Thirty Eight Moffat Limited v Auckland Council [2023] NZCA 107 (19 April 2023)

[1] Thirty Eight Moffat Ltd (the developer) is a property developer. It acquired a property at 38A Moffat Road, Orewa and completed a subdivision of that property. The subdivision comprises 22 residential lots served by a jointly-owned access lane (the lane).

[2] This appeal concerns the water supply to the subdivision. There is a water meter on Moffat Road that is connected to the public watermain on that road. A watermain within the subdivision then runs from the meter along (and under) the lane. That watermain supplies water to the 22 sections and two fire hydrants.

[3] The public water and wastewater networks in Auckland are owned and operated by Watercare Services Ltd (Watercare). Watercare is a company registered under the Companies Act 1993. It is also a council-controlled organisation for the purposes of the Local Government Act 2002. Auckland Council (the Council) is Watercare’s sole shareholder.

[4] The proceedings arise out of a dispute between the developer and Watercare about ownership of the watermain under the lane. The developer wants to vest that watermain in Watercare, and grant Watercare an easement over the lane. That watermain would then become part of the public water network, and would be owned and maintained by Watercare. However Watercare has declined to accept a transfer of the watermain and the grant of an easement. Watercare’s current code of practice expressly provides that watermains will only be installed in the public road reserve, and that public watermains in private property and private roads will not be permitted.

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[5] The developer commenced proceedings under the Declaratory Judgments Act 1908 in which it sought various declarations in relation to the Auckland Council Water Supply and Wastewater Network Bylaw 2015 (the 2015 Bylaw). The developer’s primary argument was that the bylaw was invalid. The High Court dismissed the developer’s application. Justice Downs held that the 2015 Bylaw was not invalid, and even if the bylaw had been invalid, that would not have assisted the developer: Watercare’s ability to decline to accept a transfer of the watermain was not conferred by or derived from the 2015 Bylaw.^[1]

[6] The developer appeals to this Court, seeking declarations in relation to the validity and interpretation of the 2015 Bylaw.

[7] We agree with the High Court Judge that the developer’s proceedings are misconceived. Watercare does not derive its power to decline to accept vesting of infrastructure from the 2015 Bylaw. So even if the 2015 Bylaw was invalid, that would not call into question Watercare’s ability to decline to accept ownership of the watermain under the lane. The various grounds on which the 2015 Bylaw is challenged are also not made out. The appeal must therefore be dismissed.

[8] We begin by explaining the relationship between the 2015 Bylaw and Watercare’s codes of practice.

[9] When Auckland Council was established on 1 November 2010, there were eight water services bylaws that applied to the former districts of Auckland. Each was different from the others. All were to expire 31 October 2015. So, in 2014, Auckland Council began the process of replacing these bylaws with a new water supply and wastewater bylaw that would apply across Auckland.

[10] That process resulted in adoption of the 2015 Bylaw. Its purposes are to:^[2]

[11] Clause 6 of the 2015 Bylaw is concerned with connection to the water supply and wastewater networks:

(2) Any person wishing to connect to or disconnect from the water supply network or wastewater network, or to otherwise carry out works on such a network, must make a written application for approval to Watercare, and must provide with that application all information relating to the application as is specified by Watercare.

(3) Watercare may grant approval to such connection, disconnection or other works, as the case may be, and may impose conditions which must be complied with in the exercise of the approval.

(4) Without limiting subclause (3), a condition imposed under that subclause may require that the connection, disconnection or works comply with any relevant code of practice.

(5) Watercare may refuse an application for approval to connect to a network where:

(6) Without limiting subclause (5), Watercare may refuse approval to connect to a network work where:

[12] Clause 9 is at the heart of the developer’s challenge to the 2015 Bylaw. It reads:

(1) Any person responsible for the construction of water supply or wastewater infrastructure which is to vest in Watercare and become part of the water supply or wastewater network (whether on the deposit or approval of a survey plan or at any other time) must comply with all relevant codes of practice and standards relating to such infrastructure.

(2) Any person responsible for the construction of water supply or wastewater infrastructure which is to connect to the water supply or wastewater network must comply with all relevant codes of practice and standards relating to the connection.

Explanatory note: the relevant standard as at the date this bylaw is made is Watercare Services Limited’s Water and Wastewater Code of Practice for Land Development and Subdivision 2014.

