney-General is likely to seek leave to intervene in the Supreme Court appeal if leave to appeal is granted, and depending on the breadth of the appeal allowed.

The grounds of intervention are not known but it can be taken as read that the Crown will not be intervening to protect the interests of ratepayers.

So what is the role of the Attorney–General and the Crown Law Office?

The Crown Law Office website has a bold banner that proclaims:

Trusted Legal advisers to the New Zealand Government since 1875

The Office is therefore simply the legal representative of the government that is in power.

The website states that the Office has two primary purposes. The first is:

to ensure that the operations and responsibilities of the executive government are conducted lawfully,

That appears to reflect higher values such as ensuring that the government complies with the rule of law.

The second primary purpose, however, has more of a political flavour:

to ensure that the government is not prevented, through legal process, from lawfully implementing its chosen policies and discharging its governmental responsibilities.

John Key’s government has decided as a matter of policy that Kaipara ratepayers must bear the burden of the unlawful debts (for which his own government agencies were largely responsible) and the Crown Law Office will, if the appeal is allowed, ask the Court to apply an interpretation of the law that supports the government’s policy.

The Supreme Court will only allow an appeal if it involves a matter of public importance.  Clearly the government feels that that test has been met, otherwise it would not be inclined to intervene.

If the Supreme Court allows the appeal then this is going to be a massive ding-dong battle between ratepayers and the government over the extent to which the rule of law applies in New Zealand, and will define once and for all whether the courts in this country are independent of government influence.
This is one of the most important cases to come before the Supreme Court and it is a sad reflection on the state of journalism in this country that the mainstream media remains silent on this important legal confrontation.  Clearly it doesn't understand the principles that are at stake. Or perhaps no one really cares.

From the OAG website - what the OAG SHOULD do.

 About us

The Controller and Auditor-General (the Auditor-General) is an Officer of Parliament. Her mandate and responsibilities are set out in the Public Audit Act 2001.

The Auditor-General is independent of executive government and Parliament in discharging the functions of the statutory office, but is answerable to Parliament for her stewardship of the public resources entrusted to her.

Parliament seeks independent assurance that public sector organisations are operating, and accounting for their performance, in accordance with Parliament’s intentions. There is also a need for independent assurance of local government. Local authorities are accountable to the public for the activities they fund through locally raised revenue. As an Officer of Parliament, the Auditor-General provides this independent assurance to both Parliament and the public.


The reality:

Instead of snarling at the incompetent office-holders of the Kaipara District Council, the Audit Office watch-dogs were inside fawning on them. How secure are our traditions of incorruptibility, and accountability, when the watchers are asleep or lickspittles?

Stephen Franks is principal of Wellington commercial and public law firm Franks and Ogilvie.

("lickspittle":  a person who behaves obsequiously to those in power.)


KDC SETTLES WITH OAG    31.03.2016
So, finally the cosy little arrangement between the commissioners and the OAG has reached its denouement. It has been announced that the claim for damages for negligence against the OAG has been settled by agreement following mediation, with damages of $5.375 million to be paid by the OAG, but with no admission of liability from the OAG.

See: OAG websiteNorthern Advocate

Each party is to pay its own legal costs.

As predicted by this website, that amounts to a proverbial slap on the wrist given the damage that the Auditor-General and its utterly incompetent off-spring Audit New Zealand wreaked on the Kaipara community.

If the OAG and Audit NZ had done their jobs properly then the massive illegal debt would never have happened.

We do not know the ins and outs of the legal claim which has meandered on in secret for over 15 months and we will never find out. Honest John will keep his cards close to his chest and spin a cloud of smoke around the facts.

No doubt both sides were keen to have a confidentiality clause so that those who footed the bill - the ratepayers of Kaipara - will never know whether the delay of the OAG in delivering its Kaipara Inquiry report put it outside the limitation period and whether the commissioners’ delay in issuing proceedings cost the ratepayers of the district dearly by delaying the proceedings even more.

Honest John will not even reveal what amount was claimed from the OAG. Disgraced former MP for Northland Mike Sabin campaigned for the OAG to pay $30 million. That was probably to make him feel good after he and his Parliamentary mates shafted ratepayers with his vindictive and legally inept Validation Bill.

The settlement announcement states that the OAG claimed that it was the Council that had responsibility to comply with its statutory obligations, and its failure to do so was not attributable to the OAG. Part of that is correct. The KDC does have statutory responsibilities and it clearly failed to carry out those responsibilities.

However the OAG was the auditor and had a duty of care to carry out the audits in a professional manner. It failed completely to do that and was therefore responsible for damages for its failure.

Note the dumping of liability. The OAG is the auditor and the watch-dog. It stuffs up completely and says that it is not at fault because it was the KDC that made all the errors and breached its obligations under the LGA. This is on par with a negligent surgeon saying that his negligence was irrelevant because it was the patient who must bear the responsibility for being sick in the first place.

The Auditor-General gets out of this with little egg on her face. She has denied liability, although apologising for her staff, and she won’t have to pay a penny herself. It will all come from her insurers. Her legal fees will be paid by the taxpayer.

So despite this award, the guilty parties have got away without having to pay one cent of their own money.

The OAG’s negligence was excused because of the failure of the KDC to comply with its statutory obligations under the LGA and its defective certificates in its annual reports that it had so complied.

If that is the case and we can rely on the certificate then why do we need auditors?

The question then arises as to the responsibility of the Council officers who signed the defective certificates.  this is what the LGA says in one of the schedules:

34 Statement of compliance

(1) An annual report must include a statement that all statutory requirements in relation to the annual report have been complied with.

(2) The statement must be signed—

(a) by the mayor or chairperson of the local authority; and

(b) by the chief executive of the local authority.

Surely the Mayor and the chief executive who signed the certificate must therefore be responsible.

Yes, if you believe in fairies. Believe it or not it is the OAG, under the LGA, that decides whether Council officers are liable for any loss suffered by the Council, and Lyn Provost ruled last year that neither is liable.

You will also recall that Honest John and his crew announced last year that they were not going to pursue Beca, or Bell Gully for their roles in the debacle.

All very cosy.

Note that the KDC is pursuing Jack McKerchar in the Employment Court but not for damages for his gross negligence. Just to try and recover some of the golden handshake they stupidly paid him for stuffing up Kaipara.

We then come back to the Court of Appeal. In its bizarre, sweeping judgment it decided that the when a local authority enters into a loan agreement it is not obliged to comply with the the requirements of the LGA. That is, so it argues, the effect of the protected transaction provisions in the LGA. If you follow the logic through, which the Court of Appeal never did, because the KDC borrowed money for EcoCare it was not obliged to comply with any of the provisions of the LGA relating to the loan. So when it came to signing the annual report certificate it was quite within its rights to assert that it had complied with all the appropriate LGA requirements.

That shows why the Supreme Court needs to get involved and bring some clarity to this aspect of the law.

So who really is responsible and must foot the bill? Right again! You, the innocent ratepayers.

The Court of Appeal was quite clear that, in passing the Validation Bill, Parliament was dumping the sole responsibility for the Kaipara fiasco on the innocent ratepayers. That was a policy decision made by Parliament.

Parliament has also allowed Lyn Provost, Auditor-General, its own appointed officer, to get away with incompetence and negligence that effectively destroys the standing and reputation of the Office of the Auditor General and it does not give a fat rat’s. Lyn Provost will carry on the charade in her role as auditor and watch-dog, the fat cats will slope off into the shadows even fatter than before, and the world will left as it should be, with the rule of law in tatters and the ratepayers funding the rorts of the trough-feeders.

Now we have to see whether the damages, less GST (if applicable), less legal costs, will be applied to the EcoCare debt or whether it will disappear in another puff of smoke.

Wouldn't you be smiling?

Chicken feed settlement. Should be at least $20 million, or perhaps in excess of $30 million (the illegally raised debt) from AG, McKerchar, Tiller and Councillors; though of course the KDC Commissioners have decided not to pursue any action against Tiller and Councillors, nor consultants, nor their legal advisers who would have overseen the (il)legal documentation setting up this crippling debt.

Is this settlement reflective of an all too cosy relationship between the Commissioners and the Auditor General?

Why a mediated settlement? KDC Commissioners have shown no willingness to mediate a settlement with ratepayers, just take them to courts and extract every drop of blood they can with the connivance of central government and convincing the courts that what words written in the Mike Sabin sponsored Validation Act in fact are not dastardly enough and in fact say that ratepayers should be screwed even further than Parliament allowed.

Shame on the Courts, the Commissioners, the AG and Parliament.

John Dickie

Given Honest John’s insistence that the fund still exists it is worth re-reading ratepayer Doug Bone’s comments made a couple of years ago.

Coincidentally, Doug Bone sent in his own comments on the Commissioners' evasiveness about the whereabouts of the capital of the Mangawhai Endowment Fund:

At one of the recent hearings of submissions to the KDC Draft Annual Plan, I had the opportunity to question the Commissioners over the “missing” Mangawhai Endowment Fund principal of $5.7 million. The Commissioners freely agree that the money no longer exists. It was not them that used it, but a previous Council. My question was why there was no provision in the DAP to repay our money, and why it is not acknowledged as being a debt.

