Bright v Auckland Council [2016] NZHC 1560 (11 July 2016)

High Court of New Zealand

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Bright v Auckland Council [2016] NZHC 1560 (11 July 2016)

Last Updated: 18 August 2016

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-000538 [2016] NZHC 1560

BETWEEN	PENELOPE MARY BRIGHT Appellant
AND	AUCKLAND COUNCIL Respondent

Hearing:	6 July 2016
Appearances:	Appellant in Person K F Quinn for Respondent
Judgment:	11 July 2016

_{JUDGMENT OF VENNING J}

This judgment was delivered by me on 11 July 2016 at 11.30 am pursuant to Rule 11.5 of the High

Court Rules.

Registrar/Deputy Registrar

Date...............

Solicitors: Auckland Council, Auckland

Copy to: Appellant

Media

BRIGHT v AUCKLAND COUNCIL [2016] NZHC 1560 [11 July 2016]

Introduction

[1] In a judgment delivered on 18 January 2016 in the District Court at Auckland Judge G M Harrison entered judgment for the Auckland Council (Council) against Ms Bright.¹ The judgment was for $34,182.56, being the amount of several years’ unpaid rates and accrued penalties.

[2] Ms Bright seeks to appeal that decision.

Procedural background/District Court decision

[3] The Council issued proceedings against Ms Bright in 2011 seeking to recover payment of unpaid rates for the period June 2006 to June 2011. It initially obtained judgment by default. That default judgment was set aside. The Council then sought leave to introduce a fresh cause of action for unpaid rates for the period June 2011 until January 2015 together with an application for leave to seek summary judgment. Judge Harrison granted leave to the Council to add the fresh cause of action in respect of unpaid rates from June 2011 until January 2015 and also granted leave to the Council to bring the application for summary judgment.

[4] Judge Harrison then went on to deal with the substantive issue before him, the application for summary judgment. The Judge noted that he did not understand Ms Bright to challenge either that she was a rate payer nor the amount claimed. The issue was whether she had a defence to the claim.

[5] Judge Harrison then went on to consider the defences raised by Ms Bright, namely that the Council had agreed to a rates postponement, that the Council’s assessments and invoices did not comply with the Local Government (Rating) Act

2002 and that the Council had an improper purpose in issuing the proceedings. Ms Bright argued the Council had issued the proceedings in response to her challenge that the Council had failed to comply with its obligations under the Public Records Act 2005. The Judge rejected the various defences raised and entered summary judgment.

Preliminary issues

[6] Two preliminary issues arise. First, leave is required to bring the appeal out of time. The notice of appeal was not filed with this Court until 10 May 2016. The appeal should have been filed by 16 February 2016. Ms Bright says that she did not receive a copy of the decision until 17 February 2016. She says she then went to the Auckland District Court on 3 March 2016, was advised she had 28 days to file an appeal and it was suggested that she seek an extension from the District Court Judge. On 4 March she sent an email requesting an extension. That application was declined by Judge Harrison on 7 March 2016 on the basis he lacked jurisdiction given that appeals to the High Court are governed by Part 20 of the High Court Rules. Ms Bright then filed an application for special leave to appeal out of time on

18 March.

[7] When the matter was before the Court on 12 April 2016 Katz J directed that the most effective course was for the application for leave to appeal be heard with the appeal itself. Ms Quinn confirmed the Council’s position was that it formally opposed leave on the ground that the merits of the proposed appeal did not support leave being granted.

[8] Given the explanation advanced by Ms Bright for the delay I prefer to deal with the matter on the merits. Leave is granted to bring the appeal out of time.

[9] Ms Bright also sought to adduce further evidence to support her appeal. She sought to file an affidavit which attached a submission she had made to the Local Government and Environment Select Committee. The affidavit also referred to and attached correspondence confirming her involvement with the World Justice Project, Rule of Law Index.

[10] Rule 20.16 applies to further evidence on an appeal. The Court may grant leave only if there are special reasons for hearing the evidence.² The evidence must be cogent and material, and must not be evidence which could reasonably have been

discovered at an earlier stage.³ While the evidence is a matter of record and the submissions and correspondence may have been generated after the hearing of the District Court it cannot be said to be cogent or material to the appeal. The proposed evidence is irrelevant to the matters in issue. Leave to adduce the further affidavit evidence is declined.

