New Zealand: Local Government Bulletin I

Brief Overview On Development Contributions

Development contributions under the Local Government Act 2002 (LGA) are quickly replacing financial contributions under the Resource Management Act 1991 (RMA) as the growth funding mechanism of choice for territorial authorities (Councils).

In brief, development contributions are levied in accordance with a Development Contributions Policy (DCP) which is a policy contained in a Long Term Council Community Plan (LTCCP).

What are development contributions?

The DCP allows development contributions to be imposed on all developments which generate a demand on Council’s network infrastructure, community infrastructure and reserves for which Council incurs or has incurred capital expenditure to provide new assets, additional assets or assets of increased capacity (namely, growth-related capital expenditure).

Such development will be assessed against Council’s DCP at the time of grant of resource consent, building consent or authorisation for service connection. If a development contribution is not paid, Council has extensive enforcement measures including the ability to withhold a section 224(c) certificate for a subdivision consent, prevent other resource consents from commencing, withhold a code compliance certificate for a building consent, and withhold service connections to its water supply, wastewater, stormwater, and roading networks. Council may also register the outstanding development contribution as an outstanding charge against the subject land.

Development contributions under the LGA do not require the same nexus between growth and development as financial contributions imposed under the RMA. In some cases, this allows development contributions to be levied at a substantially higher rate per additional household or household equivalent unit than was the case for financial contributions.

What is happening now?

Councils must adopt a LTCCP (many of which will contain a DCP) for the period commencing 1 July 2006, using the special consultative procedure in the LGA. This means that many of the DCPs will be nearly finalised. However, Council can continue to refine their DCPs by making appropriate submissions as part of the special consultative procedure.

Time to review the Development Contributions Policy

In terms of substantive policy, we recommend that Councils have appropriate provisions in their DCPs in respect of the following matters:

  • An assessment procedure which allows Council to assess all development at every statutory trigger and again where a substantial amount of time has passed without the development contribution being paid.
  • An enforcement procedure which allows Council to use all the enforcement mechanisms available to it under the LGA.
  • A credits procedure which includes actual credits (for previous contributions paid by financial contributions, development contributions, or by development agreements) and historical credits (which covers activities comprising existing units of demand on the subject site).
  • A remissions procedure which allows Council to make appropriate provision for special developments or where circumstances justify a partial or full remission of the development contribution (which is particularly useful for development caught in the transitional period from the financial contributions regime to the development contributions regime).
  • A procedure allowing Council to require a special assessment from the developer or enter into a development agreement where appropriate.
  • Appropriate provisions in respect of GST liability, to prevent Council’s GST liability from arising prematurely (especially months or years before the development contribution is payable).
  • Appropriate provisions relating to the transition from the financial contributions regime to the development contributions regime.
  • Appropriate provisions relating to Council and Crown developments.
  • Appropriate provisions relating to the valuation of land (where Council agrees to accept development contributions in the form of land).

Council should also consider implementing an operational manual to assist Council officers to administer and interpret the development contributions regime. Such a manual would contain the necessary procedures and delegations to ensure that Council’s financial, building and resource consent officers are working together consistently.

Lysaght Developments Limited V Whakatane District Council Environment Court, Wellington, 21 February 2006, Thompson J, (W 015/06)

A recent judgment held that an appeal against a condition of consent, requiring the payment of a development contribution, could not be brought in the Environment Court. Consequently, the sole means of disputing a development contribution condition would be by way of judicial review in the High Court.

Section 198 of the Local Government Act 2002 provides that a territorial authority may require a development contribution to be made before resource consent is granted under the Resource Management Act 1991. In this case, the Council granted Lysaght application to subdivide a piece of land into 42 residential lots, one balance lot and one esplanade reserve.

The condition was worded as follows:

That pursuant to s198 Local Government Act 2002 and the Development Contributions Policy of the adopted Long-term Council Community Plan 2004-2014, a development contribution of $10,813.50 (inclusive of GST) shall be paid to the Whakatane District Council prior to the release of the s224 Certificate for each lot being created by this development. The contribution required for each stage of the subdivision will be calculated on the number of new lots being created in that stage, that being 30 lots in Stage One and 12 in Stage Two.