(3) To avoid doubt, Watercare is not required to accept the vesting of water supply or wastewater infrastructure, or a connection to the water supply or wastewater network, which does not comply with subclauses (1) or (2).

[13] The 2015 Bylaw expressly provides that any explanatory notes (such as the one that follows cl 9(2)) are for information purposes, do not form part of the bylaw, and may be made, amended and revoked without formality.^[3]

[14] Part 5 of the 2015 Bylaw provides for enforcement, offences and penalties. It is an offence to breach certain clauses of the bylaw, but not cl 6 or cl 9.^[4] Works that do not comply with the bylaw may be removed by the Council or Watercare, and the costs of doing so may be recovered from the person who committed the breach.^[5] The bylaw also provides for recovery of costs incurred by the Council or Watercare as a result of a default in taking action required under the bylaw,^[6] or breach of the bylaw that causes damage to the water supply network or wastewater network.^[7]

[15] Various clauses of the 2015 Bylaw, including cl 9(1) and (2), refer to codes of practice. Clause 5 of the 2015 Bylaw defines “code of practice” to mean “an approved code of practice that sets standards in relation to water supply or wastewater infrastructure that is to vest in Watercare or connect with the water supply or wastewater network”.

[16] Watercare issued its first code of practice in 2012. It issued new or amended codes of practice in 2014, 2015, 2017, 2018, 2019 and 2021. The developer’s challenge to the 2015 Bylaw focuses on the provisions of Watercare’s Water and Wastewater Code of Practice for Land Development and Subdivision (the 2015 code).^[8]

[17] Watercare’s codes of practice seek to ensure, among other things, that infrastructure created by developers is: (a) acceptable to Watercare; and (b) consistent, so that the infrastructure can become part of the public water network: for example, newly constructed watermains running under roads in a new subdivision.^[9]

[18] Watercare’s codes are heavily technical. They contain rules about trenches, manholes, backflow prevention devices, pipes and many other things. The 2015 code relies heavily on a New Zealand Standard, NZS 4404:2010 Land Development and Subdivision Infrastructuree (NZS 4404), with modifications “to accommodate local variations”.^[10]

[19] Often when a new subdivision is completed, the roads in that subdivision vest in the Council and become public roads. The water-related infrastructure under those roads then vests in Watercare: Watercare becomes the owner of that infrastructure, and responsible for its operation and maintenance.

[20] In the present case, the lane did not become a public road and did not vest in the Council. But the developer wished to transfer the watermain under the lane to Watercare, accompanied by an easement over the lane to enable Watercare to access the watermain. If Watercare had accepted the proposed transfer and easement, it would have become the owner of the watermain under the lane.

[21] Watercare’s 2012^[11] and 2014^[12] codes of practice contained clauses about the location of watermains, and when a watermain on private property would vest in Watercare. These codes were similar. The 2014 code said:

Watermains are usually located in the road reserve. The location shall be specified by the Auckland Council or Watercare, within the road reserve or space allocation nominated by the Corridor Manager. Where approved by the Auckland Council or Watercare, watermains may be located in private property or public reserve, and in this case easements shall be required.

Watermains in private property will require specific approval by Watercare.

Watermains located within private property will require an appropriately sized and registered easement in accordance with Watercare’s approval.

For Watercare, an easement over private property is not the preferred option and may only be used as a temporary solution for landlocked subdivisions pending future permanent supply within a road.

The requirements of the [code] are intended to assist Watercare to ensure it is able to meet its obligations under the [Resource Management Act 1991] and other legislation. Certain requirements may be included by law, but regardless of whether this is the case, Watercare will not approve connections to its networks or accept vesting of new infrastructure in Watercare, unless the requirements of the [code] are met or written dispensation is provided. Attention is drawn to section 1.1.4 of this [code].

[23] The focus of the developer’s proceedings is, as already mentioned, the 2015 code. The clauses in the 2015 code about the location of watermains, and when a watermain on private property would vest in Watercare, read as follows:

Watermains shall be located in the road reserve. The location shall be specified by the Auckland Council or Watercare, within the road reserve or space allocation nominated by the Corridor Manager. Where approved by the Auckland Council or Watercare, watermains may be located in a public reserve, and in this case easements shall be required.