The Commissioners response was that the principal of $5.7 million now only exists in a notional sense, but as Council makes “interest” available for community projects, there is really no need for the principal to actually exist in a bank account. Such an arrangement seems, on the surface, to be perfectly fine – the community continues to benefit from the interest. But, where does that interest actually come from now? Not from the missing principal obviously, so it really just comes straight out of our rates!

But then, I asked, what if there was a Community project so important that the use of some of the principal was justified. After some consultation, they agreed that such a scenario was possible and that if it happened Council would have to provide the money. Now, given their financial state, how would Council manage to front-up with the cash? They would have to borrow it, of course!

Now let’s enlarge upon that scenario. What if we all decided that we weren’t happy with the way KDC was managing our Endowment Fund, and we wanted the stewardship of our money moved to another body. Since the Fund was created by an Act of Parliament in 1966, it would probably need another such Act to replace or amend the original. A Local Bill, perhaps – they’re easy to come by! Maybe Mike Sabin might like to sponsor it, and redeem himself in the eyes of Kaipara!

If this happened, then KDC would have to front-up with the $5.7 million. They would have to take out a loan. The ratepayers would be the security. The ratepayers, through their rates, would have to repay the loan, plus interest. So, to get back our money – and it is (or was) OUR money not KDC’s – it would cost us all more than the amount, whereas it should cost us nothing!

That, in my opinion, is where “creative accounting” crosses the fine line and becomes fraudulent accounting. Let’s not be fooled – we are never going to see our money again. It’s been stolen, and the perpetrators are getting off scott-free.

Note that the commissioners have since resolved to run down the fund.  Not only will the annual interest be taken from rates but they will make annual awards from the capital, which does not exist, so it will also come from rates.  They will do this until the "fund" is all used up and this skullduggery can be consigned to history.

Last year's mystery "prominent New Zealander" should be standing trial in the High Court in Whangarei next Monday.

Readers may recall this report of 8 May 2015 from Stuff:

A prominent New Zealander facing 12 charges of indecent assault will stand trial in April next year.The man appeared in the High Court on Thursday, where Justice Paul Heath confirmed the man's continued interim name suppression through to trial. A trial date of April 4, 2016, was set.The man has pleaded not guilty to all charges and was excused from attending a trial call over in June.Most details of the case are suppressed to protect the identity of the alleged victims....

This is in response to HONEST JOHN AND THE TRUTH 24.03.20(scroll down).  The comments reproduced below were posted in July last year and spell out the truth about the Mangawhai Endowment Fund rather than the fluff that the Mangawhai Focus publishes.  Honest John and is fellow trustees changed the name of the Fund to try and disguise the fact that the Fund was stolen by the KDC to use on unidentified expenses and the only remnant is the rental properties that still remain.  Hence the new name: Mangawhai Endowment Land Account (MELA).

The Bream Bay News reported in its edition of 23 July 2015 that it is inviting donations from those who want to contribute to a permanent legacy for the long term benefit of Waipu.

It’s a good job that Waipu is not part of Kaipara otherwise the endowment fund might go the same way as the Mangawhai Endowment Fund. That fund was supposedly held for the benefit of lands adjoining the Mangawhai Harbour. However, it was not invested separately and during the wild days of the McKerchar/Tiller regime disappeared down the financial gurgler along with countless other millions.

The Mangawhai Endowment Fund - now called the Mangawhai Endowment Lands Account (MELA) - is now a myth. A small amount is still held in properties but the rest is simply a book entry. Each year the commissioners go through a charade of allocating the interest to just causes. But there is no interest because the fund does not exist. Council simply pays what it calculates would be interest if the fund existed and takes the monies from rates paid across the district.

The commissioners treat the loan as an internal debt which means that it is not taken into account when calculating whether the Council is solvent or not. But if the debt, supposedly held on trust by the KDC, is to be repaid then it can only be repaid by raising an external debt, which all ratepayers will have to pay, interest and all.

In a report to the KDC from Linda Osborne of 30 June 2015 the position was stated as follows:

The MELA account is listed as a reserve in the accounts of Council. No cash fund exists

The report recommended that the present situation where the capital is protected, decided by ratepayers back in 2001, should be abandoned and replaced with the following:

Option B of spending all of the interest without protecting the capital would allow more funds to be available for community distribution. It would also allow Council to spend more effectively to reduce the capital and positively benefit Mangawhai.

Behind the weasel words, what is the purpose of this new approach? Whatever it is you can guarantee that it is not for the benefit of ratepayers. One can only presume that it is a way of running down the capital of the fund so that this embarrassing part of Kaipara’s history is finally expunged.

And remember that it is not the fund that is being run down because there is no fund to run down. Every payment that is made to ratepayers ostensibly from the “fund”, whether in the form of interest or capital, has to be paid by ratepayers throughout the whole district in rates, and then it is paid to the chosen few.

So who decides how the fund is to be spent. The Osborne report suggests that the commissioners have sole power:

Council is the legal holder of MELA and therefore has the jurisdiction to decide how it is spent, ensuring it is for the benefit of the Mangawhai community and/or environment.

You may argue, quite rightly, that the KDC are the trustees and may have the fund vested in them but they have a legal obligation to consult with beneficiaries, the ratepayers.

Now follow this carefully and see how the commissioners manipulate consultation to secure their own ends.

The report states:

Discussions have been held with the current MELA Committee who are also members of the Mangawhai community. The Committee have the delegation to allocate grants and are in agreement with Council’s alternative approach.

Let’s look at this comment closely as it sums up the dishonesty and the appalling governance of the commissioners.

The MELA committee, who are in agreement with the commissioner' approach, consists of:

Chair: John Robertson (Commissioner)

Members: Joanna Roberts, Alan Russek, Richard Booth (Commissioner)

Linda Osborne states that the current MELA committee are "members of the Mangawhai community". Not true. Two members are but commissioners Richard Booth and John Robertson have nothing to do with Mangawhai.

The report states that the committee are in agreement with the Council’s approach. That it scarcely surprising when two of the members of the committee are commissioners, and the other two were appointed by the commissioners.

But what of the views of ratepayers?

Community View
As they are the recipients of MELA, the Mangawhai community may have strong opinions on how it is spent, especially if it affects the amount that local groups can access for funding purposes. Given there would be more funds available to allocate to the community it is thought they would view this decision as favourable.

So there is no intention to actually consult with ratepayers. All decisions are to be made by three unelected commissioners who consult with a committee of two of the unelected commissioners and two unelected ratepayers selected by the commissioners.

A resolution confirming the new approach was passed unanimously by commissioners Robertson and Booth at the June council meeting – no doubt wearing their hats as commissioners and not committee members. Commissioner Winder was absent attending the Rogan hearing in Whangarei.

Legal Eagle has presented his concerns about what he considers to be theft of the Mangawhai Endowment Fund to the Auditor-General. No doubt there will be the usual resounding silence.

Associate Minister Louise Upston, who heads Honest John Robertson’s Cheerleaders, is not so silent. She recently visited Kaipara and met with the MELA committee and other groups. She commented:

“I was impressed by the great work that these groups are doing in their communities using their creativity to help make each of their towns vibrant and inclusive places.”

What she did not do is ask the people of Mangawhai about the creative accounting that has led to the theft of their endowment fund and the complete failure of her favourite three smart boys to include ratepayers in any consultation process about the future of the fund.

Honest John has put his honesty on the line in his latest Your Questions Answered column in the latest Mangawhai Focus.

Under the heading Dealing with myths he recounts some of what he calls "myths" that that are being spread about the regime of the commissioners.  He then goes on to present what he says are the facts.

Many readers may want to challenge Honest John on his "facts".  If you feel that he is wide of the mark then please let me have your comments or questions that you would like put to him.

Email: contactus@kaiparaconcerns.co.nz

Louise Upston, Associate Minister of Local Government,
will announce soon whether full democracy will return to Kaipara

LGA IGNORED AGAIN   24.03.2016
Associate Minister of Finance Louise Upton caused a bit of a stir on Tuesday. The KDC had scheduled a Council meeting for 9 am at its offices at the Hub in Mangawhai, but that was upset by a message from the Associate Minister that she would be calling by to meet the Commissioners.

It is uncertain what happened next, but it appears that the Council meeting was brought forward and was done and dusted before the advertised time for its start.

The KDC minutes are not yet on its website (and by the way, John, the link on the website in A-Z documents is broken) so no explanation has been forthcoming. A staff member suggested that a public notice had been put out advertising the change in time, but no evidence can be found of that.

The LGA in clause 19(4) of the Schedule 7 is unforgiving:

A local authority must hold meetings at the times and places that it appoints.

Part 7 section 46(1) of the Local Government Official Information and Meetings Act also requires 14 days public notice of meetings.

But the Act also states (in subsection (5)) that failure to publicly notify does not result in the meeting being invalid provided that public notice is given subsequently in accordance with subsection {6}.

So let’s see if our rulers, with several favourable court decisions in their favour under their belts, feel it necessary to comply with the LGA and other legislation.

Perhaps another opportunity to obtain another legal opinion from Simpson Grierson.

Associate Minister of Local Government, Louise Upston, is the one who “consulted” with a select group of National Party locals last year and suspended democracy for another 12 months.

John Key’s government must be in dread of the KDC having democratic winds exposing the real situation in Kaipara and the thought of an elected Council acting in the best interests of ratepayers.

Has John Key decided that democracy is to be denied again, or is he going to give us the semblance of democracy but with all the power vested in an adviser or commissioner still under his tight control?

