The KDC/NRC High Court Interim decision can be viewed here
The KDC/NRC High Court final decision can be viewed here.
For those who want to read the Auditor-General's report
on the inquiry into the Mangawhai wastewater scheme
MRRA circular 2014
We believe that the council will have to climb some very steep hills to successfully sue any Kaipara ratepayer for non-payment of rates, and when the time comes we intend to be ready to provide a vigorous defence to anyone who is sued by this council.
Winston Peters on EcoCare 2014
This is a sorry litany of negligence, corruption and coverup.
Winston Peters on retrospective legislation 2014
Retrospective legislation that is harmful to any party should be an abomination in a democracy. In this instance, it was used as a device to brush incompetence and corruption under the carpet. New Zealand First’s view is clear; inconvenient truths should not be buried but exposed to the cleansing light of public scrutiny. Cover up – deny – and avoid scrutiny whilst the innocent suffer and the guilty walk away unscathed and fully paid.
Winston Peters to Kaipara ratepayers 2014
National and its local MPs, past and present, should be ashamed of their underhand way of allowing the guilty to escape accountability and leaving you with the cost.
Bottom line policy of NZ First for Election 2017
Eliminate the debt burden on Kaipara District Council ratepayers caused by the Mangawhai Community Wastewater Scheme.
Phil Twyford (Labour) on the second reading of the Kaipara Validation Bill 2013 stating the two reasons why Labour supported the Bill:
The first is that if negligence or corruption is found to have been involved in the governance of Kaipara District Council, and if the report of the Auditor-General does uncover culpability of that nature, then the wrongdoers must be held accountable. I take some assurance from the unanimous cross-party agreement at the select committee, which is included in the commentary on this bill, that we expect the Government to hold those people accountable if the Auditor-General’s reports finds wrongdoing of that nature.
The second is that the Mangawhai ratepayers group must not be punished for blowing the whistle. There were wrongdoings committed here. The financial cost to the residents is significant, and they must not be punished for blowing the whistle. That is why I am pleased to see a commitment being made by the commissioners to the select committee that there would be an amnesty for the rates penalties incurred by those people withholding their rates in protest at this situation. On the basis of those two elements, I believe, then, that there is a basis for passing this bill so that all of the ratepayers and the people of Kaipara District can move forward.
The betrayal of ratepayers in respect of these two issues and the vindictive pursuit of whistle-blowing ratepayers for the draconian penalties.is the root cause of the ongoing problems.
The KDC is back to its ruthless self. Those who have outstanding legal actions for the recovery of rates have just been targeted with an unlawful demand for monies in a letter from the KDC.
The letter states that judgment has been entered against the ratepayer in the outstanding case and claims payment of the judgment amount, additional arrears of rates, legal costs and daily interest.
The truth is it that it is a complete falsification and has no basis in fact. Only last week in the Court of Appeal legal counsel for the KDC and NRC assured the Court that all the legal claims except the Rogan case were stayed.
I have also checked with the Registrar of the District Court in Whangarei who confirms that the stayed cases remain just that, and that no judgment has been entered in any of them.
To state that someone of good reputation has a judgment against them when it is palpably false is defamation of the worst kind. It is deliberate and malicious.
It is also utterly disgraceful that a local authority that is statutorily bound to comply with the law should bow to extorting money from its ratepayers.
At this stage we do not know the whys and wherefores of this disgraceful demand for money. The letter emanated from KDC staff so ultimately it is the acting chief executive Peter Tynan who must bear the responsibility. It may have been within his discretionary power or it may have been ordered directly by the Mayor and the elected members.
It also comes within the responsibilities of the Crown manager, Peter Winder, and he could have directed the Council to take the action.
Whoever is responsible should be fired immediately. We have suffered enough under the regimes of McKerchar and the commissioners. The last thing we want is more unbridled lawlessness.
We are awaiting to see how the KDC responds to its latest fall from grace.
COURT OF APPEAL 29.11.2017
Last week we had our day in the Court of Appeal. The NRC was appealing the finding of the High Court that its rates were unlawful for 5 years, and the MRRA was challenging the High Court’s finding that rating penalties could be charged on the GST added to rates, and that the KDC had followed the correct procedure in its penalty resolutions.
As expected, David Goddard QC, legal counsel for the KDC and NRC, dominated proceedings in his own inimitable way. He had few legal arguments on his side but he made a great fist of arguing that local authorities were effectively beyond the law, that matters of non-compliance were mere irregularities, and, because of the cost an inconvenience that would result to a local authority, such irregularities should be ignored.
The Judges seemed impressed ,but they have some very detailed legal submissions before them and one hopes that they see through the rhetoric and make the two councils responsible for their fundamental and important errors. it will be some months before the judgment is delivered.
This latest legal excursion probably cost the NRC the best part of $200,000 and that would be easily matched by the KDC’s fees. That puts the total amount of combined legal costs in pursuing ratepayers at over $2 million. And so far they have not recovered a single penny.
If all the penalties on rates withheld by whistle-blowers during the rates strike of 2012 had been remitted, there would have been none of this nonsense. The rates were withheld to force the government to take action to rein in an out of control KDC. The rates in question were all held to be unlawful, so, in law, no penalties were payable. It is one thing for Parliament to validate the rates retrospectively but to insist on payment of retrospective penalties on rates that were unlawful and not payable at the time was unfair, unconscionable and vindictive.
If the KDC had accepted the tender of rates (without the penalties) amounting to $1 million by those whistle-blowers in 2014, then all of this would have been dead and buried. Council could then have spent the monies on potholes and fixing our crumbling roads. Instead they have given ex-commissioner and KDC Crown Manager Peter Winder and KDC and NRC legal advisers Simpson Grierson an open ticket to treat KDC rates as a war chest to use against ratepayers to enforce and vindicate their misguided version of rating compliance that they have persuaded local authorities in New Zealand to adopt.
Peter Winder was formerly chief executive of Local Government New Zealand. That organisation is largely responsible for the unlawful rating documents that are inflicted on ratepayers throughout New Zealand. Simpson Grierson advises many local authorities and endorses rating processes and documents which many of us versed in rating law regard as blatantly unlawful. Local authorities tend to follow the advice of the so-called experts. So far it has cost the KDC and the NRC dearly.
In effect Simpson Grierson and Local Government New Zealand (through Peter Winder) are using the monies of Kaipara ratepayers to fight their own personal battle for legal credibility.
CROWN MANAGER 29.11.2017
Despite my predictions, the Crown Manager, Peter Winder, still appears to be on the KDC pay-roll. He was in Wellington last week at the Court of Appeal to oversee his continued persecution of ratepayers, all of course at the expense of ratepayers. Hopefully it will be his last trip. It is hard to see how he can survive with Winston Peters now ensconce in power and given the Deputy Prime Minister’s antipathy to the role of Crown Manager.
It is also no doubt the appropriate time for the new government to look afresh at the legality of the appointment and re-appointment of the Crown Manager and the argument that all of his actions and decisions made on behalf of the KDC have been ultra vires and are invalid.
FIRE SERVICE RULES 29.11.2017
There is still no decision from the hearing commissioners on the status of the Fire Service code of practice in the district plan. It is a massive legal problem given that the code of conduct has been applied unlawfully to non-urban arrears. That means that those applying for consents have been forced to comply with requirements that are unlawful.
It is one heck of a mess, and one wonders how the Fire Service (as it was) could be allowed by its supervising Minister to operate outside its legal parameters and inflict unlawful legal costs on home-builders.
Even under the new legislation the code of practice is still not, and deliberately not, mandatory but Emergency New Zealand is ignoring that. It is pouring massive funds (paid for out of our Fire Service Levy in our insurance policies) into pressuring local authorities (through purported RMA requirements) to incorporate the unlawful parts of its current code of practice into their district plans, thus making non-mandatory rules mandatory.
The rules are irrational and a joke, but not to those ratepayers that have been forced to shell out tens of thousands of dollars to comply with the nonsense.
Rumour has it that the bureaucrats who enforce the rules are easing off. Have they seen the writing on the wall? And if, at the end of the day, the KDC got it wrong (again), is it going to compensate those house-owners who were compelled to comply at huge cost with rules in the district plan that were unlawful?
VEHICLE CROSSINGS 29.11.2017
Some time ago I wrote to the KDC about its purge on home owners who in the KDC’s view have a non-compliant vehicle crossing from the roadway to their properties. It appears that the KDC has launched a campaign against errant owners and one can only presume that it is because of the windfall in fees that it can recover.
The permit for such work is about $380, but the KDC also charges a bond of $5,000. Even if no damage is done, a sizeable chunk of that amount is deducted on repayment to cover various costs of the council. Multiply all that by at least 100 and you get a nice little earner for a council that is desperately short of money.
I have not received a reply from the KDC to my letter but some homeowners are still being hounded by the KDC. It appears that so-called non-complying properties in Seabreeze Road have been given a deadline to comply with the KDC by-law.
It appears that the road in question was a private one that was transferred to the KDC at some time. I know nothing about it, but there would have been some agreement in respect of outstanding matters of compliance at the time. The KDC and the residents affected need to look at what arrangement was agreed to see who is responsible for matters of non-compliance.