Watermains shall only be installed in the public road reserve. Watermains in private property, right of ways (ROW), private roads, etc. will not be permitted.

The requirements of the [code] are intended to assist Watercare to ensure it is able to meet its obligations under the [Resource Management Act] and other legislation. Certain requirements may be included by law, but regardless of whether this is the case, Watercare will not approve connections to its networks or accept vesting of new infrastructure in Watercare, unless the requirements of the [code] are met or written dispensation is provided. Attention is drawn to section 1.1.4 of this [code].

[25] As will be apparent, the 2015 code strengthened the requirement that watermains be in the public road reserve. Absent dispensation, public watermains on private property were not permitted. This change was made because Watercare experienced difficulties accessing public watermains on private property, even when an easement had been created to allow access.

[26] On 15 July 2016, the owners of 38A Moffat Road applied for resource consent to develop the property into 22 residential lots served by a jointly-owned access lane. The owners submitted detailed plans. The plans showed 22 private watermains — one for each lot — running along the lane; a single water meter within the lane; a public firemain within the lane; and a connection from the water meter to the existing public watermain under Moffat Road.

[27] On 13 January 2017, Auckland Council granted resource consent. The consent was subject to conditions. These included a requirement the development be carried out in accordance with the plans submitted with the application, and a requirement that the developer seek and obtain engineering plan approval for the works to be undertaken pursuant to the resource consent.

[28] On 26 October 2017, the developer bought the property and continued to develop it, using the same engineers as the previous owners, AR & Associates Ltd.

[29] On 22 December 2017, the developer sought engineering plan approval for works to be undertaken pursuant to the resource consent. The plans that were submitted differed from those used to obtain resource consent in one important respect: rather than showing 22 individual watermains and a separate firemain, the plans showed a single, combined watermain and firemain. It appears that it was not practicable to locate 22 individual watermains within the lane, hence the change.

[30] This change meant the Council could have required the developer to apply to vary the resource consent. The Council chose not to require this; it agreed to consider the change within the context of the engineering plan approval process. In March 2018, the Council asked Watercare to review the wastewater and water supply plans as part of that process.

[31] In a letter dated 5 April 2018, Watercare recommended to the Council that engineering plan approval be granted in respect of the wastewater and water supply plans, with conditions which were identified by annotations on the plans. Watercare required a “[b]ulk Water Meter in [the] public berm” and said the “[w]ater main from water meter to lots ... [is] to be private”. In short, Watercare required that the single watermain under the lane would be private, not public: it would not be vested in Watercare.

[32] The same day, the Council advised AR & Associates Ltd of Watercare’s recommendations by emailing them a copy of Watercare’s letter, and granted engineering plan approval in respect of the wastewater and water supply plans subject to the conditions recommended by Watercare.

[33] No issue was taken at that time with Watercare’s requirement that the watermain remain private. But on 7 February 2019, after Watercare invoiced the developer for connection fees for the subdivision, the developer raised this issue with the Council and Watercare. Andrew Taylor, the sole director of the developer, says he did not do so earlier as he did not receive Watercare’s letter dated 5 April 2018 until 7 February 2019. (There was some dispute about this in the High Court, but it is not material for present purposes and we proceed on the basis that Mr Taylor’s recollection of this timing is correct.)

[34] On 12 February 2019, the parties met but did not agree. The developer paid the connection fees associated with the private watermain on a “without prejudice” basis.

[35] The developer did not seek judicial review of Watercare’s decision to decline to accept vesting of the watermain under the lane. Instead, the developer brought proceedings under the Declaratory Judgments Act in relation to the validity and interpretation of the 2015 Bylaw. The developer claimed that:

[36] The developer sought various declarations, in particular a declaration that the 2015 Bylaw is invalid. Alternatively, if the 2015 Bylaw is valid, the developer sought declarations that:

[37] Justice Downs began by considering the challenge to the 2015 Bylaw by reference to the Standards Act. Although the bylaw was based on NZS 4404, it did not refer to that standard and seek to incorporate it by reference. So, the relevant provisions of the Standards Act simply were not engaged.^[15] This finding was plainly correct, and was not challenged on appeal before us.

