This Important Notice highlights the fact that the NRC (the chief executive and his staff and elected members) failed to heed the very strong warnings from its own lawyers about absolute compliance with the law when setting and assessing rates.
The warning below anticipated the judgment of Duffy J.
The NRC also failed to take on board the lessons to be learned from the KDC rates validation fiasco, that the simplest of errors can result in invalid rates.
There are no excuses.
Encouraged by poor advice from the putative Crown Manager, some of our new Councillors seem to take the view that legal errors in rating processes are irrelevant. This approach is completely wrong.
if anyone has any doubts about the absolute necessity for strict compliance with the Rating Act then they should read the advice given below
It is taken from the Society of Local Government Managers' KnowHow Guide to the Rating Act.
Rates are a tax and the Rating Act is a taxation statute. A generally accepted constitutional principle of taxation is that all decisions, actions and procedures must be strictly in accordance with the legislation governing the tax. That means that:
• only those rates authorised under the Rating Act can be set and assessed – anything else is unlawful and likely to be set aside if challenged (the legal term for this is ultra vires)
• rates must be set strictly in accordance with the procedural steps and information requirements set out in the Rating Act (rate-setting that does not follow the prescribed process also runs a judicial risk – the person who said short-cuts make for long delays had the rating process in mind)
• there is little judicial tolerance for departures from the legislative requirements – even minor typographical errors (for example, an “and” rather than an “or”) could be sufficient to invalidate a rate.
These are not academic points – ratepayers can and will scrutinise your decisions and actions. Local authorities set their rates in open council and follow a process of consulting on their spending and rating proposals through the long-term and annual plan (more on this later). The information is therefore readily available to the public.
The legal reviewers of the Guide are Jonathan Salter and Lizzie Wiessing, from Simpson Grierson, the solicitors for the KDC and the NRC. It was Jonathan Salter who finally confirmed that 6 years of KDC rates were unlawful because of non-compliance with the Rating Act and LGA. Lizzie Wiessing was assistant counsel for the KDC and NRC in the recent High Court judicial review hearing.
So it is advice that the Mayor, Councillors, chief executive and staff of the KDC and NRC should be heeding.
There is absolutely no excuse for sloppiness or non-compliance in the rating processes.
If anyone in the KDC or NRC thinks that "close enough is good enough" then they should be looking for another job. They are costing the ratepayers of the district an enormous amount of money because of their failure to comply with the law.
It has to be remembered that if a mistake is found in a rating process then the rates for that year (and every year that has the same error) are deemed to be unlawful.
The KDC/NRC HIgh Court Interim decision can be viewed here
The KDC/NRC High Court final decision can be viewed here.
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.
MCKERCHAR AWARDED COSTS 25.08.2017
KDC ratepayers are going to have to pay the legal costs of Jack McKerchar following the ill-judged claim to recover damages from him in the Employment Court.
The Court has awarded McKerchar costs of $18,189.85. That is of course in addition to the costs that the KDC spent on its own legal advisers.
The decision can be seen here.
The Northern Advocate report is here
Despite the clear incompetence of McKerchar as KDC chief executive and the swathe of devastation left behind him, Mayor Tiller and Deputy Mayor Geange negotiated a severance deal which was in full and final settlement of all claims against McKerchar.
That deal has cost the ratepayers of the district tens of millions of dollars that could have been recovered if the correct legal process had been followed.
It was clear from the outset that, because of the settlement clause, the KDC had little chance to recover any damages from McKerchar. Peter Winder who appears to have been the driving force behind the action, failed to counter many of McKerchar’s factual arguments, and Honest John Robertson, the key witness for the KDC, failed to give evidence.
It appears that this was another of Peter Winder’s tilts at legal windmills that have enriched the KDC's lawyers and other lawyers and ended up with massive losses for the KDC ratepayers.
Another futile legal foray
Golf Club Mangawhai Mon 28 August 6:30 for 7:00pm start
Hon Winston Peters NZ First Leader and sitting Member for Northland
Willow-Jean Prime Labour candidate for Northland
Matt King National candidate for Northland
THE RIPPLES SPREAD 24.08.2017
In its report following the 2015/2016 audits of local authorities the Office of the Auditor-General referred to the interim judgment of Duffy J and the effect that it could have on local authorities throughout the country. It appears that several other local authorities could be affected by the rulings and the implication of the rulings. The OAG identifies16 councils which may have been charging their water rates incorrectly.
With the final judgment and the unlawful rates and penalties having been quashed there will be serious concern throughout local government as to how far the illegal rates canker has spread.
The illegalities highlighted by the High Court decision were just the tip of the iceberg.
EXCUSES COMING OUT OF THE WOODWORK 24.08.2017
In an earlier post the Northern Advocate reported Bill Shepherd, chairman of the NRC, as follows:
Justice Duffy said NRC may have fallen victim to legislation that was less precise than it needed to be.
So, effectively it is obscure legislation at fault. The NRC is not really to blame.
He also states on the NRC website:
"Council takes all its legal responsibilities very seriously and naturally is very concerned to comply with these.
So, is the legislation obscure? And did the NRC take its legal responsibilities seriously?
The first major error of the NRC was in setting the rates. That requires a formal legal resolution made by the elected members that is required to include certain mandatory information. This is what section 24 of the Local Government (Rating) Act (LGRA) states:.
24 Due date or dates for payment
A local authority must state, in the resolution setting a rate,—
(a)the financial year to which the rate applies; and
(b)the date on which the rate must be paid or, if the rate is payable by instalments, the dates by which the specified amounts must be paid.
All the NRC had to do in the rates resolution for each year was to state the year of the rates and the four dates in that year when the instalments were payable. Obscure? Difficult? Judge for yourself. But to me it seems pretty simple. But the NRC staff could no do it even despite the guidance of very expensive lawyers.
The second error related to the assessing of the rates. That is the process whereby the rates are applied to each individual property. The NRC delegated the asessing of its rates (and the adding of penalties and the recovery of unpaid rates) to the KDC. The NRC pleaded that it could do so because it had a delegation agreement with the KDC under the Rating Powers Act, As the Court pointed out, the Rating Powers Act was repealed in 2003. it was replaced by the LGRA which no longer permitted such delegations. It appears that the NRC and its lawyers were operating in a legal time warp.
DUFFY JUDGMENT STIRS THE POT 22.08.2017
Imran Ali's article in today's Nothern Advocate raises many issues relating to the High Court ruling of Duffy J. A fair bit of scare-mongering from the NRC but some excellent comments from lawyers and others about local authorities being obliged to comply with their legal obligations. For example:
New Zealand Taxpayers' Union executive director, Jordan Williams, said the High Court decision should send a message to local councils across the country that they need to stop being fast and loose with the Rating Act.
"Council's ability to tax is a special privilege, and at minimum heads should have rolled at the council for this error."
Compared to every council in New Zealand, Kaipara District Council pays a higher proportion of its staff a salary over $100,000. Nineteen percent of staff are paid salaries over $100,000, almost double the national average of ten percent.
But it’s not just a question of high pay:
Jordan Williams, Executive Director of the Taxpayers’ Union says, “Not only are staff paid the big bucks, Kaipara District also has the highest ratio of staff to ratepayers in Northland. As a result Kaipara ratepayers pay more for staff costs than anywhere else in Northland.”
It doesn’t get any better:
The Council also performs poorly when ranked according to other measures contained in Ratepayers’ Report. “On a per ratepayer basis, Kaipara District has the highest total operating costs and the highest debt in Northland. The only positive is that Kaipara has the most assets on a per ratepayer basis in the region.”
The KDC’s transparency is also criticised:
“Given the financial troubles at the Kaipara over recent years, we’d have expected them to put more of an effort into transparency. They were the only council in New Zealand which refused to respond to our researcher's request for rates information. Mayor Greg Gent should be justifying why his Council isn’t doing a better job at providing what is basic information the public are entitled to.”
The lack of transparency is surprising given Mayor Gent’s background in transparency. But that may be the responsibility of the chief executive and his highly paid staff.
As for the high wages and the highest ratio of staff, it scarcely seems the appropriate way to run a council that is overburdened with debt. But the report confirms what many ratepayers have noted, that the KDC is swarming with new employees
The Gent Council is very silent on the debt and the effects it has going to have on Kaipara over the next few decades. The reality is that the debt is so large that we cannot meet our financial commitments under the debt and that will progressively get worse once interest rates start rising. Council will be forced to put up rates and extract money from ratepayers in other novel ways.
One of the big issues is that on a sensible basis (not the ridiculously high ratios that local authorities set themselves) our debt far exceeds what is reasonable and affordable. That means that there is no capacity to borrow further for the infrastructure that a developing Mangawhai in particular needs. That includes Mangawhai Central. The Council has refused to let us know how the Mangawhai sewerage system will cope with the growth. According to the promises it was supposed to service 4,500 connections (Beca’s figure) but does less than half at present. It seems highly likely that we will have to have a new system or seriously upgrade the old one decades before the old one is paid off.
The high wages and ratio of staff to ratepayers is not surprising. The KDC wastage of money is startling. The ongoing saga of the Fire Service rules and District Plan changes to accommodate them has cost the KDC a small fortune and has opened itself up to all sorts of legal liability. That could have been put to bed right from the start if the KDC had received robust legal advice and had not pandered to the self-serving advice of its consultant Beca.
For years the KDC has pursued a legal vendetta against the whistleblowing ratepayers who refused to pay the draconian penalties imposed when they withheld their rates to force the government to halt the illegalities of the McKerchar /Tiller regime. The KDC could have settled the issue years ago when the rebel ratepayers generously tendered the rates but without the penalties. The cost of that vendetta has been enormous and the lawyers for the KDC have sucked out of the KDC many times the amount that the KDC could have ever recovered, even if it had gouged its pound of flesh in the way of penalties. In addition, the shonky advice from their lawyers and the Crown Manager has opened up the KDC and the NRC to a liability in respect of unlawful rates that has yet to be ascertained.
NRC RESPONDS 20.08.2017
Bill Shepherd, chairman of the NRC, comments on the High Court ruling in the Northern Advocate here.
The arficle reports a comment from the decision which appears to have been raised by Bill Shepherd:
Justice Duffy said NRC may have fallen victim to legislation that was less precise than it needed to be.
In other words the mistakes were excusable.
Let's make no mistake about it, the errors committed by the the NRC and the KDC were fundamental errors in complying with basic requirements.
Read the Important Notice at the head of this page. Local authorities know that they have to comply with the requirements of the rating process to the absolute letter of the law. In setting its rates the NRC failed to state the dates on which each instalment was payable. The requirement is as clear as a bell in the legislation, buit for several years the NRC ignored that basic requirement.
The unlawful delegation of NRC's powers to the KDC to assess NRC rates, add penalties to its rates, and to recover unpaid rates came about because of a fundamental ignorance of the law by the NRC, the KDC, and their lawyers. They were still operating under powers of delegation which were authorised under the Rating Powers Act. The problem is that the Rating Powers Act was repealed by the Local Government (Rating) Act 2002 which took effect in 2003. Those powers of delegation were no longer available from that date.
In the High Court hearings the NRC and the KDC swamped the court with a multitude of submissions as to why they should not be obliged to comply with the law. I have yet to see a sign of remorse or regret for the errors they committed, or for the the pain and financial costs they have inflicted on ratepayers in pursuing their unlawful rates. Even now when the High Court has headlined the gravity of their errors, they arrogantly point to the consequences that the ruling will have on ratepayers, and implicitly place the blame on those who challenged the legality of the rates.
There is absolutely no doubt.that the responsibility for any losses that the NRC may suffer because of the judgment must lie with the elected representatives of the NRC, the chief executive and his staff, and the NRC's legal advisers. They should be made to carry the can and not shift it on to ratepayers.
See the NRC website here.
MAYOR GENT RESPONDS 19.08.2017
Mayor Gent's response to the High Court judgment can be seen here.
The article reports the Mayor's comments as follows:
The district's mayor, Greg Gent, said the council was still absorbing the ruling.
"The rates are quashed, we're not even sure at this point actually what that means cause it's non-specific, so there's a bit to work through around this one.
"The sad thing is that it's all very technical, it's going to cost Northland ratepayers a lot of money, and I'm not sure for what."
Mr Gent said it would also impact other councils around the country.
Here are some pointers for the Mayor:
+ Quashed or set aside means that the rates become a nullity. They are unenforceable and ratepayers are not obliged to pay them. If the unlawful rates have been paid then ratepayers can choose to take legal proceedings to recover them from the NRC.
+ It is not technical at all. The NRC failed to comply with its legal obligations in setting and assessing rates. In the words of the Court the NRC committed "serious and substantial errors in failing to exercise its statutory powers properly". The Court also found that the KDC acted unlawfully in assessing and recovering rates for the NRC. The errors were basic and yet they were committed by both authorities despite legal advice from one of New Zealand's top legal firms.
+ The errors came about because of poor legal advice and an arrogant and cavalier attitude to legal compliance. Despite the lessons of the McKerchar and Tiller years, the KDC has learnt nothing. Ratepayers have pointed out that the current KDC and NRC rates are defective but the two councils continue to ignore that advice, and persist with billing unlawful rates. (That includes rates for the current 2017/2018 year.)
+ Mayor Gent was awarded a gong by the Queen for "corporate governance" and yet he suggests that he doesn't understand that the NRC and the KDC got seriously pinged by the High Court for failing to comply with the law. Compliance with the law is the first step in good governance.
+ Rates are not a God-given right. They are treated by the courts as a coercive tax, If local authorities want to exercise their special privilege of being able to charge rates then Parliament demands that they must comply with the law to the letter.
+ "It's going to cost Northland ratepayers a lot of money". That is is what the NRC has done to ratepayers because the NRC failed to comply with the law. If it wants to spare ratepayers then its should sue its lawyers for negligent advice and makes sure in future that it is correctly advised. It could also bring an action against its chief executive and possibly its elected members.
+ If the Mayor is genuinely concerned about wastage of money he should consider why he is allowing the National government through the Crown Manager to continue to persecute the ratepayers who blew the whistle on the McKerchar's destruction of Kaipara. Those ratepayers offered to pay their rates years ago but refused to pay the vindictive penalties. The KDC refused to accept them and then pursued ratepayers through their mortgagees and the courts. It has cost the KDC many more times in paying lawyers than the amount that it could ever recover. And the amount that it will recover is diminishing with each court decision.
+ The decision of Duffy J will impact seriously on other local authorities throughout the country because those authorities have the same cavalier approach to legal compliance and because they too are poorly advised by their lawyers.
+ Parliament is no longer sitting and John Key is not going to arrive this time like the Seventh Cavalry and save the day by validating all the KDC's errors with a sweep of the Parliamentary broom.
No Seventh Cavalry to rescue the NRC
FIRE SERVICE RULES HEARING 19,08.2017
The Hearing of Plan Change 4 Proposal before three Commissioners was heard in Mangawhai on 16 and 17 August.
The hearing was stacked with representatives of Fire and Emergency New Zealand (FENZ - the reincarnation of the NZ Fire Service), consultants from Beca, and the lawyer for FENZ.
FENZ presented a legal opinion through their lawyer, along with addresses from FENZ officers and Beca consultants. The KDC was represented by a consultant who presented a section 42A report on the proposal.
The main thrust of FENZ’s argument is that the RMA requires local authorities .......(continued here)
COMMENTS ON HIGH COURT CASE 19.08.2017
RATEPAYERS DANCING A JIG 19.08.2017
According to Radio NZ 's Checkpoint ratepayers in Kaipara are dancing a jig because of the High Court's latest ruling in respect of the NRC's "dodgy" rates. The item can be heard here and includes Lois William's interview with Bruce Rogan of the MRRA
RULE OF LAW RETURNS TO KAIPARA 18.08.2015
Justice Duffy has just released her final decision in the judicial review brought by the MRRA against the Kaipara District Council and the Northland Regional Council. The decision is not available yet on-line. if you would like a copy, email me at firstname.lastname@example.org
She previously found that the NRC rates from 2011/2012 to 2015/2016 inclusive were unlawful, She has now quashed (set aside) those rates along with all penalties charged on those rates.
She declined to order the refund of rates and penalties paid. The result is that those who have not paid the rates do not have any legal obligation to pay them. Those who did pay them will get no automatic refund. But she added:
It is of course possible that once the invalid rates are set aside the plaintiffs, and perhaps other ratepayers, will bring subsequent proceedings for recovery of the payments they made towards those rates. However, this potential risk is too remote for consideration here.
There is also the possibility that ratepayers will set off unlawful rates already paid against future rates.
The NRC rates for the Whangarei and Far North districts were also charged on the same unlawful basis. The Court commented:
In the interim judgment I had observed that the same errors the plaintiffs had identified would also be found in the NRC’s rates for the entire region. Ratepayers in other territories within the NRC’s region have not challenged their rates. However, the NRC recognises it remains vulnerable to such challenge.
Whilst the direct challenges to the rates of the KDC were rejected, the Court held in its interim decision that the KDC had acted unlawfully in recovering unpaid rates on behalf of the NRC, assessing rates on behalf of the NRC and adding penalties on behalf of the NRC In the final judgment the Court stated:
The NRC’s error led to it abdicating its statutory responsibilities regarding rates by in effect unlawfully handing them over to the KDC. The plaintiffs, indeed all affected ratepayers, were entitled to have the NRC carry out the statutory role Parliament had given to it.
As it stands, the KDC‘s actions in recovering NRC rates through mortgagees and through the courts were all unlawful, but no decision has yet been made on the lawfulness of the combined rates assessment notices and rates invoices issued by the KDC and the NRC. Over the last five years those documents included unlawful rates and penalties of the NRC which made them non-compliant with the Rating Act. In addition the total amount of rates payable in the documents was incorrect and non-compliant.
The High Court has still to issue its judgment in respect of the Rogan appeal from the District Court. That may well have more to say on how the invalidity of the NRC rates affects the validity of the KDC rates.
For those of us who have fought staunchly for the return of the rule of law to Kaipara the following words of the Court go some way to vindicating our stand:
 Individuals are entitled to be free from suffering unlawful exercise of statutory power, particularly when the power has elements of coercion. That is a fundamental precept in any political society that recognises the rule of law. It is particularly relevant here because ratepayers facing demands to pay invalid rates bear the burden of bringing legal proceedings to establish invalidity.
The decision is a landmark case in that the High Court has made it absolutely clear that local authorities are obliged to comply with the law when setting their rates. If they fail to do so they run the risk of rates being set aside retroactively. They can no longer thumb their noses at ratepayers and suggest that they are above the law.
DISTRICT PLAN CHANGE 4 HEARING 25.,07.2017
The hearing of the proposed Plan Change 4 is to be held on 15 August for three days at the Club in Mangawhai Heads.
Full details can be found on the KDC website here.
The hearing will be before Council-appointed Commissioners.
Only those who have made submissions are entitled to present their arguments at the hearing although it is open to the general public.
