Publications
FYI
Local Government
13 Aug 2010
Strict Approach to Requirement to Consider Community Views
Last year the High Court was asked by Whakatane District Council (WDC) to set aside the decision by Bay of Plenty Regional Council (BOPRC) to relocate its head office from Whakatane to Tauranga. The High Court refused WDC's application. The Court of Appeal has now reversed that decision.
In a judgment issued last week, the Court held that BOPRC breached the requirements of the Local Government Act 2002 (LGA) to consider community views and preferences at the first two stages of its decision-making process. In so doing, the Court has preferred the "literal" approach to Part 6 LGA in Council of Social Services in Christchurch/Outautahi Inc v Christchurch City Council [2009] 2 NZLR 123 (HC) ahead of the more "pragmatic" approach in the High Court decision under appeal, Whakatane District Council v Bay of Plenty Regional Council [2009] 3 NZLR 799.
In this FYI, Jonathan Salter and Padraig McNamara consider the implications of this important decision for local authorities.
Background
In March 2006 BOPRC agreed to undertake an accommodation and location review using external advisors (Deloitte). Deloitte's report analysed where BOPRC could best be located, assessing costs, benefits, drawbacks and hurdles. The report recommended that the head office should relocate from Whakatane to Tauranga. On 7 December 2006, BOPRC agreed 'in principle' to Deloitte's recommendation to relocate, following a recommendation from its chief executive.
Following the 'in principle' decision to relocate, there were workshops, further reports and the relocation proposal was included in the proposed amendments to the long-term council community plan (LTCCP). BOPRC's eventual resolution on 1 June 2007 in favour of relocation was carried 9 votes to 5, and on 21 June 2007 BOPRC formally resolved to adopt the proposed amendment to its LTCCP and to relocate its head office to Tauranga.
WDC applied to the High Court for judicial review of BOPRC's decision. The challenge focused on BOPRC's decision-making procedures under Part 6 of the LGA, which WDC said were flawed. The High Court found that BOPRC's processes had met the requirements of the LGA. It also expressed doubt that non-compliance with those provisions would invalidate the decision, as the statutory requirements were not mandatory.
Court of Appeal Decision
The primary issue was whether BOPRC complied with its statutory obligations to consider community views, under section 78 LGA. The Court concluded that the decision was self-evidently significant, and therefore that community views had to be considered at each of the four stages of the decision-making process listed in section 78(2). These stages are:
Stage 1: definition of problems and objectives
Stage 2: identification of reasonably practicable options
Stage 3: assessment of reasonably practicable options and development of proposal(s)
Stage 4: adoption of a proposal(s).
Consideration of community views was a two step process. First, BOPRC had to secure information as to such views and preferences; this information may be secured by councillors or an agent such as Deloitte. BOPRC satisfied the first step. The second step was "actually considering that information for the purposes of stage 1 and 2". The High Court had concluded that this could occur implicitly or accidentally. The Court of Appeal disagreed, stating that there was no evidence to show that BOPRC considered community views and preferences at stage 1 or 2, and "that is the simple end of the matter."
The Court of Appeal stated that in this instance, consideration of community views happened after BOPRC had made the 'in principle' decision in favour of relocation ie in the latter part of stage 3. The Council's focus was on the pros and cons of the 'in principle' decision to relocate, rather than addressing the underlying issues of what the problems and objectives were (stage 1), and what the reasonably practicable options for achieving those objectives might be (stage 2).
The Court took a different view about the local authority discretion (as to compliance with sections 77 and 78) under section 79 LGA. Unlike the High Court, which said that BOPRC made a discretionary judgment under section 79 as to how it was to comply with section 78, the Court of Appeal said that there was no evidence that BOPRC had exercised its discretion under section 79 at all.
The High Court had found that when the 'in principle' decision was made, BOPRC had reached the end of stage 1. At this stage, it was within its discretion under section 79 LGA to determine whether it was necessary to consider community views, or that the consideration of such views could be achieved through the information gathering by Deloitte and any councillors. The Court of Appeal agreed that a court will not interfere with a council's discretionary judgment under section 79 as to how to achieve compliance with community consultation requirements, unless it was irrational or made on a wrong legal principle. However, it determined that there was no evidence to show that BOPRC made such a consideration under section 79. The Court was not prepared to assume that this occurred accidentally or implicitly through the information gathering, in the absence of any concrete evidence.
The Court of Appeal set aside BOPRC's decisions of 1 and 21 June 2007 to relocate and to amend the LTCCP.
Moving Forward
One matter of concern is that the Court of Appeal, like the High Court in the Christchurch case, seemed prepared to make its own finding on the significance of the decision under review, rather than concluding that it was for the local authority to make that judgment. This seems at odds with the approach to assessing "significance" required by the LGA, and statements in the judgment about the role of the Courts in judicial review.
The judgment contains very little analysis of section 79, which confers various discretions on the Council as decision-maker, including a discretion about what, if any, written record is kept. Despite that, in the absence of evidence of the discretion being exercised, and in light of its conclusion that the decision was a significant one, the Court downplayed section 79 and effectively treated the section 78 requirement to consider community views as mandatory.
Although councils, when making decisions, will need to bear in mind this more stringent approach to compliance favoured by the Court of Appeal, the impact of the judgment may not be as great as first appears. In the first place, the Court was dealing with a decision which it had held to be significant. The judgment may not necessarily apply to decisions which are not significant. This is because section 76 of the LGA imposes a higher standard of compliance for significant decisions as compared to other decision-making.
Further, the Court was able to elevate the section 78 requirements to something approaching mandatory - even though section 78 is subject to section 79 - because it found no evidence of the section 79 discretion being exercised. Therefore, if there is evidence of a council properly exercising its section 79 discretion in respect of the level of compliance with section 78 (and section 77), then it will be much more difficult to show that the council did not comply with the LGA. The case does however underline the importance of the section 79 discretion being exercised consciously (rather than inadvertently or implicitly), and being able to show this (ideally through documents).
Finally, some aspects of the judgment may be relatively short-lived. Clause 8 of the Local Government Act 2002 Amendment Bill proposes the repeal of section 78(2) and its four-stage requirement to consider community views. The Court of Appeal noted that the Bill was currently before Parliament, but as it was not the current law, it was not considered.
Authors
Duncan Laing
Partner - Public Sector
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Padraig McNamara
Partner - Public Sector
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Jonathan Salter
Partner - Public Sector
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James Winchester
Partner - Public Sector
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Gerald Lanning
Partner - Public Sector
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Graeme Palmer
Senior Associate - Public Sector
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What next?
In This Article:
Last year the High Court was asked by Whakatane District Council (WDC) to set aside the decision by Bay of Plenty Regional Council to relocate its head office from Whakatane to Tauranga. The High Court refused WDC’s application. The Court of Appeal has now reversed that decision.