[38] The Judge then turned to the developer’s second and primary argument: the challenge to the 2015 Bylaw on the basis that the references in the bylaw to Watercare’s codes of practice rendered the bylaw invalid in whole or in part, because the bylaw permitted changes to be made to the codes of practice without proper consultation and/or involved an impermissible sub-delegation of power and/or rendered the bylaw uncertain and unreasonable.

[39] The Judge considered that the challenge to the validity of the 2015 Bylaw was problematic. It was predicated on an assumption that Watercare’s codes of practice were made under the bylaw, and thus that if the bylaw is invalid the codes must be too. Further, the developer assumed that if the codes were invalid, Watercare would be required to accept the watermain under the lane as public, not private. The Judge described these assumptions as “ambitious”.^[16]

[40] The Judge explained that Watercare was a legal person with full capacity to carry on or undertake any business or activity, and “full rights, powers, and privileges”.^[17] Many companies have codes of practice to guide their business activities. It was not clear why Watercare could not have codes of practice irrespective of the 2015 Bylaw. Indeed it had: the 2012 and 2014 codes both pre-dated the bylaw. It had not been argued that the 2012 and 2014 codes were invalid for that reason.^[18]

[41] The Judge said that no-one can insist that Watercare accept infrastructure as its own: there is no right to vest assets in Watercare. Watercare could decline to accept a watermain as part of the public water system — provided, of course, it acted reasonably in doing so — quite apart from the existence of an associated code of practice or bylaw.^[19]

[42] The challenges to the 2015 Bylaw appeared to be based on an assumption that Watercare’s decision to decline to accept the watermain as part of the public water system must reflect “positive authorisation of law”.^[20] However this argument rested on the misplaced assumption that Watercare’s decision interfered with the developer’s private property.^[21] However the developer’s complaint was the inverse: that Watercare would not accept private property as public property.^[22]

[43] The Judge considered that in light of these observations a declaration that the 2015 Bylaw is invalid would not resolve the dispute between the parties, so would not be appropriate.^[23] The Judge noted that he did not need to go further, but in deference to the submissions made on behalf of the developer, he addressed the remaining arguments. In doing so, he said, he presupposed that Watercare’s decision had been made under or in connection with the 2015 Bylaw.^[24]

[44] The Judge did not accept the argument that there had been inadequate consultation in relation to the bylaw because the 2012 code was made available to the public during the consultative phase, but the 2014 and 2015 codes were not, and the “prohibition” in the 2015 code was adopted after public consultation had closed in relation to the 2015 Bylaw. The Judge considered that the developer’s argument rested on the assumption that the 2012 code and the 2015 code were substantially different, which they were not. Each of the codes contained a dispensation clause. Although the 2012 and 2014 codes contemplated the possibility of an easement over private property, both made it clear that an easement was not the preferred option and was only acceptable on a temporary basis.^[25]

[45] The Judge also did not accept the argument that the 2015 Bylaw is ultra vires, or void for uncertainty or unreasonableness, because of the references it contains to Watercare’s “relevant codes of practice”. The absence of a formal process to make or amend codes of practice did not invalidate the bylaw. The absence of such a process did not confer an unreasonable discretion on Watercare.^[26]

[46] Nor did the 2015 Bylaw involve an improper sub-delegation of powers to Watercare. In deciding whether or not to accept ownership of infrastructure, Watercare was acting in its own right. It was not exercising legislative power as a delegate of the Council.^[27]

[47] The Judge did not accept the alternative argument that if the 2015 Bylaw is valid, the correct code of practice is the 2014 code, not the 2015 code. That contention was based on the explanatory note to cl 9 of the 2015 Bylaw, set out at [12] above, which identifies the 2014 code as the relevant standard as at the date the bylaw was made. However, as the Judge explained, cl 9(1) and (2) of the 2015 Bylaw refer to “all relevant codes of practice and standards”, not to any particular code or standard. Clause 5(4) of the bylaw also expressly provides that explanatory notes do not form part of the bylaw. The Judge considered that the obvious interpretation of the bylaw was that it refers to the code (and standards, if any) in force when a connection or vesting is sought.^[28]

[48] Finally, the Judge declined to consider the declaration sought in relation to a substantive legitimate expectation on the part of the developer. Such a declaration was not within the scope of declarations contemplated by the Declaratory Judgments Act.^[29] The developer sought to address this problem by substantially amending its pleading. Leave to do so was declined.^[30] That decision has not been challenged on appeal before this Court. It is therefore unnecessary to discuss it in any detail.

