Mangawhai loses in Court of Appeal

Well I guess it's Christmas and not everything that comes in the stocking is the present we were expecting. On the 17th December 2015 Harrison, Miller and Cooper JJ delivered their decision on the various matters that had been put in front of them by the Mangawhai Ratepayers and Residents Association (MRRA) relating to the PPP EcoCare wastewater scheme.

The decision is lengthy - 69 pages - and very detailed. Much of it concentrates on Bill of Rights Act matters. Justice Miller prepared the main decision. In their follow up decisions, Cooper and Harrison generally agree with Miller's findings and decision, though their reasons are not all the same.

My summary here of the decision should not be taken as gospel, but the guts, as I see it from a couple of readings are essentially these:

• when Parliament enacted the Local Government Act with the late addition of Protected Transactions provisions, it was to deliver the option of lower cost loans to Councils. The interest rates charged would be lower essentially in exchange for ratepayers having limited powers to challenge loans taken by their council, and therefore banks would be subject to fewer risks and costs.
• while residents had rights to challenge these loans through judicial review, Parliament always had the power to validate loans and loan processes later, and it had the power to do that despite Bill of Rights Act provisions which grant the right of judicial review - but those rights extend to process only (council compliance with the local government act duties to consult for example), and not substantive matters (ie the loan still has to be paid).
• Mangawhai ratepayers and residents got all the vindication they were ever going to get from the findings in the High Court judicial review that Kaipara District Council had acted against the law in whole variety of ways. There is the hint of a suggestion that MRRA might have gone further in getting its pound of flesh from the perpetrators. And there is an impression that perhaps MRRA should have pursued the Office of the Auditor General for its failings - but then the Auditor General got a prize this year didn't she - for a job well done.
• while there were process illegalities associated with the loan, which were validated by Parliament, Parliament always intended that ratepayers should still pay for those debts, and not the taxpayer.

There were some complexities in the decision relating to the fact that MRRA' membership did not include all Mangawhai ratepayers - which raised questions about precisely which persons would materially benefit from a favourable CoA finding - and an order for costs against MRRA, I believe the above pretty much sums up the decision of Miller, and likely concludes an unfortunate example of poor local governance compounded by failures in the Audit Office and the Office of the Auditor General.

Miller has cited speeches from Hansard given by Phil Twyford (for Labour) and Eugenie Sage (for the Greens) in respect to an effort by Andrew Williams (for NZ First), to explicitly exclude from the Validation Bill, provisions in respect to the outstanding debt. William's efforts did not attract the support needed in Parliament, suggesting - without really nailing it - that Parliament always intended that ratepayers would have to carry the can for their council's decisions - and that nobody else would. That is one interpretation of what Parliament did. I don't think Parliament - in respect of individual MPs - explicitly accepted that what they were doing with the validation bill was washing their hands of every aspect of this institutional failure.

I wrote some time ago about the law being an ass in respect of what happened at Mangawhai. Unsure now.