Time is running out for the government to move, so if democracy is to be denied yet again it is likely that John Key will make his move soon.

The Chief Executive’s report presented to the KDC non-meeting this week outlined in detail the ongoing saga in respect of legal action being taken against the Auditor-General and Jack McKerchar.

Previously Honest John has run for cover and claimed legal privilege to support his silence and his opacity.

This website has maintained for years that the action against the A-G was nothing more than an exercise in duplicity. The OAG delayed its report on the Kaipara shambles sufficiently so that the limitation period would expire and the whole thing has gone into the “murky dealings” basket which will only be exposed if we can get democracy back.

The Court of Appeal stated quite clearly that Parliament decided in passing the Validation Bill that the ratepayers of Kaipara alone would be responsible for the illegal debt of the KDC. Parliament does not want its own Officer and watchdog, despite evidence of rampant incompetence, to bear any of the responsibility.

So this is what Jill McPherson has to say in her report to bring us all up to date after over 15 months of legal action:

The legal cases taken by Council against the Auditor-General and the former Chief Executive Officer continue.

Fascinating stuff.

One only hopes that the new democratic council (Yeah, right!) looks very closely at the liability of the commissioners for failing to file proceedings against the Attorney-General as soon as it became apparent all those years ago that her Office and Audit New Zealand had been negligent in auditing the KDC.

The commissioners elected to delay filing proceedings on the pretext that they were waiting, and waiting and waiting for the OAG report on its own negligence.

All the lawyers that I have spoken to are of the view that proceedings should have been filed at the earliest possible moment to stop the clock running.

The big question that faces the courts of this country is whether local authorities should be allowed to operate outside the law.

Local authorities are created by statute and their powers are granted by statute. However, when it comes to enforcing the law the courts appear to shun away from applying them, even though the same court might show no reluctance when applying those laws to individuals or to companies.

Citizens are allowed to challenge the decisions of local authorities by seeking judicial review of those decisions on the basis that the authority failed to comply with the law.

That sounds pretty straight forward, but the problem is that judicial review is discretionary. So, although a complainant may establish to the satisfaction of the court that the local authority flouted the law, the court can refuse to grant any relief if, in exercising its discretion, it finds that it would be “inappropriate”.

The problem is that in respect of local authorities there seems to be a completely different set of rules when it comes to exercising discretion. The problem is, to make it worse, that no one knows what the set of rules are.

The decision of the KDC to proceed with the EcoCare project, and then expanding the scope and cost of the scheme, both without consulting with the ratepayers, were blatant breaches of the requirements of the Local Government Act. It was so blatant that one wonders why the advisers to the KDC including Beca and the KDC lawyers did not step in and advise the Council of its indiscretion.

Despite being caught in flagrante delicto, so to speak, Honest John and his crew poured money into a legal defence, first to try and strike out the MRRA claim of unlawfulness for having no basis (lost with costs awarded against them) and then denied that they had not consulted with ratepayers.

Once that defence looked hopeless they then resorted to claiming that even if they were wrong in law the Court should not grant any relief to the MRRA because the KDC was in dire financial situation and any award against it or declaration of illegal rates would result in fiscal Armageddon for the Council, which in turn would necessarily be visited on its ratepayers.

They provided endless affidavits from financial gurus arguing that Armageddon was imminent if the law was applied.

The position taken was that although there might be a breach of the law the KDC should be excused because any punishment would make the Council unviable and create mayhem for its ratepayers.

The Court of Appeal appears to have taken a similar approach. Many of those who were at the Court of Appeal hearing were somewhat surprised at Miller J’s comments, made before any evidence was heard, that to find for the MRRA and possibly put the KDC into receivership would be the “nuclear option”. It would cause financial chaos and result in a greater burden to be borne by ratepayers. He continued along those lines in his written judgment.

In other words, the Court looked at the financial and administrative inconvenience of applying the law of the land, and that approach seemed to dominate the Court’s approach to the legal issues.

The question that the MRRA’s legal counsel put to the Court in his summing up perhaps enshrines the dichotomy facing the courts in this country. Are local authorities subject to the rule of law like everyone else? Or are they in a special category, and exempt from the application of the law because any claim against a local authority will necessarily impact on the innocent ratepayers, and is likely to cause financial and administrative chaos? If the latter was chosen then not only would the local authorities’ past actions be unassailable but they could remain confident that they could in future act outside the law with impunity.

It is worth bearing in mind that local government is a delegated branch of central government. If a court held that a local authority had committed gross abuses of the law then it could threaten the financial survival of that local authority. It might also place a big question mark over the legality of many of the decisions of other local authorities and cause a few ripples through the whole structure of local government.

Parliament decided in 2002, in introducing the LGA and the LGRA, that local authorities were to be accountable to ratepayers and that legislation introduced a lot of mandatory consultation procedures and rating processes. It now seems that that John Key’s government (the string-pullers of Honest John and his crew) is arguing that local authorities should be exempt from the law because they are a special case and a strict application of the law would result in financial and administrative inconvenience and politically unacceptable outcomes.

That approach is clearly ongoing. Remember that the watch-dog and auditor for the local government sector is the Office of the Auditor-General. The A-G is an officer of Parliament, appointed by Parliament and open to discipline by Parliament. Lyn Provost the present incumbent turned a blind eye to KDC’s persistent, flagrant breaches of the law even when evidence was put before her on a plate.

Have we reached the stage where justice is applied on the basis of who has broken the law?

It is noted that there is no such squeamishness in the courts and in local government when it comes to private companies failing. Imagine Dick Smith asking the courts not to enforce its legally incurred debts because to do so would result in financial Armageddon or the nuclear option for the owners the investors, the bankers and the customers of Dick Smith.

The guaranteed demise of Dick Smith creates a far greater financial loss to the community than a financial wake-up call and a dressing-down on legal compliance for the KDC.

It will be interesting to see how the courts approach the prosecution of Hamilton City Council by WorkSafe New Zealand over the death of a keeper at Hamilton Zoo.

The Council is being charged under the Health and Safety in Employment Act for not taking all practicable steps to ensure that the employee was not exposed to hazards.

The maximum fine is $250,000.00.

The question is, will the Hamilton City Council plead that it should be exempt from the law because effectively the innocent ratepayers will be left to pay any fine that is imposed?

The MRRA has followed up its application for an appeal to the Supreme Court by filing its legal submissions with the Court.

The KDC now has 15 working days to file its own submissions in response. The Court will then decide whether to allow the appeal, and if so, on what grounds.

The grounds for appeal were really quite simple. The High Court and the Court of Appeal held that the EcoCare project was unlawful because the KDC failed to consult with ratepayers before committing itself to the scheme. The Courts also decided that prima facie the EcoCare rates were also unlawful because they were set to fund an unlawful scheme. It is accepted law that rates cannot be set for an unlawful purpose.

However, the Courts held that both the Validation Act and the protected transaction provisions in the Local Government Act overrode that unlawfulness in the rates

The MRRA argues that the Validation Act, even on the most benevolent interpretation, only validates the rates for certain rating years.

In respect of the protected transaction provisions (which makes local authority loan agreements entered into unlawfully “valid and enforceable”), there is no evidence to suggest that the interpretation adopted by the courts is the correct one.

The clear meaning of the words in the enactment and the clear intent of Parliament was to prevent local authorities from reneging on their loan agreements because of their own unlawful activities (which many of them did in the UK – hence the provisions).

There is no doubt that the KDC cannot wriggle out of its loan agreements, but, and this is the big but, the provisions do not empower a local authority to meet its liabilities by setting unlawful rates. Parliament never intended that and there is no wording in the provisions to suggest that.

The Courts have so far argued that the power to extract the money from ratepayers is “implicit”, even though the law is quite clear that powers to set rates must be explicitly provided for in legislation.

The Supreme Court will only take the appeal if it thinks that the case is of public importance or a miscarriage of justice would occur.

It seems that the District Court debacle relating to the other cases that are stayed pending the outcome in the KDC v Rogan case has been sorted out. They will now await the appeal to the High Court to be heard in May.

That appeal is on track, as is the judicial review Rogan v KDC and NRC. Both the District Court appeal and the judicial review application will be at the same hearing but separately on consecutive days.

The Rogans' application to the High Court for a stay on the payment of costs until the High Court decision has been made, has been successful.

WORZEL’S VIEW 15.03.2016
Have a read of Worzel’s view of the KDC debacle in his Mangawhai focus article, A case of misunderstanding.

He is one of the parties being sued for rates arrears and comments:

I do not understand why anyone, apart from those getting the dosh of course, would support KDC by giving them money or any other resources. While little organisations in small towns beaver away with voluntary workers and donations and achieve excellent results, the Dargaville crew suck up money like a Dyson vacuum sucks up dust only to be thrown away. John Robertson describes this organisation as ‘high performing’. But then in my other research into the human condition I have found that those who must praise themselves have seldom done anything praiseworthy.

The KDC has finally been permitted to join the Local Government Funding Agency. The Agency is a group of local authorities that can, because of its size, negotiate better rates for borrowing money.

Until mow the KDC has been excluded because its borrowings were too high to meet the Agency’s ratio, and because it had committed many acts of default under its current loan arrangements.

Despite uncertainty about the financial viability of the KDC because of the pending court cases, the Agency has decided to take a chance with the Council.