Appeal points

[11] In her notice of appeal Ms Bright advances as the grounds for appeal:

(a) citizens and ratepayers have a right to expect the Council to act in accordance with its statutory duty and to be held accountable regarding transparency and democratic accountability in spending public rates moneys, particularly on private sector consultants and contractors in accordance with the Public Records Act 2005, Local Government (Rating) Act 2002, Local Government Act 2002, and Local Government Official Information and Meetings Act 1987.

(b) the information provided by the Council on rates assessment notices and website is insufficient to establish exactly where public rates moneys are being spent;

(c) the Judge failed to give sufficient weight to the steps she says she had taken to try to resolve issues with the Council;

(d) that the Judge did not give sufficient weight to the fact the Council had “effectively offered [her] rates postponement” which she stated she would consider once information was provided;

(e) the Council’s postponement offer had not been withdrawn so the

matter should not have been taken to the Court;

[12] Ms Bright also referred to the evidence she had given to the Local

_{Government and Environment Select Committee on 7 April 2016 and her}

³ Telecom Corp of New Zealand Ltd v Commerce Commission [1991] 2 NZLR 557 (CA).

correspondence with the World Justice Project. For the reasons given above that is irrelevant and inadmissible.

[13] During the course of oral submissions Ms Bright accepted that her essential proposition was that the Council was in breach of its obligations under the Public Records Act and that provided a defence to the Council’s claim against her for unpaid rates. Ms Bright confirmed that she was not challenging the validity of the rates or suggesting the rates themselves were invalid. Ms Bright suggested this was a test case about the Public Records Act.

[14] To the extent Ms Bright considers that the Public Records Act has anything to do with this appeal, she is simply wrong.

[15] Whether or not the Council has complied with its obligations under the Public Records Act is not in issue in this proceeding. On Ms Bright’s own admissions the rates charged by the Council are valid. Rates are payable by the ratepayer, in this case Ms Bright, provided the rates are fixed in accordance with the Local Government (Rating) Act and the requirements for the assessment and notice are satisfied. In particular s 45 sets out the matters that a rates assessment must identify. Section 46 then provides the matters that the rates invoice must include. On the evidence before the District Court, particularly the affidavit of Russell Earl Varea Vaurasi dated 12 May 2015, those requirements had been complied with. The information required by ss 45 and 46 is contained in the assessments and invoices exhibited to the affidavit.

[16] The Council undoubtedly has obligations under the Public Records Act, including, as submitted by Ms Bright, the obligation to create and maintain full and accurate records of its affairs in accordance with normal, prudent business practice including the records of any matter contracted out to an independent contractor.⁴

[17] However, there is no connection at law between the Council’s obligations

_{under the Public Records Act, its powers to impose and collect rates under the Local}

⁴ Public Records Act 2005, s 17.

Government (Rating) Act and Ms Bright’s obligation as a ratepayer to pay rates

under that Act.

[18] Further, although Ms Bright does not suggest the rates are invalid, even if she did, as the District Court Judge observed, s 60 of the Local Government (Rating) Act provides that a challenge to the validity of the rates is no basis to refuse to pay them unless proceedings are issued in this Court directed to the specific issues identified in the section:

60 Invalidity of rates not ground for refusal to pay rates

A person must not refuse to pay rates on the ground that the rates are invalid unless the person brings proceedings in the High Court to challenge the validity of the rates on the ground that the local authority is not empowered to set or assess the rates on the particular rating unit.

[19] Ms Bright has not made application to this Court to challenge the validity of the relevant rates assessments.

[20] Ms Bright next referred to the rates postponement issue and the fact that she had attended a meeting of the governing body of the Council and made submissions to that body.

[21] The Council has not agreed to a rates postponement. During an earlier stage of the legal proceedings between the parties in the District Court the Council recorded that Ms Bright had, in Court, indicated her interest in a rates postponement option. In a letter of 23 October 2014 the Council confirmed its position. The relevant part of that letter reads as follows:

You have today, in Court, publically indicated your interest in a rates postponement option. Council has provisionally assed your rates arrears situation against the criteria for a postponement of rates and deem that this option would be available.

This would be on the basis that you apply, are willing to meet, and adhere to the requirements of the repayment scheme.

Should you feel that you would like to discuss the opportunity for taking up this, or any other of our payment options, please contact Kevin Ramsay, Acting Chief Financial Officer ...

