Attorney-General v Rodney District Council

[2000] NZCA 344

IN THE COURT OF APPEAL OF NEW ZEALAND CA274/99

BETWEEN	ATTORNEY-GENERAL
First Appellant

AND	VALUER-GENERAL
Second Appellant

AND	RODNEY DISTRICT COUNCIL
First Respondent

AND	MANUKAU CITY COUNCIL
Second Respondent

AND	HUTT CITY COUNCIL
Third Respondent

AND	NEW ZEALAND LOCAL GOVERNMENT ASSOCIATION INCORPORATED
Fourth Respondent

Hearing:	20 November 2000
Coram:	Gault J Keith J Tipping J
Appearances:	H Aikman for the Appellants T Sissons and J M Slater for the Respondents
Judgment:	23 November 2000

JUDGMENT OF THE COURT DELIVERED BY KEITH J

1. The respondent local authorities and Local Government New Zealand apply for conditional leave to appeal to the Privy Council from a judgment of this Court given on 18 September 2000.  The High Court had made various declarations along the lines sought by the respondent about the meaning of the Valuation of Land Act 1951.  This Court allowed the appeal brought by the Valuer-General and set aside the declarations made in the High Court.  It also dismissed the respondents’ cross appeal.

2. The interpretation dispute focuses on the expression “separate property” in s8(1) of the Valuation of Land Act.  Certain of the powers of local authorities, particularly to levy uniform annual general charges, are confined to “separate property”.  The valuation rolls prepared by the Valuer-General and the rating rolls used by local authorities to collect their rates list each such property.  The proceedings were commenced after concern was raised that local authorities had been levying annual general charges on apportionments of property rather than on each “separate property”. If such an apportionment did not constitute “separate property” the local authorities may have acted illegally.  This Court decided that a “separate property” was defined by a certificate of title.  It followed that an apportionment did not constitute a “separate property”.

3. The application, under the Privy Council (Judicial Committee) Rules Notice 1973, is made on the grounds that

   (a)the judgment of this Court is final and binding and the appeal involves, directly or indirectly, a question respecting property or some civil right amounting to or of the value of $5,000 or more (R2(a)), or

   (b)the question involved in the appeal is one which by reason of its great general or public importance or otherwise, ought to be submitted to Her Majesty in Council for decision (R2(b)).

Rule 2(a) : an appeal as of right?

1. The respondents argue, first, that they have an appeal “as of right” under R2(a).  The only difference between the parties under this head is whether the matter in dispute directly or indirectly involves a question respecting property or a civil right to retain property exceeding $5,000 in value.

2. The local authorities party to the current proceeding have indicated that on the basis of this Court’s ruling they may be liable to repay in excess of $11m.  For the combined members of the fourth respondent, the Local Government Association of New Zealand, the liability may exceed $32.5m.  It follows, according to the respondents, that their appeal does involve, directly or indirectly, a claim or question respecting property or some civil right amounting to or of the value of $5,000 or more.  They refer to the broad statements made about R2(a) by this Court about “right[s] of an indirect nature arising out of or incidental to the central question in the proceedings” in Re Bateman Television [1974] 2 NZLR 221, 223.

3. The Valuer-General contends, to the contrary, that none of the declarations sought involved any sum of money.  They were instead directed to the manner in which the Valuer-General made decisions under the 1951 Act.  The High Court Judge specifically stated that he had not formed any view about the legal consequences of making the declarations he did.  This Court similarly emphasised the abstract nature of the questions; it was not asked by the respondents to consider the legal consequences of the declarations.  It is however now those alleged consequences which form the basis for the application for leave to appeal, but whether any such liability will accrue will depend on decisions made by those councils themselves, possible subsequent legal action by affected ratepayers or, potentially, retrospective legislation validating the collection of the disputed annual general charges.

4. Those matters may not themselves defeat the contention that the appeal involves indirectly a question involving property or civil right of $5,000 or more.  But when taken with the fact that the occupiers, owners and others who have paid the disputed annual general charges and as a consequence do have direct financial interests in the matters are not before the Court, we are persuaded this proposed appeal does not directly or indirectly involve the large monetary sums potentially in issue.  If we consider the particular parties, the Valuer-General has no interest in that matter while the absent occupiers and owners do.  To adapt the words of McCarthy P in the Bateman case any rights, in the circumstances of this case, in respect of the $11m or $32.5m do not arise out of, nor are they incidental to, these proceedings. 