The Media release put out by the Council extolls the advantages of joining the Agency but, as one would expect from Honest John, they are extremely vague. He states:

It is too soon to say how the lower interest rates on borrowing will translate into future planning for the Council and ratepayers, except that it will have direct monetary benefits and savings.

Reduced interest rates do have “direct monetary benefits and savings”, that is obvious. But one would have thought that those benefits could have been spelled out in more detail. For instance: A saving of x per cent per annum on the Council debt of $xxxxxxxxx million would result in and annual saving of $x. But all that gets lost in the nice sounding words and the billowing smoke.

Why join a scheme when the benefits are not yet clear?

What Honest John does not reveal is the downside of the joining the Agency. Each member council is obliged to cross-guarantee all the debts of other local authorities that are members. But it is wider than that. As we have all found out, the ratepayers of a district are obliged to pay the debts of their council whether it acts imprudently, recklessly or illegally. And as the council guarantees the other member councils, the ratepayers are responsible for those debts as well. So, by joining the Agency, all the ratepayers in Kaipara become guarantors for the debts of Auckland City. Nice thought.

No wonder the commissioners and their string-pullers wanted this one sewn up before democracy returns. A new democratic council might look more closely at the fine print and recognise that the LGFA gives the banks bigger security and bigger control over local authorities, and all at the expense of ratepayers.

ED SAID 15.03.2016
ED SAID of the Mangawhai Focus included some interesting snippets in his latest editorial. His comments normally reflect the views of the commissioners, so it is interesting that he makes the following comments

The Commissioners’ tenure is running its course though I expect there will still be some governmental over-seeing for at least the immediate future.

More than likely he knows what is going on behind the scenes. It is hard to imagine that the government will allow the commissioners' draconian dictatorship - run for the benefit of central government and the banks - to be suddenly replaced with a liberal, democratic council which places the interest of ratepayers before all others.

Honest John has already selected some disciples and is looking for others to groom who can continue his regime, but no matter what he does there is a good chance they will be spurned by the voters. Is John Key going to risk true democracy returning to Kaipara with the possibility that the new council might reverse all the unfair, inequitable and unlawful actions of the previous regime? And even more scary, is he going to permit a council to operate that might open the books and reveal where all the monies went and point the finger at those who rorted the community?

Here’s a clue from ED SAID:

Could a particular political leaning be an advantage? Might a known right-leaning Council be able to cuddle up to the Government for the odd special privilege for Kaipara? Just a thought. The ends invariably justify the means.

"The end invariable justifies the means."  Really? 

Only just over 7 months to D Day, but don’t hold your breath. That is plenty of time for the dirty-tricks brigade to ensure that we are condemned to a continuing dictatorship from Wellington.

After months of denial, the National Party, in the guise of Nick Smith, Minister of the Environment, has finally come clean on its proposals to give ownership of fresh water in New Zealand to Maori.

The announcement was made, as one would expect, discreetly at a Party conference at Lake Tekapo last Saturday. Whilst the new flag debate controls the headlines this fundamental change to how New Zealand will function in the future was quietly slipped under the radar.

The proposals can be seen in the comments of Muriel Newman, the commentaries of David Round and Mike Butler's Water and deceit, part 2.  The speech of Nick Smith announces a consultation process Next Steps for Freshwater.

For those who are interested in the remnants of the rule of law in New Zealand and how the proposed Maori rights infringe that principle then the commentary of ex Judge John Willy are thought-provoking.

Note that submissions on the fresh water proposals close on 22 April 2016.

If you feel that this is an important issue then let you circle of friends, family and acquaintances know about it.

The MRRA has applied to the Supreme Court for leave to appeal the decision of the Court of Appeal.

The Supreme Court is the highest court in the land and some years ago replaced the Privy Council based in London.

Appeals to the Supreme Court are not as of right but have to be approved by the Court on the basis that they are of general or public importance, of commercial significance, or a miscarriage of justice may have occurred or may occur.

Now that the Notice is filed the MRRA has until 14 March to file its submissions on why the appeal should be heard. The KDC then has a further two weeks to file its submissions in reply. The Court will then decide whether it will hear the appeal.

The decision to proceed with the appeal was made by the MRRA after lengthy consideration of the legal principles involved and the effect that the Court of Appeal decision would have on not only Kaipara ratepayers but all ratepayers in New Zealand.

The Court of Appeal held that the protected transaction provisions in the Local Government Act were so broad that they entitled a local authority to set rates for an unlawful purpose.

The clear intention of Parliament when introducing the provisions, which the Court overlooked, was that the provisions were to prevent local authorities taking advantage of their own ultra vires acts and reneging on their loans. They were never intended to be used by a local authority as a sword against ratepayers.

Likewise, both Heath J and the Court of Appeal decided that the Validation Act was intended by Parliament to validate the EcoCare rates “for all purposes” including defects that Parliament was unaware of.

This again ignores the clear intention of Parliament which was to validate only the irregularities set out in some great detail in the Preamble to the Act (some 73 clauses!), and nothing more. That was the scope of the Act laid down by the Parliamentary process.

If the decision of the Court of Appeal is allowed to stand then effectively any local authority that sets a rate to fund any debt - which is every local authority - can completely ignore its obligations under the Local Government Act.

The Court of Appeal also refused to consider the MRRA’s right to a judicial review because it decided that the MRRA’s interpretation of both the protected transaction provisions and the Validation Act (which were based on the actual intentions of Parliament) were not  “viable” interpretations. The MRRA was therefore denied its fundamental rights under the NZ Bill of Rights Act.

Honest John has of course taken the offensive in the latest edition of the Mangawhai Focus (not yet online).under Further litigation a burden to ratepayers. Regretfully such litigation is a burden to ratepayers and that is what happens when the local council has been hijacked by the government, the offenders are allowed to abscond and the ratepayers are forced to pay an illegal debt to ensure that the banks get their pound of flesh.

Honest John and his string-pullers are in absolute dread that the Supreme Court might look at the Kaipara debacle and have the fortitude to bring the rule of law back to Kaipara.

I am sure that all ratepayers would be delighted to hear that they are not responsible for the illegal debts incurred by the KDC.

Honest John raises the “bankruptcy” of the KDC as a red-herring to scare ratepayers. The truth is that the KDC is and had been insolvent for many years. It has committed several acts of default under its loan agreements and only survives because it has the backing of the government. It is so much in debt that the Local Government Funding Agency will not allow it to join, and interest payments on a large part of its debts are being capitalised because it cannot afford to pay them.

And that is after using all the monies in the Mangawhai Endowment Fund (and other reserve funds) for "other purposes" (which the OAG could not trace) and not repaying them.

The solution is not difficult.

If the debt is declared by the Supreme Court to be unlawful then ratepayers would be willing to pay their fair share of the debt, being the value of the EcoCare plant.

The rest of the debt would have to be divvied up, as in any receivership situation, between the Chief Executive, the councillors, the Auditor-General and Audit New Zealand, Beca, and all those who were party to the unlawful and financially imprudent actions that created the massive debt.

Of course, the government would also have to chip in. Not because ratepayers are seeking hand-outs but because it was the government’s failure through the incompetence of the OAG and Audit-New Zealand that allowed the Kaipara debacle to get off the ground. It was also the failure of those bodies, and the various Ministers of Local Government, and John Key, who were all personally warned that Kaipara was out of control, but who chose to turn a blind eye and allowed the rorts to escalate.

There is still the outstanding issue of whether ABN Amro which originally lent the money to the KDC in questionable circumstances met the good faith requirements of the protected transaction provisions. The loan was conditional upon a report from their lawyers Russell Mceagh on the legality of the loan and it was glaringly obvious that the loan was in breach of the LGA in many respects. That is why, no doubt, the loan was sold at a 40 per cent discount. That is a compelling reason for the current bankers taking a substantial haircut.

Rather than bitching about ratepayers defending themselves from his persecution, Honest John should roll in Steven Joyce to bang a few heads together and broker a deal between the parties that was completely fair and would put all the problems of the past to rest.

Aye, but there’s the rub. This is not about fairness. It’s about shafting the ratepayer. And so far there has been no need to be fair. And that is why is why it is so important to put the case before the Supreme Court. Fairness, justice and the law is on the side of the ratepayers. All we need is a court of law to acknowledge that.

MORE FROM THE FOCUS    23.02.2016
Rob Pooley, the editor of the Mangawhai Focus, was clearly nettled by my comments in FOCUS AT IT AGAIN   02.02.2016. He wrote to me personally to try and justify the lack of a factual basis for his “honest opinions” that he foists regularly on his readers. He would do much better if his “honest opinions” did not echo exactly the views of Honest John, and if he did attempt to elicit the facts before gushing into print. A bit of investigative journalism would not go amiss.

In the following edition of 8 February ED SAID became an expert on all things ecological about the Wharfdale Crescent property which the commissioners are selling without any consultation even though it is claimed to be an important wetland area. 

After tramping through the property ED SAID opined expertly:

“Trust me, it is not a ‘wetland'. In fact it’s more like a wasteland. It is a piece of “wet land” which is PC for a ‘swamp’.

Quite coincidentally the editorial coincides with an article in the same edition on the very same matter, with the same approach and attitudes from Honest John.

