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High Court of New Zealand Decisions |
Last Updated: 22 January 2018
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IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
CIV-2007-463-000606
UNDER the Judicature Amendment Act 1972
IN THE MATTER OF the Local Government Act 2002
BETWEEN WHAKATANE DISTRICT COUNCIL Applicant
AND THE BAY OF PLENTY REGIONAL COUNCIL
Respondent
Hearing: 17-21 March and 4-6 June 2008
Appearances: D J Neutze and V T Bruton for the Applicant
J G Miles QC and K J Catran for the Respondent
Judgment: 9 April 2009
JUDGMENT OF DUFFY J
This judgment was delivered by Justice Duffy on 9 April 2009 at 3.00 pm, pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Counsel: J G Miles QC P O Box 4338 Auckland for the
Respondent
Solicitors: Brookfields P O Box 240 Auckland for the Applicant
Cooney Lees Morgan P O Box 143 Tauranga for the Respondent
WHAKATANE DISTRICT COUNCIL V BAY OF PLENTY REGIONAL COUNCIL HC ROT CIV-2007-463-
000606 9 April 2009
[1] The applicant challenges, by way of judicial review, a
decision of the respondent to relocate its headquarters
and 100 staff
positions from Whakatane to Tauranga. Both parties are territorial authorities
whose status and authority are derived
from the Local Government Act 2002. The
applicant’s challenge has the support of the Rotorua and Opotiki District
Councils,
as well as the Te Arawa Lakes Trust, which represents 60 Iwi and Hapu
in the Te Arawa Lakes area.
[2] The respondent’s decision-making powers are derived from and
subject to the Local Government Act. It follows that
the respondent’s
decision to relocate its headquarters from Whakatane to Tauranga (the relocation
decision) must comply with
the relevant provisions of the Act, as well as any
requirements that the common law imposes on decisions of this type.
[3] As with most judicial review claims, there is an overlap between
some of the grounds of review. There is a challenge to
the lawfulness of the
decision-making process, which the respondent followed. The allegations in this
regard are that:
a) The respondent failed to follow the required statutory process and,
therefore, exceeded its jurisdiction;
b) The unlawful process the respondent adopted meant that it failed to
take into account relevant mandatory statutory considerations;
and
c) In the course of reaching its decision, the respondent
breached legitimate expectations contained in the Triennial
Agreement between it
and various territorial authorities of which the applicant is one.
[4] There are also allegations of a breach of the duty to consult, which is a duty imposed under s 83 of the Local Government Act. This breach is alleged to stem from distinct flaws within the decision-making process. The respondent is alleged to have failed to provide a reasonable opportunity to be heard to those persons who sought to make submissions in person, which is allegedly due to certain councillors having closed minds on the topic and others being absent during the public consultation hearings.
[5] Furthermore, it is alleged that the respondent’s relocation
decision was the result of bias and predetermination on
the part of a number of
the respondent’s councillors. And finally, there is an allegation the
relocation decision was unreasonable.
[6] In this case the hearing was spread over two separate periods of
time. By the commencement of the second period, the key
issues between the
parties had become more refined. The applicant helpfully provided a summary of
the key issues. The findings
on these issues will determine the outcome of the
proceeding. I propose, therefore, to list the issues now and later to deal
with
each in turn. The issues are:
a) Whether compliance with ss 76 to 79 of the Local Government Act
requires the express and conscious exercise of the discretion
under s 79, or
whether this can be done by accident;
b) Whether stage one of the decision-making process – the
identification of the problems and objectives – was always
focused on
relocating the respondent’s headquarters or whether it was for the
respondent to assess what options might be open
to it to carry out the new
functions it was proposing to undertake;
c) Whether the end point of stage two of the decision-making process
– the seeking to identify all reasonably practicable
options
– was reached on 7 December 2006 when the respondent made an “in
principle” decision to relocate
its headquarters to Tauranga, or
whether the end point was reached later on 15 March 2007 when the respondent
resolved to
adopt amendments to its 10 year plan to provide for the
relocation. Within this issue is the sub-issue of whether
or not the
“in principle” decision of 7 December 2006 was in fact a decision at
all in terms of the Act;
d) Whether the respondent gave any consideration at all during the stage one and stage two part of the decision-making process to community views on the location of its head office;
e) Whether the councillors who did not attend all or substantial parts
of the hearings should have voted on the relocation
decision and, if not, what
effect did their voting have on the decision;
f) Whether some of the respondent’s councillors came to the
hearings and deliberations in May and June 2007 with closed
minds;
g) The application of the Triennial Agreement to the decisions at issue and whether that agreement gave the applicant a justifiable legitimate expectation of early notification of, and input into, the relocation
decision, as well as the review leading up to the
decision.
Facts
[7] Since the establishment of the respondent in 1989 (under s 41 of
the Local Government Amendment Act 1989 (No 2)), its headquarters
have been
located in Whakatane. The location was an historical accident resulting from
the local government reforms of that time.
Since then, from time to time the
respondent has questioned the appropriateness of this location. On 21 June
2007 a decision was
made to amend the Long Term Community Plan to provide for
the relocation of the respondent’s headquarters to Tauranga, together
with
the relocation of 100 of 160 staff positions.
[8] Over the years, the possibility of relocating the
respondent’s headquarters has come under consideration. There were
accommodation reviews in 1993, 2000, 2002 and 2003. None of these resulted in
any changes. Then in 2005 the respondent considered
looking at the issue
again but deferred doing so until its new Chief Executive, Mr Bayfield,
commenced work in the New
Year (2006).
[9] At the beginning of 2006 the respondent was faced with an issue regarding the use of land it had purchased at Sulphur Point, Tauranga, from the Tauranga District Council. The respondent had intended building on the site but the independent commissioner responsible for the consent decision refused consent. An appeal to the Environment Court was lodged. This was later abandoned and the land
was sold back to the Tauranga District Council. The inability to
use the Sulphur Point site for the respondent’s
operations in
Tauranga increased the accommodation pressures the respondent was
experiencing. The respondent’s statutory
responsibilities had increased
as a result of a change in legislation. The conflux of a new Chief Executive,
new expanded statutory
role, and the loss of the site for some expansion in
Tauranga caused the respondent to re-evaluate its performance and how it might
best deliver its responsibilities in the region. Its accommodation
arrangements were critical to this evaluation as they
had a significant
practical effect on the respondent’s performance.
[10] The relevant actions the respondent took are fully described in the
affidavits of its Chairperson, John Cronin, and its Chief
Executive, William
Bayfield. The first step was on 30 March 2006 when the respondent’s
Finance and Corporate Services Committee
agreed to undertake an
accommodation and location review using external advisers. The report the
Committee had received
from Miles Conway, Group Manager of the
respondent’s Human Resources and Corporate Services, recorded that the
brief to the
external advisers was to be developed in consultation with the
Chairman and was to investigate "all aspects of our present and future
accommodation needs, including where we would be best located to deliver our
services and the estimated tangible and intangible costs
and benefits associated
with any recommendations”.
[11] In April 2006 potential external advisers were approached. As part
of this process, on 13 April 2006 a briefing letter
was sent to Deloitte New
Zealand (Deloitte). The briefing letter makes it clear that the respondent was
seeking “a comprehensive
report analysing where [it] as a corporate
organisation could best be located and what [were] the tangible and intangible
costs,
benefits, drawbacks and hurdles”.
[12] In June 2006 Deloitte responded with a proposal. Whilst the proposal referred to the task as an accommodation needs and location review, the content of the proposal reveals that Deloitte understood the wider and more comprehensive scope of the exercise. The proposal noted that:
Environment Bay of Plenty is currently facing capacity issues in relation to
its current office space in all its present locations
and wishes to take this
opportunity to determine a long term plan for the location of the various
functions that the organisation
performs now and will perform in the
future.
[13] The Deloitte proposal was subsequently accepted by the respondent.
In short, the proposal recommended that the respondent
relocate its headquarters
to Tauranga. The key findings were that there had been a significant increase in
population in Tauranga,
with a corresponding increase in what Deloitte described
as “leadership functions in various organisations located there”.
The report recognised that the respondent needed to have a
“presence” in Whakatane, Rotorua and Tauranga. The current
offices
were near to full capacity and additional space was required in all locations.
It was seen as inevitable that the respondent
would have a bigger presence in
the Western Bay of Plenty due to the population growth in that part of the
region.
[14] The issues the briefing letter required Deloitte to cover seems to
me to extend beyond simple accommodation concerns. The
respondent was seeking
to find information on how it could best be located in terms of the impact on
its functions, present and future,
its leadership functions and role in the
region, the extent to which its functions were location biased when it came to
service delivery,
and how it could efficiently deliver its functions in terms of
its location. Deloitte was also asked to consider the recommendations
on these
issues in terms of cost and impact on human resources, property acquisition and
disposal, socio-economic costs on communities
affected, ongoing benefits and pay
back periods of recommendations, and the implementation of the identified
changes. Enclosed with
the briefing letter were the draft 10 year plan, volumes
one and two, the Regional Policy Statement, a guide to the Regional Council,
Smart Growth Strategy, Bay Trends 2004, a map of the region showing the various
locations of the respondent’s offices, the
human resources quarterly
report and the respondent’s corporate structure.
[15] A steering group was set up comprising the Chairman, Mr Cronin, Councillors Riesterer and Cleghorn, the Chief Executive, Mr Bayfield, and two senior staff members, Mr Conway and Bruce Fraser. The group met regularly, including with Deloitte. Mr Bayfield’s evidence was that during this stage it became apparent from the discussions with Deloitte that there was no financial imperative to
relocate the respondent’s headquarters, but that relocation continued
to make sense for strategic reasons.
[16] In October 2006 Deloitte undertook interviews with the
respondent's councillors and with the Mayors and Chief Executives
of local
territorial authorities within the respondent’s region.
[17] From October 2006 onwards the steering group received drafts of
Deloitte’s report. These drafts were discussed with
Deloitte.
Although, the applicant has criticised the interaction between the steering
group and Deloitte during this time, I see
no reason to be critical of what
occurred. It was important for the respondent to ensure that Deloitte was
adhering to the project’s
terms of reference, and these discussions were a
way of achieving that.
[18] Then, in November 2006, Deloitte’s issued its report.
It recommended shifting the respondent’s headquarters
to Tauranga. The
report is a comprehensive and relatively in-depth response to the terms of
reference set out in the briefing letter
of 13 April 2006.
[19] In the report Deloitte had concluded that there was a significant
increase in the population in the western area of the respondent’s
region,
particularly in Tauranga, whereas the population in the eastern areas was either
static or in decline. Tauranga was recognised
as the natural centre of the
region and Deloitte considered that the respondent should have its headquarters
located in the region’s
leading urban centre. Deloitte also considered
that the success of the respondent’s future performance, including it
assuming
a leadership role in the region, necessitated the establishment of a
more significant presence in the major population centres.
The need for a more
significant presence in the western area of the region was seen as inevitable.
The result of these conclusions
was that the continuation of headquarters
located in Whakatane came to be seen as an impediment to the respondent’s
ability
to perform its newly expanded role in the region.
[20] Whilst some increase in presence in Rotorua was recognised as necessary, the location choices seen as warranting serious consideration were to remain in
Whakatane or move to Tauranga. It is clear from the report that no other
centre in the region was realistically in contention. If
a move was to be made,
the sensible and realistic option was to move to the largest and ever expanding
urban centre in the region.
[21] In December 2006, Mr Bayfield reported to the respondent
recommending it make an “in principle” decision to relocate
(the
Bayfield report). This report contained comprehensive comment on the Deloitte
report and set out a proposed plan of action,
including the “in
principle” adoption of the Deloitte report.
[22] The Bayfield report makes it clear that the Deloitte report
was not a “blueprint for any relocation or retention
project and should
not be construed as setting out what changes will occur”.
[23] On 7 December 2006, the respondent resolved that it supported
the key recommendations in the Deloitte report and
agreed in principle that the
head office should be relocated to Tauranga, subject to further detailed
investigative work on costs
and accommodation. The Deloitte report, as well as
the report Mr Bayfield prepared for the 7 December 2006 meeting, were
subsequently
published on the respondent's website.
[24] On 31 January 2007, the respondent had a workshop with
Whakatane District Council representatives at which
a formal presentation
of the relocation question was presented. The respondent requested its staff
to provide information on
the effect of relocating the headquarters or the
respondent's ability to perform its function.
[25] In February 2007 a separate independent market economics report was obtained on the potential positive and negative economic impacts likely to result from the relocation of the headquarters. Then later that month Deloitte conducted socio-economic interviews with representatives from various interest groups in Whakatane. Also during February, councillors of the respondent met with members of the community and local authority members to discuss the issues raised in the
Deloitte report. These discussions included the respondent’s
councillors meeting with local Iwi.
[26] On 8 March 2007, Deloitte released a social impact report.
Then on
15 March 2007, there was a public release of a statement of proposal and
proposed amendments to the respondent’s 10 year plan.
The proposal
recommended moving the headquarters to Tauranga, including 130 staff positions.
This action was taken because by then
the respondent had realised that a
decision to move its headquarters away from Whakatane was a decision that needed
to be potentially
provided for in the respondent’s 10 year
plan.
[27] Between 15 March 2007 to 2 May 2007, persons having an interest in
making submissions on the question of the location of
the respondent’s
headquarters were given the opportunity to make submissions in writing. From 21
May to 24 May and on 31 May
and 1 June 2007 there were meetings at which the
respondent heard and deliberated on submissions in relation to the decision on
whether
or not to relocate its headquarters. The decision to relocate was
effectively taken on 1 June 2007 when the respondent decided to
amend its 10
year plan to provide for the relocation of its headquarters. Then on 14 June
2007, the actual decision to relocate
was made.
[28] The conduct of the hearings between 21 May and 1 June 2007 has generated some controversy. Two councillors who voted in favour of relocation on 1 June
2007, Councillors Eru and Sherry, were absent for 3.5 days of the hearings.
Another who also voted in favour of relocation, Councillor
von Dadelszen, was
absent from the hearings for periods of time.
[29] On 30 May 2007, the respondent received email legal advice that it would be preferable for councillors who had not been present at the consultation hearings (21 May to 24 May 2007) not to vote on the relocation decision. However, the advice was not followed. Chair Cronin has subsequently explained that he believed he had no authority to prevent those councillors who had not attended the public hearings and all the deliberation hearings from voting on the decision. On 30 May
2007, Chair Cronin circulated a memorandum to absentee councillors requiring them
to read submissions which they had been unable to hear presented and to read
the minutes of the presentation hearing before voting.
[30] The resolution to relocate the headquarters ultimately
arrived at was a modified version of the recommendation.
The original
recommendation had been to relocate its head office to Tauranga on the basis
that 130 staff positions were transferred.
The decision that was actually made
involved relocation of the headquarters with approximately 100 staff positions
to Tauranga
by 30 June 2010.
Legislative scheme
[31] The respondent’s decision to relocate its headquarters
to Tauranga is a statutory power of decision that
had to be exercised in
accordance with the empowering legislation. An understanding of the
legislative scheme is, therefore, the
starting point for determining whether
there are any judicially reviewable flaws in the decision process of the
respondent.
[32] The preliminary provisions in Part 1 set out the Act’s
purposes. Whereas Part 6 of the Act deals specifically with
planning,
decision-making, and accountability.
[33] Section 3 of Part 1 states that the purpose of the Act is
to provide for democratic and effective local government.
Included within
this stated purpose is a recognition of the need for accountability of local
authorities to their communities and
the importance of the role local
authorities play in promoting the social, economic, environmental and cultural
well-being of their
communities. Section 4 expressly addresses the Treaty of
Waitangi and recognises the need for local authorities to facilitate Mäori
participation in local authority decision-making processes. I consider that
the more specific provisions of Part 6 need
to be understood in the
context of the general purposes expressed in Part 1.
[34] Part 6 commences at s 75. This section outlines the purpose of Part 6 and is of a general explanatory nature. What follows afterwards is a series of provisions
that, because they do not operate in a stand-alone fashion, are best
understood when viewed collectively.
[35] Section 76(1) sets out certain decision-making requirements that local
authorities must meet. Their decisions must be made
in accordance with such of
the provisions of ss 77, 78, 80, 81, and 82 as are applicable. However, the
decision on the applicability
of those considerations is left to the local
authority (s 76(2)). As will be seen later, this is a discretionary exercise
that in
the case of ss 77 and 78 has a process that is set out in s 79. In the
case of ss 80, 81 and 82, there is no process and so here
the decision on
applicability is subject to the general administrative law requirement of
reasonableness.
[36] Section 77 sets out certain specific requirements for
decision-making. Section 78 imposes a requirement to consider
community views
and prescribes the process for doing so. Section 80 requires local authorities
to identify inconsistent decisions.
Section 81 covers contributions by
Mäori to the decision-making. Section 82 sets out the principles of
consultation
to be applied to the decision- making process. Thus far, the
statutory regime applying to decision-making by local authorities has
the
appearance of a comprehensive prescriptive regime.
[37] However, there are some unusual aspects to this regime that make it
different from the usual prescriptive regime. The language
in many of the parts
of s 76, s 77 and s 78 has a prescriptive tone. However, this is contrasted by
more discretionary language
used in other parts. The obligation in s 76(1) to
make decisions in accordance with ss 77, 78, 80, 81, and 82 rests on the local
authority’s decision on whether or not those sections are applicable to
the decision to be made. In addition, s 76(2) makes
the obligations derived
from s 76(1) subject to s 79. The obligations to take into account the
considerations in ss 77 and 78 are
also dependent on a discretionary judgment
made under s 79. Sections 77(2) and 78(4) expressly provide for
this.
[38] Section 78(3) expressly provides that the consideration it requires to be given to community views does not require any process or procedure of consultation to be followed. Nor do any of the provisions in s 76 or s 77 expressly require consultation
processes to be followed. Furthermore, s 82(3) provides that subject to
subss (4) and (5), the consultation principles in s 82(1)
are to be applied at
the discretion of the local authority. Section 82(4) sets out the criteria to
which a local authority must
have regard when making its discretionary judgment
on the applicability of the s 82 consultation principles to the decision at
hand.
Section 82(5) provides that where other consultation requirements are
imposed as well, they take precedence over the consultation
principles in s 82.
Hence, the applicability of the s 82 consultation principles to decisions that
are subject to ss 76 to 79 turns
on the discretionary choice of the
decision-maker. Unless the particular decision is also subject to other
separate statutory provisions
expressly requiring consultation, there is no
obligation to follow a consultation process when making decisions subject to ss
76
to 79.
[39] Section 79(1) gives a local authority the power to decide (in its
discretion) whether the considerations in s 77 and s 78
are applicable to the
decision at hand and extent to which this is so. A local authority must turn
its mind to this question but
it is then free to determine for itself the very
nature of the s 77 and s 78 obligations. Though this freedom is not unfettered,
s 79 sets out a process for how this is to be exercised.
[40] The practical result is as follows.
i) Under s 76(1) a local authority must first decide on the
applicability of the provisions in ss 77, 78, 80, 81, and 82 to
the particular
decision to be made.
ii) Once it has identified which of those provisions are applicable, it must then determine under s 79 how it will achieve compliance with the requirements of the those provisions. Thus, if a local authority finds that s 77(1)(a) is applicable to making a particular decision, that section will require the local authority to seek to identify all reasonably practicable options for achievement of the decision’s objective. But this will be so only once the local authority has reached a judgment under s 79(1) on how it will achieve compliance with s 77(1)(a),
including the extent to which it will identify and assess different
options.
iii) How many reasonably practicable options are identified and how
they are then assessed is for the local authority to decide.
There are always
going to be at least two options, since a decision not to act is also subject to
Part 6 (s 76(4)). Consequently,
there will always be a choice to be made between
doing nothing and doing something. Provided the conclusion on the number of
different
options is reasonable and is exercised in accordance with the required
process (s 79), it will stand.
iv) Any person wanting to challenge the substantive decision on the
ground the local authority has failed to consider all reasonably
practicable
options will only be able to do so successfully if he or she can establish that
the s 79(1) decision on the identification
of the different options is
flawed. Provided the s 79(1) decision is well founded, it will not be open to
someone later on
to contend that the substantive decision is flawed because
there was no consideration of some other reasonably practicable
option.
[41] Similarly, the extent to which the identified options must be
assessed in terms of the requirements of s 77(1)(b)(i)-(iv)
depends entirely on
the judgment a local authority has reached under s 79(1)(b) as to the extent of
this assessment. Once a local
authority has in its discretion reached a
conclusion under s 79(1)(b) on the extent of this assessment, no one can
challenge the
assessment that is undertaken on the ground it fails to meet the
requirements of s 77(1)(b).
[42] The same goes for s 78. The obligation this section imposes, to consider the views and preferences of persons likely to be affected by, or to have an interest in the substantive decision, is subject to a balancing exercise under s 79(1)(a). This provision allows a local authority to balance compliance with s 78 against the
significance of the matters affected by the decision. Hence, the nature and
extent of the consideration to be given to the community’s
views will
depend on the judgment a local authority makes under s 79. There can be no
complaint about a local authority’s
failure to comply with s 78 if what
has been done accords with the local authority’s s 79 judgment on how
compliance with s
78 is to be achieved.
[43] Section 79(1)(b) prescribes relevant procedural considerations to
take into account when making the necessary judgments under
this section. To
exercise the s 79 discretion properly, a local authority must identify matters
it thinks will be affected by the
substantive decision and their significance;
then a local authority must identify the degree of compliance with ss 77 and 78
that
is largely in proportion to those matters (s 79(1)(a)). The s 79
discretion must also be exercised in a way that has regard to the
extent to
which different options are to be identified and assessed (s 79(1)(b)(i)). A
judgment also has to be made on the degree
to which benefits and costs are to be
quantified (s 79(1)(b)(ii)), the extent and detail of the information to be
considered (s 79(1)(b)(iii)),
and the extent and nature of any written
record to be kept of the manner in which compliance with ss 77 and 78 is
attained
(s 79(1)(b)(iv)).
[44] When it comes to making a judgment under s 79(1), a local authority
must have regard to the significance of all “relevant
matters” (s
79(2)), as well as considering the principles set out in s 14 (s
79(2)(a)), the extent of the local
authority's resources (s 79(2)(b)), and
the extent to which the nature of a decision, or the circumstances in which a
decision is
taken, allow the local authority scope and opportunity to consider a
range of options or the views and preferences of other persons
(s 79(2)(c)).
Section 14 sets out eight principles, some of which have sub- principles, which
describe the role of local authorities
and the expectations attendant on that
role. Section 79(3) requires consideration to be given to other enactments, as
well as the
matters outlined in s 79(1) and (2).
[45] Section 76(3) identifies two classes of decisions. In the case of the first class, subject to the discretionary judgments made under s 79 on what form a particular decision-making process will take, the chosen process must promote compliance with s 76(1). That is, the chosen form must promote decision-making that accords
with such of the provisions of ss 77, 78, 80, 81, and 82 as the local
authority has found to be applicable when exercising its discretion
under s 79.
The second class of decisions are those that are considered to be
“significant” in terms of
the Local Government Act. For those
decisions, the chosen process (again subject to the discretionary choices in s
79 on compliance)
must ensure that s 76(1) has been appropriately observed.
That is, the chosen form must ensure there has been appropriate observation
of
those provisions of ss 77, 78, 80, 81, and 82 that the local authority has found
to be applicable when exercising its discretion
under s 79. This must be done
before the decision is made.
Discussion
[46] In essence, the combined effect of ss 76, 77, 78 and 79 is to
empower and require a local authority to create a procedural
template for the
substantive decision to be made. That the Act had this effect is
alluded to in Reid v Tararua District Council HC WN CIV2003-454-615
8 November 2004, Ellen France J at [135]. The local authority is obliged to
create the procedural template,
but the form it takes is left to the local
authority’s discretion. The discretionary decision as to how the
template is fashioned
must be carried out in a way that ensures that the design
of the procedural template is largely in proportion to the significance
of the
matters affected by the substantive decision. There is no express obligation to
record the template separately in writing.
Section 79(1)(a)(iv) authorises a
local authority to decide the extent and nature of any written record it might
choose to make.
Whilst not obligatory, a written record of how a local authority
discharged its s 79 obligations would be helpful for any subsequent
assessment
of that topic.
[47] This is a completely new approach to local authority decision-making. It departs from the usual ways in which statutory powers of decision are vested in decision-makers. In general, statutory powers of decision either prescribe the process to be followed or empower the decision-maker with discretion as to how the power is to be exercised. In the latter case, unless specific considerations are identified as relevant to the exercise of the discretionary power, its exercise is subject only to common law constraints of legality, reasonableness and procedural fairness. With this Act, the actual process for making a particular substantive decision is
partly prescribed. For the remainder, the Act obliges a local authority to
determine its own process. But in doing so, the local
authority must have
regard to a series of prescriptive requirements.
[48] Once the appropriate procedural template is developed, a local
authority can then turn to making its substantive decision.
But in making its
substantive decision, a local authority must adhere to the self-determined
procedural template (s 76(1)).
[49] The statutory scheme I have outlined applies to local authority
decisions in general. There is also a special category of
decisions that
trigger what is termed the “special consultative procedure”.
The requirements relating to this
category of decisions are set out in ss
83 to 90. Sections 91 to 97 require the making of annual and long-term plans,
which are
a further specialised form of local authority decision- making. In
addition to the specific requirements that apply to
these special
categories of decision, they must also meet the requirements ss 76, 77, 78, and
79 impose on general decision-making.
[50] The purpose of, and policy behind, this new legislative approach was
to improve local authority decision-making and to ensure
transparency in how
local authority decision-making was carried out. The approach results in what
becomes in effect performance
standards for each decision, in that a
local authority has to express its thoughts on how it will make its
substantive
decision before proceeding to do so.
[51] However, a consequence of the new approach is that the discretionary judgments a local authority makes on the procedural template to adopt for any substantive decision will themselves be statutory powers of decision that are susceptible to judicial review. As with the exercise of any other statutory discretion, those judgments will be subject to the usual requirements the common law imposes on such decisions. There is also the statutory requirement of proportionality that s 79(1)(a) introduces, as well as the relevant considerations expressed in s 79(1)(b), s 79(2) and s 79(3). It follows that any flaws at this level, either through having a poorly developed procedural template or through failing to develop one at all, will flow through to and affect the substantive decision.
[52] There are some things that the Act does not expressly provide for.
First, the Act does not expressly set out how
compliance with s 76
and its associated provisions is to be achieved. Secondly, the Act does not
expressly provide for what
will be the consequences of failure to comply with s
76 and its associated provisions. Consequently, it is left to the Court to
decide
whether or not what has been done in any given case is sufficient to
constitute compliance, as well as the consequences of
non-compliance.
[53] In terms of achieving compliance with s 76 and its associated
provisions, the Act does not expressly require there to be
a written record of
the development of the procedural template (s 79(1)(iv)). Nonetheless, the
applicant contended that the Act
requires a local authority to specify in an
express and transparent manner the judgments it has made under s 79 as to how it
will
comply with s 77 and s 78. I understand the submission to include the
contention that the same applies for the judgments a local
authority has made
under s 76(1) on the applicability of the provisions in ss 77, 78, 80, 81, and
82 to the decision at hand.
The respondent contended that those provisions
require no expression of a procedural template for the substantive decision.
It
submitted that it is enough if compliance is manifest from the process
followed in making the substantive decision.
[54] Section 79(1)(b)(iv) empowers a local authority to determine the extent and nature of any written record of its procedural template. This suggests to me that this provision gives a local authority the power to choose what it does in this regard. There are likely to be simple decisions for which the ss 76 and 79 judgments on the procedural template will be identifiable from the reasoning of the substantive decision. For example, a simple decision to sell or not to sell a block of land may not necessitate separate s 76 and s 79 judgments. An example of this type of decision is to be found in Reid v Tararua District Council (supra [46]). However, a more complex decision may benefit from the procedural template being separately articulated. There are so many considerations to take into account when reaching judgments under s 79 that, in the case of a complex substantive decision, the development of the procedural template and compliance with it may not be readily apparent from the reasons given for reaching the substantive decision.
[55] I do not accept the applicant’s` submission that the Act
requires a local authority to expressly record judgments it
has made under s 79
on the application of ss 77 and 78. If Parliament had required this to be done,
I consider it would have expressly
so provided. The decisions a local authority
is called on to make are so variable that there will be many occasions when it
would
be a nonsense to require a record of judgments made under s 79. A local
authority’s decision to sell some minor item of property
is quite capable
of manifesting the s 79 judgments on the application (if at all) of ss 77 and
78. But with some other decisions,
their nature and complexity may obscure
judgments that have been made under s 79 on the application of ss 77
and 78.
For those decisions, it would be sensible to ensure a written record
of the s 79 judgments, on the decision-making process to adopt,
was kept.
Without such a record, a local authority places its substantive decision-making
at risk.
[56] Section 76(4) states that s 76(1) applies to every decision made by
or on behalf of a local authority. Read literally, that
would cover the
embryonic thoughts that can lead to a decision affecting others. But I do not
think that would be consistent with
the scheme and purpose of the Act. It would
be a nonsense if the Act was so far reaching. For a start it would inhibit
exploratory
discussions at the conceptual stage. It would be hard to imagine
how any decision-making could be accomplished under such a regime.
The new
approach created in Part 6 was for the purpose of improving the quality and
transparency of local authority decision- making.
It was not to create a mire
in which decision-making became bogged down with preliminary requirements that
impeded good decision-making.
[57] The scheme and purpose of the Act suggests to me that the new approach introduced by Part 6 was intended to apply to decisions resulting in outcomes which may potentially affect the communities of a local authority. It would be consistent with this view if s 76 and its associated provisions were understood to engage at a time when the question to be answered by the substantive decision was being formalised. Since the nature and scope of a question can influence and even invite its answer, to exclude this stage from the Act’s provisions would weaken its force. However, I cannot see why Parliament would intend that antecedent stages,
encompassing preliminary attempts at framing questions to be answered, should
also be subject to the Act. To do so would not serve
the Act’s
purpose.
[58] This view of when s 76 and its associated provisions take effect
fits with the first stage consideration of s 78(2)(a): to
consider the
community’s views at the time when the problems and objectives related to
the matter are defined. This view also
fits with the fact that all the other
considerations in ss 77 and 78 relate to later stages in the decision-making
process than
those that are covered in s 78(2)(a). If Parliament had
intended that the stages leading up to formalising the question
to be answered
by the substantive decision should also be subject to s 76 and its associated
provisions, I would have expected to
find some indication to that effect in the
Act. However, there is none to be found. I conclude, therefore, that those
provisions
take effect from the time the question for decision is
formalised.
[59] In the course of the hearing, the applicant narrowed the focus of
its complaint about non-compliance with the required statutory
process to what
it referred to as the first two stages of the decision-making process. These
correlated with the stages identified
in s 78(2)(a) and (b); that is the stage
at which the problems and objectives related to the matter are defined and the
stage at
which the options that may be reasonably practicable options of
achieving an objective are identified. The applicant
accepted that in
terms of the first category of its grounds of review (failure to follow required
statutory process and failure to
take into account relevant mandatory
considerations), the evidence showed there could be no complaint about the
latter stages of
the process, which included the use of the special consultative
procedure in ss 83 to 89, as well as an amendment to the respondent’s
long
term plan.
[60] As I understand the applicant’s submission, the failure was
twofold: first a failure to take the steps required of
it for the first and
second stage of the decision- making process; and secondly, a failure to record
having done so. The failure
to follow the proper process being evidenced from
the absence of any record.
[61] The failures at the first and second stage of the substantive decision-making process were said to be incapable of cure through proper compliance with the latter
stages of this process. By then, the applicant contended, the dye was caste
and the scope of the matter to be decided had
become unduly narrowed by
the earlier procedural failure.
[62] The respondent rejected the need for a written record and maintained
that provided the evidence revealed, either expressly
or by implication, there
was appropriate compliance with the Act’s requirements, (which need be no
more than accidental), that
was enough. In this regard, the respondent relied
upon Reid for support. At [148] of Reid, Ellen France J accepted
that accidental compliance with s 77, s 78 and s 79 would suffice. Furthermore,
the respondent did not
accept that the decision-making process necessarily
followed sequential stages. It considered that process could operate as a
matrix,
which I take to mean that certain stages could occur at the same time or
overlap each other.
[63] I have already found that the Act imposes no legal requirement to
record in writing the manner in which compliance with ss
76, 77, 78, and 79 is
achieved. I will, therefore, concentrate on the question of the type
of compliance the Act requires
and whether there was the necessary compliance
in this case.
[64] The evidence shows that during March 2006 and April 2006, the respondent was investigating its present and future accommodation needs in the context of how best it could deliver its services to the region in the light of its newly expanded role. This entailed it embarking on an information gathering exercise for the purpose of seeing if there was a question to be answered. To do so adequately, it decided to engage private consultants. The respondent’s actions from March 2006 through to April 2006, including the engagement of Deloitte to prepare a report, can be viewed as being actions taken to assist the respondent to determine if there was a question to be answered. I do not find, therefore, that this activity was subject to the Act’s requirements. I also find that the respondent’s actions between April 2006 and up to November 2006, when the Deloitte report was published, can be similarly characterised. During this period the respondent was doing no more than to gather information. Until it was fully informed, it was unable to be sure there was a question to be decided, yet alone know how best to frame it.
[65] On 7 December 2006, with receipt of the Deloitte report, as well as
the Bayfield report, the respondent was equipped to frame
the question for it to
answer. Only then could it proceed with defining the problems and objectives it
faced in relation to its accommodation.
Once the question was framed, it was
then for the respondent to decide the procedural template it would follow to
answer the question
and then to proceed to do so in accordance with the template
it had developed.
[66] The question could have taken a variety of forms. It could have
been an open question of where the headquarters were best
located.
Alternatively, it could have been confined to questioning whether the respondent
should remain in its existing headquarters
or move to another specified
location. Provided it followed the required process and made appropriate
judgments under
s 79, as well as considered the other matters required by s
76 and its associated provisions, the shape the question
took was a
matter for the respondent to determine.
[67] The applicant contends that the respondent’s 7 December 2006 decision to accept the Deloitte recommendation in principle was premature and not in accordance with the statutory process. The applicant argues that by 7 December
2006, the defendant’s decision-making process was at the end of the
stage at which the respondent was obliged to identify all
reasonably practicable
options. Furthermore, that instead of ensuring all reasonably practicable
options were identified and giving
consideration to community views, the
respondent jumped ahead to a later stage of the statutory processes when it
made its “in
principle” decision to accept the Deloitte
recommendation. The result, the applicant contends, is that flaws in what the
applicant
asserts to be the first two stages of the decision- making process
have rendered the final outcome invalid.
[68] The respondent contends that what is described in its records as an “in principle” decision is not a decision in terms of s 78 at all. It says the adoption of an “in principle” view that relocation of the headquarters was the best thing to do signified no more than this being a “work in progress”, which did not come to a conclusion until March 2007. Hence, according to the respondent, it was not until March 2007 that it was obliged to identify the reasonably practical options available to it.
[69] I consider that the respondent’s receipt of the Deloitte
report and the Bayfield report on 7 December 2006, with its
suggestion that a
move to Tauranga would best enable the respondent to carry out its statutory
role, coincides with the time at which
the respondent, in terms of s 78(2)(a),
should have been defining the problems and objectives related to the ultimate
decision to
be made. However, the applicant argues that by 7 December 2006,
the process had reached the end of s 78(2)(b). I do not accept
that view.
On 7 December 2006 the respondent’s decision-making process had
crystallised stage one (s 78(2)(a)) only,
and from there on forward began to
move into stage two (s 78(2)(b)) of the process. It was the receipt of the
Deloitte report and
the Bayfield report which left the respondent well equipped
to reach a view on what were the problems and objectives surrounding
the
relocation of its headquarters. Until those reports were received, the
respondent did not have sufficient information to be
able to identify the
problems and objectives related to the question of where its headquarters should
be located to ensure best delivery
of services to the region. It did not even
know if the location of its headquarters had any bearing on its service
delivery. It
might have thought that was so but, until the Deloitte and
Bayfield reports were received, it could not have known there was a proper
foundation for thinking that. This is why I do not accept the
applicant’s argument that 7 December 2006 signifies the
end of
the stage at which the respondent should have been identifying the
reasonably practicable options or considering the
views of the community in
relation to its choice of such options.
[70] Since I see 7 December 2006 as a point in time signifying the end of
stage one in terms of s 78(2), this was also the time
to give consideration to
the community’s views in accordance with s 78(2)(a).
[71] As at 7 December 2006, there is no evidence that the respondent expressly formed a decision-making template. However, provided the existence of some such template can be inferred from what occurred, I see no reason why that should not be sufficient to comply with the requirements of s 76 and its associated provisions. There is nothing in the legislation to suggest otherwise. Moreover, the express provision in s 79(1)(b)(iv) for any written record of the decision-making process to be at the discretion of a local authority suggests to me that Parliament recognised
there would be occasions when the decision-making template would be
implicitly present in a decision, rather than separately expressed.
[72] The view I have taken of s 76 and its associated provisions accords
with that applied in Reid v Tararua District Council (supra
[46]).
[73] Section 79 empowered the respondent to determine that at stage one
of the decision-making process, it was unnecessary to
consider community views,
or that the consideration of such views could be achieved through the
information gathering process Deloitte
and Mr Bayfield had carried out as part
of the preparation of their reports. Part of the brief to Deloitte was to
provide recommendations
on cost and impact on human resources, property
acquisition and disposal, socio-economic costs on communities affected,
ongoing
benefits and pay back periods of recommendations, and the
implementation of the identified changes. This information, coupled
with the
knowledge the respondent’s councillors would have of the community they
represented, could have provided them with
sufficient information on the
community’s views. The type of consideration s 78(2)(a) requires
is not to be equated
with consultation. Section 78(3) expressly provides that
the section does not require consultation. How consideration of community
views
was to be achieved, if at all, was a matter for the respondents to
determine.
[74] It is implicit from the instructions given to Deloitte that the
respondent had determined that the consideration it would
give to the views and
preferences of the community was to be achieved through the enquiries Deloitte
would make for the purpose of
making the abovementioned recommendations, coupled
with the knowledge of the respondent’s councillors.
[75] The very purpose of instructing Deloitte to gather information on the impact on cost on human resources, property acquisition and disposal, socio-economic costs on communities affected, ongoing benefits and pay back periods of recommendations seems to me to be in part to enable the respondent to give some consideration to the community’s views. As part of the preparation of the report in mid-October 2006, Deloitte interviewed the Mayors and Chief Executives of the territorial authorities in the respondent’s region. Those interviews would have
enabled Deloitte to obtain a view on the impact of the location of the
respondent’s headquarters on the community, as well as
an opportunity to
assess the view the community held on the topic.
[76] I see no reason why the respondent’s consideration of
community views at this early stage of the decision-making process
could not be
done as a matter of inference from the reports it received. The choice of
performing the s 78(2)(a) consideration
in this way was open to the respondent.
There is nothing to suggest that this approach was out of proportion to the task
at hand.
[77] The applicant drew my attention to a document of the
respondent titled
“Checklist For Decision-Making Under the Local Government Act
2002” dated
28 November 2006. The document was created at the time the Deloitte report
was received and about to be presented to the respondent.
The document notes at
page 2, item 11 that the respondent does not hold information about the
community’s views on the matter.
The applicant contends that this
is an acknowledgement of the respondent that it did not have information of
the community’s
views and, therefore, it could not discharge it
obligations under s 78(2). The report has been prepared by an officer of the
respondent
and approved by the Chief Executive.
[78] The respondent contends that the section, in the form in which the
statement is made, relates to assessing the significance
of the decision in
terms of the Act’s requirements for “significant” decisions
and that the import of the statement
should not be taken to extend beyond any
such assessment.
[79] The checklist is perplexing. The officer who completed the form has
filled in the check boxes with the result the location
decision is seen as
having medium significance; not being controversial and having only a minor
or no impact on residents
and ratepayers. These are mistaken assessments.
The decision was later recognised as a significant decision which entailed it
being
approached as a significant decision in terms of the Act’s
requirements for decisions of that type.
[80] The decision to move the respondent's headquarters would have a considerable impact on residents and ratepayers as it was driven by the respondent’s
concern to ensure it was performing well. How well the respondent delivered
its services to the region was a major concern for residents
and
ratepayers.
[81] When it comes to assessing what information the respondent had about
the community’s views as at 7 December 2006, there
was information in the
Deloitte report that would assist the respondent’s councillors to form a
view on this topic. This report
would have included Deloitte’s
distillation of the information it received when it interviewed the Mayors and
Chief Executives
of the local territorial authorities. Furthermore, the
Bayfield report of 1 December 2006 specifically drew attention to the need
to
engage with “stakeholders” in the region in regard to considering
the proposed move. The recognition of the need
to engage with stakeholders was
a form of consideration of the community’s views. It needs to be
remembered that this was
very early on in the decision-making process. Part of
considering the community views must entail the recognition of the need for
engagement with the community. Until the engagement takes place, community
views can only be inferred. Furthermore, until the
decision takes some shape
and form, it is difficult to see how engagement with the stakeholders, to obtain
their views, can occur.
It seems, therefore, that some of the answers in the
checklist are at odds with other evidence. I do not find the checklist a
reliable
indicator of what was known to the respondent at that time.
[82] It is for the applicant to show on the balance of probabilities
that, at the stage when the problems and objectives of the
matter in issue are
defined (s 78(2)(a)), the respondent has failed to comply with ss 78 and 79.
Certainly there is no evidence
of the respondent expressly deciding (under s 79)
on whether or not to comply with s 78(2)(a) and, if so, how that compliance
would
be achieved. But when the conduct of the respondent at this stage of the
decision-making process is considered, there is nothing
about it that is at odds
with the requirements in ss 78 and 79.
[83] Once the Deloitte and Bayfield reports were received, the adoption in principle of the recommendation to move the headquarters fits with the commencement of the stage when the respondent could begin identifying the reasonably practicable options that would enable the identified problems and objectives to be achieved. This stage raises issues regarding s 78(2)(b) and s 77.
The view I have taken of the “in principle” decision to adopt the
Deloitte recommendation means that I regard this conduct
as signifying a work in
progress, rather than a finite decision which represents a particular stage in
the decision- making process.
[84] Section 78(2)(b) required the respondent to give consideration to
the views of the community. This of course was subject
to judgments made under
s 79 on the extent to which, if at all, there would be compliance with s
78(2)(b) at this stage of the overall
decision-making process. Section 77
required the respondent to seek to identify all reasonably practicable options
for the achievement
of the objective of the decision it was to make. This
section was also subject to s 79 judgments on whether there should be compliance
with s 77 and, if so, how that would be achieved.
[85] The respondent contends that the process of identifying the reasonably
practicable options to achieve the identified objectives
ran until 15 March
2007. This is because it took until 15 March 2007 to obtain all the necessary
and relevant information for the
respondent to be able to complete stage two of
the process and to embark on stage three, stage three being the stage
at
which the reasonably practicable options are assessed and proposals
developed. Until 15 March 2007, the respondent argues that
there was
insufficient information to enable a proper assessment of the merits of the
“in principle” view that a move
to Tauranga was best.