[49] Before us, the focus of the argument presented by Mr Illingworth KC on behalf of the developer was that the 2015 Bylaw delegates to Watercare powers to control connections to the water supply network, including powers to impose conditions that require the connection to comply with relevant codes of practice. He submitted that the 2015 Bylaw is expressed in terms which incorporate an external document — Watercare’s code of practice — in terms that are ambulatory. The code of practice has been periodically updated and revised by Watercare. In particular, it was amended by Watercare to introduce a prohibition in the 2015 code on watermains in private roads.

[50] Thus, Mr Illingworth submitted, the primary interpretative question for this Court was whether the 2015 Bylaw, which “encompasses ambulatory amendment to external documents incorporated by reference”, is saved from invalidity by s 13(1) of the Bylaws Act. He submitted that the scope of the delegation to Watercare was not sufficiently particularised to save it from invalidity or unreasonableness.

[51] Mr Illingworth submitted, by reference to a helpful table which is set out as an appendix to this judgment, that the changes from the 2012 code to the 2015 code were significant. He said the Judge had erred in finding that the codes were not substantially different.

[52] Mr Illingworth submitted that the Judge erred in declining to grant a declaration in relation to the issues raised by the proceedings. Those issues were not hypothetical. Section 3 of the Declaratory Judgments Act provides that a declaration can be made “[w]here any person has done ... any act, the validity, legality, or effect of which depends on the construction or validity of any ... bylaw made by a local authority ...”. In this case, the relevant person was the developer. It had done an act (asking for its engineering plans to be approved and asking for the subdivision to be connected to the network) the legality or effect of which depends on the construction or validity of the 2015 Bylaw. The developer therefore fell squarely within the scope of s 3 of the Declaratory Judgments Act.

[53] Mr Illingworth then went on to argue that the 2015 Bylaw delegated power to make codes of practice to Watercare, and that delegation was not saved by s 13 of the Bylaws Act, which provides:

(1) No bylaw shall be invalid because it requires anything to be done within a time or in a manner to be directed or approved in any particular case by the local authority making the bylaw, or by any officer or servant of the local authority, or by any other person, or because the bylaw leaves any matter or thing to be determined, applied, dispensed with, ordered, or prohibited from time to time in any particular case by the local authority making the bylaw, or by any officer or servant of the local authority, or by any other person.

(2) This section shall not apply to any case in which the discretion so left by the bylaw to the local authority, or to any officer, servant, or other person, is so great as to be unreasonable.

[54] Mr Illingworth referred to the judgment of Stout CJ in Bremner v Ruddenklau, in which the Chief Justice observed that s 13(1) of the Bylaws Act has two distinct limbs.^[31] Mr Illingworth submitted that both limbs of s 13(1) are limited by the words “in any particular case”. The plain and ordinary meaning of this phrase, he submitted, was that the particular case or situation must be particularised in the bylaw. Moreover, he said, the second limb of s 13(1) only applies where the determination, dispensation, order or prohibition is exercised “from time to time in any particular case”. The meaning of the phrase “from time to time” is “occasionally” or “sometimes”, but not “regularly”.

[55] The 2015 Bylaw was not saved by s 13(1) of the Bylaws Act, Mr Illingworth submitted, because compliance with relevant codes of practice was required in every case, not in particular cases or particular instances. The prohibition in cl 6.3.8.4 of the 2015 code was not particularised in the 2015 Bylaw itself. Rather, it is found in a subsequent amendment to the code of practice. The dispensing power was not particularised in the bylaw as a power to be exercised from time to time: the prohibition from 2015 onwards against watermains in a private right of way was introduced as a general rule, absent dispensation. So, Mr Illingworth submitted, s 13(1) was not engaged.

[56] Mr Illingworth went on to argue that the discretion conferred on Watercare to amend codes of practice on an ambulatory basis was ultra vires or unreasonable, by reference to various authorities, including Carter Holt Harvey Ltd v North Shore City Council.^[32]

[57] Finally, Mr Illingworth argued that the Judge had failed to consider the public law context in which Watercare exercised its powers.

[58] The relief sought by the developer before this Court was declarations to the effect that:

[59] The respondents’ submissions are reflected in the discussion below, where relevant, so need not be separately summarised.