Lysaght argued that the development contribution was imposed as a condition of the subdivision consent, thus imposed under the Resource Management Act 1991 and amenable to appeal to the Environment Court. On the other hand, the Council argued that although the development contribution decision was contained in the same document as the subdivision consent, it was a separate decision and was made under a separate statutory provision.

The Environment Court found the Council position to be correct. What Lysaght was arguing would, in essence, result in the territorial authority having to decide on the requirement for a development contribution, and the quantum of that contribution, before it had decided whether the development was to proceed or not.

Casenote: Stay Of Abatement Notice – Austin & Anor V North Shore City Council (A14/06)

This case may lead to questions about the effectiveness of using an abatement notice to prevent a resource consent from commencing when the developer has not paid a development contribution.


Bayswater Apartments Limited (BAL)was granted a landuse resource consent by the Council to convert an existing building into a resthome. The consent would commence when BAL paid the development contribution for which it was assessed. BAL did not pay the development contribution as BAL has challenged the Council’s legal entitlement to the development contribution by judicial review, set down for hearing in June 2006. Without making payment BAL proceeded to implement the consent. The Council issued an abatement notice to BAL and Austin, a director of BAL, requiring BAL to cease works until the resource consent commenced.

The arguments

The appellants sought a stay of the abatement notice on the following grounds:

  • The subject matter of the abatement notice is outside the scope of the Resource Management Act 1991 (RMA), and is not a condition of resource consent.
  • The subject matter of the abatement notice is subject to High Court judicial review.
  • The Council refused to consider the appellants’ application to review the development contribution imposed.
  • The appellants offered to make a ‘without prejudice’ payment to the Council which Council refused to accept.
  • It would be appropriate to hear the judicial review proceedings first as this is the only form of appeal available for a development contribution.
  • There would be no adverse effects on the environment if the stay was granted. The Council did not oppose, but did not accept the grounds for, the application for the stay.


The Court considered section 325(3D) of the Resource Management Act 1991 in making its decision to grant the stay. The Court held that it would be unreasonable to require BAL to comply with the abatement notice pending the determination of the Environment Court appeal and because of the judicial review proceedings underway challenging the development contribution. The Court was also satisfied that granting the stay would not have an adverse effect on the environment to any significant respect.

The appellants also made an application under section 11 6(1) of the RMA to have the resource consent commenced pending the Environment Court’s determination. The Court did not address this issue in this decision but indicated that if the appellants’ offer to make a ‘without prejudice’ payment to the Council was still available, the application was likely to be granted. If the 11 6(1) application was granted, the appeal against the abatement notice would become unnecessary.

Green Building Council

Local Government in New Zealand has been at the forefront of the move to create sustainable, ‘green’ buildings. The concept has taken longer to be picked up by the wider community but may be given impetus with the establishment of a Green Building Council in New Zealand. This note briefly considers what a Green Building Council is and what it might do.

Green building councils

The World Green Building Council has as its mission the ‘sustainable transformation of the global property industry.’1 The World Council and various member Councils are market focused and their vision of a sustainable property industry is one which ‘balances environmental, social and economic issues to ensure a viable and valuable industry for future generations’. As well as an advocacy and knowledge sharing role, the World Green Building Council is also concerned with encouraging the development of market based environmental rating systems for buildings.


A sustainable building is a ‘Green’ building but the reverse may not necessarily be true. A building that was truly sustainable would provide the perfect balance between present needs and the needs of future generations. Using current technology and materials, it is unlikely that standard would be met. As with sustainability, the concept of a Green building is aspirational. That is why commentators have talked about Green buildings as being ‘less bad’ than the type of buildings to which we are accustomed.

It is more helpful to consider what it is hoped Green buildings will achieve. A report prepared for the Ministry for the Environment2 characterised Green buildings as exhibiting:

  • Radically reduced energy consumption.
  • Improved resource efficiency.
  • Reduced environmental impacts.
  • Improved indoor environment.
  • Lower impact on local infrastructure.
  • Being easier to manage.

