New Zealand: Rating powers of local authorities

The Court of Appeal recently issued its judgment in Northland Regional Council v Kaipara District Council [2018] NZCA 63, being the latest development in a longstanding argument regarding the validity of rates set by the Northland Regional Council (NRC).

By way of background, the High Court issued an interim judgment on the matter back in 2016 (Mangawhai Ratepayers' & Residents' Association Inc v Northland Regional Council [2016] NZHC 2192), declaring certain rates set by NRC to be unlawful. The High Court found that in order to satisfy the requirements of section 24 of the Local Government (Rating) Act 2002 (Rating Act), the days/dates on which the intended rates of the NRC would become payable need to be stated specifically and explicitly by reference to a calendar date. Section 24 provides:

A local authority must state, in the resolution setting a rate,–

  1. the financial year to which the rate applies; and
  2. the date on which the rate must be paid or, if the rate is payable by instalments, the dates by which the specified amounts must be paid.

NRC's rates resolutions simply provided that:

The dates and methods for the payment of instalments of rates and any discount and/or additional charges applied to the regional rates shall be the same as resolved by the Far North District Council, the Kaipara District Council and the Whangarei District Council and shall apply within those constituencies of the Northland region.

The High Court found that NRC's resolutions for the 2011/2012, 2012/2013 and 2013/2014 rating years were not made lawfully in accordance with section 24.

The other key issue considered in the High Court related to arrangements that Northland Regional Council had with the territorial authorities in the region in relation to rates collection.

The High Court held that NRC unlawfully delegated its powers to assess and recover rates, and that the language in section 132 of the Rating Act is not sufficiently broad to permit delegation outside one local authority to persons employed by another local authority.

NRC is certainly not the only local authority to cover the region of multiple territorial authorities. There are obvious efficiencies for both ratepayers and local authorities in collecting rates in one payment, and while the High Court's decision highlighted the importance of certainty regarding the date of rates collection, it may also have been a source of concern for councils, particularly in respect of the delegation issue.

NRC appealed the High Court's interim and final decisions to the Court of Appeal. Mr and Mrs Rogan (members of the Mangawhai Ratepayers' & Residents' Association Incorporated (Association)), and the Association cross-appealed the finding that the Kaipara District Council's rates were not unlawful and also sought to support the High Court's finding in respect of the NRC, but on additional grounds.

The Court of Appeal overturned a number of the High Court's findings, relevantly its finding that the assessment of the rates had been carried out by the wrong entity, and that the NRC's contracting out of the assessment function amounted to an unauthorised delegation of a statutory function. The Court of Appeal also addressed setting rates on a GST inclusive basis, and issues associated with timing errors in penalty resolutions. However, we have not addressed these further and have instead focused on the issues regarding the assessment of rates below.

Despite agreeing with the High Court that the rates resolutions breached section 24 of the Rating Act, the Court of Appeal considered that considerations of "common sense and proportionality have a role to play" and accordingly validated the rates resolution pursuant to section 5 of the Judicature Amendment Act 1972.

The Court also addressed the validity of the penalty resolutions and the failure to state the date of calculation in accordance with section 57 of the Rating Act, which provides that a local authority may by resolution authorise penalties to be added to rates that are not paid by the due date. Both councils in this case purported to pass various penalty resolutions over the period in question, which the Rogans and the Association unsuccessfully argued were invalid. The Court of Appeal confirmed that in resolving to apply penalties to unpaid rates, the resolution cannot reserve any discretion to enforce the penalty rate; either a local authority does not have penalties and therefore does not pass a resolution, or a local authority decides to impose penalties and accordingly a resolution is passed and penalties must be added in accordance with a formula. The only discretion in respect of penalties arises after the penalty is imposed via a rates remission policy, not in the actual resolution.

In terms of the delegation issue, there was no challenge in the High Court to the correctness of the rates assessment; rather the claim was that the rates assessment had been carried out by the wrong entity. The High Court found that the NRC had unlawfully delegated its statutory function, being the assessment function, to the Kaipara District Council.

The Court of Appeal took a different view. Given the assessment of rates is a purely mechanical, mathematical process done by a computer which involves only the application of the rating formula from the local authority's rates resolution to the information relating to individual rating units, the Court of Appeal found that there was no element of discretion or evaluative judgment in producing the figure payable by a ratepayer in respect of a particular rating unit, thus the rule against delegation was not breached. In reaching this view, the Court of Appeal expressed disagreement with the counter argument, as follows:

[35] What the argument advanced by the Rogans would effectively mean is that the Regional Council must itself input the data it sends to the Kaipara District Council and at the point where an assessment run is about to take place, the Kaipara District Council would need to contact someone from the Regional Council to come and press the button. That is patently absurd and in our view highlights the flaws in the argument. It is also inconsistent with the obligation of local authorities under s 14 of the Local Government Act to save costs and eliminate inefficiencies.

The Court's finding that such an arrangement does not amount to an unauthorised delegation of a statutory function is significant for those regional councils whose rates collection is carried out by multiple territorial authorities, given the obvious efficiencies and cost savings for both ratepayers and local authorities in collecting rates in one payment.

Download article in PDF format

Related articles
Court confirms wide-ranging rating powers

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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