Honest John with his usual amiable and open approach refused permission to an ecological expert instructed by ratepayers to even enter the property. However his mates at the Focus were given free rein to go exploring the property looking for, as ED SAID says, pristine lakes, lily pads and pink-legged flamingoes.

Did ED SAID find pink-legged flamingoes?

Should we trust ED SAID’s ecological expertise, as he invited us to do?

Before making up your mind see the summary of the ecologist’s report on the property provided by the NRC.:

The size of the wetland and presence of native plants fulfils the RSQP (regional Water and Soil Plan) Appendix 13(a) criteria for an Indigenous Wetland. It is also likely that the area would fulfil at least one of the nine appendix 13(b) criteria for a Significant Indigenous Wetland.

But, no mention of any pink-legged flamingoes.

More and more we are learning that under John Key’s version of democracy it is almost impossible to hold those responsible for substantial incompetence if they belong to the upper, and protected, echelons of society.

We have seen how name suppression is generously made available to those whose reputations are at stake, while the person on the Citylink bus (the updated version of the “the man on the Clapham omnibus”) invokes no such sensitivity.

We have seen how John Key, aided by the courts, built a wall of secrecy around the charges facing MP and would-be Cabinet Minister Mike Sabin. The prohibitions on publishing any indication of the type of charges he faces have terrorised the local press into docile compliance that would draw the envy of many despots around the world.

We now read that one of the worst engineering failures in New Zealand history is being given the treatment. See the NZ Herald’s Olivia Carville: Frustrated families await justice. The attempt to bring to justice those responsible has become a pit of snarling vipers hissing at each other, with no fairness, no justice ever likely to emerge. Those responsible will be allowed to slope off into the shadows leaving the ordinary people of this country, and the foreign families of those who died wondering what sort of value system we have in New Zealand.

Those living in Kaipara will be accustomed to the situation. We learned long ago that we were being ruled by a crooked Council that basically threw the rule book away and simply plundered the local ratepayers and enriched those who were driving the EcoCare Ponzi Scheme.

The government in the guise of its local government watchdog and auditor, the Office of the Auditor-General (with its side-kick Audit New Zealand), the government appointed Ombudsman, and the Minister of Local Government, all turned a blind eye to the rort what was going on. They all stated meekly that the blatant illegalities of the Council in every aspect of the EcoCare rort were not unlawful until a court decided they were. In so doing they allowed the Council and the rorters totally liberty to continue its pillage of Kaipara for many more years.

We all know the outcome. Like FIFA, the incompetence and lawlessness in local government is simply too big to tackle. Local government in New Zealand is a complete farce. Local authorities act outside the law with impunity - Auckland with its unconsulted high-density housing foray - because they know that the Auditor-General still has quite a few years left of her Sleeping Beauty sleep, because the government (read Big Business) wants councils to have unlimited power to do whatever they want, because the cost of legal proceedings is beyond the pocket of virtually everyone in the country, and, even if one has the money and the fortitude to take a gamble on the court system, the courts seem too timid to bring the outlaw juggernaut to a halt.

Will John Key return democracy to Kaipara or will he continue the junket of Honest John and his crew for a few more years?

The rule of the unelected commissioners comes to an end in October – just 8 months away. Their rule was supposed to end last October, but the Associate Minister consulted (with blinkers on) with commissioner supporters only and decided to keep them on for another year.

But its crunch time again. Will it be democracy, or will John Key do an Environment Canterbury on us and have a mixed bag of government-appointees and some elected members?

Honest John, operating as usual beneath the murky surface, is already selecting candidates with the right credentials that can be trained up and sponsored in a grab for the democratic seats, while, no doubt, he and his crew will retain the government-appointee seats.

No doubt it will all come out in the next few months. And watch out for the catch words: Robust and stable governance, along with all the smoke and mirrors.

The KDC v Rogan appeal and the Rogan v KDC and NRC judicial review are to be heard on 9 May in a three day fixture.

If the MRRA appeals the Court of Appeal decision to the Supreme Court then this fixture may have to be vacated until the Supreme Court has released its decison.

The stayed cases that are linked to the Rogan District Court case are still up in the air and a conference of counsel and the Judge will take place on 9 February to decide what happens next. The stayed cases now have different plaintiffs and different statements of claim so it is uncertain how the Court will treat them.

Honest John and his crew are continuing to gouge the last pound of flesh out of Kaipara by continuing to sell off what they call “surplus” land.

You will recall that they tried to sell off Sellars Reserve on the estuary in Alamar Crescent/North Avenue and other land around the boat ramps. All the land involved was for the parking for trailers using the boat ramps and the KDC had long ago agreed to designate what is known as Sellars Reserve as a reserve for the enjoyment of the people of the district.

Residents rose up, but after a brief but savage engagement Messrs Robertson, Winder and Booth retreated with bloody noses.

They are still at it, “Beneath the surface”, as Honest John calls it, like three desperate Great Whites searching for anything to get their teeth into.

They have already sold of a few sections, but now they turned their attention to three sections in Wharfdale Crescent in the Heads.

The properties are situated at the eastern end of Wharfdale right on the bend where the walkway goes down to the estuary. It is a deep gully of bush and scrub that incorporates a natural wetland that is home to many species which are up for sale.

The commissioners did not consult with ratepayers on the matter, they simply passed a resolution saying it was not necessary because they are aware of the feelings of ratepayers.

Ratepayers have been slow to stir, but the “Spirt of Mangawhai” is emerging, indignation is mounting, and a counter attack is under way.

At the MRRA AGM recently a local resident did a presentation on the Wharfdale properties and the KDC’s proposals. The meeting passed a resolution that a sale of the sections be postponed.

Following is a letter from Barbara Pengelly, the Secretary of the MRRA, to Honest John that sets out a compelling case.

Dear John
Kevin Pearce has shared your correspondence with him and I noted that you state you are satisfied that you have followed due process in regards to the offering for sale of 23 -27 Wharfdale Crescent. It appears that those three titles are deemed residential at this stage but there have been requests made by concerned residents of Mangawhai to N.R.C. to have this changed, particularly in the hope of having these designated a wetland environment – or at least having number 27 so designated. The necessary survey and decision making has not yet taken place but there is heightened interest in the district that this whole area should become a reserve, particularly now that it appears to be under threat. There has been no consultation with the community.

In the past many people have remained ignorant of the true value of wetlands and consequently many wetlands have been destroyed and turned into pasture. Swamps have been drained and the balance of nature has been destroyed. Wetlands act as a giant sponge by helping to control water flow and quality and are an incredible food source for fish, birds and eels. They are important to Maori as they are host to raupo, flax and purei. These plants produce large populations of aquatic invertebrates, as well as worms and birds, such as the national threatened spotless crake and matuku.

I would ask that the sections be withdrawn from sale pending an investigation by NRC as to whether this land is deemed suitable as a reserve as a “unique wetland environment”.

To quote from the NRC’s own site, ”Most of New Zealand’s wetland animals are not found anywhere else in the world. They include fern birds, New Zealand dabchicks, New Zealand scaup and paradise shelducks. Mudfish are also unique. Animals that can only live in wetlands face an uncertain future through habitat loss and/or damage. Many, like the Australasian bittern, pateke and short-jawed kokopu, are now endangered. Conservation and restoration programmes help to provide the habitat they need and ensure our wildlife survives into the future.

If the N.R.C. were to adopt this as one of its wetland projects in Northland, the site could be developed with a boardwalk across a portion of it but with regard to not disturbing the wildlife and it could be a great project that school parties under the supervision of their teachers could get involved in. It would certainly add to the allure of Mangawhai as a varied and interesting environment- host to walking weekends, art trails, golf, bowls, water sports and a unique wetland.

The Chair of the M.R,R.A, Mr Bruce Rogan has already advised you of the outcome of our A.G.M. of 17 January where the 80 odd attendees passed a resolution that the sale of the aforementioned land be delayed pending a full geological and environmental assessment as well as full consultation with the community. Please do not add to the grievances already in place by once more keeping 'the people " out of the loop. I would ask that you reply to this letter offering some reassurance that you do care about consultation and the future of the environment in Mangawhai.

Kind regards,
Barbara Pengelly,Secretary M.R.R.A.  Mangawhai Heads.

That’s a pretty reasonable letter, no matter what side of the fence you sit on.

So, how did Honest John respond?

Rational, reasonable, eager to show that he values good governance and transparency?

Judge for yourself. This is an abbreviated copy of his letter with the abusive comments removed.

Dear Barbara

I acknowledge you email.

I did receive the email of advice that you refer to from your Chairman recently.

I note that your organisation currently has proceedings lodged against the Council in the High Court.

Further, I understand that you and your fellow committee members are considering appealing to the Supreme Court following the recent decision by the Court of Appeal to turn down MRRA's appeal against Justice Heath's High Court decisions.

Before I respond to the points you make in your email, can I respectively (sic) request that MRRA call an end to its proceedings against the Council; that it encourage its members to pay rates so that the burden of costs to support matters like roads and public reserves are borne by all property owners; and that your chairman ceases sending rude and dishonest emails to me.……..


Please advise whether the MRRA is prepared to change its aggressive and litigious approach to its relationship with the Council.

In other words Honest John will not even consider any approach on the Wharfdale issue until the MRRA ceases all legal action.