The Public Notice can be seen here and will be in the Mangawhai Focus and Kaipara Lifestyler during this week.
A section 42A report prepared by the Council’s appointed consultant has been prepared and can be viewed here.
WHERE IS GOOD GOVERNANCE AND TRANSPARENCY? 25.07.201
One of the major issues before the hearing of Plan Change 4 is whether it was lawful for the Fire Service code of practice to be incorporated into the KDC District Plan. The Fire Service code of practice is statutorily limited to urban areas only and the Fire Service exceeded its statutory authority by extending it to rural areas.
The Commissioners hearing the proposed change application will have to decide whether the KDC acted lawfully when it adopted the code of practice.
The KDC obtained a legal opinion on the matter from its lawyers but is refusing to disclose it. All it will say is that it supports the KDC’s actions.
Legal Eagle sought a copy of it under LGOIMA. That request was declined on the basis that it was legally privileged and on the basis that it would be made available when the section 42A report was released.
The section 42A report has been released but there is still no sign of the legal opinion.
Legal Eagle has again requested a copy of the opinion and pointed out that the Hearing Commissioners and ratepayers need to see and consider the legal arguments that support the KDC’s stance. It is a total abuse of power for a local authority to expect independent Commissioners to accept the KDC’s legal stance without it providing supporting arguments. That is the essence of a hearing, to weigh and balance the competing arguments.
I have sent a copy of the request to the Mayor and Councillors and the outcome will be an interesting indication of who is behind such evasive and unfair practices, the Chief Executive and his staff or the Mayor and Councillors.
I have also sent a copy to the Associate Minister of Local Government as “governance issues at the KDC” are part of her portfolio responsibility. The Crown Observer has also been notified.
Hopefully Graham Sibery the Chief Executive will take some advice and reconsider his decision.
GOVT URGED TO CURB COUNCIL 23.07.2017
That eye-catching headline in the Northland Age refers to the Far North District Council, not the Kaipara District Council. But it appears that both councils have similar problems that highlight the fundamental shortcomings of local government in this country.
A local watchdog Des Mahoney is launching a petition urging the Minister of Local Government, Anne Tolley, to appoint commissioners or a statutory manager to run the FNDC. He argues that the council is so dysfunctional and fragmented it can't carry out its statutory functions, and that the council is endangering, or likely to endanger, the health and safety of residents.
Minister of Local Government, Anne Tolley
He cites the council’s "total inability and ongoing failure to maintain and upgrade the district's core infrastructure services, such as water supply, sewage, reticulation and road network." He says the council operated 15 sewerage schemes - and was planning another at Kerikeri - and eight are non-compliant or have abatement notices issued for non-compliance.
The report goes on:
He said ratepayers are concerned the Kerikeri scheme - which fails to add capacity to the current sewerage reticulation area - will be "another Mangawhai disaster" where costs soared from $35.6 million to an estimated $57.7m and left Kaipara District Council with a huge debt, and led to commissioners being appointed.
It is the same old problem: inexperienced councillors who are cocooned from the nuts and bolts of what is actually going on at the coal face. Incompetent and inexperienced chief executives and staff, self-serving advice from consultants and lawyers, and inept monitoring of councils’ activities by the Office of the Auditor-General as auditor and as watchdog.
It will get even worse for the FNDC. The finding by the High Court that the NRC rates for the Kaipara district will also resonate in the FNDC district. The NRC rates for that district were also set on the same unlawful basis. And, if the High Court finds that the KDC/NRC rating documents were corrupted and rendered unlawful by the inclusion of the unlawful NRC rates, then the validity of the FNDC rates for the past five years will be open to legal challenge.
History repeats, déjà vu, and all that.
WHAT HAPPENED TO GOOD GOVERNANCE? 11.07.2017
Greg Gent promised us good governance and transparency.
It didn’t last very long. The whole pathetic saga of the unlawfully appointed Crown Manager is a conspiracy of silence between the Ministry of Local Government and the KDC. The government stuffed up badly in appointing the Crown Manager. A compromise was reached between the government and Mayor Gent. The illegalities have been swept under the carpet.
So, what are the facts?
Peter Winder was unlawfully appointed as Crown Manager in 2016. Beyond any doubt.
Peter Winder’s terms of reference were outside the power of the Minister under the LGA. Beyond any doubt.
Peter Winder exercised the ultra vires powers. Beyond any doubt.
The exercise of those ultra vires powers was a nullity in law. Beyond any doubt.
Forget all the smoke and mirrors emanating from the Associate Minister, Jackie Dean about the decisons of Peter Winder being valid. She is simply mouthing a script meticulously prepared by the Department of Internal Affairs (DIA) to cover up its own monstrous blunders in this affair.
Peter Winder has just been reappointed as Crown Manager. This time his terms of reference appear to be compliant. But he was appointed, yet again, by the Associate Minister. The Gazette notice states that the Associate Minister is acting under “delegation from the Minster of Local Government”. But there is no evidence of such a delegation.
The Cabinet Manual requires such delegations to be listed in formal documents but those documents show that Anne Tolley, the Minister, is responsible for the administration of the Local Government Act (under which the Crown Manager is appointed). Jacqui Dean is only responsible for governance issues in Kaipara.
I am awaiting for a response from the Associate Minister under the Official Information Act giving evidence of her authority to act. I don’t expect a lot. This whole thing smacks of another National government cover up and they will use every trick in the book to avoid public exposure.
The complicity of the KDC in all of this is amazing. Greg Gent knew that Peter Winder was being stood down in February but kept quiet about it. Since then no one in the KDC has raised any concern about the status of the Crown Manager or the validity of his actions. After all, he was illegally acting on behalf of the ratepayers of Kaipara in respect of several legal actions. They were important decisions.
A Crown Manager acts on behalf of the government, on the instructions of the government, and in the best interests of the government. The best interests of ratepayers are irrelevant. Why then is Peter Winder being paid out of ratepayers’ money? Sure that’s what the LGA says, but why is Greg Gent not kicking up a fuss about it? If the government wants a minder to ensure that it extracts its pound of flesh from ratepayers then the government should pay for it.
Greg Gent had the Associate Minister over a barrel with her misrepresentations about the role of the Crown Manager. He pressured the Associate Minister into reappointing the Crown Manager, but why did he not insist on the government footing the bill? Why dump again on ratepayers?
And why was the Crown Manager paid for the period when his actions and decisions were undoubtedly ultra vires? Is the Council seeking a refund of monies paid to the Crown Manager?
In this comedy of errors the poor Associate Minister has been let down yet again by the incompetence of the DIA. The Crown Manager’s new authority to direct the KDC relates solely to rating issues arising from rates until the 206/2017 year. So the issues of legality relating to the 2017/2018 rates are in the sole domain of the elected Council. Was that an oversight?
But wait, there’s more. Note this extract from the Gazette notice:
Remuneration and costs
The remuneration of the Crown Manager will be paid out of money belonging to the Council pursuant to section 258W of the Act. Remuneration will be paid in accordance with the Cabinet Fees Framework at a rate of $900.00 a day.
Then take a look at section 258W of the LGA
258W Recovery of expenses from local authority
(1) A local authority owes as a debt to the Crown any expenses that the Crown incurs for the appointment of a Crown Manager or a Commission to the local authority, including the payment of remuneration and expenses to the Crown Manager or a member of the Commission.
(3) The Crown may recover expenses under subsection (2) as a debt to the Crown.
The point is that it is the Crown that pays the Crown Manager and the Crown then recovers any monies paid from the KDC.
There is no legal authority for the KDC to pay the Crown Manager directly. The correct legal process must be followed.
The Associate Minister has got it wrong again.
But it goes further than that. The KDC has not paid the Crown Manager, Peter Winder. All payments have been made to, McGredy Winder & Co.
McGredy Winder & Co is not the Crown Manager. It is acompletely separate legal entity to Peter Winder.
We are dealing here with statutory powers of a statutory authority and the expenditure of public money. The requirements of the law must be followed to the letter. The KDC has acted unlawfully in paying the Crown Manager directly and it has compounded that by paying the monies to a completely different legal entity.
What a shambles.
JULY COUNCIL MEETING 10.07,2017
There are some interesting matters arising in the Agenda for the July Council meeting to be held in Dargaville tomorrow, 11 July.
Councillor Larsen had put forward six motions to be considered by the Council. The first recommends that Councillors should be responsible for appointing commissioners to planning hearing panels. The reason given is stated as:
This approach will assist in removing any real or perceived bias or favouritism resulting from staff making such appointments.
Other motions suggest:
The following plan changes are also afoot (page 44)::
Council has engaged a facilitator – Dr Jill McPherson, to work with the Mayor and Councillors in developing a new vision that expressed their aspirations for the Kaipara district, for use in the impending LTP 2018. Mayor and Councillors have since had time to consider the output from that exercise and have indicated the new Vision is to be used in the LTP 2018. (page 61)
The KDC is planning to introduce via the Long Term Plan for 2018/2028 the charging of the Uniform Gnnual General Charge (UAGC) on SUIPS. See details at page 92.
WHO CARRIES THE RATING CAN? 10.07.2017
Councillor Larsen’s concern about the incorrectness of a statement in the Rates resolution report that was considered by the elected members at the last council meeting (see THE CRUX OF THE RATING PROBLEMS) has had some repercussions.
Glennis Christie, General Manager Finance, appears to be responsible for that area. She has submitted a report, Rate setting, assessing, and invoicing process (page 165), which will be considered by the Council at its meeting tomorrow.
Clearly the General Finance Manager is not an avid reader of this website otherwise she would have been alerted to the fact that the matter referred to by Councillor Larsen, is fundamentally incorrect.
She repeats the comment again as if it sums up the legal situation:
Once a rates resolution is resolved, Council has legal authority to assess and collect rates, as well as charging penalties for outstanding amounts.
The report with that comment was vetted by the KDC lawyers. But they got it wrong and the elected members are being misled.
Setting rates by resolution creates no liability for rates. All it does is finalise the proposed rates and opens the way to the subsequent steps in the rating process.
The important point is that all of those subsequent steps in the rating process have to be compliant with the Rating Act. Only then do the rates become due and payable.
Establishing that the delegation of such matters to the Chief Executive is within the bounds of the legislation is not the issue. Nor is the confirmation that the processes have been subjected to legal scrutiny. The whole point is that the processes have to be right and the KDC and the NRC, with which it shares some processes, have a poor track record in that department, irrespective of correct delegation and legal advice.
For three of the last five years the NRC made simple errors in its rates resolution despite legal advice.
For the last five years the NRC delegated the assessment of its rates to the KDC. The High Court held that the rates were accordingly unlawful and that both councils acted unlawfully.
The important point is that Peter Winder, the go-to expert on historic rating matters, completely overlooked this blatant breaches of the law. So, quite remarkably did the lawyers for the KDC and the NRC (the same legal firm). They were applying outdated legislation.
If I was the KDC I would be seriously concerned about the whole process for assessing the rates. Modifications have been made to the unlawful process adopted in previous years but the new process appears at first sight to be in breach of the Rating Act.
The KDC and the NRC also need to look very closely at their rating information databases and their rates records. They appear to be non-compliant with the Rating Act. If that is the case then any assessment based on non-compliant records is unlawful.
The rates assessment notices and rates invoices KDC and NRC for the past five years are almost as bad as they were under the Tiller/Geange Council. The KDC, the NRC and their shared lawyers have learnt nothing from the Validation Act or from the comments in the Guide to the Rating Act (see box at top). But why do they need to learn? No one has any skin in the game and some have made a small fortune out of the ongoing illegalities of the KDC.
Some of the defects in the rates assessment notices and rates invoices are in issue before the High Court, but others are not. But, as the advice in the Guide states, they are always subject to challenge.
In an earlier post I indicated that the elected Council is on its own for the 2017/2018 rating year. The Crown Manager’s period of direction relates only to rates until 30 June 2017. So if things go pear-shaped yet again in the rating process, there is a good chance that several past years of rates will be held to be unlawful.
If that happens, then who is going to carry the can this time around?
And will the National Party be in a position to rescue the KDC yet again with another white-washing validation act?
THE CRUX OF THE RATING PROBLEMS 03.07.2017
Last Monday I attended the KDC Council meeting where the rates resolution for the 2017/ 2018 year was passed.
The rates resolution is a vital part of the rating process. It sets in concrete the rates that were proposed in the annual plan. The resolution must accord with the provisions of the annual plan and it must include certain information such as the dates on which the rates must be paid.
That is where the NRC came adrift. It failed to include the dates for payment and as a result several years of rates were held to be unlawful.
This time the KDC had done its homework. Aware that the Rating Act is very prescriptive and the omission of one single requirement can result in invalid rates, Mayor Gent announced that the report containing the resolution had been vetted by the KDC’s lawyers.
It was clear that the KDC’s lawyers had tidied up the penalties resolution. For many years it was a bit of a dog’s breakfast and it was good to see that it had been made more intelligible.
All good stuff. Council has only one shot at getting it right and it had certainly made an effort in the right direction.
But Councillor Larsen spoilt the party. He drew the Councillors’ attention to the last part of rates resolution report (page 108, page 8 of the report) which states:
Reason for the recommendations
Rates must be set by Council resolution. Once a rates resolution is adopted, Council has legal authority to assess and collect rates, as well as charging penalties for outstanding amounts. (Emphasis added)
Councillor Larsen correctly pointed out that the second sentence is totally misleading. It gives Councillors the wrong impression.
Once rates are set by the rates resolution they are fixed in law, but they do not relate to any particular property (rating unit). It is the subsequent assessing of the rates that links the rates to each rating unit and it is the rates assessment notice that advises the ratepayer of the amount of rates payable on that rating unit.
What is more important, and this is the fundamental issue, rates do not become payable by law until a rates invoice in the correct format has been delivered to the ratepayer in compliance with the requirements of the LGRA.
If elected councillors and the staff of the KDC had to learn one of the most important fundamentals in running a local authority then that is that is the one. I repeat it again:
If the rates assessment notice and rates invoices are not compliant with the Rating Act then the ratepayer is not liable for the rates.
It’s a bit like a speeding ticket. All of the legal boxes have to be ticked, otherwise it is invalid.
All of a local authority’s activities are reliant on income to fund expenditure so it is absolutely essential that its main source of income – rates – is lawful and secured. And it is only secured by ensuring that the Rating Act is complied with to the last detail through all the stages of the rating process.
The Mayor and the Councillors seemed non-plussed by Councillor Larsen’s disclosure. They seemed to think that once they had passed the rates resolution then ratepayers were obliged to pay the rates. After all, that was clearly the advice of their lawyers who had vetted the report.
Councillor Larsen then went on to point out that whilst the Councillors were responsible for considering, approving and passing the rates resolution, all later steps in the rating process – the rates assessment notices and rates invoices – were outside their control. The later processes are delegated to the chief executive and his staff. Councillors have no check on whether those processes are performed in compliance with the law.
The failure to grasp this basic underlying fact is responsible for many of the errors made by the KDC and the NRC. Over the past few years their rates assessment notices and rates invoices especially have been riddled with matters of non-compliance with the Rating Act. Those ratepayers who have withheld their rates have sensibly raised the defence that they are not liable for the rates because of the defective rating documents.
The Commissioners, who ran the KDC from 2012 to 2016 under instructions from the government, did not care whether the rates were lawful or not. Their policy was to beat the ratepayers into submission with legal threats and legal action (over 100 separate proceedings issued). They have spent a fortune of ratepayers’ money (still climbing) trying to enforce unlawful rates. In their ignorance of the facts, Mayor Gent and his Councillors have allowed the ex-commissioner Peter Winder, under the purported guise of Crown Manager, to continue his wasteful persecution of ratepayers.
At the recent High Court hearing of the Rogan appeal, where the KDC rates are being challenged, counsel for the KDC advised that he had been instructed by Graham Sibery, the KDC chief executive. He then went on to argue before the Court that ratepayers are obliged to pay rates even though they are blatantly unlawful. The only avenue to challenge the validity of any rate is to apply to the High Court for judicial review of that rate.
As no one can afford to go to the High Court, it means that the KDC takes the view that it is not obliged to comply with the law when setting rates.
It is a bizarre proposition and it is expected that the Court will affirm the responsibility of the KDC to ensure that its rating documents are legally compliant.
Such an arrogant approach to legal compliance may be the essence of the problem that has caused the KDC so much strife with it rates. The elected counsellors delegate to the chief executive and his staff the authority to deliver to ratepayers legally compliant rates assessment notices and rates invoices. An awful lot hinges on those documents, and whether they are lawful or not depends very much on the expertise of the chief executive and his staff.
In the days of Neil Tiller’s Council the sum knowledge of chief executive Jack McKerchar and his staff about compliance with the Rating Act was diddly squat.
The newly elected KDC has an awful lot of new appointees to managerial roles but I wonder if there is anyone on board who has any qualifications or even any understanding of the rating processes under the LGA and the LGRA. There are courses run by SOLGM and guides available but has the KDC employed any staff member who has qualifications or expertise in this most vital area?
Jack McKerchar obtained legal advice occasionally but kept it secret or misrepresented it to his councillors. Copies of that advice that I managed to obtain illustrated a dismal understanding of rating matters by the Council’s lawyers. The result was that six years unlawful of rates had to be validated by Parliament.
Recent legal advice has not been much better. The NRC’s rates for five years have been held by the High Court to be unlawful because of fundamental drafting errors and because the KDC acted unlawfully in assessing NRC rates under delegation from the NRC. But most importantly the High court held that all actions taken by the KDC to recover rates on behalf of the NRC were unlawful. The KDC took action against many ratepayers’’ mortgagees and through the courts.
In all of those matters the KDC and the NRC were acting under legal advice. Unfortunately that legal advice was completely wrong.
The mistake in setting the rates was a glaring error. The error in delegating the assessment of the rates and recovery of the rates arose because the legal advisers to both councils did not know that such a power was repealed in 2003. Unbelievable but true.
I, along with others, have approached the KDC on many occasions pointing out the defects in their current rates assessment notices and rates invoices. Some of them are in blatant breach of the Rating Act. But without success. Council staff who respond repeat the mantra that they are relying on legal advice that everything is compliant and that the rates are lawful until the High Court decides otherwise.
The problem is that legal advice is largely not based on the law but on what a local authority can get away with. Administrative law is stacked in favour of local authorities, the watchdogs that should be the guardians of the rule of law in local government have abdicated their role, and the court system renders legal challenge out of reach of most.
The upshot is that legal advice tends to be that if a local authority plays its hand appropriately it can get away with anything.
That it is a risky gamble. The legality of the KDC rates assessment notices and rates invoices are currently in issue before the High Court. Duffy J is currently deciding whether the unlawfulness of the NRC rates, which share the same rates assessment notices and rates invoices with the KDC, effectively infects the combined documents and make them non-compliant with the Rating Act.