The problem that KDC faces is that in the past it has issued Code Compliance Certificates (Note: not Code of Compliance Certificates) where in fact there were outstanding issues of non-compliance. The KDC has compounded the errors by failing to note the matters of non-compliance in its property records and in its LIMS. The courts have held that such a failure amounts to a breach of the duty of care that the council owes to its ratepayers, and the council accordingly becomes responsible for compliance.
I have again written to the KDC asking it to cease harassing house owners on the issue until it has fully ascertained the legal situation. I have also requested details of the Seabreeze situation under LGOIMA.
Please let me know if you have received similar demands from the KDC. (email@example.com)
NZ FIRST AND LABOUR COALITION 20.10.2017
Those of us who have fought to have the rule of law returned to Kaipara will be pleased to see that we have a new government.
Winston Peters has consistently blasted the National government for its treatment of Kaipara ratepayers and has promised that if he got the balance of power he would "fix" the Kaipara problem.
The Labour Party must also be annoyed that the legislation of 2002 (the LGA and the LGRA), which was designed to make local authorities more accountable to ratepayers, has been deftly side-stepped by local authorites and virtually swept away by the High Court and the Court of Appeal.
It will also be annoyed that the KDC commissioners and the Gent council broke the promise of an indemnity on penalties charged on Kaipara whistle-blowers' withheld rates, and have spent millions of dollars of ratepayers' money blindly and vindIctively pursuing those whistle-blowers. (See the quote of Phil Twyford under IMPORTANT QUOTES above.)
We can only hope that the new government will put pressure on the KDC to take steps to settle all the Kaipara issues on a fair and equitable basis. Then, at last, we can all concentrate on, as the current expression goes, "going forward".
THE COST OF BLIND VINDICTIVENESS 18.10.2017
I now have details of the amounts spent by the KDC and NRC to extract penalties on withheld rates from whistle-blowing ratepayers.
Remember that ratepayers withheld rates to force the government to act in respect of many years of unlawful rates of the KDC and the EcoCare rorts.
The government obtained cross-party support (except for New Zealand First and Mana) for a validation act to validate 6 years of illegal rates and other illegalities on the basis that those responsible for the rorts would be held accountable and, and that the penalties charged on withheld rates would all be remitted.
The government-appointed commissioners refused to do either and demanded payment of the penalties.
The whistleblowers tendered the rates due but without penalties. The commissioners rejected the offer and sued over 100 ratepayers for the rates AND penalties.
The whistle-blowers would have paid the instalments as they fall due but the KDC, under both the commissioners and Greg Gent, have unlawfully denied ratepayers the right to pay each rates instalment as it falls due. Any payment made is debited to the oldest debt first and another penalty is added to the unpaid current instalment.
Effectively, the legal actions instigated by the KDC and the NRC were to recover the penalties as the whistle-blowers had agreed to pay the rates. The case against the Rogans was a test-case.
The NRC sued the Rogans for $1,708.97 of which a small part was disputed penalties. The High Court declared five years of NRC rates to be unlawful and quashed them.
The KDC sued the Rogans for $20,449.52. of which perhaps $5,000 was disputed penalties. The High Court ordered the Rogans to pay that amount, not because the rates were lawful but because it held, somewhat surpringly, that ratepayers had no legal right to defend an action to recover rates, whether they were legal or not.
The cost to ratepayers of the KDC so far is set out below.
This figure does not include costs awards made by the courts against the councils.
To this should be added the wages and costs incurred by the staff of the KDC who have been deeply involved in this dispute, Plus the costs of the Crown Manager and Crown Observer who were appointed to oversee the legal actions.
In addition the NRC has indicated that it will spend another $200,000 on appealing the case to the High Court.
At this stage it is uncertain if there will be an appeal to the Court of Appeal in respect of the KDC rates.
Full details of the legal costs incurred can be seen here. (click ok and yes)
GENT COUNCIL DENIES RATEPAYERS THE RIGHT TO CHALLENGE UNLAWFUL RATES 17.10.2017
Greg Gent’s council, along with the NRC, is refusing to consent to leave being given to Bruce Rogan and his wife Heather to file an appeal to the Court of Appeal in respect of Duffy J’s recent judgment.
Brookfields, the lawyers for the KDC and NRC have advised that their clients will not give consent.
In the High Court judgment Duffy J held that ratepayers have no right to defend proceedings in the District Court by challenging the validity of rates, even if those rates are patently unlawful.
This is a fundamental denial of the rights of citizens to defend themselves in court, established by the Magna Carta, and a denial of the rights supposedly protected by the NZ Bill of Rights Act.
Because the matter was appealed from the District Court there is no appeal as of right to the Court of Appeal. Application has to be made to the High Court for leave to appeal, but that is usually granted if all parties consent. The refusal of the two councils to cooperate on what is a fundamental issue to be decided by the courts is yet another blow to the accountability of councils to their ratepayers..
This is an issue that concerns the fundamental rights of all New Zealanders. At present local authorities in New Zealand have a cavalier attitude towards legal compliance in the rating process, but, if Duffy J’s judgment is allowed to stand, local authorities will be placed outside the law. They will be able to completely ignore the mandatory requirements of the LGRA and the LGA knowing that ratepayers have no right to defend themselves in the District Court.
It is all part of the Gent’s councils continued persecution of whistle-blowing ratepayers who exposed six years of illegalities of the KDC and the rorts of the EcoCare scheme. Other political parties supported the validation of the illegalities in Parliament on the understanding that those responsible for the EcoCare rorts would be held to account and the penalties on the rates withheld would be remitted in full. The National government did neither. Through its commissioners it refused to accept payment of the rates from whistle-blowers without the draconian penalties and since 2014 has conducted a campaign of legal attrition against those whistle-blowing ratepayers to force them to pay the penalties.
After three years the net result is that the NRC rates have been declared unlawful by the courts, and Bruce and Heather Rogan have been ordered to pay $20,000 in rates and penalties to the KDC. Not because the rates are unlawful, but because they are simply not allowed to challenge the rates even though they may be unlawful. The Rogans had already offered to pay the rates so the whole legal vendetta was to recover about $5,000 in penalties.
The total cost of this outrageous and unprincipled attack on whistle-blowers (who were determined to uphold the rule of law in Kaipara) was close to $2 million dollars, all paid by ratepayers.
Greg Gent and his council have for the last year put their heads in the sand about this appalling wastage of ratepayers’ money. There was an arrangement with the National government that the Crown Manager Peter Winder would be solely responsible for decision-making and the council itself could turn a blind eye to the actions of the government in persecuting the whistle-blowers. The Department of Internal Affairs stuffed up immensely and in what Winston Peters calls “a comedy of errors”, committed a stream of blatant illegalities which it has covered up with the usual smoke and mirrors.
The end result is that all decisions in respect of whistle-blowers are the responsibility of the elected members and no one else. Whilst the Crown Manager has the power to "direct" (if his second appointment is lawful) it is the elected members who make the final decision on what actions are to be taken. Under the LGA they obliged to exercise their powers for the benefit of the district, not to pursue the political ends of the government.
The government directed commissioners did Kaipara a massive disservice in rejecting the offer of the whistle-blowers to pay the rates in 2014. But clearly they had a strategy to use the force of the government, and the coffers of the ratepayers to crush what they saw as rebel ratepayers who wanted to ensure compliance with the law.
The sad thing is that Greg Gent had the perfect opportunity a year ago to tackle the issue on a fair and sensible basis and put the whole thing to bed. He shied away from that, and by allowing Peter Winder and the DIA a free and utterly incompetent hand, he has acerbated the whole unsavoury fiasco.
No wonder Greg Gent is quitting. But he must rue that he ignored the opportunity to resolve an issue that has torn Kaipara apart. The whole matter could have been easily compromised if Greg Gent had not been so blinkered by his political allegiances, had examined the underlying equities of the situation, and had not been driven by his personal antipathy to those on the other side.
if you want to help the Rogans and the MRRA continue this fight to bring the rule of law back to Kaipara you can:
Donate directly to the MRRA bank zccount: 38-9012-0318164-00
Donate via https://givealittle.co.nz/ — search for Mangawhai Ratepayers and Residents Association.
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GREG GENT GOING, GOING ....... 11.10.2017
I have been overseas for 10 days and out of touch with NZ. I arrived back yesterday morning to find that Mayor Greg Gent had gone. Not gone by lunchtime, but he has indicated that he will resign after the next council meeting on 14 November 2017.
Local authority mayors are specifically elected so a new by-election will be required to fill the vacated position. The Local Electoral Act stipulates that the election cannot be held until 17 February next year.
Ratepayers will be obliged to foot the bill for the election. The amount has not yet been revealed. But at leasst there is no severance pay issues. Mayor Gent will receive no compensation because of his early departure. . .
In the meantime the deputy mayor, Peter Wethey will assume the role of mayor.
Other reports on the Mayor Gent’s resignation can be seen here:
STAFF QUITTING THE KDC 11.10.2017
A few weeks ago it was the chief executive. Now it is the Mayor. Both leaving for "personal reasons" with a refusal in both instances to provide further information. The Kaipara Cone of Silence.
Rumours are rife of staff issues at the KDC. We know that Alison Puchaux has left. In her role as Revenue Manager her name was on the documents served on whistle-blowing ratepayers who were sued by the KDC
A recent comparative report for local authorities revealed that the KDC was over-staffed, and had higher salaries for staff.