5. We accordingly decide that the appeal does not lie as of right under R2(a).

Rule 2(b) : an appeal as a matter of discretion?

1. Under R2(b) the Court has a discretion to grant leave if the appeal raises issues of great general or public importance or which otherwise ought to be submitted to the Privy Council. 

2. The respondents submit that the question involved in the appeal is of great general or public importance, or that it ought otherwise to be permitted to go on appeal.  They rightly call attention to the fact that this Court has often said that, so long as the appeal to the Privy Council exists, we should not be niggardly in granting leave; eg Brannigan v Davison (1996) 9 PRNZ 277, 280.  They emphasise that their contingent liability constitutes a substantial proportion of their annual rates revenue.  If, depending upon the ultimate outcome of these proceedings, the actual liability arose, and the local authorities had no accumulated provision for funding the refunds, they would have to be sourced from borrowing, rates increases or both with consequences for all ratepayers in the affected local authorities.  Even if the issue on appeal is not a matter of great general or public importance the respondents submit that the matter is of such great importance to the local authorities concerned that leave ought to be granted under the “or otherwise” limb of R2(b). 

3. Further, the proposed appeal is important not just for the past, in respect of those possible liabilities, but also for the future.  While the 1951 Act has been repealed and replaced by the Rating Valuations Act 1998, valuation under that new Act continues to be based on “separate property”; see s7.  At the substantive hearing in this Court it was said that a declaratory judgment about the old Act would be of value for the interpretation and application of the new legislation as well.

4. The Valuer-General accepts that there is little doubt that the issue is of some importance to the three respondent councils, given the size of their contingent liability which is put at 2.3%, 7.7% and 5.4% of their annual rates revenue.  The estimated total liability nationwide is 1.2% of councils’ overall annual operating income.  The Valuer-General contends however that it is not a matter of great general or public importance for a number of reasons.  The case involves a straightforward issue of statutory interpretation on which this Court was unanimous even if it disagreed with the High Court.  The issue does not involve complex or wide ranging issues of law on which the guidance of the Privy Council is likely to be helpful or where this Court should have any reasonable doubts about the accuracy of its decision.  The issue requires an understanding of the central role of a certificate of title to land under the Torrens system even if it is not purely indigenous.  Further, although the public has an interest in ensuring that the collection of rates is carried out according to law, this does not mean that every question involving the mechanism on which rates are collected is of great or general importance.  So far as any obligations of the authorities to repay are concerned, there is also the question touched on in the judgment of this Court (para [15]), whether any such obligation would be affected by a later ruling rejecting the view of the law on which the Valuer-General had acted : the legislative provisions placing time and other limits on challenges to valuation and rating might be relevant.

5. As McCarthy P indicated in a case in which the Court divided and a majority refused leave, while there are relevant principles, whether an appeal gives the rise to issues of great general or public importance is largely a matter of opinion;  Rich v Christchurch Girls’ High School Board of Governors (No.2) [1974] 1 NZLR 21, 26.

6. For two broad reasons related to the law and the facts we conclude that in our opinion the issues do reach the required standard and that leave should be granted : the question of law is an important one at the heart of the valuation process, not just for the old Act but also, it would appear, for the new;  and the amounts involved, both relatively and absolutely in the financial affairs of the local authorities concerned, are large.  On the latter, we would however note that this is yet another case of public agencies using the full range of procedural and appellate opportunities open to them to pursue litigation when legislative answers (which may be required in any event) may be more effective.

Result

1. Accordingly, conditional leave to appeal to the Privy Council is granted on the standard terms, that is on the payment of security of costs of $2,000 and the preparation of the record for despatch to London within three months.  The respondents are awarded costs of $1,500 and disbursements to be fixed by the Registrar in the absence of agreement.

Solicitors

Crown Law Office, Wellington for the Appellants
Simpson Grierson, Auckland for the Respondents