That to me is verging on a desperate attempt to blackmail the people of Mangawhai. Decide for yourself. Here is the definition of blackmail in the Crimes Act with the relevant bits highlighted

237 Blackmail

(1) Every one commits blackmail who threatens, expressly or by implication, to make any accusation against any person (whether living or dead), to disclose something about any person (whether living or dead), or to cause serious damage to property or endanger the safety of any person with intent

(a) to cause the person to whom the threat is made to act in accordance with the will of the person making the threat; and

(b) to obtain any benefit or to cause loss to any other person.

Bruce Rogan of the MRRA has urged all ratepayers to write to John Robertson making their views known. You should also write to the Minister, the Prime Minister and also let local newspapers know to what depths he is stooping.

FOCUS AT IT AGAIN  02.02.2016
Talking of newspapers, it is sad to see that the Mangawhai Focus is at it again. For a short amount of time the editor of that newspaper had a sudden rush of journalistic ethics and refrained from his bigoted and uninformed editorials garnered straight from Honest John’s mouth.

The rush of sanity is now in remission. In the latest edition the Focus reverts to being the propaganda sheet for the commissioners.

I would like to include a link to the offending editorial but it is not available on the website. Perhaps it has been “pulled” because of the amount of critical mail already received.

The editor paints a benign picture of the commissioners trying to resolve the illegal debt problem by “whatever means”. Later in his editorial he fantasises about the missed opportunity to combine the expertise of ratepayers and commissioners and solve all the KDC problems together. The blame, of course, lying with the MRRA.

If he had read this website he might have learned that the commissioners were appointed by the government to enforce the debt against the ratepayers and collect the arears of rates. Take a look at their terms of reference.

He is obviously completely ignorant of the agreement that the MRRA reached with the former Council to form a Council/ratepayer focus group to resolve the illegal rates problems. Bruce Rogan also reached agreement with Steve Ruru that an independent forensic accountant be appointed to examine the finances of the KDC. Within a short time of their arrival the commissioners swept that all aside and unilaterally announced the introduction of a validation bill.

The Court of Appeal stated in its decision that Parliament’s endorsement of the Validation Bill was a clear decision from Parliament that the ratepayers of the district were to bear the burden of the illegal debt single-handedly. That is clearly the policy of John Key’s government and that is what his commissioners have enforced. The dismal failure to hold any other party responsible bears witness to this.

The editor of the Focus clearly favours dictatorships over democracy. This is his logic:

Derisive cries of anti-democratic goings-on are spurious to say the least. Voters had their shot at democracy; they, democratically, elected the council in the first place.

In other words, democracy failed, so dictatorship is the remedy. These are the sentiments of every dictator in human history.

He then loses the plot completely by suggesting that the commissioners should sell off unused land and sell of half the golf course"

That would bring in $30 odd million and “the debt is immediately cut in half and imminently (sic) bearable.

That shows his total adherence to the Government’s line that no guilty parties must be held responsible for any of the debt, but it also shows his complete misreading of the Mangawhai community. People are going to be incensed at his suggestion of selling half of the golf course to meet illegal debts that came about because of the illegal actions and incompetence of others

He then becomes a legal expert and opines that the free legal assistance that the MRRA received has got them nowhere. His expertise comes from the school of life:

I have learned throughout life that anything offered for nothing generally is worth exactly that.

He has either had a miserable life totally devoid of the rewards of generosity and charity or he simply trots out bigoted well-worn platitudes.

He suggests, with the benefit of his accumulated legal wisdom, that in respect of Validation Act:

The MRRA should have challenged the Government over this issue and not the KDC or commissioners who only acted on the Government decision.

Why did the lawyers never think of that? Probably because it was Parliament that enacted the Validation Act (not the Government) and in our democracy (!) no one can challenge a decision of Parliament.

Make you own minds up about the latest offering from the Focus, but if you feel strongly about it then write to the editor and let him know what you think. Until we show what the community thinks of the nonsense that he writes he is not going to change.

It's been a tough year.  We started the year with great hopes that our quest to have the rule of law returned to Kaipara would be welcomed by the courts.  We have been sadly disillusioned.  Honest John has steamrollered right over us and swept all before him.

Neither the District Court not the Court of Appeal apeared disposed to our arguments.  Justice de Ridder in the District Court appeared hostile to our cause from the outset and all those who watched his conduct in the court would have had serious concerns about the quality of our justice system.

The decision that emerged from the District Court effectively strips ratepayers of any rights under the legislation, the NZ Bill of Rights Act, and effectively excludes any right to judicial review  in respect of local authorities.

It was a flash-back to the Middle Ages, the age of serfdom.

In the Court of Appeal Justice Miller seemed almost mocking of our claim.  He stated from the outset that if we were successful the results would be "nuclear" for the KDC from a financial point of view.  He seemed to like the phrase and repeated it many times. 

The "nulcear" outcome seemed to arise because of his view of what would happen of the KDC was forced into receivership.  But he seemed to be unaware that receivership for local authorities is deal with in the legislation and is a very gentle animal compared with normal commercial receivership.

He also pointed out that judicial review was discretionary and one got he feeling that the legal rights of ratepayers were dispensable given the nuclear carnage that the vindication of their rights would create for the KDC.

I understand that there is a small group of ratepayers who are still refusing to pay their rates.  Well done you guys for having the fortitude to fight City Hall, the Government and the Courts.  And that also applies to everyone who has fought this battle and finally been forced, one way or another, to succumb to the unbearable pressures imposed on them.

No matter what the courts say, I can state quite categorically that our cause is well-founded and legally sound.  The rates set and assessed by the Commissioners are as illegal as all the other illegal rates in the past.  Parliament set clear obligations that must be followed to the letter if the rates are to create liability on ratepayers.

Likewise the High Court declared the EcoCare loans to be unlawful.  The KDC itself may be compelled to meet its obligations under those debts because of the protected transactions provisons under the LGA, however there is nothing in the law of New Zealand that entitles a local authority to step outside the limitations of the LGRA and set a rate for an unlawful purpose.  The deeming of the debt to be enforceable against the council - despite the underlying illegality - is strictly a contractual matter between the KDC and its banks and it does not affect the Council's power to set rates within the limitations imposed by the LGRA.

But we will put that aside for the moment and concentrate on the festive season ahead.  May I wish all my readers a very Merry Christmas and a happy and safe one, and may I wish everyone in Kaipara a prosperous New Year.  Hopefully it will be a year when we can put all the issues to bed and hopefully go some way to removing the monkey of a debt of our backs.

We need to remember that Honest John has only ten months to go and then our democratic council can get in there and do what should have been done years ago.  There's a nice thought.

An application for leave to appeal to the Supreme Court needs to be filed and served within 20 working days of the date of the Court of Appeal decision. The period from 25 December to 15 January is excluded.

The decision was given on 17 December so 5 working days elapse before the 25 December That leaves 15 working days from 15 January which takes us to Friday 5 February.

Here’s my quick fix for the problems of the KDC.

Historic Illegal Rates

• KDC agrees to credit the vindictive penalties and accumulated penalties and the ultra vires rates (EcoCare rates charged on the “units of demand” for the 2009/2010 to 2011/2012 years and for the 2009/2010 year when service not available on 1 July2009).

• The KDC agrees to set, asses and invoice its rates from 1 July 2016 in full compliance with the LGRA.

• Ratepayers pay arrears of rates.

• Ratepayers withdraw appeal in KDC v Rogan and the judicial review application MRRA and Rogan v KDC. Costs awarded in the District Court are waived.

The vindictive application of penalties “as a lesson” to ratepayers and the entrenched attitudes of the commissioners (no doubt driven by their string-pullers) has prevented this issue being resolved and created a huge amount of bitterness in the community.

A generous approach to the penalties would end the conflict (as ratepayers tried to do a year ago when they tendered their rates without the penalties). The amount involved is miniscule given that any refunds could be dealt with by credits, that the penalties were windfalls anyway, and that the KDC would receive all the arrears of rates. It would also save a fortune in legal costs on both sides.

The ultra vires rates caused the original ratepayer revolt against the KDC. The validation of these utterly illegal rates by the Validation Act was unjustifiable and unconscionable. The amount involved is chicken-feed. A small gesture that would help set things right in the eyes of the community

In respect of the illegal rates processes it is absolutely clear, despite what Judge de Ridder said, that the assessment and invoicing of rates is legally non-compliant. Put that behind us and ensure that in future all the rating processes comply with the law. It is not an onerous task and there is absolutely no disadvantage to the KDC.

Illegal debt

• KDC and ratepayers agree to abide by the decision of the Supreme Court in respect of the illegal debt.


• Get rid of the secrecy, suspect panels and predetermined agendas.

• Start at the very beginning by stating the problems, analysing the water, and then looking at a broad range of options including the suitability and viability of the current plant.

I have been extremely critical of the Mangawhai Focus in the past. It appeared to attach itself firmly to the shirt tails of Honest John and simply became a mouthpiece for his propaganda. Its editorials were half-baked homilies that were one-sided and often showed a company ignorance of the facts.

There has been a massive shift. The editorials have gone and now ratepayers are given a huge amount of space to vent their concerns. The letters to the editor section may have gone too far with wordy overstated cases, but even that has served a purpose.

Dr Ian Greenwood was allowed a considerable latitude to state his case and defend his besmirched honour, and in so doing raised many more questions about his attitudes, and the scientific rigour of the advisory panel's approach to EcoCare Mark 2.