The Northern Advocate reports that the KDC has had four chief executives in the last five years. Huge concern were expressed at the time about the appointment of Graham Sibery in 2016 for the maximum term of five years by the outgoing commissioners. He had no experience in local a government and seemed totally unsuited for the job. He lasted just over a year.
It appears that Sibery had worked with commissioner Peter Winder during the Rugby World Cup. He reported left for “personal reasons” but the truth has yet to come out, including the size of the severance pay that ratepayers have been obliged to pay.
The Northern Advocate article referred to above makes some pointed remarks about the recent appointment of Peter Tynan as acting chief executive and his links with Mayor Gent:
The current acting chief executive, Peter Tynan, was appointed a month ago, after being recommended for the job by Mr Gent.
A qualified accountant with no local government experience, Mr Tynan had been chief executive of Southern Cross Health Society, on whose board Mr Gent is the chairman.
Mr Gent was also chairman of Kaipara's Remuneration Committee which recommended Mr Tynan to the full council.
Mayor Gent has also announced that Richard Booth, one of the original four commissioners appointed to Kaipara, has stepped down from his role of chair of the Audit Risk and Finance Committee of the KDC. He is being replaced by Stana Pezic who has the appropriate experience and, as it happens, Mayor Gent records that he has “been part of an audit committee that Stan has chaired”.
CROWN MANAGER 11.10.2017
Richard Booth advised that he was standing down so that “council can truly move on from that phase of its history”. He was referring to the commissioner phase.
Unfortunately that is not possible. Peter Winder, one of the ex-commissioners is still ungainfully employed by the KDC as Crown Manager. His role as a National Cabinet appointee is to extract every last cent out of whistleblowing ratepayers who were betrayed by Parliament. So far he has spent over a million dollars of ratepayers’ money and has done nothing but expose the unlawfulness of the actions and rates of the KDC and the NRC.
It is uncertain whether he is still employed as Crown Manager. His first appointment as Crown Manager and his terms of reference were challenged by Legal Eagle, and as a consequence the Crown Manager’s role was terminated (several months before it was publicly announced). He was reappointed for a second time after Mayor Gent and Deputy Mayor Withey indicated to the government that the Associate Minister had misled them and they might possibly resign.
The second appointment of Peter Winder as Crown Manager is also unlawful, as are the terms of reference. He was again appointed by the Associate Minister who did not have the appropriate signed authority from the Prime Minister as required by the Local Government Act and the Cabinet Manual. The Department of the Prime Minister and Cabinet is fully aware of this but is refusing to acknowledge the unlawfulness of his appointment..
The government is digging a deeper and deeper hole for itself. Sooner or later, one way or the other, the truth will come out, and the delay in accepting the inevitable will create an insoluble legal mess. Despite what the Associate Minister is advised to say publicly, all of the actions and decisions of the Crown Manager during the first and second appointments will be ultra vires and a nullity.
That day may not be too far away. Winston Peters has made no secret of the fact that Peter Winder was a government "mate" and that his appointment, firing, and reappointment were "a comedy of errors". Peter Winder may be well advised to look for another job, and quickly.
Graham Sibery, chief executive: GONE
Greg Gent, Mayor: GOING
Richard Booth, chair Audit Risk and Finance Committee: GONE
Barry Harris, Crown Observer: MISSING IN ACTION
Peter Winder, unlawfully appointed Crown Manager: GOING
SURPRISE DECISION FROM THE HIGH COURT 30.09.2017
Duffy J has finally made her decision in the Rogan appeal to the High Court. It can be viewed here.
She has found that the Rogans do not have to pay the NRC rates because they are unlawful, but she has ordered that the Rogans pay $20,449.52 to the KDC.
She did not find that the KDC rates were lawful. She endorsed the submissions of the KDC and held that a ratepayer does not have the right to defend recovery proceedings for rates arrears in the District Court on the grounds of invalidity.
Ironically she suggested that if the same arguments had been presented in a judicial review application to the High Court the result may have been different
The whole decision hinged on the meaning of section 60 of the Local Government (Rating) Act (LGRA). It is a bizarre provision, atrociously drafted, that has been used by local authorities to deprive ratepayers of their fundamental right to defend a legal action in court.
Section 60 states:
60 Invalidity of rates not ground for refusal to pay rates
A person may not refuse to pay rates on the ground that the rates are invalid …..
The section then goes on to state that a ratepayer may refuse to pay rates if an application is made to the High Court challenging the validity of the rates on very narrow grounds. The Rogans case did not fit within those grounds.
So what do those few words actually mean? Ratepayers already have a clear obligation under the LGRA to pay rates, just as a local authority has obligations to set, assess and invoice rates in compliance with the law. Section 60 allows those who come within the narrow grounds to withhold rates. Not completely, but until their challenge in the High Court has been resolved.
Those like the Rogan’s have no such latitude. They do not come within the special grounds so they have no lawful reason to withhold their rates. Their obligation to pay the rates under the LGRA remains and, if the rates are not paid, the KDC has the power to commence proceedings in the District Court pursuant to section 63 of the LGRA. We all agree with that.
Section 63 states that a local authority can recover unpaid rates in the District Court as a debt and the court has the power to hear and determine the proceedings. That section appears to suggest that the procedure is the normal debt collecting process where the claimant has to establish that the debt is due and payable and the defendant has the right to present any defence to the claim. At the hearing Duffy J agreed with that scenario.
Duffy J now sees it differently. She has interpreted the simple words of section 60 to mean that a ratepayer is precluded from defending any action in the District Court to recover rates where the defence is based on invalidity of the rates. It is hard to imagine what other grounds could be argued, so effectively the High Court has decided that ratepayers have no right to defend themselves in a rates recovery proceeding in the District Court.
There is no clear explanation in the judgment for this interpretation. Duffy J simply states that because the invalidity is not a reason for not paying rates this precludes “a defence based upon invalidity being run in rates recovery proceedings”.
It is a massive non-sequitur that seems to contradict the whole basis on which our whole legal system is based. There are prohibitions against all sorts of things in our laws, but that does not mean that if someone fails to comply with a prohibition that they are denied the right to defend any charge in court.
Duffy J supports her interpretation:
 The interpretation of s 60 that I have reached is consistent with the language of the section and with the scheme and purpose of the Act.
I challenge anyone to find any words in section 60 that refer to the right to defend an action for recovery of rates being precluded.
As for the scheme and purpose of the Act, the LGRA was heralded as making local authorities accountable. The LGRA states in section 3 that the purpose of the LGRA is to promote the purpose of local government set out in the Local Government Act (LGA). Section 3 of the LGA lists the purposes of local government, one of which is:
(c) promotes the accountability of local authorities to their communities;
Duffy J’s decision does the opposite and completely removes any accountability.
Duffy J also argues that her interpretation - that any defence to rates recovery is precluded - is based on the intentions of Parliament in drafting the provision:
 The reason for this is plain. Parliament wanted to ensure that enforcement of the liability to pay rates could proceed in a timely and efficacious manner. The recovery process is about debt collection; it is not to be delayed or hindered by legal arguments about whether any aspect of the rating process was validly or otherwise correctly performed.
She produced no evidence to support this hypothesis and no such evidence was adduced at the hearing.
As for the comments about debt-collecting, lawyers will be surprised to learn that the High Court considers that debt-collecting in the courts should not be hindered by legal argument.
Perhaps the biggest surprise is that the judgment of Duffy J negates the fundamental right of New Zealanders to justice under section 27 of the New Zealand Bill of Rights Act (NZBORA) and the basic right to defend oneself in court under the general law. These were argued by the Rogans but completely ignored in the judgment, even though section 6 of NZBORA places an obligation on the court to adopt an interpretation of a provision that is consistent with the rights in the Act.
Under section 5 those fundamental rights may be overridden in the public good if that can be “demonstrably justified in a free and democratic society”. However, there is a large body of precedents that state that if the rights of individuals are to be limited by statute then the wording must be explicit, clear and unambiguous.
Readers can judge for themselves whether section 60 explicitly, clearly and unambiguously deprives ratepayers of the right to defend an action for recovery in court. If that was Parliament’s intention, why did it not make such an important restriction on fundamental rights absolutely clear? How about:
A person may not raise the defence of invalidity of the rates as a defence in any action to recover rates.........
Duffy J must realise that the consequence of her judgment is that there can be no challenge to the lawfulness of rates set by local authorities. There is, of course the option of judicial review but that is completely out of the reach of the average New Zealander.
Local authorities already take a cavalier approach to rate setting. They now know that their rates cannot be challenged for any reason. As Duffy J stated, the recovery of rates “is not to be delayed or hindered by legal arguments about whether any aspect of the rating process was validly or otherwise correctly performed”. No need for consultation on rates. No need to set or assess rates in compliance with the LGRA. No need to send out rates assessment notices or invoices. A local authority can add in any other charge it feels like adding. All it has to do is to apply to the courts to recover any sum it likes under the guise of “rates” and there is no defence that the ratepayer can present.
Without exaggeration Duffy J has taken us back to the 13 Century when King John was forced to sign the Magna Carta and acknowledge that he was subject to the law of the land. One of the clauses in that historic document sets out the right to justice:
No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgement of his equals or by the law of the land.