[86] I have already rejected the applicant’s contention that 7
December 2006 heralded the end of the stage at which
the reasonably practicable
options were to be identified (s 78(2)(b)). The evidence suggests to me that
until March 2007, the respondent
was in the process of gathering information
that would enable it to reach a decision on where its headquarters should be
located.
I consider that regard to the requirements of ss 77 and 78 would have
been an implicit part of this decision- making process.
[87] The evidence shows that from 7 December 2006 to March 2007, the defendant took significant steps to equip itself with further information to enable it to determine if the “in principle” decision to move its headquarters to Tauranga should be carried out. This culminated with a decision on 15 March 2007 to amend the
respondent’s long-term plan to include a proposal to move the
headquarters to Tauranga. This step was taken as the respondent
had
belatedly realised that a decision of this magnitude required inclusion in the
long-term annual plan.
[88] The degree of engagement with the community between January 2007 and
March 2007 demonstrates consideration was being given
to the community’s
views. The affidavit evidence of Chair Cronin, Councillor Bennett and Chief
Executive Mr Bayfield recounts
numerous meetings the respondent had with members
of the community, members and officials of local authorities within its region
and local Iwi. The purpose of these meetings was to inform the community on
the matter under consideration and to receive comments
from the community on
this topic. Whilst there is no evidence of the respondent expressly determining
a template for this stage of
its decision-making process, there is ample
evidence to suggest to me that, in terms of s 78(2)(b), consideration was being
given
to the community’s views.
[89] I now turn to consider if the decision-making process being followed
at this time reveals that implicit or accidental consideration
was given to the
reasonably practicable options available to the respondent for its choice of the
location of its headquarters.
The choice of the reasonably practicable options
available was for the respondent to make. Provided its choice accorded
with
s 79, it is not for the applicant to point to what it considers to
be additional reasonably practicable options and assert
that the respondent has
omitted to consider them.
[90] Following receipt of the Deloitte report and the Bayfield report, the respondent’s focus was on two possible locations for its headquarters: the existing location in Whakatane or Tauranga. None of the specialist reports the respondent had received from December 2006 onwards suggested that any other location in the region was tenable. In such circumstances, I consider that the respondent has implicitly determined that the only reasonably practicable options available for it to consider for its headquarters location were Whakatane or Tauranga. The information the respondent was gathering between December 2006 and March 2007 was sufficient to inform it of the matters set out in s 77(1)(b). I also consider that the evidence is consistent with the respondent seeking to reach a decision in a manner that took account of the matters in s 77(1)(b). The entire purpose of considering the
move of the headquarters was to enable the respondent to perform its
functions and responsibilities better. The achievement of that
aim would
encompass the matters set out in s 77(1)(b).
[91] It follows that I find the respondent’s decision to move its
headquarters to Tauranga is a decision that complies with
s 76 and its
associated provisions. The applicant’s challenge on the ground there
was no compliance with the required
statutory processes has failed. As regards
the issues for determination in this case, the finding I have reached means
that:
a) As regards the first issue, I consider that it is enough if
compliance with s 76 and its associated provisions is achieved
by implication or
accidentally.
b) As regards the second issue, I consider that at the point when the
identification of problems and objectives was undertaken,
the initial approach
was to consider how the respondent was to carry out the new functions it was to
undertake but that after 7 December
2006, the respondent moved to the second
stage of identifying the reasonably practicable options to enable it to achieve
its objectives,
and these became focused on the location of the
respondent’s headquarters.
c) As regards the third issue, I consider the end point of what may be
described as stage two of the decision-making process
(s 78(2)(b)) was not
reached until March 2007.
d) As regards the fourth issue, I consider the respondent gave proper
consideration at stage one and stage two of the decision-making
process to
community views on the location of its head office.
[92] Before turning to the next ground of review, I propose, as an alternative to the conclusions I have reached, to consider the legal consequences of the respondent’s decision not complying with s 76 and its associated provisions.
[93] In relation to the consequences of non-compliance with the statutory scheme, the concepts of mandatory and directory effect can provide some assistance on how to interpret this legislation. In Petch v Gurney (Inspector of Taxes) [1994] 3 All ER
731 at 736, Millet LJ said:
The difficulty (in deciding whether a statutory requirement is mandatory or
directory) arises from the common practice of the legislature
of stating that
something “shall” be done (which means it “must” be
done) without stating what are to be
the consequences if it is not
done.
Bennion On Statutory Interpretation at 46 states that:
[I]t would be draconian to hold that in every case failure to comply with the
relevant requirement invalidates the thing to be done.
So the courts’
answer, where the consequences of breach are not spelt out in the statute, has
been to devise a distinction
between mandatory and directory duties.
[94] The unusual nature of s 76 and its associated provisions make it
difficult to determine the consequences of non-compliance.
The general
principle is that non- compliance with mandatory considerations will
invalidate a decision: see CREEDNZ Inc v Governor-General [1981]
1 NZLR 172 at 183. But statutory considerations with that legal effect
are truly mandatory in that Parliament prescribes
them and intends that
decision-makers have no choice but to take them into account. The considerations
in s 76 and its associated
provisions have the appearance of being mandatory but
in many respects Parliament has given the decision-maker a choice as to their
application in any particular case. The inclusion of a discretionary choice of
this nature undermines the considerations’
otherwise mandatory
character.
[95] When the language of s 76, and its associated provisions, is
contrasted with the latter parts of Part 6, which apply to the
special category
of decisions affected by ss 83 to 97, it is notable that those subsequent
sections do not permit a decision- maker
any choice over when they will apply
and, if so, how they will be applied. The prescriptive language in ss 83 to 97
is not tempered
by other expressions that resemble the discretionary authority
which is also to be found in ss 76 or 79.
[96] Section 76(3)(a) enjoins a local authority to “ensure” its decision-making processes “promote compliance” with s 76(1). Being required to promote compliance is not the same as being compelled to achieve it. Section 79(1) makes it
the “responsibility” of local authorities to make discretionary
judgments on how to achieve compliance with ss 77 and
78. Being made
responsible for achieving compliance is also not the same as being compelled to
achieve it. The use of such expressions
is a departure from the usual
expressions that are recognised to result in decisions being set aside for
non-compliance. The language
of s 76(1)(a) and s 79(1) suggests to me that the
purpose of those sections is to set performance standards for achievement,
rather
than to impose mandatory requirements with invalidation being the
consequence of non-compliance.
[97] In the case of “significant decisions”, s 76(3)(b)
states that a local authority must ensure that before the
decision is made, s
76(1) has been “appropriately observed”. The use of the words
“must ensure”, “before
the decision is made” and
“appropriately observed” is stronger language than in subs 3(a) of s
76. These words
have the ring of mandatory requirements. That
Parliament has chosen to use different language for
“significant”
and “non-significant” decisions suggests
to me that Parliament was setting a stricter standard for non-compliance with
s
76(3) in the case of significant decisions. Nonetheless, it is not clear to me
that Parliament intended decisions that fall within
the scope of s 76(3)(b) to
be subject to mandatory requirements which will cause them to be invalidated if
there is non compliance
with the statutory scheme.
[98] The words “must ensure” suggest to me a directive to local authorities which requires them to make certain or to make sure their significant decisions comply with s 76(3). However, Parliament then uses the words “appropriately observed”. The difference here is the use of the word “appropriate”. This has the meaning of “right” or “suitable” [Collins Dictionary] or “fitting” [New Shorter Oxford Dictionary]. The New Shorter Oxford Dictionary defines “appropriately” as “fittingly”. Whether something is appropriately observed requires a value judgment. Unlike a requirement for observation simpliciter, a requirement for appropriate observation is not an absolute. Its presence or absence cannot be measured in black and white terms. Any objective assessment of whether or not something has been appropriately observed will involve an element of reasonableness. Something may be appropriately observed in one context but not in another. Once this degree of relativity is introduced into s 76(3)(b), it becomes difficult to read the provision as
imposing the type of consequences that administrative law has traditionally
attached to a failure to follow statutory provisions having
a mandatory
character. For the consequences of non-compliance to have the effect of
invalidating a decision, I consider the statutory
language must be expressed in
clear terms. This is because such consequences carry serious repercussions. I
am not able, therefore,
to read s 76(3)(b) as having the effect of imposing
mandatory compliance requirements on local authority decision-making under s
76
and its associated provisions. It follows that if I am wrong on finding that
the respondent has implicitly complied with s 76
and its associated provisions,
or that implicit compliance is sufficient to meet the provisions’
requirements, nonetheless,
I do not consider non-compliance will invalidate the
decision.
[99] When the decision in this case is looked at overall, it is apparent that in terms of compliance with s 76 and its associated provisions (ss 77 to 82), the steps taken after 17 March 2007 can be treated as beyond criticism as there has been no challenge to those steps. This part of the decision-making process coincides with ss 78(2)(c) and (d). From 7 December 2006 to 17 March 2007 (being a period that fits with s 78(2)(b)), there is clear evidence to show there were a number of occasions on which the respondent, through its members and officials, engaged with the community for the purpose of obtaining community views on the appropriate location for its headquarters. All the expert advice and information the respondent received showed there to be only two viable choices for the location of its headquarters. This in my view demonstrates that it was reasonable for the respondent to approach the question on the basis there were only two reasonably practicable options available for it to choose from. Such an approach cannot be said to be unreasonable in the sense that term is understood in administrative law. On the information available, there is nothing to support the view that no reasonable decision-maker would have approached the location question as a choice between staying at the existing location or moving to the largest and growing urban centre in the region. Nor can taking such an approach be said to be out of proportion to the significance of the decision to be made. I do not consider, therefore, that what occurred over this period was inconsistent with the requirements of s 77.
[100] On 7 December 2006 when the respondent received the Deloitte and
Bayfield reports and decided to accept the Deloitte report’s
recommendations in principle (being a time that fits with s 78(2)(a)), there was
no reason why the respondent could not consider
the community’s views
through inferences drawn from the information it received in the Deloitte and
Bayfield reports and from
the knowledge its members held, as elected
representatives of the community. At this early stage of the
decision-making
process, that type of regard to the community’s view can
be viewed as being in proportion to the matter then under consideration.
The
discretion in s 79 contemplates that different types of consideration may be
given to community views at different stages of
the decision-making process.
There is nothing in s 78 to suggest that the consideration to be given to
community views must be
of the same value throughout the decision-making
process. Moreover, s 79 would permit a decision to be made that no such
consideration
was necessary at this stage of the decision-making
process.
[101] It follows that, even if the failure to articulate the
decision-making template for the first two stages of the decision does
not mean
there has been non-compliance with ss 77 and 78(2)(a) and (b), I consider that,
in terms of s 76(3)(b), when looked at overall,
the actions the respondent took
in the lead up to the final decision in June 2007 were enough to ensure that s
76(1) had been appropriately
observed.
[102] I will now deal separately with the allegation that there has been a failure under ss 4, 14(1)(d) and 81 to discharge properly the obligations those provisions impose in relation to Mäori. In this regard, it is alleged that Mäori were given no opportunity to contribute to stages one and two of the decision-making process. It is also alleged that at all stages of the decision-making process, the respondent failed to comply with its policy in its “LTCCP on Development of Mäori capacity to contribute to the decision-making process”. The applicant contends that at stages one and two of the decision-making process, there were no discussions with Mäori. This view of events turns on the applicant’s view of when these two stages in the decision-making process came to an end. I have found that stage one of the process (s 78(2)(a)) ended on 7 December 2006. At this time there had been no discussions with Mäori. However, there is nothing in ss 4, 14 or 81 of the Act that would require
discussions to have been carried out with Mäori at stage one of the
decision-making process.
[103] By stage two of that process (from 7 December 2006 to 17 March 2007), there were discussions with Mäori taking place. The evidence of Councillor Bennett, Councillor Eru and Bruce Murray (the respondent’s Group Manager, People and Partnerships) outlines the steps the respondent took to involve Mäori in the decision- making process. That evidence shows that during stage two (7 December 2006 to
17 March 2007), the respondent actively sought to engage with Mäori to
obtain their views on the relocation decision.
[104] For completeness, I have considered s 77(1)(c) and whether that
provision has any application to the respondent’s decision.
I do not
consider that this provision impacts on a decision of the type that the
respondent was making.
[105] Sections 4, 14 and 81 do not require separate consideration to be
given to Mäori at a series of different stages in the
decision-making
process. When considering all the steps the respondent took to reach its
decision on the re-location of its headquarters,
I consider that it discharged
those obligations to Mäori which the Act has imposed on the
respondent.
Breach of legitimate expectations
[106] The next ground of review is the allegation that the respondent has
breached legitimate expectations contained in
the Bay of Plenty
Local Government Triennial Agreement. The parties to this agreement
are the applicant,
the respondent, Kawerau District Council, Opotiki
District Council, Rotorua District Council, Taupo District
Council,
Tauranga District Council and Western Bay of Plenty District
Council. The agreement was entered into
in fulfilment of the obligations
s 15 of the Local Government Act imposes on local and territorial authorities.
There are statements
in the agreement to the effect that:
The parties would, where practicable, communicate and consult openly, honestly and respectfully and proactively (no surprises).
Also, that the parties would ensure each had early notification of and
participation in significant decisions that may affect them
and their
communities. The applicant contends that the respondent’s actions have
breached the legitimate expectations inherent
in this agreement. The alleged
failure lies in the respondent not placing the possible relocation of its head
office to Tauranga
on the agenda of a “Mayors and Chairs” meeting
until 19 April 2007, which was after the respondent had released its statement
of proposal of 15 March 2007.
[107] My reading of the agreement is that it sets out protocols the signatories will follow during its currency. Those protocols are designed to provide a means by which the signatories can work together for the betterment of the Bay of Plenty region. The agreement envisages some consultation before significant decisions are made by any one of the signatories. Its intent seems to me to be to encourage the signatories to work collaboratively where possible for the good of their region. The agreement contains statements of intent and of best practice. I consider it is akin to a policy statement providing no more than administrative reassurance to the signatories and the communities they serve. There is nothing that I can see in the agreement that could amount to an enforceable legitimate expectation that adds to the legislative requirements imposed on the respondent. In particular, I see nothing in the agreement that would require notice to be given at a Mayors and Chairs meeting prior to public notice of a proposed change as provided for in the 15 March
2007 statement of proposal. My understanding of the agreement’s
references to consultation is that they do no more than to
recognise the
statutory consultation requirements the Act imposes on the
signatories.
[108] The law of legitimate expectations is derived from the duty to act fairly. It developed as a requirement that assurances given, or regular practices followed, would not be departed from without affording persons adversely affected an opportunity to be heard. In this form the law of legitimate expectation has created a common law foundation for a duty to consult. Failure to follow the assurances given, or changes of practice without providing those affected with an opportunity to be heard, could result in the decision reached being set aside. Generally, the persons claiming that they were adversely affected had to establish the decision affecting them had deprived them of a right, interest or expectation of a benefit. The law of
legitimate expectations recognised that such persons were entitled to be
consulted before being deprived in that way.
[109] In this case the only benefit which the applicant claims deprivation
of is the benefit of early consultation, early meaning
some time before
the statement of proposal was issued in March 2007. However, the
respondent’s consultation obligations
are imposed by legislation. In
order for the agreement to impose justifiable consultation obligations that were
additional to those
imposed under the Act, very clear language to that
effect would be required. The terms of the agreement do not have
that
effect. I find, therefore, that in terms of issue (f) of the issues for
determination, the Triennial Agreement did not give
the applicant a justifiable
legitimate expectation of consultation that extended beyond the statutory duties
of consultation which
the Act imposed. It follows that the applicant has not
made out this ground of review.
“Closed minds”/failure to consult properly
[110] The grounds of review under this category are focused on what
occurred in the later stages of the decision-making process
(after 17 March
2007) when the respondent’s members and Chair attended the public
consultation meetings that were held and
subsequently when the respondent came
to make its final decision.
[111] The allegations in relation to a breach of the duty to consult are that the absence of certain members of the respondent from the public hearings for the purpose of consultation means that the respondent did not properly discharge its obligations to consult. The issue here being whether their absences have precluded proper consultation. Flowing from this is the secondary issue of whether those persons who were absent from the public consultation hearings should have voted on the final decision. The same absences are also relied upon as evidence to prove certain members of the respondent had already closed their minds to the outcome, with the result the respondent’s final decision on where its headquarters should be located is tainted with predetermination and bias and is, therefore, invalid. There is also the wider issue of whether those members of the respondent who voted to move the headquarters to Tauranga did so as a result of predetermination and bias. Finally
there is the issue of whether those members of the respondent who were absent
from part of the deliberation hearings should have voted
on the final
decision. The determination of these issues involves the application of
similar legal principles and so there
is a degree of overlap among
them.
[112] I will deal first with the allegations of bias and predetermination.
This type of challenge to the decisions of local authorities
under the previous
legislation required a plaintiff to show actual predetermination or bias, rather
than apparent predetermination
or bias. A helpful authority on this point is
Travis Holdings Ltd v Christchurch City Council [1993] 3 NZLR 32 at 47.
Tipping J said:
What in my judgment is required is no more and no less than this. The full
council must come to the meeting at which the s 230 resolution
is to be
considered with an open mind as to whether the land in question should be sold.
The councillors must be prepared to
give a fair and open-minded
hearing to anyone who appears at the meeting and submits for whatever reason
that the land should
not be sold. If it could be shown that the council had not
approached the meeting on that basis, then the resolution to sell would
prima
facie be invalid and, subject to any relevant discretionary matters, liable to
review. What I am saying is that in my judgment,
in the particular statutory and
factual setting with which this case is concerned, anyone challenging a s 230
resolution on the basis
of predetermination or fettering of discretion is
required to show actual predetermination or fettering rather than the
appearance of the same.
Tipping J drew support for the conclusion he reached from a consideration of
earlier cases on local government and the legal position
with Ministers of the
Crown and central government. In that regard Tipping J at p 47 adopted a test
applied by Richardson J in
CREEDNZ Inc v Governor-General (supra [95)]
which equated predetermination with being “irretrievably committed”
to a particular position. This approach
sets a high threshold for proving
predetermination or bias in relation to decisions of the executive or local
authorities. There
is nothing in the current legislation that would cause me
to think that the legal test for predetermination and bias has been altered.
Accordingly, I propose to approach this case on the same basis as was done in
Travis Holdings.
[113] I propose to make some general comments on the evidence before dealing with specific allegations of bias and predetermination made against individual
members of the respondent. In June 2007 Chair Cronin and eight of the
respondent’s councillors voted for moving the headquarters
to Tauranga.
Five councillors voted against the move.
[114] In their affidavit evidence, Chair Cronin and the eight councillors
who voted in favour of moving the headquarters to Tauranga
denied they were
biased or had predetermined their decision. Each of them contended that during
the deliberations on 31 May and
1 June 2007, they had approached the relocation
decision with an open mind, prepared to consider every sensible option, but,
having
done so, each of them concluded that moving the respondent's headquarters
to Tauranga was the best decision.
[115] The report of the meeting on 31 May 2007 records Chair Cronin
addressing the councillors and on the need to approach
the decision
they were about to undertake with an open mind and without bias. He directed
them to be prepared to listen and
to consider all the submissions that had been
made to the respondent with an open mind. The deliberations ran over from 31
May
2007 to 1 June 2007. Because of the factual allegations of bias made against
certain councillors, limited cross-examination was permitted.
When under
cross-examination, none of the persons who had voted in favour of the move
retreated from the assertions in their evidence
in chief of having had a fair
and open-minded approach to the relocation decision. There was nothing in the
evidence which I heard
and read that would cause me to conclude that the persons
who voted in favour of the relocation of the headquarters did so simply
because
they were “irretrievably committed” to the idea of relocating the
headquarters.
[116] The evidence the applicant relied upon to prove predetermination or bias was provided by the councillors who had opposed the relocation decision or other persons in the community opposed to that decision. Their evidence, either referred to passing comments from the persons alleged to be predetermined, or offered what was in essence opinion evidence to prove the presence of predetermination or bias. Their evidence also reveals an assumption that Councillors Eru, Sherry and von Dadelszen, who were absent for part of the public consultation hearings (in the case of Councillors Eru and Sherry their absences were for 3.5 of the 4 days of
hearings), had already reached a predetermined view and should not,
therefore, have participated in the deliberations. There were
other comments,
which in essence debated the wisdom of the decision to relocate and which
suggested alternative ways in which the
decision could have been
approached.
[117] Proof of actual predetermination requires evidence capable of objective
assessment. The opinions or value judgments of persons
who have participated in
the decision-making process but who have taken a different view from those
alleged to have pre-determined
their decision are not helpful. This type of
evidence is not reliable. I have no doubt that the applicant’s
witnesses
firmly believe their assessment of what occurred is correct. But
the account they give does not go far enough to provide evidence
that those who
voted for relocation were irretrievably committed to that certain outcome. With
decisions of this type, it is to
be expected that members of regional councils
will hold certain views and express those views from time to time. There is
nothing
objectionable about councillors holding preliminary or in principle
views on decisions, provided when it comes to making the actual
decision, they
do so with a mind open to other alternatives. Indeed it is always likely to be
the case that members of local authorities
will hold particular views on certain
issues. The effect of local body democracy is that persons are voted into
office holding certain
views. What is important is that when they come to make
decisions, they follow a thought process that recognises a change of mind
may
eventuate. I have seen no evidence that would suggest to me that those who
voted for relocation of the headquarters failed to
have this
recognition.
[118] In Travis Holdings Ltd there was evidence that, prior to reaching their final decision, councillors had adopted stances that could be taken to suggest they favoured a particular course of action. Nonetheless, the Court accepted that preliminary steps taken towards passing a particular resolution, whilst perhaps problematic under an appearance of bias test, would not be for an actual bias test. The Court recognised that constraint on a council conducting preliminary steps towards passing a resolution on the ground those steps could indicate bias would make life “extremely difficult for council staff and sub-committees”. The Court was of the view that:
There will have been some exploratory discussions as to
potential purchasers, what they may wish to do with the
land and so on, and I am
very mindful of the fact that endless difficulties, both legal and
administrative, could ensue if the
threshold for intervention was set at
the level of an appearance of predetermination. In my judgment when
requiring a
local body to pass a resolution under s 230, Parliament cannot have
intended the sort of delicate footwork that would be necessary
if the test were
appearance of predetermination.
I think the same comments can be applied to what has occurred in this
case.
[119] Having made these general comments on the evidence, I will
deal with evidence of predetermination as it relates
to individual members of
the respondent.
[120] There was evidence from the applicant’s witnesses of
occasions where Chair Cronin is alleged to have made
remarks which, the
applicant contends, evidence of predetermination on the part of Chair Cronin.
Before the 2004 elections,
Chair Cronin is alleged to have said he had the
numbers to move. Shortly after the election in 2004, Chair Cronin is alleged to
have held a meeting at his home with the newly elected councillors and to have
presented them with a number of actions he wanted
to see achieved in the three
year term, one of these being relocation of the headquarters. Chair Cronin
rejected having any such
discussion with Mr Oppatt about his intention to move
headquarters. At a meeting with a regional focus group in January 2007, Chair
Cronin is alleged to have said words to the effect that his driving to meetings
in Whakatane would soon be history. After the first
day of deliberations on
31 May 2007 when the members of the respondent went to a restaurant in
Whakatane, as they left
the restaurant and were walking past the
regional council building in Whakatane, Chair Cronin is alleged to have
said:
If they had sold us the land, the headquarters would be staying in
Whakatane.
[121] When under cross-examination, Chair Cronin was challenged about a
conversation he was alleged to have had with John Forbes,
who is the Mayor of
the Opotiki District Council. It was put to Chair Cronin that at a Christmas
social event in 2006, Chair Cronin
had essentially given Mayor Forbes a:
Heads up from yourself that the headquarters was moving and he took the heads up to be a fait accompli this was going to happen.
Chair Cronin rejected this suggestion. Chair Cronin was then challenged on
his alleged failure as chair of the regional council
to direct councillors who
had not been present during the consultation hearings to desist from voting.
His response was that he
had no authority to stop councillors who were entitled
to vote on the issue from voting. He said that he had been in local authorities
for the best part of 20 years and that, to his knowledge, there has never been a
councillor excluded from annual plan, deliberations
and submissions in that
time, with the exception where there was a conflict of interest. His view was
that he had no authority to
prevent the councillors who had not fully
participated by attending all the submission hearings and deliberations from
participating
in the decision. It was suggested to Chair Cronin that his mind
was not open to persuasion and that he was determined to see the
relocation of
head office to Tauranga. His response was that he rejected that suggestion
entirely and that when it came to making
the decision, he had addressed the
councillors, stating to them:
It is important that within the process that the issues be with an open mind
and without bias. It is important that councillors be
prepared to listen and
consider all the submissions with an open mind, however, that does not mean
councillors may not have a working
plan or views but that they are prepared to
listen and consider the submissions with an open mind.
Further on, he said he addressed the council to the effect:
As we move in to the debate deliberations, I will ask you if there are any
other issues for consideration so as to ensure that the
deliberations are both
robust and within correct procedures.
Chair Cronin said he also attempted to ask all the councillors individually
did they approach the process in that position.
[122] I have no reason to doubt Chair Cronin’s evidence. The overall
impression I have of all the allegations of predetermination,
said to be
supported by evidence of comments made prior to the final decision being
made, which could suggest a particular
view, do not take the matter far
enough to establish the presence of actual predetermination.
[123] Councillor Eru attended a public consultation meeting in Rotorua. He did not attend the meetings in Tauranga or Whakatane. He had suffered a serious car
accident at the beginning of April 2007. He also had a cataract
operation at Rotorua Hospital. In addition, his wife
was ill. For these
reasons, he did not attend three and a half days of the four days of
consultation hearings. However,
Councillor Eru said that he had the
opportunity to read the submissions presented at those hearings and that
Councillor Bennett had
come to Rotorua to go over the oral submissions with him.
He did not, however, listen to the audio record of any of the oral submissions.
Councillor Eru was adamant under cross-examination that he had gone through all
the written submissions and, with the help of Councillor
Bennett, had gone
through the oral submissions and council summaries of the submissions.
Councillor Eru was unable to say what exactly
had been sent to him, but he said
that he had read everything that had been sent to him. In this regard Chair
Cronin has said that
he directed that all the relevant material be sent to the
respondent’s councillors.
[124] Councillor Eru accepted, when cross-examined, that the volume of
material and the personal difficulties he was experiencing
at the time through
the health problems of himself and his wife would have made his role in the
deliberation process difficult.
It was put to him in cross-examination that at
the council meeting in June, his mind was not open to consider anything other
than
a shift of head office to Tauranga. He rejected that. The reasons for
Councillor Eru not attending all the meetings are acceptable.
Furthermore, as
will be explained later in the judgment, I do not consider the Act requires
councillors who participate in decisions
to have personally attended all the
public consultation meetings, nor, where deliberation hearings go over a number
of days, do I
consider they need to attend every sitting. I am satisfied,
therefore, that the absences of Councillor Eru have neither affected
the quality
of the public consultation, nor do I think show his participation in the final
decision to be affected by predetermination
or bias.
[125] At a meeting with the regional focus group at the Rotorua Airport, Councillor Eru is alleged to have made it clear he supported the move and could not be persuaded otherwise. The applicant relies on an affidavit of Lorraine Brill. In her affidavit, Ms Brill said that when Mr Eru was questioned at this meeting, he made a comment to the effect he would not support doing anything that would help Ngati Awa as they had tried to take the Kaingaroa Forest away from them
(Te Arawa). Councillor Eru denied that he would have said anything to that
effect. Councillor Eru’s response to what Ms
Brill said was,
“she has got that totally wrong”. Councillor Eru’s view
was that Ms Brill was mistaken
because, in his words, “the issue with Te
Arawa and Ngati Awa is totally out of kilter”. His evidence was that on
the
basis of his knowledge of history, he would not have said something like
that. When asked whether there was a view within Te Arawa
that Ngati Awa tried
to take the forest at Kaingaroa, he said, “no, there was
not”.
[126] Ms Brill’s affidavit provided on 29 November 2007 records
something which occurred at a meeting on 19 February 2007.
Councillor Eru
rejects the suggestion he would have made the statement concerned and, to
support his rejection, he says that, in
effect, there has never been an issue
between Ngati Awa and Te Arawa regarding Ngati Awa trying to take Kaingaroa
Forest with them,
so that the comment is not only incorrect in terms of
Councillor Eru not having made it, but it does not fit with the historic
position.
I note in her affidavit at paragraph 21 that Ms Brill says that Mr
Eru made a comment to the effect that moving was the right decision
and his mind
was made up. She does not say what his words were. The statement seems simply
Ms Brill’s interpretation of what
Councillor Eru said. Without having
his actual words expressed, it is not possible to assess objectively whether or
not the effect
of those words could amount to a statement evidencing
predetermination. An allegation of bias and predetermination is serious.
To
prove actual bias requires reliable evidence. I am not satisfied that the
evidence from Ms Brill is sufficiently reliable to
persuade me on the balance of
probabilities that Councillor Eru had made what had amounted to an
admission of having a predetermined
view as at February 2007.
[127] Councillor Sherry only attended the public consultation meeting in Tauranga. He did not attend the meetings in Rotorua or Whakatane. He has sworn an affidavit in which he asserts that while he did not attend all the public consultation meetings, he did fully inform himself by reading all the written material from those meetings. He said he was open to persuasion and ready to be persuaded as to a different outcome from that for which he ultimately voted for. Under cross-examination he provided explanations for why he did not attend all the consultation meetings. The records of the deliberation meeting record that he addressed the meeting and gave an
assurance that he had read all the submissions and that he was approaching
the decision with an open mind. I see no reason not to
accept his
evidence.
[128] At a Christmas function in December 2006, Councillor von Dadelszen is
alleged to have said the move was “a done deal
and we have the
numbers”. The applicant relied upon these remarks to prove
predetermination on the part of Councillor von Dadelszen.
Councillor von
Dadelszen was cross-examined about the comments he was alleged to have made.
Councillor von Dadelszen’s recall
was that he had started to say the
respondent had voted in favour of an “in principle” decision, which
would be to accept
the Deloitte recommendation to move the headquarters, when
Colin Hammond (a retired local body politician and member of the Regional
Focus
Group which opposed the relocation) aggressively attacked him about the
statement. Councillor von Dadelszen refuted the suggestion
that he had said
the decision to move was a “done deal” and he said he would never
use the words “you easties have
got to live with it”. His evidence
was this was not the sort of language he would use. He conceded he was angered
by Mr Hammond’s
comments and he may have said “we have the
numbers”, but he knew at that stage that a final decision was at least six
months away.
[129] The applicant is inviting the Court to draw the inference from words
said at a Christmas party in December 2006 that Councillor
von Dadelszen had
such a closed mind that his decision in June 2007 to vote in favour of the
headquarters’ move can be said
to be predetermined. There was a
significant time gap between the Christmas party in December 2006
and the
June meeting. In view of Councillor von Dadelszen’s
denials of predetermination and his assertions of approaching
the June
2007 decision with an open mind, which I have no reason to disbelieve, I am not
prepared to rely on comments made six months
earlier to find that Councillor von
Dadelszen had a closed mind in June 2007.
[130] Councillor von Dadelszen was also cross-examined about him being absent on the last day of the consultation hearings in Whakatane on 24 May 2007. It was put to him that by that time he had made his mind up to vote in favour of relocation. He rejected any suggestion. He rejected the suggestion that by the time of the respondent’s deliberations, he was not open to persuasion.
Councillor von Dadelszen said that although he had been absent for one day of
the public consultation hearings, he had taken it upon
himself to read all the
submissions thoroughly to ensure that he was fully informed when it came to the
time of making his decision.
Again I see no reason to disbelieve
him.
[131] Councillor Raewyn Bennett, in a meeting with Ngati Awa in February 2007, is alleged to have made it clear she supported the move and that it was time for Western Bay of Plenty Mäori to have the head office located in their district. In her affidavit evidence, Councillor Bennett rejected any suggestion her decision to support the headquarters move was affected by predetermination or bias. It was put to her in cross-examination that she had favoured the move because she thought it best for the Iwi which she represented (namely, Western Bay of Plenty Mäori) and that she thought they would be better served by having the regional council headquarters in Tauranga. She accepted that her concern about “the urbanisation of Iwi” was one of the factors that she took into account in her decision-making but rejected the suggestion this was entirely what had motivated her decision. She agreed that she had been at a meeting on 26 February 2007 of local Iwi that was attended by Jeremy Gardiner. Mr Gardiner’s recall of the meeting was that Ms Bennett had represented to the meeting that the relocation was to go ahead and that she had told him she would be voting for it. Under cross-examination, Ms Bennett denied that she had a conversation to this effect with Mr Gardiner. She said that at the meeting she gave reasons for supporting the “in principle decision” of
7 December 2006.
[132] Ms Bennett’s understanding of the communications she had at the
meeting of
26 February 2007 was for her to outline why she had decided to support the Deloitte recommendation. She denied that the effect of what she said at the meeting was to promote the headquarters relocation. An email was put to her, which she had written to Bruce Fraser on 18 February 2007, in which she had said the words “at Fisheries forum tomorrow (promoting HQ)”. It was put to her that the statement in the email reflected what she would actually have been doing at the meeting. She rejected that idea and said that all she was doing was to raise awareness among Iwi in the various areas. When it was suggested to her that as at February 2007 she was going out to
the community trying to sell the relocation decision, she rejected that on
the basis that at that point in time no decision had been
made.
[133] Mr Gardiner had sworn in his affidavit that Councillor Bennett had
said it was “Ngati Rangi’s turn to have the
regional council located
near them and that Ngati Awa had their turn”. Councillor Bennett said she
did not make the statement
and never would make such a statement.
I have no reason to reject Councillor Bennett’s evidence
on
the points where there is a conflict with Mr Gardiner’s evidence.
Statements made in the context of meetings to
discuss the issue of the
headquarters relocation are now being lifted out of their context. In
addition, it may be that certain
glosses are being placed on those statements,
which may not have been intended at the time the statements were
made.
[134] With decisions of this type, it is to be expected that councillors
will have discussions with members of the community.
In the course of those
discussions, councillors may make comments that may suggest they hold a
particular view. It is difficult
to see how councillors could engage
effectively and explain why they have taken a certain stance without perhaps
creating an impression
of holding particular views. That is very different from
having a predetermined view. It follows that I am not satisfied on the
balance
of probabilities that Councillor Bennett made the comments now alleged to
demonstrate bias and, in any event, even if she
did, I do not interpret those
comments or words to such effect as amounting to actual bias.
[135] On 25 April 2007, Councillor Pringle wrote a letter to the editor of
the
Whakatane Beacon in which he stated:
While I sympathise with the effects to what this change means to any people
in Whakatane;
and
This will happen but at the same time we do not intend to leave Whakatane in
the lurch.
[136] Councillor Pringle was cross-examined about bias as revealed through the letter he had written to the editor of the Whakatane Beacon on 25 April 2007. It was put to him that the way in which he had expressed himself in the letter revealed he
was treating the relocation as a foregone conclusion, rather than as a
possibility. He accepted that the letter could be read in
that way, but said
that was not his intent because the decision on the relocation was still to be
made. He explained the letter
on the basis that he was responding to letters
that had been published earlier on and he was putting matters in context. He
rejected
the suggestion that at the time he wrote the letter, he had made his
mind up about the relocation of headquarters. It was suggested
to him that he
had written the letter using references to relocation, rather than possible
relocation, because, in his mind, the
relocation was going to happen. He
rejected this suggestion.
[137] I consider that when local body politicians write letters to local
newspapers regarding issues that have become contentious
within the community
for the purpose of explaining the benefits of the move, the language used may be
stronger and less precise than
that which a lawyer would use. I am not
prepared to infer from the words Mr Pringle wrote in a letter to the editor
designed to
answer earlier letters that this amounts to sound, reliable evidence
of actual bias on his part. He has rejected that suggestion,
and I have no
reason to disbelieve him.
[138] The applicant has also alleged that the respondent's decisions were made with undue haste and did not allow for any or sufficient time for proper consultation and input and consideration of the community views, particularly at stage one and stage two of the decision-making process. This allegation depends on the view being taken that stage one and two of the decision-making process had reached an end by
7 December 2006. I have already rejected this view on the facts, which
disposes of this allegation.
[139] Another allegation made against those who voted for relocation of the headquarters was that none of those who did so were willing to engage in any meaningful debate as to the pros and cons during the deliberation hearings on
31 May 2007 and 1 June 2007. To counter this allegation, the respondent pointed to the minutes made of the deliberation hearings. In my view, those minutes support the respondent’s view of what occurred. A perusal of the minutes reveals that a number of those who voted for the relocation actively participated in the deliberation process. It follows that I do not find the applicant has established this allegation.
[140] As regards the failure of Councillors Eru, Sherry and von Dadelszen
to attend all of the submissions and deliberations hearings,
I do not see their
absence as undermining the quality of the consultation process. The applicant
has not directed me to any authority
which establishes that the members of a
local authority who vote on a decision must have attended all the public
consultation hearings.
The applicant relied on s 83 of the Act to support its
assertion that the requirement in that provision to give submitters an
“opportunity
to be heard” could not be met without the
respondent’s members attending all the consultation meetings.
[141] Like Tipping J in Travis Holdings, I think that parallels can be drawn between local authority decisions and those of the executive. When Ministers of the Crown come to make decisions that require consultation, there is generally no requirement that a Minister will individually attend and participate in any consultation process. That is left to the officials who then have the responsibility of preparing reports for the minister outlining the thrust of the matters consulted on and the submissions received. If the officials do a poor job of summarising the submissions produced during the consultation process, that can leave a Minister open to the accusation he or she has not properly consulted. Although decided on another ground of review, the judgment in Air Nelson v Minister of Transport CA279/06
5 May 2008 is relevant to understanding the consequences of decision-makers
being poorly informed by their officials.
[142] I do not understand the applicant in this case to be critical of the
materials that went to the respondent’s members
for the purpose of
recording for them and informing them on the consultation submissions received.
Provided the written material
the respondent’s officials produced provided
a fair and accurate account of the submissions received during the consultation
hearings and the respondent’s members read this material, I can see no
reason for finding the consultation process was flawed.
[143] Furthermore, when the votes of councillors whose absences from the submissions hearings are put to the side, of the remaining votes, those who voted for relocation are still in the majority. The outcome was not a closely balanced decision which hinged on the votes of those who did not attend all the submissions hearings.
Even if they had abstained, the numbers were still against those who voted
against relocation. The applicant contended that as that
would have resulted in
a six to five split for relocation, it may well have been that some of the six
may have changed their minds.
I find this to be speculative. There
is no foundation for it. In circumstances where the three councillors who
were absent from the consultation meetings gave proper consideration to the
consultation materials, and when those who voted for
relocation outnumbered
those against, with or without the abstention of the three councillors, I cannot
see how their absences from
some of the consultation meetings can have any
impact on the respondent’s performance of its obligations to consult under
s
83.
[144] The applicant attempted to make something out of the fact the
respondent’s legal advisers had advised against those
who had missed part
of the submissions’ hearings from voting on the decision. That advice may
have been given out of an abundance
of caution. Whilst adherence to it would
have avoided one of the grounds of challenge to the decision to relocate, the
departure
from the advice was not wrong in law.
[145] The applicant also challenged the absences of Councillors von
Dadelszen and Bennett from part of the deliberation hearings.
However, at all
times the necessary numbers to make up the required quorum were present. It is
not as if these councillors absented
themselves for most of the two days of
deliberations and did no more than to arrive at the time when the vote was to be
taken. It
is in the nature of local body work that members of local authorities
will need to absent themselves from deliberation hearings from
time to time.
Provided those persons ensure they are well informed and approach the decisions
to be taken with an open mind, I can
see no reason for being critical of them
being absent for part of the deliberation process.
[146] It follows that the applicant has not made out the grounds of review of predetermination and bias, or of failure to consult. The failure to consult also came under the heading of unfairness and procedural impropriety in that the applicant contended that a breach of the duty to consult under ss 82 and 83 was also a procedural impropriety and unfair. The applicant’s failure to establish there has been
a breach of the statutory duty to consult means it has failed on the
ground of procedural impropriety and unfairness as well.
Unreasonableness
[147] The applicant contends that the decision to move the applicant’s headquarters from Whakatane to Tauranga was unreasonable. Wellington City Council v Woolworths New Zealand Limited (No 2) [1996] 2 NZLR 537 is a leading case on challenges on the ground of unreasonableness in relation to local government decisions. That case involved the setting of rates and earlier legislation. The Court of Appeal concluded that the setting of rates was essentially a matter for decision by elected representatives following the statutory process and exercising the choices available to them. The Court was not prepared to interfere with what was essentially a policy decision. It recognised that the setting of rates required the exercise of political judgment by elected representatives of the community. In that regard, economic, social and political assessments involved were complex. The test for unreasonableness applied in Wellington City Council was that given by Lord Diplock in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374,
410, where it was said:
It (unreasonableness) applies to a decision which is so outrageous in its
defiance of logic or of accepted moral standards that no
sensible person who had
applied his mind to the question to be decided could have arrived at
it.
[148] When I apply that test to the present decision under review, it seems to me that the decision cannot be so described. The councillors of the respondent who voted in favour of a move of the headquarters had sufficient material before them in the form of the Deloitte report, the Bayfield report and other material gained following those reports which supported the headquarters move. It is for the applicant to establish that the decision to move the headquarters was one that no sensible person could have arrived at in terms of the test set out by Lord Diplock. On my reading of the reports on which the respondent relied, they outlined the long- term wisdom in moving the headquarters to the most populace centre in the region for which the respondent was responsible. The benefits of having the headquarters sited in the most populated and growing centre of the respondent’s region are set out in the reports on which the respondent relied to inform itself. These reports make
sense. It was open to the councillors to decide that it was in the
region’s long-term benefit for the headquarters to be sited
in Tauranga.
The evidence revealed that most regional authorities have their headquarters
sited in the most populated centre of
the region they serve. While it seems
that the respondent has managed to carry out its role to date, the idea that,
with the increased
responsibilities legislative change has placed upon it, it
would better perform its role if sited in Tauranga is a tenable one. There
is
nothing about the decision which would suggest to me it was unreasonable in
terms of the test applied by Lord Diplock
and approved of in
Wellington City Council. I do not find the decision to be an
unreasonable one.
[149] The applicant elected not to pursue the ground of review based on the
taking into account of irrelevant considerations and
mistake of fact. The
ground of review based on failure to take into account relevant considerations
is largely covered by the findings
made on s 76 and its associated provisions.
In regard to those additional considerations the applicant has pleaded as being
relevant
considerations which were not taken into account, the applicant has not
identified how they have the mandatory character necessary
to support this
ground of review. For this reason, the applicant fails on this ground of
review.
[150] After this proceeding was heard, the judgment in Council of Social Services in Christchurch/Outautahi Inc v Christchurch City Council HC CHCH CIV 2008-
409-1385 25 November 2008 was issued. The Court in this judgment has
interpreted the effect of s 76 and its associated provisions
differently from
the interpretation contained herein. I have considered the judgment but must
respectfully disagree with the interpretation
it expresses.
Result
[151] The applicant has failed to establish the grounds of judicial review
on which it relied to support its claim that the respondent’s
decision was
unlawful and invalid.
[152] Leave is reserved to the parties to file memoranda on
costs.
Duffy J
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URL: http://www.nzlii.org/nz/cases/NZHC/2009/439.html