Honest John recently shot himself in both feet by babbling on about the lack of evidence of pollution in the Mangawhai Harbour. He seemed totally unaware that this admission undermined the whole approach to EcoCare Mark I and EcoCare Mark 2. As Christian Simon pointed out in the latest letters to the editor, the research into the problem and its causes should come before the solution.

Karen Wooley in another letter makes her point in respect of bovine pollution at Tern Point, but all of us are left asking why no independent research into the problem has ever been carried out. There is nothing like a bunch of incontrovertible facts to resolve the “he said, she said” debate.

There are good letters from Bruce Rogan, from John Dickie and from Christian Simon. Christopher Dickie makes some telling remarks. He dismisses Honest John’s “political spin” that he suggests that no one buys into and adds:

Instead, what ratepayers need to be able to read in the paper is progress on how the Commissioners are honouring the assurance given a year ago of “sheeting home accountability by taking legal action against Audit New Zealand which we [the Commissioners] believe failed in its duties and against the former Chief Executive.”

Spot on. Honest John has produced thousands of words of propaganda during the last year glossing over the cracks and misrepresenting the true financial status of the KDC but has failed to address in any way the fundamental problem of the liability for the debt.

One year on from his announcement about the OAG and Jack McKerchar he has said nothing. He has been allowed to get away with it so far. But it is clear from the columns of the Focus that the ratepayers of the district are very aware that Honest John and his team have failed miserably in this area. He has allowed the culprits to escape whilst carrying on a vindictive campaign against the innocent ratepayers and dumping all liability at their door.

The letter from Philip Scothern is a gem. He quotes Prof Worzel:

"Politics is another modern tool of plunder. Why bother killing useful labour units in order to steal their resources when regulation, negotiation and manipulation can just as readily divest people of their sovereignty, liberty…”

Over the last ten years we have seen the financial resources of the Kaipara community stripped and transferred to all the rogues that were permitted to perform their rorts on the district by the government watchdogs and Ministers. And, as a penalty for our objections to this systematic theft, we have been stripped of our democracy and vindictively dealt to.

Honest John may have all the big artillery and may have forced local ratepayers into submission, but beneath the surface the resentment is huge and that will swell when the books are opened next year and the true extent of the plunder is finally revealed.

Sepp Blatter hung on in FIFA for a long time and looked invincible. The rort appeared to be too big for anyone to challenge.

There may be a lesson in that for Honest John and his team

COURT OF APPEAL    22.12.2015
Apologies to readers for my delay in reporting on the release of the Court of Appeal decision in the MRRA v KDC case which was released on 17 December.

Quite coincidentally the two old warhorses, Bruce Rogan and myself, were both in hospital at the time of the release and were in no position to read the decision, never mind about assessing it.

Bruce was having his other hip replacement in North Shore Hospital, and I was in Whangarei Hospital having tests to identify a viral infection.

We are both now emerging from the wood and can now start look at the latest offering from the Justice system.

I haven’t read the judgment yet. I intend to get on to that today. But a couple of points have already become clear.

• The conspiracy theorists amongst us take it as read that the courts are, along with the troughers, lined up against us, and are intent on ensuring that ratepayers do not use the law to avoid their fundamental obligation in life which is pay for all the excesses and illegalities of local authorities.

To that end it was predicted that the Court of Appeal decision would be released just prior to Christmas so that the decision and the powerful message it was sending to the ratepayers of New Zealand would go ignored by the press, buried in a mountain of Christmas trivia, and would slip by unnoticed.

It is the standard political manoeuvre that politicians indulge in time and time again and was used to pass the Validation Bill in December two years ago.

• A pre- Christmas release would also create real problems for any appeal to the Supreme Court. There is a set time, calculated in “working days” for an appeal to be lodged, and certain days over the Christmas/New Year’s break are not counted as working days.

The problem is that legal holidays extend far beyond the actual statutory working days and it is almost impossible to find over the holiday period a new barrister who has competence in administrative law and the particular angles of this case, and the time to get himself /herself up to scratch, and to file a Supreme Court appeal within the allocated time-frame.

• Add to this the fact that Matthew Palmer, who championed our cause in the High Court and the Court of Appeal, was immediately appointed as a Judge of the High Court after the Court of Appeal hearing. This was quite strange in that he had only been a QC for about 14 months. But what it meant was that our key legal adviser was removed from our team part way through the case. One day he was our adviser, leading the charge and honing our case, and the next day he was gone, out of touch, and had effectively joined the other side. All the money that we had invested in his expertise and coming to grips with the intricacies of our case was gone forever.

That loss is felt severely at this time. Matthew created our case in a way that was good enough to see him appointed as a judge, but, quite bizarrely, all of his submissions were in fact peremptorily dismissed by the Court of Appeal. This fundamental paradox needs an explanation but we have been denied access to the very person who could offer us some sort of insight into what had happened and who could advise on our next move.

• Several people have raised with me why the Court of Appeal decision was released only a week after I advised in a post that the decision would not be released for some time. The facts are clear:

1. The Court advised on 9 December 2015 that it was “unable to provide you at this time with an expected date of delivery”.

2. On 16 December, one week later, the Court advised that the decision would be released the following day (17 December).

I leave readers to interpret the facts for themselves.

So, according to the conspiracy theorists, we have been well and truly shafted, yet again, by a court system that is supposed to treat citizens with absolute fairness.

The ratepayers of the district picked a massive fight when they alerted the authorities to the illegalities of the KDC. We knew that we would be fighting the local government troughers and all those who feed off it. We knew we would be fighting the banks and other vested interests that are protected by all the mainstream political parties that rely on the banks for financial support.

What we did not realise was that we were actual fighting a judicial system that over the years has exposed a soft underbelly which is beginning to look very suspect.

The specific issues of glaring and persistent legal non-compliance raised by the MRRA broadened into a more fundamental and nagging question of whether local authorities are above the law. And, with the delivery of the District Court decision and the Court of Appeal decision, that inquiry has moved its ground. We are now questioning whether the courts in New Zealand are truly independent of the executive, as they should be, or whether they are simply using their judicial discretion to enforce the political policies of the executive to the detriment of the rule of law.

It’s a very serious question. A question that is of the utmost importance for all New Zealanders.

WANT A NEW JOB?   09.12.2015
How about this one?

This what Honest John has to say about Kaipara:

Following a period of Commissioner governance, the Council is now financially sound and has made significant progress addressing historical legal, organisational performance and community relationship issues. It is very well prepared for the challenges ahead in the District's future. Council elections will be held in October 2016. It is planned that the new CEO will be in place to assist in the leadership of this transition and the extremely promising future of the district.

Is that misleading or not?

Just forget the debt (declared to be illegal by the High Court) that will impoverish the district for generations to come, and the cupboards that will be stripped bare of all funds and trust monies.

Forgive me for my ignorance. I thought that the EcoCare Ponzi Scheme Mark 1 was undertaken to protect our pristine Mangawhai Harbour from human pollution.

I wasn’t around when EcoCare was first mooted but I am sure that all the information that was foisted on ratepayers about the need for the sewerage system swung on the fundamental need to protect our Harbour.

The promoters consistently used “Save the Harbour” as the reason for the scheme and emotive words like “eco”, “pristine”, “preserve” etc were freely bandied around and underpinned the whole approach.

I am also certain that just recently, in a series of articles in the Mangawhai Focus, Honest John’s carefully selected advisory panel told us all repeatedly that our Harbour was at risk because of human pollution and exhorted us to support the EcoCare Ponzi Scheme Mark 2.

Doubt has now been cast on the evidence of pollution by the person one would least expect.  In the latest edition of the Mangawhai Focus Honest John reveals that in fact there is very little hard evidence relating to pollution of the Harbour, both past and present. This is what he says:

The Council has recently launched a project aimed at closing the knowledge gap on water quality in the harbour. This project revolves around research and testing of the harbour and its tributaries, with the overall objective being to ensure a healthy and productive harbour able to be enjoyed and valued by all.

The initial phase involves understanding testing practices. We need to find out what testing has historically happened, what testing is currently happening and what testing may be needed to ensure sustainable management practices.

You may be surprised to know that little testing has been done in the past; to understand harbour health a systematic and co-ordinated approach is needed that gives us knowledge of trends relating to the harbour’s health. This matter was discovered by the Mangawhai Community Wastewater Panel members who assisted the Council to review the Mangawhai Community Wastewater Scheme earlier this year.

Really? “Little testing in the past”. If that is the case, why was the pollution of the Harbour the fundamental driving force for the EcoCare projects when, in fact, there was no evidence to show that pollution was an issue?

That seems to suggest that the pronouncements about human pollution as the reasons for the Mark 1 and Mark 2 schemes were no more than baseless puffery.

It also seems to add weight to the view that the EcoCare undertakings were not about salvaging the Harbour and all that ecological sweet-talk, but quite simply a rort that was hatched by those involved to enrich themselves at the expense of gullible ratepayers.

“HARBOUR POLLUTION” was the catch-word to suck ratepayers in, both for original scheme and for Honest John’s Mark 2 version.

It also seems that the allegations that any contamination comes from bovine sources, allegations that have been around for many years and which have been persistently ignored, may have some significance when some real, independent research is undertaken.