To no one will we sell, to no one deny or delay right or justice.
The High Court has taken a decisive step backwards in respect of the rule of law and individual rights in New Zealand. It has thrown down the gauntlet to all New Zealanders. It will be interesting to see whether the people will fight for those rights.
KDC AND NRC, WAS IT WORTH IT 30.09 2017
Now that the High Court judgments are out the KDC and NRC can sit back and assess whether the pursuit of ratepayers was worthwhile.
Remember that the whole issue in this dispute was the penalties added to the rates withheld by whistle-blowers.
The rates strike of 2012 was instigated to alert and compel the authorities to take action in respect of the illegalities of the KDC. As a result of the strike the council resigned and commissioners were installed. All the illegalities were finally recognised and validated by Parliament. There was cross-party support for the legislation (except for New Zealand First and the Mana Party) on the understanding that those responsible for the illegalities and blow-out on the sewerage system would be held accountable, and that the penalties on whistle-blowers’ rates would be remitted.
Two penalty charges only were remitted. The government-controlled commissioners refused to remit the balance, perhaps as a warning to ratepayers not to mess with “City Hall”. The whistle-blowers felt betrayed. They had acted in the public interest, to maintain the rule of law, and they were being punished unfairly. They dug their toes in and refused to pay their rates until the penalties were fully remitted.
In 2014 the whistle-blowers tendered all the outstanding rates (but not the penalties) amounting to nearly a million dollars to the KDC in full and final settlement of the dispute. The KDC commissioners returned the payments and instituted over 100 legal proceedings against ratepayers. As well as pressuring the mortgagees of many more ratepayers.
The MRRA had no argument with the KDC and tried to set up a system whereby its rates could be paid directly rather than channelling them through the KDC. The NRC refused to cooperate.
The pressure brought to bear by the KDC compelled many ratepayers to pay the rates and penalties, and at present there are only five or six still refusing to pay. They are willing to pay the rates as and when they fall due but the KDC and NRC have a totally illegal repayment policy denying a ratepayer the right to pay an instalment as it falls due. Any such payment is used to pay off the oldest debt, and yet another penalty is added to the unpaid instalment.
The Rogan case was a test-case for the other cases. The KDC and NRC sued the Rogan’s for $20,449.52 and $1,708.97 respectively.
The District Court found in favour of the councils on the basis that the Rogans were not allowed to defend the claim under section 60 and that they should have applied to the High Court for judicial review. The Rogans applied to the High Court and that court held that the HRC rates were unlawful and quashed them. It rejected the very limited challenge to the KDC rates. In the appeal from the District Court the High Court has now held that the NRC rates are unlawful and has ordered that the Rogans to pay the KDC $20,449.52.
So how did the two councils fare? Note that the ratepayers had tendered the rates and were prepared to pay them, so the dispute was only about the penalties.
The NRC sued the Rogans for $1,708.97. That includes rates and penalties. The court held that their rates were unlawful and that the NRC was not entitled to recover the rates or penalties. In addition it opened up the NRC for liability to refund the rates to all their ratepayers in Kaipara and also in Whangarei and in the Far North.
The NRC has advised that its legal costs were as follows:
• The total amount of legal costs incurred by the NRC in respect of the judicial review brought by the MRRA. $205K
• The total amount of legal costs incurred by the NRC in respect of the District Court action against Bruce and Heather Rogan to recover arrears of rates. $108K
• The total amount of legal costs incurred by the NRC in respect of the High Court appeal from the District Court action against Bruce and Heather Rogan. $5K
That is a total of $318,000 of ratepayers’ money in an attempt to recover $1,708.97 in rates and penalties. But as the Rogans had offered to pay the rates, the amount at stake was perhaps $300.
The NRC has appealed the decision and has stated that it expects to spend another $170,000 to $ 190,000 of ratepayers‘ money.
The KDC has a court order for the $20,449.52 that it claimed. The Rogans had tendered payment of the rates, so the dispute was only in respect of the penalties. They would have amounted to about $5,000 at the most.
I have not yet received from the KDC its figures for the legal costs but I suggest that they be as high as $500,000. If the Rogans decide to appeal they will be higher.
The facts speak for themselves.
KDC TARGETS HOME-OWNERS 27.09.2017
We should have known that something was afoot when we saw a car with KDC markings driving slowly along Margaret Street in Mangawhai Heads with the passenger taking photos of properties.
We now know what the KDC was up to. Some properties in Margaret Street, Holiday Crescent and Roberts Street have received a rather threatening letter from the KDC advising them that they have no right to access their properties by car.
The letter states that “Section 207.3 of the Kaipara General Bylaws prohibits a person from driving any vehicle across any footpath or water channel other than upon a crossing properly constructed under the provisions of this bylaw”.
The letter goes on to allege that the existing vehicle crossing for the property is non-compliant. It requires the house-owner to apply for a permit to construct a compliant crossing.
Some of those people have lived in their houses for 30 or 40 years or more and are now being advised by the KDC that they are committing an offence by driving their cars onto their properties and effectively have been committing an offence since they bought the property.
All the properties in question have a concrete footpath with kerb and channelling. There is a concrete access strip into each property but for some reason the kerb is continuous along the front of those properties. There is no dip in the kerb to allow easy access by motor vehicle. To overcome this some owners have a length of wood, others a concrete strip in the gutter to ease access.
The notice does not state what the problem is but that would appear to be the issue.
The KDC’s sudden targeting of property owners after so many years raises some very obvious and questions that abound with common sense.
• First, when the KDC or its predecessor was kerbing and channelling the roads, why did it not allow for a road crossing for each separate property? Unfathomable.
• Second, all of the properties that have been targeted have fully compliant building permits or building consents. We all know that when a house is being built the provision of a vehicle crossing is a vital part of the process. The consent will not be signed off until the vehicle crossing is compliant. So why were all the properties in question signed off if the vehicle crossings were unlawful and the owner and emergency vehicles was not allowed to drive onto the property? Farcical.
The property that I own which is being targeted has a code compliance certificate. That mean that all building work relating to the property is compliant, and that includes the vehicle crossing. If the KDC was negligent and signed off building consents and issued code compliance certificates negligently then it has to suck up and bear the responsibility for that. It cannot go on a witch-hunt and try and retroactively enforce regulations that it failed to enforce years ago.
• Third, what about the Land Information Memorandum, the LIM? Most of us get those when we buy a property. They are statutory documents under the legislation (LGOIMA) which require the local authority so show all adverse matters relating to the property. I bet that not one single LIM issued for the properties targeted refers to the unlawful vehicle crossing. That is the sort of problem that the LIM was designed to highlight. The courts have held a local authority is negligent if it fails to warn a purchaser about an outstanding issue with a property. So, if there is a non-compliant vehicle crossing that the KDC failed to reveal then it is the KDC must bear the responsibility. Negligence.
• Why has the KDC suddenly decided that this is a matter of urgency and a reason for bullying home-owners when it is decades old and the reason for any non-compliance, if any, sits fairly and squarely with the KDC?
What to do?
If you have been targeted you can accept that the KDC is right and comply with the notice.
You can take legal advice on the matter. That will be expensive and it is unlikely that any lawyer will be well-versed in the law relating to vehicle crossings.
Legal Eagle is challenging the legality of what the KDC is doing. I have had little time for research but there are some obvious responses.
The KDC bylaws are prefaced with the following:
Relationship of this Bylaw to Statute Acts and Regulations thereto:
To avoid any doubt, where there is any conflict between this Bylaw and the provisions of the Operative District Plan of the Kaipara District Council or any Statute Act or Regulation, the Statutory Act, Regulation or District Plan, shall prevail.
The Local Government Act 1974 offers some help. It states:
335 Vehicle crossings
(1) Where vehicles are being taken or, in the opinion of the council, are likely to be taken, on to or from any land across any footpath on any road or any water channel on or adjoining any road otherwise than by means of a crossing properly constructed under the provisions of any bylaw made by the council, the principal administrative officer or other officer authorised by the council may, by notice in writing, require the occupier or, in any case where there is no occupier, the owner of the land to pay to the council such sum of money as the council from time to time fixes as payment for the cost of the construction of a crossing by the council.
(2) Within 28 days after the service of the notice, the occupier or owner, as the case may be, may object in writing to the council against the requirements of the notice, and the notice shall thereupon be deemed to be suspended pending the determination of the objection or, where application is made to the court to confirm the notice, pending the decision of the court.
The first thing that stands out is that the provisions relating to the notice in subsection (1) do not accord with the wording of the KDC notice The LGA 74 provision enables the local authority to recover a sum of money for the authority to construct the crossing. The bylaw notice requires the owner to apply for a permit to construct a crossing.
Clearly under the preface to the bylaws the LGA 54 prevails. That necessarily means that the notices delivered to home-owners by the KDC are non-compliant with the legislation.
Just to be safe, Legal Eagle will be sending a letter to the KDC objecting to the notice. That has to be done within 28 days of the service of the notice.
To the Chief Executive Kaipara District Council
Attention: Denise Hopkins
Vehicle crossing: (Address)
I refer to your notice of (date) and object against the requirements of the notice pursuant to section 335 of the Local Government Act 1974.
The notice is then suspended. From then on it is a matter of determining the legality of the KDC’s notice and working out who is responsible for the fundamental omission.