[60] The developer’s challenge to the 2015 Bylaw is in our view fundamentally misconceived, for three related reasons.

[61] First, the ability of Watercare to decline to accept vesting of the watermain under the lane, and an easement over the lane, is not derived from the 2015 Bylaw. Like any other company that owns and operates network infrastructure, it is free to decide whether or not to accept the transfer of an asset and the grant of an easement. It was common ground before us that Watercare exercises its powers within a public law framework, and subject to public law constraints.^[33] But no challenge to Watercare’s decision was presented on that basis. Absent such a challenge, Mr Illingworth did not identify any legal basis on which Watercare could be compelled to accept ownership of an asset that it did not wish to own.

[62] More specifically, Mr Illingworth was not able to identify any source of an obligation for Watercare to accept vesting of infrastructure unless excused from doing so by the 2015 Bylaw. No such obligation is found in the 2015 Bylaw itself, or in any other legislation (primary or secondary).

[63] That is why cl 9(3) of the 2015 Bylaw provides that to avoid doubt Watercare is not required to accept the vesting of water supply or wastewater infrastructure which does not comply with subclauses (1) or (2) of cl 9. Clause 9(3) simply records what the position would be in any event, absent cl 9 and absent any code of practice.

[64] Mr Illingworth submitted that the 2015 Bylaw confers an authority on Watercare in addition to the powers it would otherwise have; and it clothes Watercare’s codes of practice with an authority they would not otherwise have. However in the context of vesting of assets in Watercare, those propositions are not correct. Absent the bylaw, Watercare would have precisely the same ability to decline to accept ownership of infrastructure that did not comply with its own internal codes of practice.

[65] It follows that there is no connection at all between the validity of the 2015 Bylaw and the ability of Watercare to decline to accept ownership of infrastructure that the developer wishes to transfer to it.

[66] Second, the ability of Watercare to issue codes of practice, and apply those codes of practice when determining whether to acquire new infrastructure, does not depend on the 2015 Bylaw. As the Judge noted, it is common for companies to have codes of practice.^[34] That is especially unsurprising in the context of a major network utility operator.

[67] Watercare is not exercising any legislative power when it adopts a code of practice to guide its own decision-making and to provide information to the public about Watercare’s approach to various technical matters, and to what assets it will agree to acquire. The limits on sub-delegation of powers in a bylaw stem from the constitutional principle that where Parliament confers a legislative power on a local authority, that power should be exercised by the local authority on which it was conferred, and not by some other person. Unless expressly authorised to do so, the local authority cannot delegate that legislative power. That principle is not engaged here, because adopting a code of practice is not an exercise of legislative power.

[68] Third, as Mr Illingworth was constrained to accept, there can be no objection to references in the 2015 Bylaw to compliance with technical standards set out in a code. Dealing with detailed technical issues of this kind in a code of practice, rather than in the bylaw itself, is sensible and probably necessary in practice. Mr Illingworth accepted that if the codes were limited to setting standards, there could be no objection to them. The developer’s objection in this case stemmed from what he described as the “blanket prohibition” on vesting of infrastructure under private property effected by Watercare through the 2015 code. If there was to be a provision of this kind, he submitted, it should have been in the bylaw, not in a code of practice that can change from time to time.

[69] The difficulty with this argument is that there was no legal “prohibition” on Watercare accepting the vesting of infrastructure under private roads. The 2015 code did not prohibit Watercare from accepting ownership of any asset: it simply recorded Watercare’s usual approach, absent any dispensation. Nor did cl 9(3) of the 2015 Bylaw operate as a prohibition, when read together with the 2015 code. As already explained, cl 9(3) was not an operative provision. It did not confer any power on Watercare, or preclude any action by Watercare.

[70] For these very fundamental reasons, the developer’s challenge to the 2015 Bylaw cannot succeed. We therefore need not engage with the submissions on the appropriateness of making a declaration in this case, as no basis for making any declaration has been made out.

[71] We need deal only briefly with the variations on the developer’s core argument, in these circumstances.

[72] We do not consider that the references in cl 6 and cl 9 of the 2015 Bylaw to compliance with “relevant codes of practice” relating to infrastructure render the bylaw uncertain or unreasonable. Nothing that ought to be prescribed by the bylaw has been left to the codes of practice. Mr Illingworth accepted as much in relation to technical matters. And as already explained, it was not necessary for the bylaw to deal with questions of vesting at all, let alone in more detail.