It is also considering, or may transfer such a decision back to the District Court, whether any of the many matters of non-compliance with the rating act renders invalid the rates assessment notices and rates invoices of the KDC. One simple mistake in the rating process will result in the KDC rates being declared unlawful for the past six years.
Mayor Gent and Deputy Mayor Wethey are adamant that they do not want to get involved with historical rating issues. But they are involved. They cannot draw a line on the past. A local authority is a legal continuum and the current council is responsible for the errors of past councils. It cannot legally put its head in the sand and ignore the past, especially where the court invalidates the rates for the past six years.
In John Key’s era the simple solution to rating illegalities was to push a validation bill through Parliament. The political climate has changed dramatically since then and Parliament will not readily provide a laundry service to sanitise the KDC’s dirty washing.
It may be time for a paradigm shift in the KDC.
LIMITED POWERS OF THE CROWN MANAGER 03.07.2017
Surprisingly, the authority of the Crown Manager to direct the Councillors of the KDC is limited by his terms of reference. His authority only extends to:
• any additional legal actions against the Council relating to rates for the 2016/17 rating year and prior rating years; and
• any legal action that is required by the Council to collect rates due for the 2016/17 rating year and prior rating years.
We are now in the 2017/2018 rating year and outside the lawful domain of the Crown Manager. Thus any defects in this year’s rating process will be the direct responsibility of the Mayor and elected councillors. The government’s baby-sitter will not be available. Not a bad thing.
WHY IS THE CROWN OBSERVER STILL THERE? 30.06.2017
In my last post I advised that Barry Harris, the Crown Observer to the KDC, had not been “terminated”. He is still operating and is on the payroll of the KDC.
What caused me to believe that he had gone was an email from Mayor Gent to the Associate Minister of ! March 2017:
Crown Observer (Barry Harris)
KDC would be comfortable to disestablish the Crown Observer role. Barry has advised, with his added responsibilities at Dairy NZ through Chair ill-health,
he is too busy and is finding attending our meetings difficult. He also notes our governance is operating satisfactorily. I have now built up sufficient local government networks that I could seek help if needed.
So, if the Mayor says he wasn’t needed, and if Barry Harris says he wasn’t needed, why is he still there four months later?
And why are the ratepayers of the district forking our $750 a day for someone who is not needed?
The reason is to be found in a Briefing of 10 March 2017 given by the Department of Internal Affairs to the Associate Minister. One of its arguments for not terminating the role of the Crown Observer was stated as:
It would make it harder for the Government to receive impartial advice about the performance of the Council.
The DIA goes on:
We propose that the Crown Observer remain at least pending additional Crown appointments. This will enable the Council to continue to receive guidance and support from the Crown while it is still dealing with some complex legal cases.
It is all about the legal cases. The role of the Crown Observer is to enable Crown (the government) to have control of the historical legal issues facing the KDC. The Crown Observer is there as an additional government man to ensure that the KDC goes down the right track. He can also report back to the government if the elected members show any inclination to question why they are being forced to endorse and to fund the massive costs of the government’s vindictive legal actions against whistle-blowing ratepayers.
Have the elected councillors ever stopped to wonder if they are being taken for a ride by the government? Why all this waste of money on legal minders and legal disputes when the issues could have been resolved so easily years ago on a fair and honourable basis?
It might be time for them to take their heads out of the sand and start asking some serious questions.
Adviser or the government's legal minder?
LAZARUS 2 RISES FROM THE DEAD 27.06.2017
I reported in a recent post that the Crown Observer, Barry Harris had also quit. Mayor Gent wrote to the Minister earlier in the year advising that he was no longer needed and that he had other work commitments. Well, needed or not, he is still on the payroll and collecting his daily allowance. He was present at the Council meeting.yesterday in his official capacity.
WINSTON’S VIEW ON REAPPOINTMENT OF CROWN MANAGER 27 06 2017
This is how New Zealand First sees the reappointment of the Crown Manager:
Comedy of Errors Continues as Crown Manager Re-Appointed
The comedy of errors continues with the government’s response to the beleaguered ratepayers of Kaipara District Council in Northland.
“Today former Crown Manager Peter Winder has been re-appointed by Associate Minister of Local Government Jacqui Dean.
“Mr Winder’s job was terminated in April, with the government citing technical flaws’ by then Associate Minister of Local Government Louise Upston in making the appointment.
Mr Winder should never have been appointed in July last year. He was a government ‘mate’ and one of three commissioners who failed to take action against Beca, the project management company of the Mangawhai Wastewater Scheme that blew out. Ratepayers are still facing a debt mountain of $65m and an additional $321,960.62 in legal expenses run up by Mr Winder.
“The saga of a government letting its people down started with the failed scheme, then went to former Northland MP Mike Sabin’s validation of rates bill supported by all parties except New Zealand First and to the Audit Office finally recognising and paying $5.3m last year for failing to monitor expenses. Now we have the failed Crown Manager appointment and re-appointment.
“Validating the rates was an appalling move – retrospective legislation that is harmful to any party should be an abomination in a democracy but it was used as a device to brush incompetence and corruption under the carpet.
“The National government continues to let down ratepayers, and seems utterly bereft of providing an adequate response to repair past wrongs.
“There was never any attempt to try and renegotiate the loans, to lessen the load, or step in to do their duty for the people of Kaipara.”
CROWN MANAGER RESUMES HIS ROLE 27.06.2017
Peter Winder recommenced his new term as Crown Manager for the KDC on 20 June 2017, as reported in the Kaipara Lifestyler.
It appears from correspondence obtained from the Associate Minister’s Office that the KDC was to be left high and dry without its legal minder. However, it seems that pressure from Mayor Gent and the hint of a possible resignation might have triggered a re-think by Wellington.
It also seems that the Department of Internal Affairs has taken notice of the legal challenge of Legal Eagle and made sure this time that the terms or reference of the Crown Manager are compliant with the Local Government Act. Under the previous unlawful appointment the Crown Manager was given powers to make decisions on behalf of the Council. That is not allowed. He is only permitted to direct the Council and then it is over to the Council to decide whether it will comply with his directions.
However, there is doubt over the legality of the re-appointment of Peter Winder by the Associate Minister. The Ministry of Local Government has been obstructive in its release of information under the Offical Information Act but it appears that the appointment of a Crown Manager can only be made by the Minister, Anne Tolley.
More about that later.
The Gazette notice setting out Peter Winder’s terms of reference can be seen here.
LAZARUS RISES FROM THE DEAD 15.06.2017
Gone by lunchtime but back before dinnertime, Kaipara's own Lazarus is back with us. Peter Winder, late Crown Manager of Kaipara has just been appointed as the new Crown Manager of Kaipara.
The appointment is not going to take effect until 30 June and it appears that the legal botch-ups that blighted the previous appointment might be avoided. Note that in Talking Points the Crown Manager's role is vaguely defined:
What is the extent of the Crown Manager’s authority?
The Crown Manager provides direction on outstanding and future legal actions relating to the development of the Mangawhai Community Wastewater Scheme, the setting and collection of rates during and prior to the Kaipara Commissioners’ term
The Gazette notice will, when it comes out, spell out the authority of the Crown Manager. Remember that the authority is limited to directing the council.
Clearly this is a major victory for Greg Gent. He made it clear to the Associate Minister that he was misled by her predecessor Louise Upston into standing for the Mayoralty on the basis that he would not have to deal with past rating issues. He even intimated that he would quit if his demands were not met. So, it appears his demands have been met.
But it is not that simple. First, the appointment of the Crown Manager has to be made lawfully. That should not be that difficult, but the Department of Internal Affairs that advises the Minister and Associate Minister made a complete dog's breakfast of the last appointment. Despite official information requests they are still covering up and pretending that Winder was properly appointed even thought he was termnated because he wasn't properly apponted. All contradictory and a shameful display of abuse of power and disregard of democracy by the government.
The second issue is that Mayor Gent and his councillors, whether they like it or not, are going to have to make all the decisions relating to historic rating issues. That's how the system works. The Crown Manager directs the council to make a decision and the Council is obliged to make that decision. A failure to comply with a direction from a Crown Manager can result in commissioners being appointed.
No doubt this compulsion will enable Mayor Gent and his councillors to separate themselves from the decisions they are obliged to make. It's the old war crimes defence of being forced to follow orders.
However, it's a little more complicated. When elected members make a decision they are obliged under the LGA to act in the best interests of the district. That means ratepayers come first. The Crown Manager acts under the instructions of the Department of Internal Affairs and in the best interests of the government. There is an immediate conflict. The DIA is out for its pound of flesh from defaulting ratepayers. it doesn't care how much of Kaipara's money it spends in pursuing ratepayers through the courts because it is sending a message to all ratepayers in the country that messsing with the government doesn't pay.
Peter Winder has a dismal track record in legal matters. He and his commissioners failed to sue Beca. They made a total hash of suing the Auditor-General and Jack McKerchar. The High Court has declared their actions in recovering monies from mortgagees on behalf of the NRC, and suing ratepayers on behalf of the NRC, to be unlawful. Likewise the assessing of NRC rates by the KDC and adding NRC penalties was also declared to be unlawful.
The cost of all of this has been horrendous. In obtaining information under the Offical Information Act I have sighted some of the legal biills from Simpson Grierson. They would make your hair curl. And you are paying them. Mayor Gent likes to trot the figures out to show how much the rates fight has cost the KDC. But if he were to take his head out of the sand he might see that his council is being used by the government to batter ratepayers into submission and to provide a tidy retirement fund for the the KDC lawyers.
TRANSPARENCY AND DEMOCRACY 07.06.2017
If you are one of those who was not blind-sided by the affability of Sir John, you will be seriously alarmed at the whittling away of democracy in New Zealand.and the powerlesssness of the ordinary people.
We know all about it in Kaipara but it is happening everywhere. In North Rodney the movement to separate from Auckland has hit a brick wall of central government manipulation. Read about the latest from the Northern Action Group .
DOCTOR JEKYLL AND MR HYDE 05.06.2011
Ex-politician Rodney Hide has a regular Opinion column in the Sunday Herald where he dishes out common-sense comments on the absurdities of our laws or other matters that grab his attention.
This week he has a go at the police for threatening dairy owners who defend themselves with prosecution for assault. He takes a swipe at MP Nicky Wagner who suggests that dairy owners stop selling tobacco and cigarettes.
Suddenly on reading Rodney Hyde’s comment my memory banks sent two boing-boings to my brain. The first one reminded me that Rodney Hide was a politician and at one crucial stage he was Minister of Local Government under the National government.
The second triggered the memory of Robert Louis-Stevenson’s The Strange Case of Dr Jekyll and Mr Hyde.
So how are the two linked?
There’s a commonality of name, with a different spelling for Hyde.
But it is a similarity in contrasting behaviour that is striking. Dr Jekyll's was a kindly man with a solid reputation who occasionally transformed into Mr Hyde, “a sociopath — evil, self-indulgent, and utterly uncaring to anyone but himself” (Wikipedia).
Rodney Hide does not fall into that category. He strikes me as a good sort with a vast amount of fairness and good sense.
However, when he was Minister of Local Government he was the architect of the Super City. Enough said. He was also the Minister dealing with the Kaipara problem, and the fairness and good sense that we praise now were then nowhere to be seen.
He was Minister during the reckless days of Jack McKerchar and it was Rodney Hide who along with Lynn Provost, the Auditor-General, refused to take any action to rein in the excesses of the KDC. He was presented with endless complaints and legal submissions on a plate from ratepayers but he refused to take any action.
It was not just the failure to take action and stop the rort in its tracks that was the issue; by taking no action he gave Jack McKerchar credibility. The failure to act by the government was a tacit endorsement of McKerchar’s follies and a defence to all those who were challenging him.
If Rodney Hide had acted immediately then it would have been a completely different story.
The only reason that McKerchar was able to negotiate such a good settlement agreement and severance payment in 2011 is because the Auditor-General and Rodney Hide (and the National government) gave McKerchar their tacit support and put him in a strong bargaining position.
I have no doubt that the decisions that Rodney Hide took in those days did not represent his personal views. It is clear that John Key’s government would not allow any attack on his vision of local government, of which the prime foundation was the unaccountability of those feeding at the local government trough. And of course it was the Department of Internal Affairs whose task it was to ensure that the policy was implemented on every occasion. Rodney Hide just “obeyed orders”.
So, what was the comment that Rodney Hide made that triggered this memory bubble? In reply to Nicky Wagner’s comment he said:
She must have missed the memo explaining everyday people must make a living and pay taxes in the expectation that the Government will protect them from theves and bullies.
Here in Kaipara that is the expectation that we had. We thought the Minster and the Auditor-General would protect honest hard-working ratepayers from the thieves and bullies during the McKerchar/Tiller regime that were destroying our council. It didn’t happen. We were abandoned by Rodney Hide and Lynn Provost who allowed the pillagers to do their stuff, and then, when it was all over, they forced us to pay for all the losses.
LYN PROVOST GETS HER GONG 05.06.2017
Which brings me on to Lyn Provost.
I have written many words about Lyn Provost, our former Auditor-General and it is all bad. She may have done some good things during her term of office but, as far as I am concerned, she betrayed the people of Kaipara.
As watchdog of the local government sector and as auditor of the KDC she was grossly negligent in her failure to notice all the vast amouny of evidence that pointed to illegalities and irregularites in the KDC’s operations. She turned a blind eye to everything that was going on.
Then, when she was presented with incontrovertible evidence of rampant unlawfulness, she chose to ignore it. Jack McKerchar couldn’t believe it when she failed to act. He used her implicit endorsement to bludgeon his opponents.
I have a strong memory of her in Mangawhai at the Golf Club apologising to ratepayers for failing to act, but stating blatantly and defiantly that she was not going to accept responsibility for the failure of others.
In doing so she confirmed that her ignorance of the law was not only in the sphere of local government but extended to basic agency law. The boss is responsible for the errors of the staff. But perhaps she was referring to the more important National government principle that trough feeders are never held accountable.
Despite her responsibility for tens of millions of dollars of losses for Kaipara she was appointed to be a judge when Peter Winder’s firm awarded a prize for excellence to Peter Winder and his two commissioner mates. They reciprocated by delaying the action for negligence against their mate Lyn so that she could plead “out of time” and escape without any finding of negligence, a modest financial sop to ratepayers, and not even the proverbial slap on the wrist.
Somewhat surprisingly she found no evidence of fraud in the KDC debacle even though all the hallmarks of fraud were there, based on her own website's guide to fraud. The complete lack of documentation for large financial payments did not trigger any concern.
She even skited when completing her term about allegations of fraud:
During my time as Auditor-General, I have seen an increase in these accusations.
None of my inquiries has upheld those accusations.
She was the watchdog and the auditor for Rodney and yet she saw nothing, whilst on the same set of facts Fitzgerald J in the High Court produced over two hundred pages of reasons why there was bribery and corruption that met the high level of proof under the Crimes Act.
Coincidentally, her successor as Auditor-General, Martin Matthews, has been stood down because he of his concerns over the way he dealt with a massive fraud at the Ministry of Transport.
So she has got a gong. What is the a basis for giving a gong to a woman who has single-handedly destroyed the reputation of the Office of Auditor-General and made a mockery of its supposed dual roles as watch-dog and auditor?
Here we go. The award is for:
Her work in that critical watchdog role has seen her honoured, with the citation noting her role in improving New Zealand’s accounting and auditing reputation.
That’s what you get when you are a trough-feeder. It doesn’t matter how badly you perform, you can always rely on your mates at the trough to look after you.
But, in spite of that, nothing will budge from my mind the view of Lyn Provost with her head in the clouds:
Should have gone to Specsavers!
GORILLAS IN THE MIST 04.06.2017
Do you remember this cartoon?
"I'm here to consult"
And this one:
Last year the then Associate Minister of Local Government, Louise Upston, appointed two eight hundred pound gorillas to the KDC in the form of a Crown Manager and a Crown Observer. They were put there to ensure that the policies of the government were adhered to along the well-worn track followed by the commissioners. They were also entrusted with ensuring that the persecution of whistle-blowing ratepayers through legal proceedings was continued.
By now everyone knows that Peter Winder, the Crown Manager, was gone by lunchtime with the Associate Minister formally “terminating” him on 19 April.
In fact we have now learned from official information requests that he was actually gone before breakfast.
According to the Associate Minister, Peter Winder stood down as Crown Manager on 24 February 2017 with immediate effect.
Peter Winder - gone before breakfast
But, as they say on TV adverts, “Wait, there’s more”.
Those same requests revealed that the other gorilla, the Crown Observer, has long gone.
On 1 March 2017 Mayor Gent asked the Associate Minister to “disestablish the Crown Observer role”. Apparently Barry Harris’ other commitments were too great. Mayor Gent did not request a replacement.
No official announcement has been made. Perhaps losing two gorillas in the same month was not a good look.
DOES GREG GENT’S COUNCIL ENDORSE THE TACTICS OF THE KDC’S LAWYERS? 04.06.2017
In an earlier post I reported that at the High Court hearing on 30 May David Goddard QC addressed the issue of the unlawful Crown Manager and confirmed to the High Court that KDC’s chief executive, Graham Sibery, had confirmed KDC’s instructions to Simpson Grierson (and therefore David Goddard) and to Brookfields (David Neutze) to act on its behalf.
A chief executive generally actions the decisions made by the elected councillors. But the chief executive also has delegated authority to deal with some matters within his own discretion. That may include defending legal actions on behalf of the council.
Whilst lawyers are entitled to use every trick in the book to defend their client in court, the client always has the final say on what legal tactics or defences should be employed.
Local authorities must exercise their powers for the benefit of the district (section 12(4) LGA). That means for the benefit of ratepayers.
One of three purposes of the Rating Act (section 3 LGRA) is to provide local authorities with flexible powers to set rates to fund local government activities. That makes good sense.
The other two purposes relate to the rights of ratepayers. To ensure that rates are set in accordance with decisions that are made in a transparent and consultative manner. And to provide for processes and information to enable ratepayers to identify and understand their liability for rates.
Why then is the KDC under Mayor Gent endorsing legal tactics and defences that are clearly not in the best interests of ratepayers?
Counsel for the KDC argued at great length that the multiple failures to comply with the strict requirements of the LGRA were minor errors and should be ignored or validated by the Court. They are the same sort of errors that resulted in the Kaipara Validation Bill, and yet the KDC and NRC is still perpetuating those errors.
The High Court called the errors “substantial and grave” but the KDC and NRC still argued that the Court should ignore them because any adverse declaration would result in adverse administrative and financial consequences for the councils.
The KDC ignores any allegation that its rates are unlawful. It trots out the section 60 argument every time. In the High Court it argued that ratepayers do not have any right to defend a legal action for the recovery of rates, even though those rates are blatantly unlawful.
It argues that its rates are lawful until the High Court decides otherwise and that ratepayers’ only course of action is to file judicial review proceedings in the High Court. And if that happens the KDC will employ the most expensive lawyers in the land (paid for by ratepayers) to block any legal action.