Anyone who is in the same boat is welcome to use the form of response set out above. Send it by email to firstname.lastname@example.org,nz
I will also be requesting the KDC to treat my application as a test-case and not to take any action against any other party until the legality of the KDC’s notice has been established.
If you have received a notice then please feel free to contact me at email@example.com
I will keep everyone advised of progress through this website.
SIBERY RESIGNATION – ANOTHER MCKERCHAR SETTLEMENT? 23.09.2-17
In 2011 the KDC announced that Jack McKerchar was resigning as chief executive “for personal and health reasons”.
That was a lie. The truth was that the KDC secretly paid $240,000 to get rid of McKerchar in a deal brokered by Mayor Tiller and Deputy Mayor Geange. That is the infamous agreement which contained the full and final settlement clause which prevented the KDC recovering substantial damages for McKerchar’s incompetence.
Persistent pressure and LGOIMA requests finally exposed the truth about the resignation.
In August this year the KDC announced that chief executive Peter Sibery had resigned. No reason was given. Graham Sibery has made no comment and Mayor Gent refuses to give any reasons .
The Lifestyler reported Mayor Gent:
Asked for further details, Mr Gent said that employment agreements remained a private matter under the Employment Relations Act 2000 and the Privacy Act 1993.
One might say that Graham Sibery’s departure is clouded in secrecy. There is a wall of silence around it.
Graham Sibery - Was there a financial settlement?
I have suggested in an earlier post that it looked likely that the KDC and Sibery have parted company under a confidential agreement. That may entail a sum of up to a million dollars, given that there was almost four years to run on his contract.
The departure was sudden so it seems that there was no time for the appropriate performance procedures and review under his employment contract.
He could have been fired on the spot, or constructively fired, in which case there will be legal claim and a hefty award in damages.
Or Sibery may have decided to quit for personal reasons.
Looking back, there has to be some concern about the motivation behind Sibery’s original appointment just over a year ago.
• He had no experience in local government when that was desperately needed. the KDC had to have a qualified and experienced skipper at the helm capable of tackling the muddy waters of Kaipara.
• Why did Peter Winder and the commissioners appoint Sibery when it was the right of the newly elected council to appoint its own chief executive?
• And why a contract for the maximum term of five years allowed under the LGA?
• Did Sibery and Winder work together during the Rugby World Cup?
In short, why appoint a square peg to fill around hole for a term of five years when it was pretty clear that it would never fit. Was that a ploy to ensure that when there was an inevitable parting of the ways there would be a virtual guarantee of a hefty golden handshake?
Of course all this is speculation, but that is what happens when those in powers slam down the portcullis on transparency. And that is what they have done. This is the response of the KDC to my LGOIMA request for information regarding the resignation of Graham Sibery:
Whilst there may well be community interest in this matter, there are good reasons under section 7(2)(a) and 17(a) of the LGOIMA for withholding this information at this time to avoid infringing upon Mr Sibery’s personal privacy. There is also good reason for withholding under section 7(2)(c), to protect information which is subject to an obligation of confidence because the release of the information would be likely to damage the public interest by detracting from Council’s ability to manage its employee relationships in confidence. I am of the view that those good reasons for withholding outweigh the public interest in the matter.
If a chief executive suddenly leaves a job in breach of his contract then the reasons for his departure should be public knowledge. Ratepayers pay the salary of the chief executive and any golden handshake that he may be given. Ratepayers also pay the wages of the Mayor and councilors. Under the basic principles of accountability and transparency it is fundamental that such matters should be publicly revealed.
Mayor Gent’s reference to the Employment Relations Act 2000 and the Privacy Act 1993 are just smoke-screens.
Graham Sibery’s personal privacy has nothing to do with it. He is a public figure and, if he quits after one year into his contract, those who pay his salary are entitled to know why. If he resigned for personal reasons then that is all that we need to know. But the way Mayor Gent has gone about this suggests that there is something far more costly to ratepayers that is being hidden.
As for the other ground quoted by the KDC in its response, section 7(2)(c) of LGOIMA only applies where there is an “obligation of confidence”. That appears to suggest that there is a settlement agreement of some sort with a confidentiality clause, probably with a financial payout of some kind.
In the McKerchar resignation, the KDC simply lied to ratepayers. In the Sibery resignation the KDC has not lied, but it has refused to tell the truth.
In the McKerchar resignation the truth finally emerged when the annual report revealed the golden handshake paid to McKerchar. The annual report is a statutory document and is required by the LGA to include details of all remuneration paid to a chief executive during the year in question.
Unfortunately for ratepayers, the year in question ends in June 2018 and the KDC has three months in which to publish that report. That means that we will not know whether the KDC has paid an inducement to Graham Sibery to resign until the end of September 2018.
The alternative is that the KDC rethinks its obligations to ratepayers and comes clean on the matter. If it has got nothing to hide then it should make a statement stating that Graham Sibery resigned for personal reasons and that there was no financial settlement. If it does that then we can put that issue to bed.
THE BIG ECOCARE FRAUD 20.09.2017
Chris Sellars (aka Worzel) has been very brave in his article Worzel’s Fraud Report in the latest Mangawhai Focus. (not yet online) He pulls no punches in stating that those responsible for the EcoCare shambles were guilty of fraud.
He is in good company. Winston Peters has repeatedly stated that the EcoCare was fraudulent.
Last year Worzel wrote an article on organised criminal gangs. He commented:
What then do organised criminal gangs do? Do they meet in secret to conspire and break the law? Do they engage in lies and intimidation in order to obtain compliance with their wrongdoing and suppress opposition? Are they a burden financially and socially to their communities? Do some of the more powerful gangs have friends in politics who can pull a few strings and ‘fix’ things for them? Does this sound like the Mongrel Mob, Headhunters, Hells Angels or Ulysses Motorcycle Club to you?
Sounds more like the Kaipara District Council to me.
This website went on to comment:
When you look at the financial damage the KDC has done to our communities, businesses and families then you can safely say that the KDC is the most destructive gang in all of our lives.
The KDC fraudulently and illegally entered into a Ponzi type arrangement that was planned to enrich those involved with full knowledge that the ratepayers of the district would be dumped with a massive illegal debt.
They lied and misrepresented the situation for years, they pilfered all the funds set aside for other purposes to feed their rort and stole the Mangawhai Endowment funds monies. They created a smoke pall to disguise the financial realities and the utter ineptness of the EcoCare scheme and they even persuaded Parliament to force the luckless ratepayers to pay their illegal tithes plus vindictive penalties.
As ex detective Mike Sabin said about the Councillors who were responsible for the Kaipara rorts: "if they had been company directors they would all be in jail now."
And that's where they should be, along with all the others who suspended their judgement and their obligations to the community and to their professions, and allowed the Kaipara rorts to proceed, condoned the excesses and incompetence and illegalities, and stood by and watched as the people of Kaipara were fleeced.
They are all now sitting back with smug smiles on their faces while the current gang continues to pursue and harass the only people who come out of this indecent shambles with clean hands - the ratepayers of the district.
THE BIG ECOCARE LIE 20.09.2017
The Big Lie was that EcoCare was necessary because of the pollution of the Mangawhai harbour caused by septic tank outflow, thus necessitating a modern sewerage system that would fix all the problems. There was, in fact, no evidence at the time that the harbour was polluted but it gave the rorters an ecological and emotional peg on which to hang their fraud.
That lie has finally been exposed by the results of water quality testing in the catchment area for the harbour that have just been released. See the report on the KDC website. Not surpisingly the catchment area for the harbour is seriously polluted.
MEDIA COMMENTS ON NRC’S DECISION TO APPEAL 15.09.2017
Note how all reports regurgitate the spin of the media statements without any critical assessment. By repeating the statements over and over again they add to their credibility in the minds of readers.
For a critical assessment of the media comments of the NRC scroll down to COMMENTS ON NRC MEDIA RELEASE 13.09.2017
It is important that sight is not lost of the REAL ISSUES.
• The Kaipara Validation Act was enacted by Parliament in 2013 on the understanding that those responsible for the unlawful Kaipara debt would be held to account and that penalties on the withheld rates of whistle-blowers would be remitted. The government controlled KDC commissioners did neither, creating a deep bitterness within the community. Many ratepayers refused to pay the rates unless the historic penalties were remitted.
• The ratepayers had no issue with the NRC and tried to make some arrangement to pay the NRC's part of the combined rates directly to the NRC. The NRC refused to cooperate.
• In 2014 ratepayers paid approximately $1 million in withheld rates to the KDC on behalf of the KDC and NRC but without the penalties. The KDC returned the monies and responded by issuing over 100 separate proceedings against ratepayers in the District Court to recover the KDC and NRC rates and the penalties, as well as pursuing many more ratepayers through their mortgagees.
• Some rebel ratepayers have tried to pay rates instalments as they fall due, as they are entitled to do under the Rating Act. However the NRC (and the KDC) deny ratepayers that right because of their unlawful “oldest debt first” policy. Any payment of an instalment is applied to the oldest debt and not the instalment. This is in blatant breach of the requirements of the Rating Act.
• Most ratepayers succumbed to the legal pressure and paid the rates and penalties. About seven are still defending court actions with the action against Bruce and Heather Rogan being the test-case. In that case the District Court rejected the Rogan’s defence that the rates were unlawful and ruled that the Rogan’s were liable for the rates and penalties because they failed to file judicial review proceedings in the High Court to challenge the legality of the rates. The Rogans immediately filed an appeal against the ruling and, with the MRRA, applied for judicial review of the rates. The High Court held in the judicial review that five years of NRC rates are invalid. The judgment on the District Court appeal has still to be delivered by the High Court.
• Following the judgment of High Court the MRRA approached the NRC and suggested a meeting to see if settlement could be reached by the parties. The NRC CEO Malcolm Nicolson responded on behalf of chairman Bill Shepherd as follows:
Having given the matter careful consideration and having sought legal advice, Council has decided to process with the lodgement of an appeal to the High Court decision. We therefore conclude that there is little merit in meeting at this time.
• The amount of legal costs incurred so far to recover the penalties on whistle-blowers withheld rates will soon be revealed following LGOIMA requests but it is many hundreds of thousands of dollars. In addition the NRC is also planning to spend the best part of $200,000 dollars on the latest appeal plus any costs that may be awarded against it. All of that is ratepayers’ money.
• The amount of rates and penalties owed to the NRC by the Rogans and the other six ratepayers is approximately $17,700.
NRC TO APPEAL HIGH COURT DECISION 13.09 2017
The NRC has just issued a media release advising that it is lodging an appeal against the two judgments of Duffy J in the High Court relating to the validity of its rates.
COMMENTS ON NRC MEDIA RELEASE 13.09.2017
The NRC media release is full of the smoke and mirrors that we have come to expect from our local councils. The release is set out in full with comments from Legal Eagle in blue.
For further background information scroll down to:
WHAT IS THE REAL REASON BEHIND THE LEGAL CHALLENGES TO KDC AND NRC RATES? 06.09.2017
NRC COUNCILLORS FACE DILEMMA 06.09.2017
Media Release 13 September 2017
Urgent hearing sought for appeals against Mangawhai rates rulings
The Northland Regional Council (NRC) is to file an appeal against a recent High Court decision quashing several years of its rates in the Kaipara district and is seeking to appeal the court's earlier related decision which found two issues with the council's rating practices.
These issues were how council set due dates for the payment of rates and its arrangements for rate collection within the Kaipara district. The council is also seeking an urgent hearing for the appeals.
The NRC failed to include the dates for payment of instalments in its rates resolutions. This is a fundamental part of statutory process for making the rates lawful. It also unlawfully delegated to the KDC the power to assess NRC rates, add penalties to them, and to recover overdue NRC rates.
The High Court last month made an order setting aside the regional council’s rates for the Kaipara district for the five rating years 2011/12 to 2015/16 inclusive and any penalties imposed by – or on behalf of – NRC over that same period.
However, the High Court was clear that there was to be no order requiring the council to refund the rates and penalties involved, despite finding for the plaintiffs (the Mangawhai Ratepayers and Residents Association and Richard Bruce Rogan and Heather Elizabeth Rogan) on the legal status of the rates.
The High Court did not order repayment of invalid rates simply because the remedy of restitution is not available under a judicial review application. That would require a separate application.
Soon after the release of the most recent High Court decision, regional council chairman Bill Shepherd said at the heart of the case – which had implications for local authorities nationally – was the council’s use of its Kaipara district counterpart to collect rates on its behalf.
The heart of the case was the failure of the NRC to comply with simple legal requirements that it had been warned about on many occasions.
The Rating Act allows another local authority to collect rates on its behalf, but that is all.
The judgment certainly has implications for other local authorities. Most local authorities, like the NRC, have an arrogant disdain for compliance with the law and believe that they are protected from any challenge by the indifference of the Auditor-General and the government, and the unfairness and cost of our judicial system. If any challenge does survive then they expect to be rescued by a sympathetic government passing validating legislation.
Compliance with the law appears to be outside their contemplation.
Chairman Shepherd confirmed Wednesday, 13 September that appeal documents will be filed with the Court of Appeal.
He says in its decision, the High Court had noted the NRC had acted in good faith with the judge commenting the council “may have fallen victim to legislation that was less precise than it needed to be”.
A generous comment from the Judge that is not quite in accord with the facts.. The omission of dates from the rates resolutions was a fundamental error that should never have happened. How hard is it to comply with a requirement to include four dates in a legal document? The unlawful delegation was based on a complete ignorance of the law. The agreement drawn up between the NRC and the KDC was based on legislation repealed in 2003.
How would the NRC councillors feel if they were the object of a botched operation where the surgeon committed basic procedural errors and used outdated practices? Would they be happy if the hospital pleaded that the surgeon had acted in good faith and that some of the procedures were unclear?
With that in mind, in addition to the appeal, Chairman Shepherd says the council will also approach the Department of Internal Affairs asking it for a law change clarifying the section of the Rating Act covering rates collection arrangements.
And while he is at it, how about a nice little validation act to sanitise all the NRC’s illegalities? And how about the ludicrously drafted and incomprehensible section 60 of the Rating Act which is used by local authorities to persecute ratepayers. A little clarity there would not go amiss.
Note the red herring. Its the law's fault. Nothing to do with fundamental incompetence.
Chairman Shepherd says that if an urgent hearing is granted, the council's appeals could potentially be heard before a three-member bench of the Court of Appeal within three to five months; much less than the nine to 12 months likely under a standard appeal.
Initial estimates were that the appeal could cost the NRC in the order of $170,000 to $190,000.
The rates are invalid because of the incompetence of the NRC and the incompetence of its legal advisers. The NRC has already paid a king’s ransom in legal advice in respect of rates and in pursuing whistle-blowing ratepayers to recover vindictive and unconscionable penalties on withheld rates. The councillors of the NRC are happy to spend more and more of ratepayers’ money pursuing their victims down a blind and endless tunnel because they know that they will never be held to account. Meanwhile their lawyers cast off any blame for past incompetent advice and salivate at the thought of further rich pickings in the Court of Appeal.
While appealing will be costly, the council feels the issues at stake are too important not to appeal. The collection of rates by the district councils in the region on behalf of the regional council provides significant cost savings which benefit the region's ratepayers.
Indeed the cost savings are important. But not if you fail to comply with simple legal requirements and pour hundreds aof thousand of dollars down the gullets of your lawyers..
Referring to the years at the centre of the High Court case, Chairman Shepherd says ratepayers can be assured “our council has not acted irresponsibly and blatantly flouted the law”.
The NRC has legal obligations that it did not comply with. The Court stated in its interim judgment:
 In short, the NRC has failed to exercise its statutory powers properly when determining rates resolutions and it has unlawfully sought to delegate the performance of a number of its functions in relation to rates to KDC. These are substantial and grave errors that warrant recognition by this Court making declarations of invalidity.
No amount of spin can disguise the gravity of the errors.
“We have arranged the collection of our rates by the Kaipara, Whangarei and Far North District Councils using standard sector practice in the interests of saving our ratepayers the additional cost of maintaining a separate rates collection department within our council.”
On the contrary, you have cost your ratepayers a huge amount of money because you failed to comply with your fundamental but very simple legal obligations. Good intentions mean nothing if accompanied by incompetent performance. And a tip. Don't follow "standard sector practices" unless you are absolutely sure that they comply with the law. Otherwise you could end up like ..........the NRC.
Chairman Shepherd says it’s also important to remember that all the rates collected during the years covered by the court case had been spent in good faith on a wide range of projects and work programmes that had been clearly outlined in the relevant Annual and/or Long Term Plans at the time.
“These plans are widely consulted on and outline how we fulfil our purpose for our communities; including outlining how much we will collect in rates and how and where we will spend them.”
All the more reason to be careful. You are obliged to balance your books which mean that you have an absolute obligation to ensure that the rates are set and assessed lawfully so that you can meet your statutory obligations. You failed to do that. There are no excuses.
Lastly, he says it’s important to remember the judge’s decisions do not relate to the rates for the current financial year, or the 2016/17 financial year.
That’s right. But, sadly, you rating documents for the current rating year suffer from ongoing defects and non-compliance with the Rating Act. Your rates invoice denies ratepayers with arrears their fundamental statutory right to pay that instalment by due date without incurring a penalty payment. You apply an “oldest debt first” policy whereby ratepayers with arrears are denied that right, with the payment being used to pay the oldest debt, and a penalty added for non-payment of the instalment.
Your legal advice on this matter is completely wrong and the fact that many other councils apply the same policy is completely irrelevant. The reality is that when the issue comes before the High Court, which it will, the inclusion of that policy in your rates invoices will invalidate them all. Be warned.
COMMENTS ON REBELLION IN PARADISE 13.09.2017
There have been a lot of online comments about this article. Go to the article here and scroll down to the bottom.
REBELLION IN PARADISE 10.09.2017
The ratepayers who fought the law and won. See today's article by Susan Edmunds in the Sunday Star Times.cataloguing the fight for justice in Kaipara.
Watch the video interview with Bruce & Heather Rogan. Not only does it show our beautiful estuary but it also sums up why the KDC and other councils throughout the country must comply with the law.
The MRRA was represented in the latest District Court and High Court cases by Jeremy Browne of Henderson Reeves in Whangarei. Thomas Biss, one of the other directors of that firm, sums it all up with his comment:
"It's important that people stand up and say 'if the Government is going to rule, it's important that it acts in accordance with the laws'.