[22] The letter makes it clear that the rates postponement option would be available on the basis that Ms Bright made an application and was willing to meet and adhere to the requirements of the scheme (which included a postponement fee, and the registration of a statutory land charge). It also required an annual statutory declaration.

[23] Ms Bright confirmed to the Court that her response was the public statement recorded in her notice of opposition in the District Court. It was in the form of the following open letter:

31 October 2014

‘Open Letter to Auckland Council CEO Stephen Town, from ‘anti-corruption whistle-blower’ Penny Bright in response to your ‘rates postponement offer’ of 23 October 2014.

Auckland Council CEO Stephen Town

Dear Stephen,

This is to confirm, in writing, (and with more detail), the response I made yesterday, Thursday 30 October 2014, to the Auckland Governing Body meeting, held at the Orakei Marae.

Auckland Council Controlled Organisation (CCO) Auckland Transport provides the ‘devilish detail’ on awarded contracts, for which I have been fighting for the last seven years, by disputing and refusing to pay rates, because of the lack of transparency in public rates spending:

_{https://at.govt.nz/about-us/procurement/awarded-contracts/}

“Auckland Transport is committed to ensuring its procurement activities are

undertaken in an ethical and transparent manner.

The attached lists detail all of the contracts awarded in the previous six months that are valued over $50,000.00.

Details include:

the contract number, the contract name, the supplier, and the award value.

View the latest awarded contracts list (PDF 64KB)

(https://at.govt.nz/media/618879/NZTA-Awarded-Contracts.pdf)

Disclaimer: we endeavour to list all contracts awarded above the value of

$50,000.00 in the previous six months. Whilst all possible care and effort has been taken to ensure accuracy in this list, we accept no responsibility for any errors or omissions. Accordingly, this list should be used for reference only”.

Once the same ‘devilish detail’ about awarded contracts is equally available for public scrutiny on the following Auckland Council and Auckland Council Controlled Organisation (CCO) websites, including ‘legacy CCOs’, (with the added proviso that this applies to ALL contracts awarded, not just those less than $50,000), THEN I will consider the ‘rates postponement’ offer, made in your letter to me dated 23 October 2014:

[24] Mr Vaurasi, the rates billing and data team leader of the Council, confirmed that as at 16 June 2015 the Council had not received an application for rates postponement from Ms Bright.

[25] Judge Harrison also recorded that Ms Bright handed up further documents during the District Court hearing which included an application for postponement dated 18 December 2015. It contained the following statement:

Dear Sue, please accept, in good faith, this partially completed Auckland City “Rates Postponement” application, as formal notification, that I shall complete it, once Auckland City Council and CCOS provide information on their spending, as outlined in pgs 9, 10 and 11, of the attached document: “NZ Whistleblower Alert! open letter to Auckland Council CEO review committee regarding progress on private procurement “transparency” and the role of the CEO. Penny Bright.

The Judge was correct to assess that as not a valid application for rates postponement.

[26] It is apparent from her responses that Ms Bright has not made an application for postponement of rates in accordance with the procedure provided by the Council. Ms Bright’s open letter response and partially completed application were at most an indication of a conditional intent to apply for rates postponement if certain conditions she sought to impose on the Council were met. It was quite outside the terms of the offer or invitation to treat by the Council.

[27] Finally Ms Bright says she has attended meetings of the governing body of the Council. She effectively challenged Ms Quinn’s authority. Ms Quinn as counsel is an officer of the Court. She warrants that she has authority from the Council by her appearance on its behalf. There is no evidence to suggest she does not have proper authority.

[28] None of the issues that Ms Bright raise amount to a defence to the Council’s claim for rates. Ms Bright may wish to make a point about the Council’s obligations under the Public Records Act and the Local Government Act, but these proceedings are not an appropriate vehicle to do so. Ms Bright, like other ratepayers, has an obligation to pay the rates that have been validly assessed as payable by her. Her refusal to do so simply increases the administration costs of the Council.

Result

[29] While leave is granted to bring the appeal out of time the appeal is dismissed.

Costs

[30] The Council is entitled to costs. Costs should be on a 2B basis subject only

to the Council’s counsel filing a memorandum to confirm that the costs on a 2B basis do not exceed the actual costs incurred by Council on this appeal.

Venning J