[73] The argument that the “prohibition” on vesting in the 2015 code should not be able to be introduced by Watercare as a delegate in the absence of a formal process of the kind that applies to amendment of bylaws faces essentially the same difficulty. As explained above, there is no “prohibition” on vesting in the 2015 code, and Watercare’s ability to decide what infrastructure it accepts is not an exercise of legislative power. So there is no need to consult on the changes made in the 2015 code as if that code were a bylaw.

[74] Mr Illingworth’s submissions in relation to the scope of delegation authorised by s 13 of the Bylaws Act need not be addressed, in the absence of any relevant delegation of legislative powers. However we pause to note that the argument that s 13(1) requires the particular case or situation to be specified in the bylaw is in our view plainly wrong. So too is the submission that s 13(1) only applies where the determination, dispensation, order or prohibition is exercised occasionally or sometimes, but not regularly. A classic example of a bylaw of the kind contemplated by s 13(1) is a bylaw that requires a person engaging in some activity — for example, operating a food truck — to have a licence or permit issued by the Council. A bylaw may authorise the grant of such licences or permits subject to conditions. The bylaw can require a licence to be sought in each and every (particular) case: the bylaw does not have to identify specific (and limited) circumstances in which a licence is required. A determination about whether to grant a licence, and if so on what conditions, may be made from time to time as each and every case arises — that is, as each licence is sought — not only occasionally or sometimes. Nothing in the language of s 13 supports the approach contended for by the developer in this case, which is inconsistent with the language of s 13 of the Bylaws Act and with long-established principle.^[35]

[75] Mr Illingworth’s submission that the discretion afforded by the 2015 Bylaw to Watercare to amend its codes of practice on an ambulatory basis was ultra vires or unreasonable also falls away, once it is appreciated that the codes of practice are not authorised by the bylaw, and do not depend on the bylaw or any other statutory framework for their issue or application by Watercare.

[76] We accept Mr Illingworth’s submission that Watercare operates in a public law context, manging public assets in the interest of the Auckland public. Watercare’s decision-making is subject to a number of public law constraints.^[36] But these proceedings did not involve any challenge to Watercare’s decision-making. Nor can the public law context within which Watercare makes decisions have any bearing on the relief sought in relation to the validity and interpretation of the 2015 Bylaw.

[77] For the sake of completeness, we note that Mr Illingworth made submissions about the importance of connection to water supply. He emphasised that supply of water is an essential facility. However the question of connection to the public water supply was not in issue here. Watercare agreed to connect the subdivision to the public watermain at the roadside on Moffat Road. These proceedings were concerned solely with the question of whether Watercare was required to accept vesting of the watermain under the lane, coupled with an easement over the lane. That question does not raise any issue of access to water as an essential facility.

[78] Finally, in the course of oral argument Mr Illingworth developed a “fallback argument” that the Court should find that the prohibition in the 2015 code on acceptance of infrastructure under private land is not a “standard” for the purpose of the definition of “code of practice” in cl 5 of the 2015 Bylaw. So, he submitted, the Court can and should declare that this provision does not form part of the code of practice for the purposes of the bylaw.

[79] We accept that it is strongly arguable that provisions in a code of practice that are not “... standards in relation to water supply or wastewater infrastructure ...”^[37] should be disregarded when applying references in the 2015 Bylaw to compliance with codes of practice. However this does not assist the developer in the present case. Even if we were persuaded that cl 6.3.8.4 of the 2015 code was not a “standard” for the purposes of the 2015 Bylaw, that would not affect the validity of the 2015 Bylaw. Nor would it affect Watercare’s power, as owner and operator of the water supply network, to decline to accept vesting of the watermain under the lane. Because this point can have no bearing on the outcome of the appeal, and because it was not fully argued before us, we refrain from expressing a concluded view on whether cl 6.3.8.4 amounts to a “standard” for the purposes of the 2015 Bylaw.

[81] The appellant must pay costs to the respondents for a standard appeal on a band A basis, with usual disbursements.