The KDC is acting contrary to the purposes of the LGA and the LGRA and is denying the fundamental right of ratepayers to challenge the validity of rates and to defend an action in court for recovery of rates.
The KDC under Greg Gent is stubbornly refusing to amend its rating documents so that they are legally compliant. And with the new rating year commencing on 1 July the KDC and the NRC are both is risking yet another year of unlawful rates.
One of the issues before the High Court is the provision that the KDC has adopted that any payment of rates is used to pay oldest debts first. That provision is completely unlawful. It may be acceptable in commercial practice but the payment of rates is governed by strict statutory rules.
A ratepayer is entitled under the LGRA to pay each rates instalment as it falls due, and if that instalment is paid by the due date then no instalment penalty is incurred. That applies irrespective of the fact that the ratepayer may be in arrears. That is a statutory right.
The KDC does not allow that. It deducts the payment from the arrears and then charges a penalty on the instalment.
I have challenged the KDC on this point time and time again but it refuses to budge. No doubt it is relaying on s 60 and the legal presumption that its rating policies are valid until the High Court decides otherwise. But it is only a matterof time before Emperor’s clothes drop away and the KDC’s arrogant and stubborn defence of the indefensible is exposed in all its nakedness. And that means more massive bills for validating unlawful rates.
I agree with those who suggest to me that the new council under Greg Gent has the potential to get Kaipara back on track. But if that is to happen the new council has to tackle the rating issues and the bitterness that they have caused in the community. It has to look at the situation afresh. It needs to cast aside the political advice coming from Wellington. It needs to take a really good look at the advice that it is getting from its lawyers and decide whether a war of attrition in the courts is really the way forward.
If I was Mayor Gent or one of the elected councillors I would be ashamed of some of the arguments that legal counsel advanced on behalf of the KDC. They amounted to a rejection of the rule of law, and the denial of the common law and statutory rights of ratepayers.
And I am sure that if Greg Gent and his Councillors had been present at the hearing to hear those arguments put forward on their behalf, they might too have had some reservations about where their legal advisers are taking them.
REPORT ON THE HIGH COURT PROCEEDINGS 02.06.2017
Legal Eagle's full report on the High Court proceedings can be seen here.
YOU HAVE TO SMILE 02.06.2017
New Zealand is so small that the same actors seem to appear in every show. It is the same on the legal stage. In the latest unlawful saga to embroil the KDC, the lawfulness of Peter Winder’s status and actions as Crown Manager is being challenged.
At the same time Peter Winder is acting on behalf of hotel interests and threatening legal action against Auckland City’s new bed tax. The NZ Herald reports that according to Winder - whom it dubs as “a local government expert” – that there is a high chance of a legal challenge if the council adopts the new levy.
The levy was adopted on 1 June. So we await the legal challenge.
According to the NZ Herald Mayor Goff is convinced that he has the law on his side and has taken advice from the council’s own legal team, wait for it, “the law firm Simpson Grierson and David Goddard QC”.
That of course is the same legal team that has been acting for the KDC and appeared at the hearing of the MRRA illegal rates claim in the High Court a couple of days ago.
It is also the same legal team that Peter Winder was purportedly instructing on behalf of the KDC as its Crown Manager.
One has to smile. Peter Winder is so vehemently challenging the lawfulness of a single Auckland City rate when as a commissioner in Kaipara he was responsible for validating a voluminous amounts of unlawful rates stretching over six years.
Not only that, the High Court has already found that the KDC under Peter Winder and his fellow commissioners acted unlawfully in assessing the rates of the NRC, in adding penalties to the rates of the NRC, and in recovering rates through mortgagees and the court on behalf of the NRC.
Following the recent hearing, the High Court is now deciding whether all the rates of the KDC during the term of Peter Winder were unlawful because of the defective rates assessment notices and rates invoices. If the Court decides that they are unlawful then it looks as if another validation act is the only way out.
But hey, who cares. The judges are kept in their jobs and the lawyers and consultants make truckloads of money. No one in the councils is responsible for any illegalities or wasting money on lawyers. After all it is the ratepayers that foot all the bills, and that is how it is in our 21st century feudal system.
WHO IS JACK MCKERCHAR? 01.06.2017
In this week’s Mangawhai Focus Ed Said comments that a couple of people he asked did not know who Jack McKerchar was. He summarises the situation with the comment:
Few new residents in the past five years know nor care.
He goes on to suggest that McKerchar may have been fully entitled to his severance pay. He appears to claim that there was no lack of integrity on McKerchar's part but that in fact McKerchar had used his nous in negotiating a settlement agreement in his own favour.
Ed said concludes:
Let’s just consider the chapter closed and move on to better things.
It is true that many of the new people in town, and in fact many of the new Councillors, do not know the name McKerchar or the dreadful things that went on under McKerchar’s regime.
Many of people that Ed Said refers to would not know Kaipara has a massive debt that is one of the largest in the country based on population. It will be around for generations. It will never be paid off and, when interest rates rise, rates will have to soar to meet it.
The debt is probably $40 million larger than it should be because of Jack McKerchar and all the others involved in the Kaipara rort.
Those people Ed Said refers to would not know that the KDC failed in its legal obligations to consult with ratepayers before embarking on the EcoCare scheme and, as a result, the High Court declared that the EcoCare project was unlawful, as was the loan raised to finance it. And that status of being unlawful still stands.
They would not know that the High Court and the Court of Appeal accepted that all rates set to meet the costs of EcoCare were unlawful because they were charged for an unlawful purpose. But, to protect the interest of the banks, both Courts stretched and twisted the law to the limit. They held that because the KDC was obliged to pay the EcoCare debt as a “protected transaction” under the LGA, it was implicit that the ratepayers were obliged to fund that debt even though the rates were technically unlawful.
One of the reasons people don’t know about Jack McKerchar and the debt is because local newspapers such as the Mangawhai Focus have done little to expose the illegalities and incompetence that have blighted this community. The Focus has always taken a pro-Council approach irrespective of its incompetence and blatant irregularities, and has reported negatively on those who have tried to bring some legal accountability to Kaipara.
Once the incompetence and the illegalities were finally exposed the local papers expressed little concern and led the movement to bury the past and move on. They are still at it.
Ed Said also takes a swipe at the commissioners and all their advisers for not picking up the full and final settlement of all claims provision in McKerchar’s settlement agreement. (That would be his first criticism of the commissioners.) The point is that it was all window dressing. A sop to the masses. There never was any show of suing McKerchar successfully. The commissioners knew that and just went through the motions. In fact Honest John never bothered to front as a witness even though he was the only one who had the information and reports from McKerchar’s contemporaries. There were massive gaps in the evidence and McKerchar was allowed to get away with unrebutted claims. Some of the claim was filed outside the limitation period.
The commissioners did the same with the proceedings against the Auditor-General. They waited until the limitation period had expired before filing proceedings, and of course the Auditor-General defended the action on that very ground. The KDC got a measly $5 million in a confidential settlement. If the case had been handled appropriately the award of damages could have been huge and the KDC debt would now be very much smaller.
And why was the case not handled appropriately? Because the government, which directed the commissioners, did not want the Auditor-General to be held responsible. In local government in New Zealand the establishment protects its own. There is no accountability.
The Auditor-General had the power under the LGA to pursue the councillors who were directly responsible for the illegal rates and the unlawful EcoCare scheme and debt. But she declined to do so. The commissioners decided not to pursue Bell Gully the KDC’s lawyers, nor Beca the KDC consultants who were responsible for much of the EcoCare scheme. It was Beca that dreamt up the secret doubling of costs on the scheme.
Imagine what the debt would have been today if those responsible for the Kaipara debacle had been held to account by someone who really cared about Kaipara.
“And moving right along ….” That is the heading for Ed Said’s comments. He is right. That is what we all have to do in life. The sad thing is that in Kaipara, as we try to move ahead, we still have a Council that is perpetuating the errors of the past. We also have a massive debt (part of it still unlawful) that will sit on our shoulders for years.
Perhaps we need to erect a Memorial Plaque in all the communities in Kaipara to name and shame all those who by their incompetence, negligence or indifference imposed such a financial burden on the people of Kaipara. It might serve as a potent reminder to all the people of the district, and especially to newcomers who are unaware of the events, of how the errors of the past can burden us for generations.
And, when the burden of the debt becomes hard to bear, people would know who to blame
Everyone would then know who Jack McKerchar was.
WHO IS AT THE TILLER? 01.06.2017
During the lawless roller-coaster of the Tiller regime I used to ask if anyone was at the tiller of the good ship Kaipara. The French have a saying which translated means: The more things change the more they stay the same.
We now have Greg Gent in charge of the ship, except for one specific area.
Remember how the Crown Manager Peter Winder was appointed by the then Associate Minister of Local Government Louise Upston to take all responsibility for decision-making and actions in respect of historic rating issues and relevant legal proceedings.
The newly elected Council was precluded by the Minister from having any role in those particular matters.
Following an inquiry from Commissioner Booth Associate Minister Upston advised him on 7 July 2016 as follows:
Newly-elected council members will not have a decision-making role in regard to legal actions within the Crown manger’s responsibilities.
That is a pretty clear statement of the situation. The problem is that there are serious doubts about the lawfulness of the appointment of the Crown Manager. In addition it is beyond doubt that the Associate Minister did not have the authority under the Local Government Act (LGA) to grant the Crown Manager the powers purportedly granted in his terms of reference..
Under the LGA a Crown Manager can only direct a local authority. The power of decision-making remains vested in the elected members. Although the elected members are obliged to comply with the directions of the Crown Manger they still have to balance this against their obligations under the LGA to act in the best interests of the Kaipara district.
There is clearly a conflict there. The Crown Manager is appointed by the Minister and acts under the directions of the Minister and the Department of Internal Affairs, which effectively runs local government in NZ. The Crown Manager‘s role is to make decisions in accordance with government policies and not the in the interests of ratepayers..
The other important issue is that, in granting certain powers of a local authority exclusively to the Crown Manage, Associate Minister Upston was limiting the powers of an elected council under the LGA to make decisions in respect of all matters. She had no lawful right to do that.
As mentioned in an earlier post, in November last year Legal Eagle formally challenged the legality of the appointment and the terms of reference of Peter Winder. That was followed by the Christmas break, John Key’s resignation, and a change of Minister and Associate Minister. There was no response to my challenge. However official information requests have revealed that on 24 February 2017 Peter Winder stood down as Crown Manager, effective immediately.
That was done in complete secrecy with no official announcement. It was not until nearly two months later on 19 April that the Associate Minister publicly announced the “withdrawal” of Peter Winder as Crown Manager.
We all have read about Mayor Gent’s reaction. He felt that he and other Councillors had been misled by the Associate Minister when she advised that the Crown Manager would be responsible for all historic rating issues.. He was absolutely right. The DIA had stuffed up hugely in respect of the appointment of Peter Winder and either did not have an understanding of very clear statutory provisions, or simply did not care that they were acting outside the law.
This legal shambles raises important constitutional considerations.
From October 2016 to 24 February 2017 Peter Winder was acting unlawfully as Crown Manager. During that time he made many decisions on behalf of the KDC in respect of the illegal rates proceedings before the High Court. All of those decisions of Peter Winder were unlawful.
He quit on 24 February. From that date onwards no one had the power to make any decisions at the KDC. Mayor Gent publicly made it clear during April and on 2 May that the and his Council were not making any decisions in that area.
Jump forward to the High Court hearing of 30 May 2017. David Goddard QC advised the Court that he was acting under instructions from KDC’s lawyers Simpson Grierson who had received advice from KDC's chief executive Graham Sibery that their instructions to act were confirmed.
Graham Sibery can only act on decisions made by the elected Council so it appears that, despite his protestations, Greg Gent and his Council have now accepted that that they are responsible for all future decision-making in respect of the historic rates and legal proceedings.
But that raises a few issue.
• If the Associate Minister purportedly limited the statutory power of the elected Council in respect of historic rates, has she taken action to restore those powers?
• What about the period from October 2016 to 24 February 2017 when Peter Winder was acting unlawfully? What is the legal status of all the decisions that he made?
• Who made all the decisions for the KDC in respect of the High Court proceedings from 24 February 2017 until the Council recently assumed responsibility?
The worrying thing is that in all situations it appears that the decisions relating to the litigation are being made by Wellington. The DIA was directing the Crown Manager, and presumably it stepped into the gap when he stood down. It is also clear from correspondence obtained under official information requests that the DIA is now advising Mayor Gent and his Council directly.
From a constitutional point of view, and if you like from a good governance point of view, that is totally unacceptable. Under the LGA a local authority has the following obligation:
12(4) A territorial authority must exercise its powers under this section wholly or principally for the benefit of its district.
Greg Gent stood for Council on the platform of good governance. He even has a "gong" for it. Now is the time to show that good governance and put the interests of the KDC and its ratepayers first.
Following the advice of the DIA with its political objectives will continue to deepen the divide in the district. Following aggressive and confrontational legal advice that has been found wanting time and time again will only achieve the objectives of lawyers, to promote confrontation and a bottomless source of legal fees.
Greg Gent and many others have painted the MRRA and supporting ratepayers as the enemy of the Council. He blames them for many of the problems facing the Council. He needs to step back and take a fresh look.
The MRRA and other ratepayers have fought for nearly ten years to have transparent democracy and the rule of law in Kaipara. They want a local authority that acts in the best interests of the people of the district, not its political masters in Wellington. A council that is completely open and transparent and complies with the law in all respects.
DIRTY TRICKS FROM THE GOVERNMENT 01.06.2017
A lot of things have happened in the Peter Winder saga since my last to post on that matter.
Official information requests were made to the KDC, the NRC, the Ministry of Local Government and the DIA for information relating to the appointment and termination of the appointment of Peter Winder. As expected all parties stone-walled to a certain extent. We extracted some useful information but we could not obtain two important bits of information.
• First, the DIA and the Ministry have failed to provide us with information relating to which Minister was responsible for the administration of the LGA at the relevant times. Under the LGA it is only that Minister who has the power to make appointments under the LGA. The power is vested in the Minister of Local Government but that power can be assigned to another Minister or delegated to an Associate Minister. But all such assignments and delegations are contained in a registers in accordance with the Cabinet Manual.
We suspect that he Associate Minister Louise Upston did not have the power to appoint Peter Winder on 7 July 2016. A copy of the appropriate register will confirm that one way or the other.
There is nothing secret about these registers. They are there so that the public or the press knows which Minister in responsible for each specific Act of parliament. The difficulty we have is that this a historic register which is only available for scrutiny on request.
The DIA is fully aware that it is obliged to produce the information but may simply refuse, in which case we are obliged to pursue the matter through the Ombudsman’s Office.
• Second, we sought a copy of the legal opinion on the legality of the appointment and terms of reference of the Crown Manager that was obtained by the Ministry and the DIA, presumably from the Crown Law Office.
Normally communications between client and lawyer are privileged and do not have to be revealed. However In law there is what is called implied waiver of legal privilege. That occurs when the person claiming privilege reveals that there is a legal opinion or advice, states the effects of that advice, and the legal consequences of that advice. Because they have released details about the infomation and is relying on its effects, it is considered only fair that the full advice is made available,
No response has been received to that request.
But there is another exception. Under the legislation (Section 9(1) of the Official Information Act) anyone refusing to supply information must consider whether the withholding of the information outweighs the public interest in making the information available. This is called the public interest test.
The DIA said that it applied the test and advised that the withholding of the information outweighed the public interest in disclosing it.
There are three very important legal issues here:
• The legality of the appointment of Peter Winder.
• The legality of his terms of reference.
• The lawfulness of decisions and actions taken by Peter Winder during his term of office.
If Peter Winder was unlawfully appointed to a statutory role in the KDC, and if he was given unlawful powers under his terms of reference then the people of Kaipara are entitled to know the truth. And to know what is the legal status of his decisions and actions.
The Ombudsman has a guide to the public interest test which can be seen here.
The guide sets out in great detail all of the considerations relating to the public interest test including such issues as transparency and accountability. It quotes comments of the Auditor-General in respect of transparency:
Impartiality and transparency in administration are essential to maintaining the integrity of the public sector. Where activities are paid for by public funds or are carried out in the public interest, Members of Parliament, the media, and the public will have high expectations. They expect people who work in the public sector to act impartially, without any possibility that they could be influenced by favouritism, or improper personal motives, or that public resources could be misused for private benefit.
In respect of accountability it quotes the Danks Committee:
Another argument often stressed is that access of citizens to official information is an essential factor in making sure that politicians and administrators are accountable for their actions. Secrecy is an impediment to accountability, when Parliament, press, and public cannot properly follow and scrutinise the actions of government or the advice given and options canvassed. Divisive suspicion of government and its advisors is encouraged when decisions are made without recognisably comprehensive public presentation of how they have been arrived at.
The problems in respect of Peter Winder’s appointment are serious. They were sufficiently grave for him to be withdrawn immediately. If they are that serious then the people of Kaipara have a right to know what they are.
The Minster has stated that all decisions made by Peter Winder are lawful and still stand because he acted in good faith. That cannot be. If he was appointed unlawfully and if his terms of reference were ultra vires then any actions taken by him were unlawful. Good faith is irrelevant
The DIA is stone-walling and putting up a smokescreen to disguise the truth and hide the fact that it has been incredibly incompetent. It has comprised the position of the Ministers and Associate Ministers and Mayor Gent and his councillors. It is trying to dodge accountability for its failures.
We have to remember that the DIA acts on the instructions of the government so ultimately the blame for the cover up must be placed at the door of the National Party Cabinet.
Third term arrogance? Total disregard tor transparency and accountability in the public service?
Make up your own mind.
MAYOR GENT AND HISTORIC RATING ISSUES 18 May 2017
Mayor Gent appears to have softened his approach to dealing with historic legal issues.
Having publicly stated that he would have nothing to do with the historic rating isues and legal proceedings, he has clearly changed tack and made comments on the McKerchar judgment, as reported in the Northern Advocate.
Mayor Gent was reported as saying that it was highly unlikely that the Council would appeal the decision.
Now that Peter Winder has gone it seems that the elected members will now be responsible for dealing with all historic legal issues including deciding whether the KDC will appeal the McKerchar decision.
The Associate Minister has promised help but cannot appoint anyone to make decisIons on the KDC's behalf.
MCKERCHAR ESCAPES 18.05.2017
Ratepayers will be seriously miffed that Jack McKerchar has finally escaped the hangman’s noose.
But for once, the Courts got it right.
Judge Colgan’s judgment leaves no doubt that the fatal mistake of the KDC was the settlement agreement between the KDC and McKerchar in 2011. McKerchar agreed to quit on payment of a nice tidy severance payment.
The KDC was so desperate to get rid of him they signed away all of their rights to sue him in future. A lot of the responsibility for that rests on the shoulders of Mayor Neil Tiller and the Deputy Mayor Julie Geange. Neil Tiller in particular had a dogged allegiance to Jack McKerchar that defies logic even though he was well aware of McKerchar's shortcomings and the damage that he was causing to Kaipara.
In defence of Neill Tiller and Julie Geange, they had no support from advisers or higher up the local government chain.
Bell Gully, the KDC’s lawyers, lacked a basic understanding of the LGA and in the time that I was battling Jack they appeared to give their blessing to even McKerchar’s most blatant illegalities.
The Auditor-General, both as watchdog for local government and the KDC’s auditor, not only turned a blind eye to the patent illegalities of McKerchar, but even refused to do anything about them when irrefutable legal submissions were presented to her on a plate.
The Minister of Local Government also dodged for cover time and time again.
Jack appeared to have the blessing of the government and the government agencies in his illegal rampage. That made it very hard for the elected council to accept that he was incompetent and to take any action to terminate his appointment.
I advised Julie Geange at the time to instruct an expert in employment law and go through the legal process of getting rid of McKerchar without having to pay him a cent. At that stage McKerchar had offered to quit but only if he was paid a king’s ransom. He knew innately how to beneft financially from any situation.
I don’t know who gave legal advice to the Mayor and Deputy Mayor about the deed of settlement but it was very poor advice, especially in hindsight. .
McKerchar alleged that he was pursued in court for political reasons. He is probably right. The legal case against him was poor because of the deed of settlement. Even Mayor Gent now says:
"It's a challenge to overturn something which is signed as full and final settlement." (Northern Advocate)
I suspect that everyone knew what the outcome would be. The DIA, which controlled the commissioners, no doubt agreed to the proceedings to appease the plebs. The cost was irrelevant as it was coming out of ratepayers’ pockets anyway.
Judge Colgan refrains from openly criticising the commissioners' conduct of the case but it is clear from his comments that it was conducted somewhat casually, to be generous, with many legal issues being left in a vacuum.
One gets the feeling that the commissioners simply went through the motions, and John Robertson appears to have taken the money and run. He was the prime driver and gatherer of evidence and, as the Court remarked, he failed to front for the hearing leaving massive gaps in the evidence.
The failure to file proceedings in time to recover penalties was nothing more than gross negligence. It harks back to the claim against the Auditor-General when she escaped liability because of the failure of the commissioners to file proceeding within the limitation period.
The real villains of the piece are those who allowed all this to happen. They gave McKerchar carte blanche to perform his mischief and failed in their obligations to rein him in. First and foremost the fault lies with the Auditor General and Audit NZ. Their incompetence was monumental.
Council’s lawyers and advisers also bear the blame for inept advice.
But the real bad boys are those in government and government agencies that allow local authorities to run out of control and to flout the law.
The government was fully aware of what was going on in Kaipara and the persistent illegalities (because I and many others advised them) but they did nothing. In so doing they gave their tacit approval to McKerchar. They made him untouchable.
And even when McKerchar was finally found out, it was the government and its agencies that did everything that it could to ensure that none of “their boys” were left to carry the can. They pulled the strings of the commissioners to ensure that legal liability vanished like a globule of dropped mercury.
All too predictable. But they don't care. Its only ratepayers’ money and the perpetrators are never going to be held responsible under our present local government system.
And the irony is that those who have been the victims of serious injustices will do nothing about it and continue to vote for those who have rorted them and got away with it.
SUMMARY OF THE MCKERCHAR JUDGMENT 18.05.2017
Legal Eagle's summary of the McKerchar judgment can be seen here.
MCKERCHAR ESCAPES LIABILITY 17.05.2017
Former KDC chief executive, Jack McKerchar, has escaped any legal liability for his part in the KDC EcoCare debacle.
The Employment Court has struck out an action for damages brought by the KDC.
The report in the Northern Advocate can be seen here.
The full Court judgment is here.
COMMENTS TO FOLLOW
DID ANNE TOLLEY REFUSE TO SACK WINDER? 10.05.2017
The government has acknowledged that there were serious concerns over the appointment of Peter Winder as Crown Manager for the KDC. The concerns were so serious that he was terminated immediately. That suggests very strongly that he was appointed unlawfully.
The reason appears to be that he was appointed by the Associate Minister of Local Government who does not have the power to make such an appointment. The administration of the Local Government Act (LGA), and the right to make Ministerial appointments, is vested in the Minister of Local Government pursuant to the delegations under the Cabinet Manual.
So, if that is the situation, and Louise Upston as Associate Minister of Local Government acted unlawfully in appointing Peter Winder, why did the current Associate Minister (Jacqui Dean) withdraw him? The LGA is quite clear that only the Minister has the statutory power to appoint or terminate the appointment of a Crown Manager.
Could it be that the Minister, Anne Tolley, simply refused to become part of the legal botch-up by the government and the subsequent subterfuge?
Minister of Local Government, Anne Tolley
Did she say "NO"?
Was it left to Jacqui Dean as Associate Minister to carry the can?.
The clever wording of the Associate Minister’s media statement and Gazette notice has the DIA's DNA all over it. The Associate Minister in the Gazette notice did not “terminate the appointment” of Peter Winder, which is the correct statutory wording. She merely “terminated Peter Winder as Crown Manager”. The word appointment was dropped, presumably on the basis that she had no power, as Associate Minister, to terminate his appointment. In any case, how can you terminate an appointment that was a nullity?
In the media statement the wording was even vaguer: she simply “withdrew” the Crown Manager. No mention of terminate or appointment.
The problem with that is that there is no power vested in any one under the LGA to “withdraw” a Crown Manager, and certainly the Associate Minister has no such power.
In short the so-called termination or withdrawal of the Crown Manager was simply an unlawful window-dressing artifice to try and cover up the fact that Peter Winder had never been lawfully appointed in the first place.
It is now over to the government and the DIA. Will it keep digging and bring in more white-wash and smoke and mirrors? Or ……..
Watch this space.
WILL THE NEW COUNCIL QUIT? 10.05.2017
Mayor Gent had been quite vocal about the way in which he and the newly elected councillors of the KDC were misled by the Minister of Local Government, Louise Upston. She indicated, as we all know, that the new council would not have to deal with the historic rating issues or legal proceedings. It could concentrate on the future with the Crown Manager assuming responsibility for historic rating issues.
In the Kaipara Lifestyler of 2 May 2017 and in the latest Mangawhai Focus (same paid adverts and not on line) Mayor Gent explains the problem from the new council’s perspective.
It is clear that the Associate Minister promised more than she could deliver under the law. The provisions of the Local Government Act (LGA) require a local authority to make ALL decisions on behalf of the authority. A Crown Manager and a Crown Observer may be appointed but they can only have the power to direct or the power to advise the elected council. They cannot have the power to make decisions on behalf of a local authority or to take actions on behalf of an authority. Those powers remain vested in the elected councillors.
The only exception is where a commission is appointed. In that case the commissioners step into the shoes of the elected councillors and assume all the powers, duties and obligations of the local authority.
The Associate Minister got it completely wrong in both appointing the Crown Manager (only the Minister can do that) and in giving Peter Winder powers that were not available under the LGA. Clearly she was badly advised by the experts at the Department of Internal Affairs (DIA) which administers the Ministry of Local Government.
There is absolutely no doubt that, in legal terms, they seriously stuffed up. The appointment of the Peter Winder was unlawful, as were his powers under his terms of reference. That means all decisions and actions made and taken by him were unlawful.
In addition the validity of last October’s election may be in doubt because the government completely misrepresented to all candidates the nature of the role that they would have in the hybrid KDC.
The end result is very unhappy Mayor and councillors, and a legal botch-up of the highest order.
Those of us who have battled the KDC and its illegalities for many years in an attempt to get the rule of law and true democracy returned to Kaipara are allowed a wry smile at these unfolding events. The DIA is behind all the problems that have been caused by the Tiller/McKerchar Council, and Honest John and his compadres. It is the DIA that has allowed its mates on the local government gravy train to escape any liability for their unlawful actions. And it is the DIA that has dumped all liability for the unlawful debts of the KDC on to the innocent ratepayers of the Kaipara.
It is nice to see, for a change, that the DIA, in its arrogance and incompetence, is not, this time, dealing to innocent ratepayers, but has scored an own goal by seriously misleading those who are on board the same local government gravy train.
Mayor Gent says that it is an issue that the government should deal with and is waiting to see how the Minister will honour the pledge that was given to councillors before the election. He states ominously that the councillors will then decide if the future support offered by the Minister is acceptable to them.
That sounds very much as if the Mayor councillors may well quit if the government does not come to the party. That will be interesting because, as I have said earlier, the LGA simply does not allow a Crown Manager or any other Ministerial appointee to have the powers that Louise Upston promised.
That is unless the government changes the law, or unless commissioners are reappointed.
It will be interesting to see how the government tries to wriggle out of this one.
FIRE RULES: SOME ADVICE FOR FREE 04.05,2017
Here’s some advice to Mayor Gent and his council – for free. Dump the Fire Service rules and stop all the nonsense about water tanks for firefighting.
The KDC has turned down my request for a copy of the legal advice that states that the Fire Service Code of Practice was “appropriately incorporated” into the District Plan which became operative in 2013.
It’s all very well quoting a legal opinion that supports the KDC’s actions but according to the principles of good governance, transparency and simple fairness it is only right that that document should be made publicly available.
The response from the KDC is that it is “legally privileged and the matters will be covered off in the Section 42A report which is nearing completion, and will be released before the Hearing, which will be held later this year”.
(The formal Hearing with an RMA Commissioner is to be held to consider the submissions on Plan Change 4)
“Covered off”? I suspect that means that it will be quoted as some authority, but the legal arguments themselves will not be exposed to any scrutiny.
Why claim legal privilege if there is nothing to hide? If Greg Gent and his council genuinely believe that the inclusion of the fire rules in the District Plan was lawful then why don’t they come out and tell us why? What are they hiding?
I am totally opposed to what has happened. I have some very strong legal arguments to support that view and I am quite happy to air them publicly and have them scrutinised.
To start with, the Code of Practice under the Fire Service Act can only set standards for water supply volume and pressure for water mains. Anything else is outside the lawful scope of the Code of Practice.
Therefore the inclusion of “recommendations” in respect to water supply in non-mains situations is unlawful.
In addition those recommendations are not standards.
The KDC is free to include fire rules in its District Plan. However, the inclusion by reference of purported standards in the Code of Practice, which are ultra vires and a nullity, is unlawful in itself.
Those rules were incorporated because of poor decision-making by the KDC, bullying by the Fire Service, shonky legal advice, and a massive conflict of interest by the KDC’s consultant, Beca, which was acting for both the Fire Service and the KDC.
Greg Gent’s council has put its head in the sand and refused to look at the absurdity of the situation and take positive action. It is digging itself deeper into the mire and pouring more and more money into a bottomless pit of lawyers, consultants, hearings and commissioners, all of which suck the life blood our of local authorities.
The Fire Service pulled a nice swifty. It acknowledges that the fire rules in the Code of Practice are not mandatory, but by pressuring the KDC to incorporate them in its District Plan they automatically became mandatory
So those rules sit now in the District Plan as mandatory standards. That suggests that they are best practice specifications. But In reality they are a bunch of requirements that have virtually no relevance to the Kaipara district and do absolutely nothing to aid firefighting in the district.
Their irrelevance is borne out by the willingness of the Fire Service to dispense with the so-called mandatory standards as it sees fit. Most of the extreme rules have now been unofficially dispensed with and the Fire Service is enforcing just a few illogical rules to cling on to its vestiges of power.
Mayor Gent and his council should take a drive around new subdivisions in Mangawhai and see for themselves the eyesores created and the sheer craziness of the rules. Firefighting tanks within a couple of metres of houses, and in some instances even built under the house. All contrary to the fundamental principles of firefighting.
Has anyone in the KDC ever wondered how you can build a modern house on a 600 m2 section with garaging, outbuilding, drives and water tanks, and more water tanks, and comply with site coverage and impermeable areas requirements?
How can you bury a water tank when the water table is just a couple of metres below the surface?
And how is it that the Fire Service has become a de facto consent authority under the RMA? Consents are issued by the KDC, but somehow the Fire Service has assumed the right to decide on the conditions of consent in respect of compliance with the fire rules.
There is no legal authority for such a role. The Fire Service is a statutory authority and it has no power under the Fire Service Act to act as a de facto consent authority under the RMA or otherwise. That role is completely ultra vires and unlawful.
The biggest farce is that the Fire Service Act is being repealed on 1 July 2017 and replaced by the Fire and Emergency Service Bill which will bring in huge changes and a new code of practice. (See here for details)
My advice to the KDC is to withdraw Plan Change 4 and cancel any hearing. Tell the Fire Service to get a legal opinion to justify its role in Kaipara. Then ignore all the silly rules
The world will not come to an end. Kaipara operated for years without the rules. Other local authorities do not have them.
As for ignoring the District Plan, that is precisely what has been happening over the last year or so with the so-called rules being discarded at the discretion of the Fire Service. The KDC can now use its discretion as consent authority, sensibly, to ignore the rules.
When the new Act has settled in the Council can then reconsider its position and obligations under the new legislation.
So there you go, free legal and practical advice that would result in a sane and sensible outcome and would save the Council hundreds of thousands of dollars in pointless bureaucratic processes. The advice is free and it is not privileged in any way. It is open for public scrutiny, as it should be in a free and democratic society.
MAYOR GENT POINTS THE FINGER 28.04.2016
Kaipara Mayor Greg Gent has cried ”Foul” over the way that he and Deputy Mayor Peter Wethey have been treated by the Associate Minister of Local Government, the Department of Internal Affairs, and the government.
He claims in the Northern Advocate that the government indicated prior to the local election last year that it would take care of the past rating issues through the Crown Manager whilst the newly elected council could concentrate on the future. He suggests that he was misled:
“You could argue that there has been a breach of contract by the Minister”
There was no contract, at least not that I know of, but there is little doubt that Greg Gent and Peter Wethey were seriously misled by Associate Minister Louise Upston. They both made it quite clear publicly before the election that they were only standing on the basis that the Crown Manager would take sole responsibility for historic rating issues, as promised by the Associate Minister.
It now turns out that the appointment of the Crown Manager was ultra vires. That means that the Associate Minister did not have the power to appoint a Crown Manager with the powers that she purported to give him. The Local Government Act is very specific about who can appoint a Crown Manager and the powers that can be granted.
Louis Upston is probably innocent as well. The LGA and her Ministry is advised by the Department of Internal Affairs (DIA) which offers advice on policy and legal advice. Someone in the Department stuffed up in a big way and has now left Louise Upston, Jacqui Dean (the new Associate Minister), Greg Gent and Peter Wethey high and dry.
Mind you, they were all warned that the appointment of Peter Winder as Crown Manager was unlawful. In a post on kaiparaconcerns (scroll down to ELEPHANT IN THE ROOM 10.09.2016) I warned that the appointment of Peter Winder was unlawful.
On 2 November 2016 I also advised the government that the appointment of the Crown Manager was ultra vires. I sent detailed legal submissions to the Minister of Local Government, the Associate Minister of Local Government, to the Prime Minister, John Key and to all the members of the Cabinet.
I finally received a response on the day that the Jacqui Dean announced that Peter Winder was terminated.
During that time, according to Greg Gent’s comments, the DIA obtained a legal opinion which concluded that the appointment of the Crown Manager was unlawful. But, apparently no one told Greg Gent and Peter Wethey what was going on. They were left in ignorance. But, and more importantly, the Crown Manager was allowed to carry on for several months acting unlawfully and making decisions on behalf of the KDC that are now, in law, a nullity.
The ultra vires appointment of Peter Winder was a legal disaster, but the failure to take immediate action last October and allowing him to make unlawful decisions has made the situation almost irrecoverable.
Of course the new Associate Minister Jacqui Dean puts a spin on the whole thing. Wary of the shonky advice received from her advisers in the past, she puts the poisoned chalice down and states, no doubt through clenched teeth:
“I am advised that past directions of the Crown Manager stand because they were made in good faith.”
Jacqui Dean is a smart cookie. She was deputy mayor of the Waitaki District Council. Her husband is a lawyer. She knows that she has been betrayed by her advisers. But for the sake of her political future she is obliged to continue to mouth the weasel words that they churn out to cover up their ineptitude.
Note how the comment relates solely to “past directions” of the Crown Manager. That is carefully crafted. The problem is that the Crown Manager was given the power to make decisions and to take actions on behalf of the KDC totally independent of the council. Those powers were ultra vires. The only legal power available to the Crown Manager was to “direct” the council to take action, with the council making all the decisions and taking all the actions. However, the Crown Manager did not direct the council in any way, so the “past directions” are valid, because there weren’t any. But, and this is what the statement cleverly glosses over, what of all the ultra vires independent decisions and actions that the Crown Manager took without any reference to the council?
In respect of the good faith claim, Jacqui Dean knows as well as any first year law student that ultra vires actions, that is actions taken outside the scope of statutory powers, are a complete nullity. They can have no legal affect at all.
Acting in good faith, that is mistakenly believing one had the legal power to act, is completely irrelevant. Ultra vires acts cannot be validated by ignorance.
This falsification of the legal situation by the Associate Minister on the advice of her advisers is an utter disgrace.
It is dirty tricks of the first order and illustrates the depths to which the government will go to cover up its ineptitude.
Jacqui Dean has promised help to Greg Gent and Peter Wethey to sort out the mess. The reality is that the LGA does not allow her to split the decision-making of a local authority. Either the council has full powers, with advice from a Crown Observer and directions from a Crown Manager, or the Minister appoints a Commission which assumes the full powers of an elected council. Back to the future.
The irony of all this is that in 2012 Greg Gent and his review team were appointed by the Minister to review the out of control KDC. That appointment was also ultra vires. At that time a review team could only be appointed following a protracted process. The Minister ignored that and appointed the review team anyway. When I challenged the appointment as being ultra vires the response was that the KDC had requested the appointment and, in any case the law was in the process of being changed.
Requesting the Minister to act does not validate ultra vires powers, and we all know that the law in force at the time of the action is the current law.
The Minister took no action on that occasion to rectify that situation. Greg Gent knew at the time of the allegation that the appointment of the review team was ultra vires but proceeded to act and make decisions on that basis.
It appears that the wheel has come full circle.
Skeletons don't go away
CROWN MANAGER TERMINATED 20.04.2017
Peter Winder, the Crown Manager for the KDC has been terminated.
That is the delightful phraseology of the formal notice in the Gazette.
What the Associate Minister of Local Government meant to say is that the appointment of Peter Winder as Crown Manager for Kaipara has been terminated, which is the correct terminology under the LGA. But she won’t use “termination” in relation to “appointment” because in fact Peter Winder was never legally appointed. You can’t legally terminate something that never legally happened.
The Associate Minister uses the same delicate phraseology in her Media Statement of 19 April when she states that the Crown Manager has been “withdrawn”.
Gone by lunchtime
Back in November last year, Legal Eagle posted on this website that the appointment of Peter Winder as Crown Manager was unlawful, as were his terms of reference. I made detailed legal submissions to the Minister and Associate Minister. Nothing happened for some time with the change of Minister and Associate Minister when Bill English became leader of the government. However, recent prompts for a response, with the last on 18 April, resulted in the Associate Minister’s Media Statement the following day.
The Media Statement is a fine example of political duplicity.
The Ministry of Local Government and the Department of Internal Affairs, which runs local government in New Zealand, would have obtained a legal opinion to examine the allegations that I had made.
That opinion would have confirmed my submissions to be correct because the terms of reference were so blatantly in breach of the Minister’s powers under the LGA.
The problem facing the Ministry and the Department was that, because of his ultra vires terms of reference, Peter Winder had acted unlawfully as Crown Manager and made unlawful decisions, and taken unlawful actions on behalf of the KDC. These relate to instructing legal counsel in respect of the judicial review proceedings in the High Court and in respect of the appeal to the High Court in respect of the District Court claim by the KDC against Bruce and Heather Rogan for arrears of KDC and NRC rates.
The consequence of the unlawful appointment is that legal counsel were not lawfully instructed by the KDC and they have been acting, effectively, without any authority from the KDC.
The ramifications of this abuse of legal process has yet to be worked out.
The only way that the unlawful decisions and acts of the Crown Manager could be legalised retrospectively is through Parliament enacting validating legislation. But in an election year, with Winston hovering with his axe in hand, that is unlikely to happen.
The only way out of the mess is for the government to try and bluff its way out of it by minimising what has happened. And that is what it has done.
The Associate Minister suggests that the action in withdrawing the Crown Manager was in response to “an evaluation of assistance to the Council” when in fact it was direct result of Legal Eagle’s submissions on the matter.
Note that there is no mention of illegalities in the Media Statement but a reference to “technical uncertainties” and “potential technical flaws”. No reference to fundamental and blatant breaches of the law.
But the biggest white-wash is in respect of the effect of the breaches of the LGA. The Associate Minister refers to the “potential technical flaws” and states:
This does not bring into question prior actions of the Crown Manager, but if the role continued there would be uncertainty about the legality of future actions.
That is patently wrong. Why would such technical flaws affect the legality of future actions but not past actions?
The truth is that every action of the Crown Manager was unlawful and no dissimulation by the Associate Minister will change that. End of story.
This is a legal mess of the highest order.
As stated, the ramifications for the High Court legal actions are complex and that has to be sorted out. But it is clear that the KDC is not responsible for any legal costs incurred by the Crown Manager in respect of the pending legal cases because he was acting ostensibly for the KDC but without any legal authority. At first blush it would appear that the Crown Manager is personally responsible for those costs, but he may be able to recover those costs from the DIA because of its negligence in appointing him on an unlawful basis.
There is a provision in the LGA (section 258Y) that the Crown Manager is not liable for any acts done by him, but those acts have to be done in the exercise of his powers as a Ministerial appointee. However those powers were ultra vires and a nullity in law. Section 258Y goes on to state that the protection only relates to acts done in “directing a local authority to act”. Peter Winder did not do that. He made decisions and acted completely independently of the KDC.
The remuneration for the Crown Manager is paid by the Crown and then recovered from the KDC as a debt owing. No doubt the KDC has paid the invoices that it has received from the Crown. However, because the Crown Manager’s appointment and terms of reference were unlawful, the KDC is entitled to a refund from the Crown of all monies paid to Peter Winder.
The Associate Minister promises, somewhat vaguely, in the Media Statement to provide ongoing support to the KDC.
The problem that she faces is that her Ministry and the DIA misled the prospective candidates at the election last year into believing that under the sham semi-democracy, they would only be responsible for the future of Kaipara. The murky past, with all the illegalities, would fall within the domain of Peter Winder as Crown Manager.
The reality is that a Crown Manager cannot have such powers under the LGA. The elected members must make all decisions, and because a local authority is a body corporate with perpetual succession, the newly elected Council is responsible for all illegalities, past, present and future.
The Gent Council has now been dumped with managing the current legal actions against the Rogans and other ratepayers and defending the judicial review proceedings of the MRRA. So far the commissioners and Peter Winder as Crown Manager have acted at the behest of the DIA which appears to be driven by the desire to crush the rule of law in Kaipara and place the KDC outside the reach of the law. The Gent Council will now have to instruct the KDC’s solicitors in preparation for the hearing on 30 May. What those instructions are will give us clear indication of where the new Council is going and what we can expect from it in the future.
There is no way that the new Council can shirk from its new-found responsibilities. The elected members have every right to feel peeved at the gross mismanagement of the whole business by the Ministry and the DIA, but the reality is that there is nothing in the lawful armoury of the Minister under the LGA that can help them. Except, of course the appointment of commissioners.
It will be interesting to see how the Ministry and the DIA will conjure up some assistance for the KDC that is within the law.
In the meantime, the Associate Minister’s failure to fully face up to the unlawfulness of the Ministry’s actions in appointing the Crown Manager, and the gravity of the resulting situation, leaves everything in legal limbo. Once again, as the government ducks for cover, it may be up to ratepayers to seek help from the courts to ensure that the rule of law is still relevant in Kaipara.
AUDITOR-GENERAL WARNS OVER UNLAWFUL RATES 17.04.2015
Duffy J’s declarations of unlawfulness (see earlier post) have drawn little response from local authorities. They tend to sweep such issues under their oversize and somewhat bumpy carpets
However, the new Auditor-General, the recently appointed Martin Matthews, has highlighted his concerns over the effect of the ruling of Duffy J and the widespread impact it will have on the validity of local authority rates in New Zealand.
The Auditor-General’s comments are to be found in the report just tabled in Parliament, Local government: Results of the 2015/16 audits. That is, audits of all the local authorities in New Zealand. The Overview can be seen here, the summary of the report can be seen here, and the full report here
A special part of the full report is dedicated to comments about the High Court judicial review of the rates of the KDC and the NRC. It can be found in Part 5 – Rates issues at page 23.
The report is timely. The Gent council appears to have inherited certain attitudes from the commissioners in respect of unlawful rates, rates strikers, and the obligation to pay rates and one would hope that the warnings from the Auditor-General would bring about a complete re-think of attitudes.
The view of the Mayor and some of the current Councillors suggests that ratepayers have an absolute legal obligation to pay rates; that local authorities are entitled to rely on rates being paid to meet their obligations such as roading and other expenditure. If ratepayers withhold their rates then other ratepayers will be obliged, unfairly, to make up the difference.
That is not the situation. Local authorities do have the power to set, assess and collect rates to meet their commitments. However, Parliament has laid down certain rating procedures that must be complied with to ensure that rates are set and assessed incompliance with the law. Both Parliament and the courts recognise that the charging of rates is akin to levying coercive taxes and therefore absolute compliance with the law is required.
In short, ratepayers are obliged to pay their rates, but only if the local authority complies with the law and sets and assesses the rates lawfully.
That did not happen in the past in Kaipara. All the EcoCare rates set by the McKerchar/Tiller regime were blatantly non-compliant (as were some other rates), but as readers will recall, the Minister of Local Government, Audit New Zealand and the Office of the Auditor-General all turned a blind eye even when the blatant illegal transgressions of the KDC were laid out in front of them. The KDC was given tacit approval by the so-called watch-dogs to charge ratepayers unlawful rates.
When ratepayers went on a rate strike to force the government to take action and enforce the rule of law, the National government pushed through a validation bill to validate all the illegalities, gazumped the MRRA judicial review of the rates that was before the court, and compelled ratepayers to pay vindictive penalties on the rates that had been retrospectively validated. In addition the government appointed commissioners ensured that those responsible for the unlawful EcoCare debts of the KDC were not held liable.
It would be nice to think that the Validation Bill would have served as a warning to the KDC and the NRC that extreme care was necessary in its rating processes and in its rating documents to ensure that they were in compliance with the law. That has not happened and some of the rating documents of the KDC and NRC continued to be in breach of the requirements of the LGRA.
Over the years Legal Eagle and others have pointed out the defects in the rating documents but the commissioners dismissed all challenges as having no substance. Not only that, they threatened rate strikers with legal action to recover the unpaid rates, pursued many through their mortgagees, and issued over one hundred legal actions against striking ratepayers.
That resulted in the representative defence by Bruce and Heather Rogan to an action for recovery of unpaid rates, and the Rogans and the MRRA seeking a judicial review of the KDC and NRC’s rating decisions.
As detailed in the post below, Duffy J has so far held that the rates of the NRC were unlawful and that the KDC acted unlawfully in setting the rates of the NRC, in adding penalties to the unpaid rates of the NRC, and in taking steps to recover the rates of the unpaid rates of the NRC.
Duffy J will make her final rulings on the matter and on the case against the Rogans following the hearing in the High Court on 30 May.
The Office of the Auditor General (OAG) has finally woken from its lethargy under Lyn Provost and, as a result of Duffy J’s judgment, sounded a warning to the whole of local government, and to Parliament, on the widespread non-compliance with the law in respect of rating. In his Overview of the report the Auditor-General summarises the obligations of the elected members of a local authority:
Getting it right
Elected members are ultimately responsible for “getting it right” when it comes to what the local authority does and how it does it. This means that elected members should ask appropriate questions and be satisfied that their local authority has appropriate policies and practices in place.
A local authority’s power to set rates is essentially the power to tax people for the costs of the services the local authority provides. A recent High Court decision highlighted the importance of getting it right when setting rates. Although setting rates can be complex, it is concerning that some local authorities are not meeting best practice. Local authorities are responsible for ensuring that they comply with their legal and accountability obligations.
In the report itself the Auditor-General goes into greater detail:
5.2 A local authority’s power to set rates is essentially a power to tax people for the cost of the services that the local authority provides. The judgment reflects the strict approach that the courts take to interpreting legislation that gives entities the power to tax, and reinforces the extreme care that local authorities need to take to set and collect rates correctly.
5.3 A public entity is responsible for ensuring that it complies with its legal and accountability obligations. In the context of setting rates, local authorities are responsible for ensuring that they comply with all aspects of the Local Government (Rating) Act 2002 when they set, assess, invoice, collect, and recover rates.
5.4 Rates are a significant part of a local authority’s revenue. This is reflected in the audited financial statements. The purpose of an audit is to increase the confidence that the public can have in the reported information. In our audits, we seek reasonable assurance that rates revenue has been properly calculated and that there is no major risk to the rates revenue reported.
Impact of the High Court decision
the OAG report suggests that the legality of the rates of four regional councils might be affected by the unlawful delegation ruling (para 5.20). In addition 16 local authorities need to consider the way in which water rates are charged.
In summary the report suggests:
5.26 The judgment reinforces that rate-setting processes and arrangements require care and precision. Some established arrangements might need to be reconsidered for lawfulness.
That is an understatement. The problem does not lie with “established arrangements” being reconsidered and rating documents amended for the future so that they ate legally compliant. That is easily accomplished if local authorities are so minded.
The problem lies with the damage that has been done in the past. If the past rates of all those local authorities are in fact unlawful then it means that they are open to legal challenge by the ratepayers of those districts.
In addition, the High Court has yet to decide on the legal consequences that flow from the declarations of unlawfulness that it has already made.
The unlawfulness of the NRC rates means that all its rates for the relevant years are unlawful, as are any penalties that were charged. It also means its rates assessment notices and rates invoices are unlawful. Because it shares each of those documents with the KDC, it follows that the unlawfulness of the NRC rates taints the whole document and renders the whole document unlawful. Consequently the rates of the KDC are rendered unlawful.
The NRC adopted the same delegation arrangement in respect of FNDC and the Whangarei District Council, so that the legality of the NRC rates for those districts is challengeable, as is the legality of the rates set by the FNDC and the Whangarei District Council.
The same consequences apply to other local authorities which adopt the same processes.
More illegalities in rates
Whilst the High Court has recognised some of the illegalities in the rates and rates processes of the KDC, the NRC and possibly other local authorities, there are, as stated above, other ongoing blatant legalities in the rating documents of the KDC, the NRC and most other local authorities in New Zealand that have not been challenged in court.
For example, the most recent rates invoice received by all ratepayers in the Kaipara District is unlawful and as such it does not create a ratepayer’s liability to pay the rates under the LGRA.
A rates instalment invoice must by law be for the amount of the instalment only. Whilst information may be included about previous unpaid rates and penalties, the amount payable under the invoice must be for the current instalment only. Likewise the last date for payment must relate to the payment of amount of the current invoice only.
Ratepayers have the fundamental statutory right under the LGRA to pay each incurrent instalment before the due date without incurring any instalment penalty. That applies even if a ratepayer has arrears of rates.
The KDC and the NRC deny ratepayers that right. The TOTAL NOW Due under the invoice is not the instalment only but an invoice for the instalment and all arrears. The LAST DAY FOR PAYMENT does not refer to the instalment only but to the instalment and all arrears. The invoice then adds the following provision.
If you do have any rates arrears, any payments that you make towards your rates will be credited first towards the oldest amount due.
So if a ratepayer exercises the statutory right to pay an instalment without an instalment penalty being incurred, the amount paid will not be applied to that instalment but to the oldest arrears.
This policy, in blatant contravention of the LGRA, has been rigorously enforced by the KDC and the NRC.
Those ratepayers who have withheld their rates have done so because of fundamental legal principles and because they saw that the decision not to remit penalties incurred during the rate stake as a callous act of retribution by the government-controlled commissioners against those who had protested for the return of the rule of law to Kaipara.
But those ratepayers were still prepared to pay their rates. In 2013 they tendered all their outstanding rates to the KDC. But the commissioners refused to accept them because they did not include the penalties. They wanted their full pound of flesh.
Those same ratepayers would have paid each rate instalment as it fell due, to avoid further instalment penalties, but the unlawful rates invoices of the KDC and the HRC have prevented this.
This current illegality of the rating documents of the KDC raises interesting legal issues.
The Crown Manager was appointed to take exclusive responsibility for all issues arising from historic rating illegalities of the KDC. In granting those powers to the Crown Manager the Minister curtailed the statutory powers of the elected council to make all decisions in respect of the KDC.
Interestingly, Minister did not appoint a Crown Manager for the NRC which has massive issues with historic rating illegalities and shares rating documents with the KDC.
Legal Eagle’s view is that the powers granted to the Crown Manager - to make decisions and take actions on behalf of the KDC - are ultra vires However, that issue is irrelevant because the illegality of the KDC and NRC current rates invoice is not related to past irregularities. The defective invoices have been issued by the newly elected councils of the KDC and the NRC since they were elected last year. They are very much current and ongoing issues.
Greg Gent and the newly elected Councillors are therefore directly responsible for the unlawful rates invoices that have been delivered to ratepayers. Because those rates invoices are not compliant with the law they do not create a legal liability on ratepayers to pay the rates.
The new Mayor and Councillors may run for cover and argue that the oldest debt first policy is standard practice in the commercial world. But that ignores the fact that the rating process is not a normal commercial transaction. It is the charging of a coercive tax with mandatory statutory rules. Ratepayers have certain statutory rights which a local authority cannot curtail.
They may argue that the policy is imbedded in the computer programme that they use. The simple answer to that is that they should change the computer programme to comply with the law.
The fact that Local Government New Zealand endorses and promotes the policy, and that many local authorities in the country adopt the policy, is irrelevant. The issue is not whether it is commonly accepted practice but whether it is compliant with the law.
Finally, the elected members cannot hide under the skirts of their lawyers who proffer legal opinions justifying the oldest debt first policy. The KDC has for many years been badly served by its lawyers. The legal mess that they are in now is because they have blindly followed legal advice that has proved to be, to be generous, less than adequate,
In the end liability for the KDC’s actions in respect of unlawful rating documents sits squarely on the shoulders of the elected members. To reiterate the comments of the OAG above:
Elected members are ultimately responsible for “getting it right” when it comes to what the local authority does and how it does it. This means that elected members should ask appropriate questions and be satisfied that their local authority has appropriate policies and practices in place.
When Winston Peters gave a speech in Mangawhai last year, Greg Gent asked him why elected members were not held responsible in law for the illegal actions of a local authority, just as company directors were held responsible for the unlawful actions of a company.
He was no doubt referring to the judgment in the Nathan case in which Heath J made it clear that company directors must apply their own judgement in the exercise of their duties rather than simply relying on management and expert advice.
There are of course special provisions In the Local Government Act for the OAG to recover a broad range of losses suffered by the local authority where the elected members are seen to be responsible for those losses. The OAG takes into account whether the individual member protested against the action causing loss, or how the member voted when the formal decision was made. (See section 46 LGA)
Good faith is a defence where the member relied on an expert’s opinion. However, the elected members of the KDC cannot rely on the advice of the KDC’s Chief Executive because it is acknowledged that he had no expertise or experience in local government matters or local government law.
Likewise, the advice received from the KDC’s lawyers over the years has been wanting.
The KDC under Greg Gent has a problem. It clearly has an antipathy towards those who insist that the rule of law should apply in Kaipara. It appears to believe that it has a right to be able to collect rates irrespective of its compliance with the law,
The decision of Duffy J and the report from the OAG signal that such an approach is no longer acceptable. If rating processes and documents are not compliant with the law then ratepayers are not obliged to pay the rates. In such a situation the responsibility for the non-payment of the rates does not lie with the ratepayer but with the elected members who failed to ensure that the rating process were compliant with the law.
Perhaps it is time for the new Council to do a reassessment, rejig its attitudes, and ensure that its actions comply with the law.
WHO IS THE FERRYMAN? 13.04.2017
The Gent council has been strangely silent on the High Court decision of Duffy J which was delivered last year. In that judgment Duffy J made the following findings:
• The KDC acted unlawfully in assessing the rates of the NRC.
• The KDC acted unlawfully in recovering the rates of the NRC. (“Recovering” means recovering unpaid rates of the NRC through approaches to ratepayers’ mortgagees or through legal action of the threat of legal action.)
• The KDC acted unlawfully in adding penalties to the unpaid rates of the NRC.
In addition, Duffy J declared the rates of the NRC for the years 2011/2012 to 2015/2016 to be unlawful.
Presumably the new Gent council has stepped aside from this issue because it comes within the apparent domain of the Crown Manager. The Crown Manager – ex-commissioner Peter Winder - was appointed by the Associate Minister of Local Government to take sole responsibility and make decisions on behalf of the KDC in respect of all matters arising from past rating issues.
The problem is that, in the view of Legal Eagle, both the appointment of the Crown Manager and the powers granted to the Crown Manger were ultra vires. That means that the Minister did not have the power under the Local Government Act or otherwise to appoint the Crown Manager in the way that he was appointed, or to grant him the powers that were purportedly granted.
Legal Eagle sent his legal submissions to the Minister and Associate Minister last year but has yet to receive a response.
The issue is hugely important and urgent. The High Court judicial review is still proceeding. Duffy J has only given an interim judgment and made declarations of unlawfulness but has yet to deliver a final judgment in respect of the relief that will be granted to the MRRA and Bruce and Heather Rogan in respect of the unlawful actions of the NRC and the KDC. Relief relates to the ordering of a refund of unlawful rates.
Lawyers Simpson Grierson are acting for the KDC and the NRC and have appointed David Goddard QC to act as counsel. Through their lawyers the KDC and the NRC have made submissions to the effect that the two councils should not be obliged to refund any unlawful rates because of the administration costs and because the burden would fall on all ratepayers. They sought and were granted an extra day’s hearing to argue their case. This will be in the High Court at Auckland on 30 May 2017)
The big question is this: who is instructing Simpson Grierson on behalf of the KDC?
Presumably it is Peter Winder under his powers as Crown Manager which were granted by the Associate Minister.
But what if those powers are in fact ultra vires, as argued? That means that the Crown Manager has no legal power to make the decisions that he has made, and in fact his decisions in respect of the judicial review are a nullity. That means that the KDC has not lawfully instructed its lawyers, and Simpson Grierson and David Goddard are acting without the authority of the KDC.
It’s a bit of a legal mess to say the least, with the hearing just over a month away. The KDC’s ferry is drifting towards another legal battle but it is unsure who is at the steering wheel.
APARTHEID NOW ENTRENCHED IN NEW ZEALAND LAW 10.04.2017
Whilst PC4 further submissions and the Annual Plan meetings have been well under the radar in Kaipara, on the national scene most New Zealanders will be completely unaware that apartheid has been entrenched in our legal system with the passing this week of the amendment to the Resource Management Act.
Frank Newman sums up the general feeling towards the RMA:
The RMA is a disgrace. It's a racket for lawyers, self-acclaimed experts on all manner of esoteric concepts, planners, commissioners, judges, and iwi. Many of these racketeers have become rich, at the expense of inflated land and house prices, and consent applicants.
The amendments to the Act tinker with its numerous shortcomings but, more importantly introduce race-based provisions that give unelected iwi representatives the power to make decisons on resource consents based on “cultural” considerations.
It is undisputed that these provisions are the pay-off that Nick Smith, the Minister promoting the Bill, has negotiated for the support of the two Maori Party seats in passing the Bill through Parliament.
Here are various comments
Whale Oil (Neville Gibson NBR)
SEE THE FURTHER SUBMISSIONS 08.04.2017
The submission period for further submissions on PC 4 has come to an end.
Those further submissions are now available for viewing on the KDC website. Click Further subs at the top. Note that there are four pages of them.
The majority of submitters vehemently oppose the inclusion of the Fire Service Code of Practice in the District Plan. Naturally Beca (on behlaf of the Fire Service)and the Far North District Council oppose that view. I have also found one other ratepayer who is pro the tanks but only on the basis that no sections are less than 1000 m2. and that would allow space for tanks.
It will be interesting to see what the KDC does with such a clear message sent by ratepayers.
The biggest hurdle to be faced is that the code of practice in its present form is unlawful.
The Fire Service exceeded its statutory powers by including in its code of practice so-called standards relating to districts that do not have reticulated water. It did not, and does not have the legal power to do that.
It means that those standards have no legal basis whatsoever.
It follows therefore that the adoption of the standards by the KDC was unlawful.
The Fire Service has also set itself up as a consent authority under the RMA so that in considering applications for a resource consent from the KDC the Fire Service (not the KDC) has the power to decide which of its standards must be adhered to.
It is acknowledged in the submissions of Beca on behalf of the Fire Service that some of its standards are not applicable. Which seems to ignore the obvious, that standards are just that. They are standards that apply to all situation. If they may or may not apply then they can scarcely be called standards.
The most nonsensical thing about the so-called standards is that they only apply to new properties. The Fire Service’s statutory obligation to promote fire protection for all properties, not just new ones, has been completely ignored.
TANK DEADLINE 02.04.2017
The deadline for further submissions is 4:30 tomorrow 3 April.
This is the last chance to make you views known and to stop Tank Town becoming a reality
For those who are finding the process too complicated, a further submission template and guidance can be found under Fire Safety Rules on this website.
Grant Douglas gives his impression below of what Mangawhai might look like in the future if we do not stop the madness.
MANGAWHAI UNDER TANK REGIME
Some comments from readers
"What a load of bureaucratic nonsense."
"Sorry, but I am not able and have not the time to work through all the regulations".
"Happy to say we have sold our property and getting the Kaipara council out of our lives and feel better for it.a permanent cure for a headache."
"This council of the people is starting to sound like the previous devious mobs .I fear Kaipara is again heading for the courts at taxpayers expense and only hope some common sense will arrive soon."
"Yet another money grab by the Kaipara Council. A spare tank that cannot be used for consumption is yet another enforced cost and waste of money."
TANK TOWN SUBMISSIONS 27.03.2017
The feedback I have been receiving is that the process for making further submissions is simply too complicated for most people, The information is difficult to find on the KDC website. Then there are several versions of the former submissions that one has to refer to, with a number given to each submitter and a specifc number for each point made in a submission.
One also has to go through certain hoops just to establish the right to make a submission.
And then there is the obligation to serve notice on all those whose submissions you refer to.
Whatever you do, try to avoid the template offered on the KDC website. It is confusing and prompts one to put in the answer that they are seeking. In some places I was confused as to what they wanted.
I have therefore prepared a standard response for those who are opposed to the Tank Town provisions. It can be found here. All you need to do is:
You can ask to be heard at the formal hearing of submissions, or you can indicate that you may join a joint case presented by others.
The deadline for submissions is 4:30 pm on Monday 03 April 2017.
The only way we can get rid of the dedicated firefighting tanks requirement is if hundreds of us make our views known to the Councillors. This is our last opportunity to do something positive about an issue that is upsetting many of us and which will turn Mangawhai and other settlements into tank towns.
The risk of fire has to be appreciated, but the chance of a fire occurring is once in 600 years or so. If we all adopted the same draconian approach as the Fire Service we would all go round wrapped up in cotton wool and wearing body armour and crash helmets.
Make sure your partners make separate submissions, and get on to your friends, neighbours, relatives and work mates. If you use the local Facebook pages then please post links to this site and get things moving.
if you have any difficulties you can email me on email@example.com
TANK TOWN 19.03.2017
As mentioned in TANK TOWN LATEST 16.03.2017 (scroll down), the KDC has decided to steam-roller ahead with Plan Change 4 (PC4) rather than heed the voices of ratepayers and withdraw it. Most ratepayers want PC4 to be withdrawn and a new proposal to delete all references to the Fire Services Code of Practice.
PC4 has now been opened up to further submissions (as required by the RMA) and I encourage everyone to make a further submission. Councillors are swayed by public opinion and we need to make it absolutely clear to our Councillors that we do not want their water tanks.
This is an important issue for the future of Kaipara and especially for Mangawhai. It is your LAST CHANCE to stop the Tank Town nonsense. Alert all your friends to what is going on and make sure that you ALL make a submission. (Details to be provided next week.)
Most people are unaware of the status of the requirement for new houses to provide a dedicated water tank for firefighting. Many believe that is all done and dusted. Far from it. The matter has still to be resolved.
The previous Tiller Council adopted the Code of Practice in the District Plan holus bolus. There was no consideration as to whether there was an existing problem or whether the Fire Service rules would address any such problem, if one existed. No assessment was carried out of the incidence in the district of dwellings and other buildings being lost to fire as a result of inadequate onsite firefighting water supplies.
The rules required a dedicated 45,000 litre water tank for firefighting for a new house, and a 20 metre set back from a house for trees and shrubs. They also required a concrete driveway, turning circle and hardstand to be situated on the property to accommodate a 20 tonne fire appliance - the likes of which have never been seen in Kaipara..
The KDC informally reduced the tank requirement to 10,000 litres (if the NZFS gave its approval) and a resource consent was obtained on the payment of a $1,000 fee.
Following numerous complaints from ratepayers and builders, Plan Change 2 (PC2) was introduced last year to formally reduce the tank size to 10,000 litres (without having to obtain a resource consent} but the other standards of the Code of Practice remained untouched.
The New Zealand Fire Service objected to the reduction in tank size. Plan Change 2 was not supported by the majority of submitters who requested among other matters that Council not adopt the proposal and reconsider the whole matter of including Fire Safety Rules in the District Plan as a new proposal.
Rather than responding to the overwhelming clamour for a total rethink, the commissioners introduced Plan Change 4 (PC4) which reduced the size of tank to 10,000 litres, got rid of the setback of 20 metres for trees and shrubs in urban areas, and made modifications to other rules in the plan.
The problem is that the PC4 is fixated on compliance with the Code of Practice and the size of tanks, rather than looking at the risk factors, cost analysis and asking objectively how the risk of fire can be best managed in non-reticulated areas.
The new Council (elected in October last year) has to some extent inherited the bad decisions of the former council and the commissioners. But it could have been proactive. The submissions on the PC4 (November last year) were overwhelmingly in favour of the PC4 being rejected and a new plan change being introduced removing all references to the Code of Practice. The sensible thing would have been to withdraw the PC4, as the KDC did with PC2, and propose a new plan change that considers mitigating fire risk and firefighting methods without being hamstrung by blind adherence to the Code of Practice.
The new Council is now going through the statutory process for PC4 by asking for further submissions, but it has given no indication where it stands on the issue.
Is it going to listen to ratepayers, reject SC4, and start again and do it properly? Or is it going to submit to the pressure from the Fire Service and steam-roller PC4 through against the wishes of the community?
Legality of KDC’s actions
There are serious allegations that the KDC failed to comply with its statutory obligations in adopting the Code of Practice. Likewise, the KDC failed to comply with the RMA in respect of the consultation process in respect of PC2 and PC4.
Legality of the Code of Practice
There is legal dispute as to whether NZFS Code of Practice is permitted by law to include standards that do not relate to water mains. Section 30 of the Fire Services Act is so badly drafted that it suggests that the Code is limited to water mains only in urban areas. That means that the Fire Service cannot include any recommendations in the Code on situations where there are no water mains.
Resolving that issue may be superfluous. The current legislation, the Fire Services Act 1975, is being replaced by the Fire and Emergency New Zealand Bill once it is enacted later this year. The Bill has had its second reading in the House and is now in the committee stage. It should take effect later this year.
The new legislation provides for a code of practice that unambiguously covers all water supplies, whether mains or other sources. The Government Administration Committee considered the draft of the Bill and, in an acknowledgement of the ambiguity of the current legislation, recommended amending clause 6 (Interpretation) to add a definition of “firefighting water supplies”. It stated: “This definition would include both reticulated water supply systems and tank supplies. This amendment would make it clearer which water supplies the code of practice would apply to”.
That will resolve the legality issue once and for all.
But other issues remain
Council has never considered the issues
The KDC has never considered the fundamental issues. Is there a problem? What are the levels of risk of a fire occurring? What steps should be taken to mitigate the risk taking into account the potential risk, the costs, the practicability, and the effect on the environment and amenity values of the district.
Jonathan Larsen, now Councillors Larsen is a professional fireman. He has calculated that on the basis of historic fires in the Mangawhai area one building would be expected to be damaged in some way by a fire once every 625 to 833 years. And, if you have to wait 800 years for a fire to occur at your property, is a dedicated 10,000 water tank going to be relevant?
Cost of changes to the District Plan
If a specific code of practice is referred to in the District Plan then each time the code is changed the district plan has to be changed. Changing a district plan is tortuous and expensive. There are no set time limits under the Fires Services Act for reviewing a code of practice but under the proposed legislation a new code must be published to replace the existing code. The code must be reviewed each three years.
If PC 4 is adopted by the KDC it will have to do another plan change next year when the new code is published, and each three years after that.
The new Bill, like the Fire Services Act, does not make the adoption of the code of practice mandatory.
It is also noteworthy that PC4 rejects several of the standards in the Code. For instance the requirement for a 45,000 litre tank has been modified. The 20 metre setback from trees or shrubs is regarded as “unnecessary and onerous” in the urban setting and has been removed. Several of the other standards have already been rejected.
It is also relevant that In respect of the neighbouring local authorities, the Far North, Whangarei District Councils and Auckland Council (in the Rodney Plan) do not make a direct reference to the Code of Practice in their Plan.
Access to tanks
On small sections any tank dedicated to firefighting must necessarily be close to the house itself and the seat of the fire. It is likely that it will inaccessible in a fire.
The Fire Service originally insisted on access to the firefighting tank being by way of a special coupling so that only the fire brigade could access it. In other words, where there was a fire the house owner would be unable to use the dedicated firefighting tank water while waiting for the fire brigade to arrive.
The Fire Service has now conceded that a house owner may access the water in the tank through a separate connection but only to fight a fire. It is unsure how the Fire Service intends to police that requirement. In the recent drought it is likely that all dedicated firefighting tanks would have been raided by their owners.
Reliance on water tanks
There is no evidence to suggest that the lack of tank water has been an issue in any fire in the district. Rural properties may not be able to draw on neighbours’ supplies, but is likely that the house will have burned down long before the fire brigade arrives. In settlements like Mangawhai there will nearly always be an adequate water supply for firefighting from the domestic tank on the property or alternatively from neighbours’ tanks. My own property in Mangawhai has six 45,000 litre tanks within 30 metres of the property. That is my own and five tanks of four neighbours. Is adding five more tanks going to make any difference given the minimal risk of fire?
The Mangawhai fire truck carries a limited supply of water. The brigade also has a water tanker that accompanies the fire truck. Surely that is the solution to the problem. Having water at the fire scene, but having no firemen and their equipment to use it is pointless. It makes sense therefore for the brigade to take with it as much water as it can, and then rely on domestic tank supplies for the balance, if they are needed.
Such a solution is simple and effective. It is cheap and it has no detrimental effect on the environment. Coupled with educational programmes for reducing fire risk it would be a reasonable response to the actual risk of fire.
However, the most important thing is that, unlike the standards of the Fire Service for non-mains areas, it allows the fire brigade access to water to fight fires in all buildings irrespective of whether they are new or old.
The cost of providing water tankers is minimal compared to the cost and amenity detriment of a proliferation of tanks that will never be used. Finance could come from the Fire Service levy on insurance or a special targeted rate on all properties for a few dollars a year.
Despite what the Fire Service claims, the present Code of Practice only relates to urban areas where there are water mains. It sets standards for the supply and pressure of water in the water mains. In respect of areas where there are no water mains, the Code of Practice purports to include standards but, and this is a big but, those standards are for new houses only. The standards in the Code relate only to the regulatory process for subdividing and building new houses, but there are no provisions for existing houses.
That is completely illogical. Existing houses are equally at risk from fire as new houses. It is as absurd as suggesting that only those born after a certain debt should be obliged to wear seat belts in cars.
If the KDC is serious about mitigating the risk of fire and providing standards for fighting fire when it does occur, then it need to break away from the shackles and short-sightedness of the Code of Practice. It needs to look at the degree of risk, the options for mitigating the risk, and the cost and acceptability of doing so.
It also needs to listen to its communities.
The section 32 evaluation provided for PC4 covers all aspects of the issue and is worth a read.
FURTHER SUBMISSIONS PROCESS 19.03.2017
Full details of the “further submissions” process have now emerged.
The further submission period is 17 March to 4:30 pm on Monday 3 April.
But wait there’s some catches.
Only certain people can make submissions. According to the RMA the KDC can make further submissions as of right. But ratepayers can only make further submissions if they meet the following criteria:
• Any person representing a relevant aspect of the public interest
• Any person that has an interest greater than the interest that the general public has
The problem is the KDC requires such persons to prove that they come within the one of the two categories and the KDC can reject the submission if it considers the criteria is not met.
You cannot make submissions on a new issue. You either have to support or oppose a submission already made.
Full details of all submissions previously made are on the KDC website.
The further submission process is a nightmare. The submission has to be in the format stipulated, and must make accurate references to the submissions being supported or opposed. It then has to be served (by email) on the KDC and on the original submitter. Email addresses of the original submitters are provided by the KDC.
Next week I will be offering more guidance on how to complete the further submissions form and the basis on which all ratepayers can make submissions
TANK TOWN LATEST 16.03.2017
What a load of bureaucratic nonsense.
Mangawhai is furious about the ludicrous Fire Service rules that were incorporated into the KDC District Plan that are turning magical Mangawhai into a tank town. Last year Proposed Plan Change 2 was rejected by submitters. Then Proposed Plan Change 4 was rejected. Most submitters wanted the Fire Service Rules to be completely deleted from the District Plan on the basis that they served no point, destroyed the natural amenities of the district, and were incredibly expensive.
Most saw it as a kow-towing to Wellington bureaucrats and a ticket clipping scheme for the KDC.
Coincidentally with my recent article (see below) the KDC has now made its move. It has advised submitters to the Plan Change 4 proposal that they may make further submissions but only in support or opposition of a submission previously made. A Public Notice will appear in the local rags in the next few days. The further consultation period is for two weeks only
So, instead of listening to the people and getting rid of the rules altogether, Greg Gent and his council have decided that they intend to push through the proposal despite the fact that it is totally unnecessary and is unwanted by the ratepayers of the district.
Firefighting is an important issue but we have to be balanced in our approach. Wearing crash helmets and body armour in cars would reduce injuries from car crashes. Banning people from swimming in the sea would reduce drownings. But would a proliferation of dedicated water tanks do anything to save lives and properties from fire?
The rules only apply to new properties (which are likely to have an ample provision for household water). So what about the risk to existing properties? Or is there a risk? If there were a fire at my place then there are five 45,000 litre tanks within 20 metres of my property. Sure, they may not be completely full, and might have been pretty low a couple of weeks ago, but the chance are they will have sufficient water to fight a fire. After all, the new proposed amount for a dedicated tank is 10,000 litres.
One of the ludicrous requirements of the Fire Service was that each dedicated water tank had to have a special coupling so that it could only be accessed by the Fire Service. So you could have all that dedicated firefighting water but not be able to use it yourself to fight the fire while waiting for the Fire Service.
Acknowledging the stupidity of such a requirement, the Fire Service now states that it will allow normal access to the tank for the house owner in addition to the Fire Service coupling. But the Fire Service is adamant that the water in the tank is not to be used for household use. Really? And how is the Fire Service going to police that? In the recent drought would there be one house owner who would not have drawn from the dedicated firefighting tank to access drinking water and to enable them to flush their toilets?
If the KDC was really serious about getting to the bottom of this it should promote the importance of keeping water tanks topped up. For its part the Fire Service should ensure that a tanker with an adequate supply of water accompanies each fire truck called out to a fire. That happens now. But it should be the principal means of ensuring an adequate supply of water.
