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CIV 2015-488-182 [2018] NZHC 228




First Respondent


Hearing: 9 February 2018

Counsel: J Browne for Appellants

P Moodley for Respondents

Judgment: 23 February 2018


This judgment was delivered by me on 23 February 2018 at 11.30 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors/Counsel: Henderson Reeves Connell Rishworth, Whangarei Brookfields, Auckland


.[1] On 26 September 2017 I dismissed the appeal of Richard and Heather Rogan

(the Rogans) against the recovery of rates of the Kaipara District Council (KDC).1

The Rogans now seek leave to appeal to the Court of Appeal against this decision.

[2] The question for which leave is sought is:2

Was the High Court’s interpretation of s 60 of the Local Government (Rating) Act 2002 correct?

[3] There is no dispute between the parties about the correct test for the grant of

leave to appeal.

[4] Leave is required because this is a second tier appeal, the proceeding having

originated in the District Court.3 The parties have proceeded on the basis that the test

for leave under the Senior Courts Act 2016 is materially the same as its predecessor s

67 of the Judicature Act 1908 and so the principles in Waller v Hider continue to apply:4

... the test is well established. The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal.

[5] There is no dispute the question as framed by the Rogans is a question of law.

Where the parties differ is whether it can be characterised as a question capable of

bona fide and serious argument; and whether the case involves some interest, public

or private, of sufficient importance to outweigh the cost and delay of a further appeal.

[6] The Rogans contend the question they raise is capable of bona fide and serious

argument as s 60 of the Local Government Act is unclear and capable of a number of

interpretations. They argue that s 60 does not refer to rates recovery proceedings and

there is nothing in the language of the section that expressly engages its application to

the type of challenge they have made against the payment of the KDC’s rates.

1 Rogan v Kaipara District Council & Northland Regional Council [2017] NZHC 2329. 2 This question was formulated during the course of the hearing. 3 Senior Courts Act 2016, s 60. 4 Waller v Hider [1998] 1 NZLR 412 (CA) at 1-2.

.[7] On the other hand, the KDC argues the interpretation the High Court has

adopted is plainly the only available interpretation and none of the other interpretations

identified by the Rogans is seriously arguable.

[8] I accept that s 60 is a difficult section. It states that a person may not refuse to

pay rates on grounds of invalidity unless that person has brought proceedings in the

High Court to challenge the validity “on the ground that the local authority is not

empowered to set or assess the rates on the particular rating unit.” Accordingly, the

section identifies a very specific type of challenge to the validity of rates.

[9] There are subsequent steps that follow the setting or assessing of rates, which

a local authority is required to take before it can recover unpaid rates. For example, a

local authority may correctly set or assess rates, but then fall into error when it comes

to completing one or more downstream steps in the recovery process. In the judgment

I delivered I concluded that in those situations, unless a ratepayer obtained interim

relief in judicial review proceedings against payment the obligation to pay the rates

would remain. In such circumstances, if the judicial review was later found to be

successful the ratepayer would then have to take steps to recover rates paid from the

local authority.

[10] The Rogans have always contended that a challenge to the validity of the rating

process that focuses on steps taken after the rates have been set or assessed is not

caught by the proviso in s 60, and accordingly they are free to challenge the validity

of those steps as part of their defence in a rates recovery proceeding.

[11] I acknowledge s 60 is silent on the question of challenges to rates that are not

based on alleged validity of the setting or assessment process. The possibilities are:

first, that Parliament intended those type of challenges could provide no excuse at all

for refusal to pay rates (which is what I found); secondly, as the Rogans argue, s 60

does not address those type of challenges and accordingly they are outside the section’s

scope, hence there is nothing to preclude them being raised in a rates recovery

proceeding; and thirdly, when Parliament used the words “empowered to set or assess

rates” it was broadly referring to the entire process for recovering rates, in which case

the proviso would apply to challenges made against any step in the rating process.

.[12] The various available interpretations of s 60 and the lack of clarity in the

language of the section persuade me that the question as to its proper interpretation is

seriously arguable. The impact of such questions and their answers extend beyond the

Rogans to other ratepayers. There will be a general and ongoing benefit from a

decision from the Court of Appeal on s 60.

[13] Accordingly, I reject the KDC’s argument that the meaning of s 60 is clear and

that there is no room for serious argument about other possible interpretations.

[14] The KDC argues that the delay that a second appeal will bring is not justified

in this case. It points to the fact the Rogans were also parties in a judicial review of

rates set by the KDC, and the very points they have argued in the appeal before me

could have been included in the judicial review. I accept that is so. However, if they

had included the present argument in those judicial review proceedings, which I also

heard, my conclusion would have been the same, and then they would have then been

entitled as of right to appeal to the Court of Appeal. I do not see their failure to take

the opportunity to include the argument in the judicial review proceeding as a

disqualifying factor.

[15] I understand from the parties that in addition to the Rogans there are five other

ratepayers who have not paid rates and recovery procedures were stayed against those

persons now awaiting the outcome of my decision on the appeal. If those proceedings

proceed those ratepayers will be entitled to issue judicial review proceedings and the

delay the KDC envisages from the granting of leave to appeal will nonetheless occur.

Indeed, if judicial review proceedings are issued the delay will be more protracted than

if there is a second appeal. In this regard I accept the Rogans’ argument that the issue

on which they seek leave to appeal is confined and should be able to be dealt with

quickly and efficiently in the Court of Appeal.

[16] I understand that since delivery of my judgment on the appeal another

ratepayer has paid the rates owing, but the five ratepayers previously mentioned hold

fast to their present stance. In such circumstances I consider the cost and delay of a

further appeal does not outweigh permitting the Rogans to bring their appeal before

the Court of Appeal.

.[17] Accordingly, I am satisfied that leave to appeal should be granted.

Ratepayers and Residents,
Feb 25, 2018, 4:45 PM