Solicitors:
Govett Quilliam, New Plymouth for Appellant
Simpson Grierson, Auckland for First and Second Respondents

2012 Code of Practice	2014 Code of Practice	2015 Code of Practice
6.3.8 System layout 6.3.8.1 General Water mains are usually located in the road. The location shall be specified by the Auckland Council/Watercare, within the road or space allocation nominated by the Corridor Manager. Where approved by the Auckland Council or Watercare, water mains may be located in private property or public reserve, and in this case easements shall be required. Water mains should: (a) Be aligned parallel to property boundaries; (b) Should not traverse steep gradients; and (c) Should be located to maintain adequate clearance from structures and other infrastructure.	6.3.8 System layout 6.3.8.1 General Watermains are usually located in the road reserve. The location shall be specified by the Auckland Council or Watercare, within the road reserve or space allocation nominated by the Corridor Manager. Where approved by the Auckland Council or Watercare, watermains may be located in private property or public reserve, and in this case easements shall be required. Watermains should: (a) Be aligned parallel to property boundaries; (b) Should not traverse steep gradients; and (c) Should be located to maintain adequate clearance from structures and other infrastructure. Refer section 6.3.9	6.3.8 System layout 6.3.8.1 General Watermains shall be located in the road reserve. The location shall be specified by the Auckland Council or Watercare, within the road reserve or space allocation nominated by the Corridor Manager. Where approved by the Auckland Council or Watercare, watermains may be located in a public reserve, and in this case easements shall be required. Watermains should: (a) Be aligned parallel to property boundaries; (b) Should not traverse steep gradients; and (c) Should be located to maintain adequate clearance from structures and other infrastructure. Refer section 6.3.9
6.3.8.4 Water mains in private property Water mains in private property will require specific approval by Watercare. Water mains located within private property will require an appropriately sized and registered easement in accordance with Watercare’s requirements. C6.3.8.4 For Watercare, an easement over private property is not the preferred option and may only be used as a temporary solution for landlocked subdivisions pending future permanent supply within a road. A typical situation where Watercare may approve water mains in easements is a fire main in a right of way.	6.3.8.4 Watermains in private property Watermains in private property will require specific approval by Watercare. Watermains located within private property will require an appropriately sized and registered easement in accordance with Watercare’s approval. C6.3.8.4 For Watercare, an easement over private property is not the preferred option and may only be used as a temporary solution for landlocked subdivisions pending future permanent supply within a road.	6.3.8.4 Watermains in private property Watermains shall only be installed in the public road reserve. Watermains in private property, right of ways (ROW), private roads, etc. will not be permitted.

^[1] Thirty Eight Moffat Ltd v Auckland Council [2021] NZHC 2978 [High Court judgment].

^[2] Auckland Council Water Supply and Wastewater Network Bylaw 2015 (25 June 2015), cl 4(1) [2015 Bylaw].

^[8] Watercare Services Ltd Water and Wastewater Code of Practice for Land Development and Subdivision (May 2015) [2015 code].

^[11] Watercare Services Ltd Water and Wastewater Code of Practice for Land Development and Subdivision (November 2012) [2012 code].

^[12] Watercare Services Ltd Water and Wastewater Code of Practice for Land Development and Subdivision (December 2014) [2014 code].

^[20] At [41], referring to Philip A Joseph Joseph on Constitutional and Administrative Law (5th ed, Thomson Reuters, Wellington, 2021) at 723.

^[25] At [47]–[49], citing the 2012 code, above n 11, cl 6.3.8.4; and the 2014 code, above n 12, cl 6.3.8.4.

^[33] See for example Moncrief-Spittle v Regional Facilities Auckland Ltd [2022] NZSC 138.

^[35] See for example, Carter Holt Harvey Ltd v North Shore City Council, above n 32, at [68].
^[36] 2015 Bylaw, above n 2, cl 5(2).

	BETWEEN	THIRTY EIGHT MOFFAT LIMITED Appellant
	AND	AUCKLAND COUNCIL First Respondent WATERCARE SERVICES LIMITED Second Respondent

Hearing:	24 August 2022
Court:	Goddard, Moore and Edwards JJ
Counsel:	G M Illingworth KC, S J Ryan and S A Kilgour for Appellant P M S McNamara and C J Ryan for First and Second Respondents
Judgment:	19 April 2023 at 11.30 am

Court of Appeal of New Zealand

Thirty Eight Moffat Limited v Auckland Council [2023] NZCA 107 (19 April 2023)