Ratepayers would be happy to pay a special rate of $10 per year which should cover the tanker costs. Better than having to endure a proliferation of tanks, at great expense, for no benefit, and having Magical Mangawhai turned into a tank town.
The irony of it all is that the provisions of the Code of Practice adopted by the KDC in its District Plan are completely unlawful. The Code of Practice can only relate to the supply and pressure of water mains. Anything else is outside the legal power of the National Commander.(See post below)
Look out for the public notices. If we are going to stop this tank nonsense we must make our voices heard. If we don’t they will trample all over us.
FIRE SERVICE RULES AND WATER TANKS 12.03.2017
A ratepayer who is being compelled by the KDC to install a dedicated 45,000 litre tank to meet the Fire Service rules in the District Plan has asked me what has happened to the proposal to reduce the tank size to 10,000 litres without the need for a resource consent.
Good question. What did happen to all the submissions that we made on the Proposed Plan Change 4 last November?
In short, nothing.
In fact the submissions can be seen here. And they are worth a read. There is far more common sense in the submissions from ordinary ratepayers than can be found in the approach of the KDC with all its consultants and advisers.
As a result of the overwhelming opposition from ratepayers, Proposed Plan Change 4 has ground to a halt. But beyond that nothing more has been done.
The main provision in Proposed Change 4 was to reduce the dedicated firefighting tank size from 45,000 litres to 10,000 litres. But most of the submissions suggested deleting the Fire Rules from the District Plan completely on the basis that the requirement of concrete tanks in front of every property is an affront to the principles behind the District Plan and the RMA. Then there is the ludicrous requirement that all shrubs and trees within 20 metres of a house have to be removed. That did not go down too well.
The other problem is that the KDC did not comply with the RMA in the consultation process.
But the elephant in the room is the fact that there is no evidence to support the proposition that complying with the Fire Service Code of Practice will reduce the damage or injury/death caused by fire. The rules serve no purpose.
In its obsequiousness to Wellington the KDC failed to face up to that fundamental issue.
The tragedy is that whilst the new Council twiddles its thumbs on this matter, the KDC is still requiring 45,000 litre tanks to be installed.
The other elephant in the room (we could start a zoo) is the big question-mark hanging over the legality of the part of the Fire Service’s Code of Practice which has been incorporated into our District Plan.
Here’s some legal analysis for those who are interested,
The New Zealand Fire Service Commission is a statutory body set up by the Fire Service Act 1975 and its powers are defined by that Act.
The functions of the Commission are set out in the Act. Under section 14(b) the Commission has the "general control, within the framework of this Act, of the Fire Service and the functions and activities of the Fire Service”.
The command and operation of the Fire Service is delegated to the National Commander who exercises all the powers and functions of the Commission. (Section 23)
We then get to the part of the Act that relates to the Kaipara issue. It deals, as the heading shows, solely with the powers of the National Commander in respect of water mains.
30 Use of water in mains for fire protection, fire fighting, and hazardous substance emergency purposes
The powers of the National Commander in respect of water mains are set out in s 30(2):
(2) The National Commander may from time to time cause to be made such checks as the National Commander considers necessary ……..etc
We are now getting to the important part in subsection (3)
(3) In carrying out its duties pursuant to subsection (2) the National Commander shall publish a Code of Practice specifying standards for water supply volume and pressure which are required. This Code of Practice shall be notified by the National Commander in the Gazette. [Emphasis added]
And that is it. Read it again. And again. “…the National Commander shall publish a Code of Practice specifying standards for water supply volume and pressure which are required.
In other words the Code of Practice only includes the standards relating to water mains.
However, what the Fire Service has done is to sneak into the Code of Practice matters that are totally outside the statutory ambit of the document. That is, recommendations in respect of firefighting where there are no water mains.
The Fire Service will argue, with feigned innocence, that they are merely “recommendations” and not technically part of the Code of Practice. Therefore they are not mandatory.
That is rubbish. The Fire Service in Wellington pressures weak-kneed local authorities into including Its “recommendations” in their district plans so that they becomes fully binding on all ratepayers. That is what they did to Kaipara.
Ratepayers are then compelled to comply with the new rules, at great cost to themselves, and at huge detriment to the amenity value of their properties.
If someone wants to reduce the draconian effect of the rules they may apply to the Fires Service to reduce its “recommendations” (to allow a smaller water tank) and then pay a sweet thousand dollars to get the tick from the KDC.
The KDC in all of its reports acknowledges that the recommendations are not mandatory. But it also knows that once they are in the District Plan then they become binding.
Now here’s the rub.
What the KDC does not realise is that the recommendations In the Code of Practice are completely unlawful. The National Commander only has the powers and functions set out in the Fire Service Act. The Act is quite clear that the National Commander onely has the power to publish a Code of Practice that relates to standards for water mains. And that is it. He has no legal power to issue recommendations in the Code of Practice in respect of firefighting where there are no water mains.
His actions in including the recommendations in the Code of Practice are outside the National Commander’s statutory powers. That means that they are ultra vires, as lawyers call it. The result in law is that recommendations are a complete nullity and have no legal effect. It is as if they did not exist.
All sorts of legal consequences arise. Was the KDC acting unlawfully when it adopted unlawful recommendations? Is that part of the District Plan ultra vires? And was the KDC acting unlawfully in compelling builders to install firefighting tanks in compliance with unlawful rules in the District Plan? Could those forced to install tanks seek reimbursement from the KDC?
What is needed now is strong action from Greg Gent’s Council to resolve this issue once and for all. They cannot let it drift on and continue to force developers and home builders into installing tanks at a ludicrous cost and to the detriment to the environment. Especially when the Council itself in its Section 32 Evaluation report questions the wisdom and necessity of such rules, and when the KDC will readily reduce the water tank size to 10,000 litres on the payment of a "sweetner".
The Council needs to examine, with its lawyers, the legal status of the Code of Practice “recommendations”. And if it is accepted that they are unlawful, then the Council needs to ascertain the legal consequences of its actions and front up to ratepayers.
But it needs to act quickly and make some big decisions. Ratepayers are being seriously disadvantaged by the delay.
All the background information on Proposed Plan Change 4 can be see on the KDC website here.
Mangawhai - KDC's vision of the future?
WATER ISSUE 1 12.03.2017
The story goes that Big Business plunders local authorities and their ratepayers by exerting pressure to install sewerage systems and reticulated water systems so they can rip off ratepayers in the construction process, and then build an empire of fat bureaucrats to feed off the rating system in administering the system Auckland's Watercare comes to mind.
We have already been rorted over the Mangawhai sewerage system and sceptics say that a reticulated water system for Mangawhai is the next rort waiting in the wings. Rumour has it that the fiasco over the Fire Service water tanks is part of the subterfuge to impose a reticulated water system on ratepayers.
Just a rumour? Take a look at the report from Opus commissioned by the KDC in April 2016 on the options and cost of providing a water supply in Mangawhai. One of the options is a reticulated network to cover the Village and the Heads at an estimated cost of $24 million. Water would come from the Maungaturoto dam and would be piped to Mangawhai.
No doubt the recent drought and the shortage of water will be used be used to push the proposal..
WATER ISSUE 2 12.03.2017
In WATER PROBLEMS IN MANGAWHAI 23.01.2017 (below) I advised that the KDC was spending $275.000 of ratepayers’ money to upgrade the Mangawhai Heads reticulated water supply. The commissioners budgeted only $30,000.
It appears that the reticulated supply services only 17 connections (or possibly 18). It is in effect a private water supply but paid for by ratepayers. The upgrade cost works out at $15,277,78 per connection.
And what is the upgrade for? Ratepayers have not been advised.
More transparency from the new “good governance” Council would be appreciated.
See: the report on the upgrade funding at page 353
The reticulation plan is at page 4
WATER ISSUE 3 12.03.2017
The Mangawhai Focus reports that the NRC has completed its testing of the quality of the water at major swimming spots in Northland. The results are available on the Lawa site here.
The two swimming spots tested – the surf beach and the camp in the estuary - were both deemed “low risk”.
That’s all good. But ,,,,,,where are the results of the testing carried out by the KDC late last year. Christian Simon in the Focus' Letters to the Editor asks some very pertinent questions.
A bylaw introducing a warrant of fitness regime was introduced last year by the KDC for private sewerage systems solely on the basis of “well documented evidence” that the harbour was polluted and that private systems were the cause.
There was, in fact, no evidence at all from the past, and it seems there is no current evidence.
Please, Councillors, let us have the facts.
UNFAIR TO WASTEWATER PANEL? 31.01.2017
A reader has been suggested that I have been unfair on the Mangawhai wastewater panel, and that the panel did its best to come up with a solution to the problems that we face with our wastewater.
The problem is that many of us have no confidence in anything that was done by the commissioners. They were appointed by the government through the agency of Greg Gent, now our mayor, who was instrumental in getting them appointed to ensure that that the loans to the BNZ and ANZ were protected from the Armageddon that he felt would ensue if the KDC went under.
The upshot was that the commissioners were given the task of ensuring that ratepayers were obliged to pay the debts to the BNZ and the ANZ to finance the EcoCare Scheme that the High Court declared to be unlawful.
We all know how the commissioners manipulated the situation, with the help of Parliament, the OAG, and some bizarre and questionable decisions from the judiciary. Together they stitched up the ratepayers of Kaipara and allowed the guilty parties to escape without any liability.
Big question marks hang over the EcoCare scheme and the plant that we have paid so handsomely for. For years ratepayers have needed some very blunt answers to someone very relevant questions, but the commissioners have ducked and dived for years.
The appointment of the watewater advisory panel was an example. What we wanted was some independent assessment of the plant, its capacity, its condition, and an honest assessment of the disposal farm and the reticulation system.
Note that we paid around $60 million for a system that Beca promised would give us 4,500 connections. It has nowhere near that capacity. At the last count, a year ago, it was under 2,000 connections and no one will reveal how many more it will take. Will it reach the promised 4,500?
The new Whanganui sewerage system announced last year is to cost $39 million including the cost of the disposal process and the land for discharge. Whanganui has a population of about 42,000.
The new Whanganui sewerage system is to replace the prior one which turned out to be a lemon. An out-of-court settlement had been reached with the developer of the failed system)
The purchase of the disposal field and the price paid raised many eyebrows around Mangawhai and it is still plagued by doubts. The farm cannot be used as a dairy farm because the discharge from the sewerage plant breaches Fonterra rules. Yet the discharge must inevitably find its way onto neighbouring farms which are contracted to Fonterra.
Is that an issue? Cold hard facts would go a long way to dispelling doubts.
As I understand it the wastewater committee was appointed to advise on options for the future because the disposal options at the farm were limited. I recall that they were looking at upgrading the treatment and disposing it via a pipe-line out to sea, or discharging it into the Mangawhai Harbour, or reverting to the old idea of discharging it onto the golf course.
I don’t know what happened but it now appears that all of the new options have fallen by the wayside and it's back to the farm.
The thing about the wastewater panel was that they had no experience in these matters. They were advised by Harrison Grierson (who do have experience) and on the basis of what they learned they were supposed to advise the commissioners. I struggle to understand why the commissioners did not simply get advice from the experts directly.
All in all, it seems to me that the whole process did not answer any questions about the quality of the plant or its structure or the viability of the disposal farm. We appear to be drifting along on an ad hoc basis in the hope that it all works out and the big decisions will have to be delayed. It’s a bit like the John Key School of Thinking: spin out the feel good platitudes and ignore the deferred problems.
The reticulation network has raised all sorts of questions. Who pays for it? The EcoCare debt is allocated so that future connections bear $26.2 million of the current debt and only a portion of the interest on that amount is funded. The rest of the interest is capitalised. The idea was that the development contributions from future users were to be used to meet this debt. But the problem is that development contributions cannot be used for past debt, only for new infrastructure. Not only that, the development contributions are needed to pay for the extensive reticulation needed to connect to the plant, and to pay for extension of the disposal fields.
So where does that leave the $26.2 million?
The only thing to come out of the panel was the septic tank bylaw that was based on supposed evidence of pollution and evidence of the culprit. "The well-documented evidence" did not exist. John Robertson made a mockery of it all by announcing that "surprisingly" the waters of the Mangawhai harbour had never been properly assessed. The panel sprang into action with photos of Peter Wethey – before his election to the KDC - testing waters here and there. But there have been no results. (See the previous article.)
And to cap it all, we read in the NZ Herald today that of 928 spots tested between 2009 and 2013 for E.coli showed that all urban sites exceeded the minimum acceptable state for “primary contact” like swimming.
It appears that when it comes to water quality Mangawhai and the whole of New Zealand is living in a dream world where there are not facts except those that are made up.
The new Council would do a great service to the people of Kaipara, and in particular Mangawhai, by facing up to these issues and giving ratepayers the cold hard facts.
We have been through and incompetence and spin of the Tiller/McKerchar regime, the smoke and mirrors of Honest John and his cohorts.
If Greg Gent and his Council are going to win ratepayers over then they are going to have to tackle these issues fairly and squarely. Honesty will go a long way.
WATER PROBLEMS AND "ALTERNATIVE FACTS" 27.01.2017
The Trump Presidency has already given us the expression “alternative facts”. But make no mistake about it, alternative facts are alive and kicking in New Zealand.
Especially when it comes to water pollution.
A few days ago the NZ Herald headlined that experts had been stunned by the toxic water readings in Auckland Harbour.
The figures have been available for years. Ten of the beaches in Auckland are so polluted that the Auckland Council put up permanent signs banning swimming. The Council no longer bothers to test the water.
One million cubic metres of wastewater and raw sewage is pouring into the harbour each year from 41 points around the inner city suburbs.
There is nothing new in this. It was just that the Council did not want it publicised, and the Herald was more than happy to ignore the facts and support John Key’s propaganda about clean-green New Zealand and how attractive it was to foreigners.
It is quite bizarre how Auckland City was vaunted just a few months ago by Key as "one of the the most liveable cities in the world", is now been exposed as being one of the most unliveable, with impossible house prices, seriously neglected and inadequate infrastructure and polluted beaches. And that’s just for starters.
Nothing has changed, it was just that the glaring facts were conveniently being ignored.
We know all about this in Mangawhai. The EcoCare sewerage scheme was promoted on the basis that it would stop pollution of the Mangawhai Harbour. There was absolutely no solid evidence to support this but the feel-good "eco-care" spin disguised the clear intention to rort the natives.
And then last year the commissioners and their anointed panel used the same argument to support the introduction of a bylaw and WOF for private sewerage systems. According to the panel there was "well-documented evidence" to establish that private sewerage systems were responsible for the pollution of the Harbour. An Official Information request established that there was no evidence of pollution because no testing had been done, and the casting of the blame on private systems had no basis whatsoever.
As always, the probability of bovine pollution was not even considered.
Having reached a conclusion on “alternative facts”, the panel then undertook tests, no doubt on which they could retrospectively base their conclusions. But that was months ago. Where are the test results?
This is what Christian Simon says in his letter to the editor in the latest edition of the Mangawhai Focus:
For months I am waiting for the Mangawhai harbour water testing results. But we get absolutely no information, not about nitrogen, not about E. coli. All the information Kaipara District Council (KDC) and their Harbour Health Advisory Panel release is that “the results need further interpretation and more targeted testing”.
Just how long does it take to establish that water is polluted? Or could it be that the results do not sit comfortably alongside the conclusions that have already been acted upon?
It is important that we give the newly elected Council a fair go but it is also equally important that it does not uncritically endorse the smoke and mirrors and spin that accompanied virtually every decision of the commissioners.
This is the time for the truth, the real facts. We are not interested in alternative facts.
See also: Brian Rudman's City residents kicking up a stink
WATER PROBLEMS IN MANGAWHAI 23.01.2017
The drought, and the shortage of water, has raised some interesting issues in Mangawhai. Some ratbags are stealing water and others see that this as an opportunity for the KDC to impose an Auckland-style Watercare behemoth on the ratepayers of Mangawhai. They rorted the people with the sewerage system so why not do the same with the water?
Mangawhai already has a Council-owned water service in Mangawhai. Just to recap on earlier articles, the Mangawhai water treatment plant services only the Wood Street shops and public toilets and the Council-owned campsite. It is effectively a service for commercial operations.
Such an enterprise should be strictly user pays, with those using and benefiting from the service paying for its costs and capital expenses. However, it appears, and I stand to be corrected, that it is funded by all ratepayers across the district out of general rates.
The commissioners budgeted for $30,000 capital expenditure for the service for the 2016/2017 year. However the new Council advises in a report on the matter (at page 353) that it has now revised the budget to upgrade the system to $275,000. That is 900 per cent more than the commissioners budgeted.
The sad thing is that the new Council, with all its bowing and curtseying to good governance, has made no comment on how such a mistake could have happened. It simply glosses over the massive increase.
Many might think that it is because the new Council does not wish to criticise any actions of the commissioners by offering any negative comments, especially when two of the commissioners are still on board with very influential positions, and the Associate Minister of Local Government is effectively running the KDC.
It could be that the situation has changed and new problems have arisen which require extra expenditure. If that is the case, surely ratepayers should be kept abreast of the situation, especially as they are effectively funding a private water service.
The report refers to the sale of the property at 250 Molesworth Drive for $380,000. This property is one of those held on behalf of ratepayers in the Mangawhai Endowment Fund, which the Council now calls the Mangawhai Endowment Lands Account (MELA). Despite the fact that any sales of Endowment Land are required by law to be paid into the Endowment Account, the KDC report mentioned above recommended that $205,000 of the proceeds of sale should be used to fund part of the capital costs of the Mangawhai water supply.
It appears from the unconfirmed minutes of the December meeting of the Council that this was rejected, and the all the proceeds of sale are to be paid into the MELA account.
From the point of view of the ratepayer that was an excellent result. It was in compliance with the Mangawai (sic) Empowerment Lands Act 1966 and it was a sensible decision. But the question lingers as to why the Council report recommended using Endowment monies for such a matter, and why the Council was inclined to make that decision without reference to the MELA committee that is supposed to make such decisions on the allocation of funds.
We also need to remember that the MELA fund is a fiction. It does not exist. The OAG in its report on the Kaipara debacle reported that all the monies in the Fund had disappeared without any paper trail during the heady days of McKerchar and Tiller. The Fund is now a mere fiction that was perpetuated by the commissioners and no doubt will receive the same treatment from the new Council.
Footnote: For those interested, whilst the Auditor-General could not find any paper trail for the missiong Endowment Fund, and although she highlights on her website that such a failure was a prime indication of corruption, she never pursued the matter any further. She even prevented the SFO from enquiring into any aspect of the Kaipara debacle. To cap it all off she found in her final report that there was no evidence of corruption in Kaipara.
Note also the article immediately below which considers the statement from Lyn Provost that in 7 years at the helm of the OAG she never found any corruption in New Zealand. And yet the High Court filled 200 pages with reasons why there was corruption in Rodney at the time that the OAG was the auditor for Rodney.