Beca were involved with the original scheme and Harrison Grierson has fronted the current version. It seems quite bizarre that both should launch into projects, which incidentally are massive earners for their own pockets, on the basis that pollution of the Harbour is the raison d'etre for the schemes, when in fact, as Honest John highlights, there was, and is, little hard evidence to support that proposition.

One would have thought that professionals would have done the research well in advance of making any proposals. Clearly, on the basis of what Honest John is now saying, they didn’t.

That revelation should concern us all, but so should Honest John’s reaction to the situation. He advises as follows:

A further advisory team has recently been established consisting of community members, Iwi, and the Council. The community members are offering their time as volunteers, and have been drawn from the panel of the earlier exercise. The team is also working closely with Northland Regional Council.

Their purpose is to:

* Design an ongoing water testing programme for the Mangawhai Harbour.

* Identify the nature of the water quality issue…..etc

Note that no one in the advisory team is named but the members are selected from the previous advisory panel that was carefully hand-picked by Honest John.

Members of that team did themselves no credit by what seemed to be their slavish adherence to ridiculous terms of reference and the predetermined plans of the commissioners and their advisers.

Many ratepayers are sceptical about the panel’s work to date and this new, secret “in-house” appointment suggests that the inquiry into pollution will be anything but frank and independent.

We all know that the commissioners have so far ignored all suggestions of any pollution being caused by bovine effluent flowing into the Harbour from Tern Point and other places.

We also know that several influential people who support the commissioners live in Tern Point.

It will be interesting to see if the secret panel has the courage to allow independent assessment of the Tern Point pollution or whether they will be steered in other directions.

Question: Why was local man John Dickie not appointed to the new panel? He is one of our foremost experts on water quality and has worked all over the world in that capacity.

There are rumours circulating in Mangawahi about a strong stench emanating from Tern Point which is to the south of the Mangawhai Estuary.  Apparently it is not the smell of bovine faeces, as one would expect, but is rather "fishy" in nature.  No doubt the Council will expore the provenance of the smell and establish if there is any substance to any of the rumours. 

OAG GONG  09.12.2015
Sniffer Dog has advised me that the invited luminaries at the accountants knees-up where Lyn Provost was awarded a gong for her work in "strengthening public sector performance and accountability" (see earlier post BEYOND BELIEF....) were not aware of her stuff-up over Kaipara and did not know that she is being sued for negligence in the High Court.

Guests at the conference like Bob Geldorf and Justice Kirby from Australia had no input into the awards and were simply there to provide the dressing for the salad to make it all look good and give the impression that it was an international award for our Auditor-General.

Bear in mind that the award was from accountancy firms and that most accountancy firms in NZ rely on delegated work from the OAG to butter their bread.  Not a bad idea to lick the boots of a fellow troughers even though its incompetence is on public record.

Perhaps Bob Geldorf shoud have serenaded Lyn with his song "Too late she cried". 

ROGAN CASE UPDATE   09.12.2015
An appeal to the High Court has been lodged by Bruce and Heather Rogan in respect of the the decision of Judge de Ridder in the District Court.  The Rogans have also applied for a stay of execution of the District Court decision and payment of costs pending the resolution of the case in the High Court.

It is understood that the appeal will be heard by the High Court in May next year when the judicial review filed by the KDC and the Rogans against the KDC and the NRC will also be heard.

STAYED CASES  09.12.2015
The stayed cases in the District Court that have the same defence as the Rogans' case will also continue to be stayed pending the outcome of the appeal. 

The status of those cases is unclear.  The substance of the Rogan case was changed by the addition of a further plaintiff, the NRC, and by the filing of a subsequent and replacement statement of claim. It was therefore pursued on a different basis to the stayed cases.

COURT OF APPEAL DECISION   Following two separate inquiries to the Court of Appeal about when the judgment could be expected, the following information was forthcoming from the Deputy Registrar of the Court:

The Court will normally deliver its Judgment within 3 months. An enquiry has been made to the Judges, who advise they regret the delay in respect of this matter. I am unable to provide you at this time with an expected date of delivery.

I have made an inquiry of the Judges who presided in the hearing. I have been advised that a date for the delivery of the Judgment cannot be provided at this stage.

The ratepayers' fight to get the rule of law recognised in Kaipara, as you all know, has been long and hard.

We have fought an incompetent council, with a suspect chief executive and mainly dopey councillors, whose lawyers and advisers knew diddlysquat about legal compliance and simple competence.

We have been the victim of a foreign bank and contractors who were bent on rorting the people of the district, and we have hit a brick wall with a government that is intent on imposing its grand design on ratepayers despite its illegality and unfairness.

In short we are up against the trough mentality where those who feed generously at the public trough compel ratepayers and tax payers to keep them supplied with an endless source of sustenance.

On the other side of the coin, they ensure that no trougher has any liability for incompetence, financial imprudence or legal non-compliance.

They have absolutely no liability to anyone, and the fundamental principle that binds the brotherhood is that all troughers must ensure that all fellow troughers are never held accountable for their failures, their incompetence, their negligence, their financial imprudence or their reckless or deliberate flouting of the law.

The OAG is a government organisation that serves as watchdog for the local government sector to ensure compliance with the law. It is also appointed as the auditor for all local authorities and must ensure that they comply with the audit requirements so that the monies of ratepayers are properly protected.

As we all know the OAG failed dismally to perform its obligations in Kaipara. Its audit of the KDC carried out by the OAG’s subsidiary Audit New Zealand reached heights of incompetence that are quite incredible. It ignored the basics check lists and basically rubber stamped the rort that was clearly going on before its eyes.

At the same time the OAG rejected detailed legal submissions from ratepayers establishing persistent illegal rates and development contributions. It kicked for touch and said it was a matter for the courts.

When the full extent of the OAG incompetence was uncovered, Lynn Provost, the Auditor-General, came to Mangawhai and had the audacity to state that she was not going to accept responsibility for the incompetence of her staff. Clearly her knowledge of the law of principal and agency rivals her competence as an auditor.

In any other situation she would have been “gone by lunch time”. But not when you are trougher. The rules are different. The other troughers allowed her to escape. She was allowed to hold an “independent” inquiry into EcoCare even though her Office was principally responsible for the debacle. (The principle of conflict of interest does not apply to troughers.)

Her report found that her Office and the Audit New Zealand were negligent, but the report was delayed to such an extent that the limitation period for suing for negligence had virtually expired.

The previous MP for Northland - whose name cannot be mentioned because the government has put the frighteners on everyone because they want to keep top secret the charges he is going to face in his trial in May next year – put pressure on the commissioners, along with the MRRA and ratepayers, to sue the OAG and audit NZ for negligence.

The commissioners are, of course, fellow troughers  and reluctant to take any action against another trougher whose incompetence had unfortunately, despite the efforts of troughers, had some daylight cast on it. They dithered, while the limitation period seeped away, and, under pressure, finally succumbed and issued proceedings against the OAG claiming damages for negligence.

That was in December 2014. Almost a year ago. Virtually nothing has been heard about how the case is progressing. “Legally privileged”, says Honest John.

We all know that the case will never get to court. There will be a confidential settlement with the OAG denying any liability, and ratepayers will not be advised of the outcome even though it was their monies that were lost because of the OAG’s incompetence and even though they funded the legal case.

The damages agreed to will be derisory even though the fundamental responsibility for the Kaipara illegalities and blow out lie at the door of the OAG.

The Auditor-General is an officer of Parliament. She is appointed by Parliament and can be disciplined and dismissed by Parliament. But whilst there was some criticism of her role in the Kaipara fiasco when the Kaipara Validation Bill was churning its way through Parliament, no action was ever taken against the Auditor-General.

The Christchurch City Council validation bill is wending through Parliament at the moment and MPS are incredulous that yet another council with all its highly paid executives and advisers could stuff up a simple thing like setting rates unlawfully for the last ten years.

There are also questions about the competence of the “auditor” and why these blatant illegalities were not picked up. But there is no attack on the OAG, which was the principal auditor for the CCC, or any criticism of the ongoing incompetence of that Office. She will, again, remain in her job and be free to allow local authorities the freedom to be incompetent and flout the law and the requirements of prudent management.

But it is worse that. Troughers reward fellow troughers with prestigious prizes that grab the headlines and establish their superficial credentials, while the reality of their incompetence skulks unseen in the shadows.

Remember how earlier in the year the KDC commissioners made a huge fuss about the SOLGM gong they won for high performance. It was then revealed by this website that things were not as they seemed. To summarise, the KDC under the stewardship of Peter Winder (and two other commissioners) won a gong for its high performance in awards sponsored by Peter Winder's firm, with Peter Winder and Lyn Provost as two of the judges. (Ironically, Lyn Provost was at that time being sued by the commissioners for negligence.  Such is the cosy rapport between troughers.)

In respect of Lyn Provost her fellow troughers have excelled themselves.   Take a deep breath, and do not read this if you are squeamish.  According to the OAG website:

The Controller and Auditor-General, Lyn Provost, last night received an award for her outstanding contribution to public administration in New Zealand from Chartered Accountants Australia and New Zealand (CA ANZ).

As Auditor-General, Lyn has worked to strengthen public sector performance and accountability in New Zealand and overseas, particularly in the Pacific. She has advocated for financial and public management to ensure that the public sector can deliver quality services to citizens now and in the future.

Lyn received her award from global activist Sir Bob Geldof.

Lyn is on the right

For earlier posts click here.