RATES RULING AND RESIGNATION ROCK KAIPARA 10.09.2017
See the article in Local Matters.
INTERIM CEO APPOINTED 07.09.2017
The Lifestyler has just announced the appointment of an interim chief executive for the KDC. He is Peter Tynan who was previously chief executive at Southern Cross Healthcare where Mayor Greg Gent is chairman. He is currently on the board of Osteoporosis NZ.
The new appointee will remain until a permanent chief executive is appointed and will be on the same salary as Graham Sibery
Many of us were alarmed last year when Graham Sibery was appointed KDC CEO by the commissioners for five years without having had any experience in local government. The KDC is seen as the cot-case of local authorities with a track record of incompetence, non-compliance with legislation, and blatant flouting of the law. Many felt that an experienced captain at the helm was essential to offer the guidance and advice that the KDC desperately needs to get back on track and win back the trust of ratepayers.
It is therefore disappointing that the new appointee has no experience in local government.
It may well be that the adage “beggars can’t be choosers” applies. Moving to the KDC as a career move is a bit like moving to the “Warriors”. Not many takers, especially in an interim role. But there is no doubt that Peter Tynan has many other qualities. If he can break away from the political mind-set that constrains Greg Gent’s council, he could bring a fresh pair of eyes and a dose of practical common sense which could help resolve some of the deep-seated issues that divide Kaipara.
THE REASON WHY .........................
WHAT IS THE REAL REASON BEHIND THE LEGAL CHALLENGES TO KDC AND NRC RATES? 06.09.2017
The High Court has declared that five years of NRC rates are invalid. The MRRA is overjoyed. The NRC is in crisis. Many ratepayers and outside observers do not understand what is going on.
Many think that ratepayers have an unchallengeable obligation to pay rates so that our local council can fulfil its role and meet its financial obligations. I have heard people stating that because of the recent High Court ruling the roads will now be neglected, even though the NRC is not responsible for roads. Others suggest that a small group of discontents have used minor legal technicalities to avoid payment of rates for their own personal gain. Mayor Gent muddies the waters with his obfuscatory comments. (See Anthony Roberts’ letter in the latest Mangawhai Focus.)
Many of the elected councillors have no idea why there is so much bitterness about the past rating issues because they were not around at the time. And they are unlikely to find out. Mayor Gent and his Deputy Mayor Wethey endorsed the government’s appointment of a Crown Manager to deal with those historic issues under direct instructions from Wellington and have carefully steered councillors away from any involvement.
So, it is time that the real reasons were laid bare so we can all understand what is driving the defiant ratepayers .........(More)
NRC COUNCILLORS FACE DILEMMA 06.09.2017
Very soon the Councillors of the NRC will have to decide if they are going to appeal the judgment of Duffy J that invalidated five years of NRC rates.
The problems they face are:
Judgment is very tight
The judgment of Duffy J is very tight. That means it is argued very methodically and carefully. There is not much doubt that the NRC’s rates were seriously defective. The Rating Act lays down procedures in the rating process which must be followed if rates are to be lawful. Despite what has been suggested the requirements are quite straight forward and simple to understand. Compliance is not hard. Putting four instalment dates in a resolution is not beyond the expertise of most people, never mind the expertise that a local authority should have or can call upon.
Even David Goddard QC (counsel for the NRC) struggled to counter the non-compliance of the rates. He tried hair-splitting arguments like suggesting that because the rates has been declared to be unlawful in the interim judgment it did not mean that they were invalid. His main thrust was to persuade the Court to use its remedial discretion, which is available in judicial review applications, and decline to make any award against the NRC. He relied on the Armageddon argument. That is, any negative finding would result in disastrous financial and administrative consequences for the NRC and it ratepayers. Affidavits from costly experts were provided to support the scenario.
Duffy J systematically and clinically dismissed all of the NRC’s arguments and it is unlikely that she will be overturned on appeal.
NRC’s lack of awareness of legal outcomes
The NRC should not be surprised at the outcome. The Knowhow Guide to the Rating Act published by the Society of Local Government Managers (SOLGM) is the “Bible” for setting rates in compliance with the law. It was legally reviewed by the NRC’s own solicitors and contains warnings about making simple errors in rating processes and the dire consequences that can result. (The Guide can be seen here. See page 6, the paragraph starting with “Rates are a tax…”)
The NRC should also have learned from the Kaipara Validation Act of 2013 that minor errors as well as major errors can result in rates being set aside. That Act contained 73 clauses in its Preamble setting out the defects in KDC rates and other matters from 2006 to 2012. The important message to be learned is that even one simple error could result in the rates being deemed to be unlawful. The NRC shares rates assessment notices and rates invoices with the KDC and should have been on high alert.
Poor legal advice
There has to be a question mark over the legal advice the NRC received. It is unclear whether the defective rates and penalty resolutions were vetted by the NRC’s lawyers but the fundamental errors should have been picked up. For five years they were missed.
The omission of the dates in the rates resolution was a glaring fundamental error that should never have happened. The unlawful delegation to the KDC of the assessing of NRC rates, the adding of penalties, and the recovery of NRC rates was simply inexcusable. The delegations, all set out in a formal Rating Services Agreement (presumably prepared by a lawyer), were blatantly unlawful. The law allowing such delegations was repealed in 2003.
Offers to settle declined
It is hard to comprehend why the NRC got involved in the dispute in the first case. The real issue was the punitive penalties charged on whistle-blowers’ rates that were withheld as a protest in the rate strike of 2012 (see post above). The NRC had two opportunities to resolve the matter fairly.
o It could have accepted payment of the rates tendered in 2014 and written off the penalties. The penalties on rates withheld by whistle-blowers were an unconscionable windfall and insignificant.
o It could have accepted Bruce Rogan’s offer for the NRC rates to be paid directly.
Instead the NRC threw its lot in with the KDC and unlawfully hounded the whistle-blowing ratepayers through their mortgagees and the District Court. It is important to note that the NRC argued in the District Court that the Rogans did not have the right to defend the action to recover rates arrears in that court unless they filed judicial review proceedings in the High Court. The Rogans and the MRRA therefore filed the judicial review proceedings at the instigation of the NRC. The rest is history.
Enormous cost of litigation
The only amount at stake in this whole dispute was the historic penalties on whistle-blowing ratepayers’ rates. What that amount was is unknown but it was certainly many, many times less than the NRC has spent on trying to recover the penalties.
Over the years with the threats to ratepayers, pressure on mortgagees and court actions, most ratepayers have understandably succumbed and settled with the KDC and NRC. For some years now there has been a staunch rump of about seven ratepayers who have legal actions against them stayed pending the outcome of the test case against Bruce and Heather Rogan. On the figures provided by the KDC the total amount outstanding in rates and penalties is approximately $195,000. That is for the NRC and the KDC. On a rough calculation I estimate that the amount owing to the NRC in rates and penalties is about $17,700 in total. A large part of that is made up of rates which the ratepayers tendered in 2014 and was returned. The negligible balance is the penalties, the pound of flesh that the NRC was so desperate to secure, clearly at any cost.
To recover that amount the NRC has shared legal costs with the KDC. Legal Eagle is seeking the amount of those costs under an official information request, but with lawyers’ costs (two top New Zealand law firms and a top QC and senior solicitor), expert witness’s costs and court costs, the final figure for the NRC alone will amount to several hundred thousand dollars. Costs have yet to be awarded by the Court but to cap it all the NRC may have to pay the legal costs of the ratepayers. Plus there is the contingent liability to refund rates paid, if legal action is taken by ratepayers.
The pursuit of ratepayers for those unconscionable penalties has been a disaster for the NRC. It must look back with regret to 2014 when it had the opportunity to settle on a fair and reasonable basis, and on a basis that was anticipated by parliament, and to put the whole acrimonious dispute behind it.
Continuing invalid rates
Despite the two judgments of Duffy J, and the clear warning that she has delivered to local authorities, the NRC rates for 2017/2018 are unlawful. Or, more accurately, the combined rates invoices of the KDC and NRC are non-compliant with the Rating Act, which means that the rates are not payable by ratepayers.
One of the issues relates to the payment of rates. A rates invoice is an invoice for the current instalment of rates. The ratepayer is obliged by the Rating Act to pay the instalment and if payment is made by the due date a penalty of 10 percent on the instalment is avoided.
However, where a ratepayer has arrears of rates the NRC denies the ratepayer the right to pay the instalment in accordance with the legislation. It has an “oldest debt first” policy. If a ratepayer with arrears pays the amount of the current instalment the amount is deducted from the oldest amount owed, and, as the current instalment has not been paid, an instalment penalty is then added.
This unlawful device is widely adopted by local authorities presumably to compel ratepayers to pay arrears. It is included on the advice of lawyers and Local Government New Zealand but is fundamentally unlawful.
Such a policy may be used in commercial arrangements but the setting, assessing and invoicing of rates are statutory procedures with strict requirements set out in the Rating Act. A local authority cannot override those requirements. The fact that the policy is widespread does not change the situation, it simply means that more local authorities have opened themselves up to legal challenge, with dire consequences if a challenge is successful.
One of the difficulties facing local authorities is that their legal advisers have advised for many years that the “oldest debt first” policy is compliant with the law. There is a huge reluctance for those adviser to now admit that they were wrong and perhaps face the prospect of being held responsible for many years of unlawful rates.
Who is to blame?
Who is to blame for the whole fiasco? Clearly responsibility lies with those who made the decisions to fritter away so much money on a futile legal foray that was doomed to disaster. With common sense and a fair approach the whole dispute could have been settled sensibly years ago.
There are two issues. When suing to recover a debt one has to be absolutely sure that the debt is due and payable. That means, in respect of rates, that one must be absolutely certain that the rates have been set, assessed and invoiced lawfully. If the NRC launched into court with over one hundred claims for rates arrears without having those rates thoroughly legally vetted for compliance, then it was grossly negligent.
If those rates were legally vetted then the NRC has to ask itself whether it is going to hold its legal advisers responsible for missing such elementary errors.
One of the problems with local authorities and legal advice is that no one in a local authority has any “skin in the game”. They are playing with other people’s money and stand to lose nothing personally and, as things stand at present, are going to be protected by central government from any liability for incompetence or negligence. It is also worth noting that litigation lawyers make their money out of long drawn out legal disputes, not out of quick settlements on a fair and sensible basis.
But the big issues is why the NRC got involved in the political decision to persecute whistle-blowing ratepayers of the KDC. It was those whistleblowing ratepayers who through their rate strike and legal submissions finally forced the KDC and the government to acknowledge that the KDC had acted illegally and incompetently for 6 years.
How did the NRC come to be party to the ruthless pursuit of unfair and draconian historic penalties levied on the withheld rates of KDC ratepayers??
The reality is that this was a political issue driven by the National government and the Department of internal Affairs which is responsible for the administration of local government. Local government in New Zealand skates on very thin ice both financially and in respect of legal compliance. The last thing the government needed was for a group of rebel ratepayers to challenge the fundamental legality of rates, the competence of a local authority, and raise concerns about the cracks in the façade of local government. Ruthless retrospective validation acts, and vindictive treatment of those daring to blow the whistle are the weapons of choice. No doubt it was expected that the rebels would have succumbed years ago under the sheer oppression of the government-driven action. But that did not happen.
The Kaipara commissioners, appointed and instructed by Wellington, turned down every approach for settlement, including the tender of the outstanding rates. Although the commissioners are gone, one of them Peter Winder was appointed on instructions from the Cabinet to continue as KDC Crown Manager to assume the complete responsibility for decision-making in respect of the outstanding KDC rating issues and the current litigation. In other words, all that KDC rating decisions in respect of this rating litigation have been made by the government through the commissioners and now through Peter Winder. And that is exactly where most of the responsibility for this legal and financial disaster lies.
WHO IS RUNNING THE SHIP? 3.09.2017
Graham Sibery’s role as chief executive of the KDC terminated on 1 September according to Mayor Gent. Sibery will be asked to help on an ad hoc basis “if needed”. That raises and important legal question: Who is now running the good ship Kaipara?
Under the Local Government Act (LGA) a local authority must have a chief executive. It cannot function legally without one. That becomes apparent when you look at the role the chief executive plays, as set out in section 42 of the LGA.
The KDC is therefore obliged to appoint an acting chief executive until a permanent one is appointed following a selection process.
Will it be a current member of KDC staff? Will ex acting chief executive Jill McPherson come back to claim that position? Or the role may suit Peter Winder when he gets stood down, again, as Crown Manager. Or, and this is a long shot, will Jack McKerchar, with his vast experience and unsullied record, return to the seat he kept warm for so many years?
GENT ON SIBERY RESIGNATION 31.08.2017
Paul Campbell of the Kaipara Lifestyler reports on Mayor Gent's statement in respect of the Sibery resignation:
A statement from Mayor Greg Gent said Mr Sibery “resigned on Friday 25 August 2017.
“The council wishes to acknowledge the contribution that Graham has made while in the CEO role and wishes him well for the future. His last day in the office is September 1, although he will be available ‘if needed’ after that date for a short period. A process will begin immediately to find a successor.”
Asked for further details, Mr Gent said that employment agreements remained a private matter under the Employment Relations Act 2000 and the Privacy Act 1993.
Not much transparency there. We do not know if Sibery simply quit, whether a deal was done behind the scenes, or whether there will be a prolonged employment dispute. In the case of Jack McKerchar his departure in 2011 was flossied up for the public as a resignation for health reasons. It turned out that there was a contactual agreement for him to quit on the basis of $240,000 being paid.
The truth will come out sooner or later.The annual report is obliged to show all remuneration paid to staff but that will not come out until next year..
FRANK NEWMAN'S COMMENTS ON NRC RULING 31.08.2017
Frank Newman comments on the NRC judgment can be seen in Breakingviews here.
One may ask, why does it matter? It matters that council's not only act within the law, but that they act fairly and with a duty of care. Not so many years ago the NRC could have been considered the best managed of the four councils in Northland. To its credit then, it was sharply focused and had a culture of professionalism that put ratepayers first. Nowadays its focus seems to be to please everyone about everything, and exercises might over right.
(The Rogans) are exceptional people and without such righteous folk all-powerful ratepayer funded organisations like local governments would have become even more totalitarian as they already are. Heavens knows how much ratepayers money the NRC has spent on the matter - much more than $300k I suspect as true to form the Council hired expensive top-ranked (“Band 1”) legal counsel to put its case. The NRC should tell us how much their mistake has cost ratepayers and whether anyone will be held accountable, and save the trouble of the question having to be asked under the Official Information Act.
It's time our councillors at the NRC had a serious think about what their organisation has become, and where it is going. That's what they are elected to do.
WHAT’S THE SIBERY SETTLEMENT WORTH? 28.08.2018
Are ratepayers of the KDC going to have to fork out for another golden handshake that will make Jack McKerchar’s $240,000 pale into insignificance?
In 2011 the KDC paid chief executive McKerchar $240,000 to persuade him to leave and it looks as though history is repeating itself with the departure of current chief executive, Graham Sibery who “resigned” on Friday. (See post below)
McKerchar’s departure case in 2011 was described as a “resignation”. An infonews post reported it as follows:
Mayor Tiller advised the Council had accepted the resignation which has been tendered for personal and health reasons. “Jack has been with Council since 1993 and has achieved many significant outcomes for Council in that time” said Mayor Tiller. “We wish him well for the future and thank him for his loyal service to Council.”
Mr McKerchar noted he was not getting any younger and his health, affected by diabetes, was not as robust as he would like. “I want to increase my fitness and get the health benefits that will bring so I can lead an active and healthy life as I get older” said Mr McKerchar. “The stresses of the position mean I cannot devote the time I need for myself and this will give me an opportunity to do some things for myself, including supporting my family.”
The reality was rather different. The KDC had been desperate to get rid of McKerchar. Mayor Tiller and Deputy Mayor Geange had negotiated a secret settlement agreement with McKerchar whereby he was paid $240,000 with the provision that it was in full and final settlement of all claims between the parties.
The KDC refused to release details of the secret arrangement but after pressure from ratepayers and a LGOIMA request from Legal Eagle the KDC finally relented. (See Lifestyler report.)
In January 2013 the KDC sent three documents to legal Eagle, including the settlement agreement. They can be seen here.
In respect of Sibery’s departure no reason has been given so far by Mayor Gent. That does not look good. Normally in such situations the departure arrangements are agreed in advance and dressed up in suitable spin in a media statement, with the truth well-removed from public scrutiny. The lack of any gloss on the departure suggests that trouble lies ahead.
Sibery had nearly four years to run on his contract. He moved from Australia to take up the KDC position. There is no suggestion that he was dismissed following the normal and requisite procedure. These are all signs that KDC ratepayers are in for another substantial flogging. This time we may be looking at the $1 million dollars, plus all the legal costs if the matter goes to court.
At this stage we do not know what the situation is, the reason why Sibery has resigned, and why the Mayor is refusing to make any comment. Legal Eagle will apply for that information through a LGOINA request. What we do know is that the KDC has been left high and dry without a chief executive and with its breadth of problems and poor reputation it is going to struggle to find anyone of sufficient capability.
We also know that the Crown Manager Peter Winder, wearing his hat as commissioner, played a large role in the appointment of Sibery. The commissioners shocked everyone by gazumping the new council and appointing Sibery, with absolutely no local government experience, for a term of five years.
The appointment met with widespread criticism, which, of course, has now been vindicated.
KDC CHIEF EXECUTIVE QUITS 26.08.2017
Graham Sibery, the KDC chief executive has suddenly handed in his resignation.
According to a Northern Advocate report, he handed in his notice yesterday. It is understood that he is going to continue working for an undefined period until a replacement is found.
Mr Sibery was appointed by the KDC commissioners just over a year ago for a five year term. That appointment raised eyebrows in the community because many felt it was up to the newly elected council to appoint its own chief executive. In addition, a term of five years was considered far too restrictive for the incoming council.
Perhaps the biggest criticism of the appointment was the fact that Mr Sibery had absolutely no experience in local government. Whilst some may argue that a good track record in business is an important asset, there is no doubt that, given KDC’s poor track record in legal compliance, someone with broad experience in local government was an absolute necessity.
To add to the mystery of the sudden resignation, Mayor Gent is refusing to make any comment on the matter beyond the fact of resignation