These characteristics clearly indicate a movement from the types and styles of buildings we are familiar with to something with a lower impact on the environment. That movement is not something isolated to the building industry but part of much wider global efforts to encourage broad-based sustainable development.

Rating systems

Knowing with certainty that you are dealing with a building of appropriate Green standards is important. The role of developing rating systems which provide a measure of ‘Greenness’ and enable comparison across buildings has been taken up by Green Building Councils.

There are a large number of different rating systems throughout the world. Since 1990, the UK has had BREEAM (Building Research Establishment Environmental Assessment Methodology); the US has had LEED (Leadership in Energy & Environmental Design) since 1999; Australia is developing ‘Green Star’ as an environmental rating system for buildings.

The Australian system, developed by the Green Building Council of Australia (which is comparable to the Energy Star system used increasingly in relation to household appliances), has as its goals to:

  • Establish a common language.
  • Set a standard of measurement for Green building.
  • Promote integrated, whole building-design.
  • Recognise environmental leadership.
  • Identify building life-cycle impacts.
  • Raise awareness of Green building benefits.
  • Reduce the environmental impact of development.

In New Zealand, one of the first tasks of the fledgling Green Building Council is to settle on an appropriate rating system which achieves the above in New Zealand.

Leading the way

Local government, with its longer term outlook is in the ideal position to build Green and show the rest of New Zealand that Green buildings work, are cost effective and save on operating costs. Once a rating system is developed or adopted by the New Zealand Green Building Council, local government can continue to lead by having its buildings rated.

What Parliament Taketh Away, The Greens Giveth Back...

The Resource Management (Climate Protection) Amendment Bill (No 27-1) passed its first reading in the House of Representatives on 29 March 2006. The Bill proposes to reinstate regional councils’ powers under the Resource Management Act 1991 (RMA) to consider the effects of greenhouse gas discharges on climate change. This will apply both to decisions to grant discharge or coastal permits, and to the development of regional plan rules.

Since the enactment of the Resource Management (Energy and Climate Change) Amendment Act 2004 (the 2004 Amendment Act) in March 2004, regional councils have had limited scope to look at the effects of greenhouse gas discharges on climate change when considering applications for discharge permits or coastal permits, or when formulating rules for regional plans.

In deference to the scale of the climate change issue, the rationale behind the 2004 Amendment Act was that climate change matters would be best controlled at a national level. This was to be effected by the implementation of a National Environmental Standard (NES) and a proposed carbon tax. However, two years have passed and a relevant NES has yet to be promulgated.

Similarly, in December 2005 the Government decided not to proceed with the carbon tax in its proposed form. Consequently, the effects of greenhouse gas producing activities on climate change are currently unregulated.

As an interim response to this situation, the new Bill, proposed by Greens MP Jeanette Fitzsimmons, seeks to reinstate local control of activities that may contribute to climate change by repealing sections 70A, 70B, 104E and part of section 104F of the RMA. This will allow regional councils to consider the effects of greenhouse gas discharges on climate change when considering applications for discharge permits or coastal permits, or when formulating rules for regional plans.

This will have an obvious impact on producers of greenhouse gases, who will need to establish the acceptability of discharges of those gases in the context of sustainable management when obtaining or renewing discharge permits. It also suggests that producers may need to get involved in plan change processes where regional councils seek to incorporate new rules relating to greenhouse gas discharges into their existing plans.

Significantly, the Bill also proposes to repeal section 9 of the 2004 Amendment Act (which revoked regional plan rules that controlled discharges of greenhouse gases to air on the basis of their climate change effects, as of 2 March 2004). Accordingly, those rules will automatically be reinstated into their parent regional plans and will take immediate effect, as the Bill does not propose any transitional mechanism in this regard.

The Bill has now been referred to the Local Government and Environment Select Committee, which is receiving public submissions and is expected to report back to the House on 28 September 2006.


1 See

2 Value Case for Sustainable Building in New Zealand, December 2005 updated February 2006, Ministry for the Environment.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions