C P Group Ltd v Auckland Council - [2021] NZCA 587

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA117/2020
[2021] NZCA 587

BETWEEN	C P GROUP LIMITED First Appellant MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED Second Appellant MLC SCENIC LIMITED Third Appellant T & T CLARRY’S HOLDINGS LIMITED Fourth Appellant
AND	AUCKLAND COUNCIL Respondent

Hearing:	13–14 April 2021
Court:	Kós P, Gilbert and Courtney JJ
Counsel:	A R Galbraith QC, T B Fitzgerald and S R Hiebendaal for Appellants J A Farmer QC, J W S Baigent and J M T Salter for Respondent
Judgment:	10 November 2021 at 9.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed.
BWe make declarations that the decisions to impose the APTR in the 2017/2018 and 2018/2019 rating years were invalid. Those decisions are set aside.
CIf the parties are unable to agree on consequential relief, this aspect is to be remitted to the High Court for determination.
DThe respondent must pay one set of costs to the appellants for a complex appeal on a band B basis and usual disbursements. We certify for second counsel.
ECosts in the High Court are to be determined by that Court in the light of this judgment.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)

Table of Contents

Introduction  [1]
The issues  [13]
Decision to impose the APTR for the 2017/2018 year
Council governance structure  [15]
           ATEED  [17]
           Mayoral Proposal to introduce APTR  [23]
           Consultation document   [29]

Supporting document  [30]
Consultation  [39]
Staff report  [45]
Modifications to proposed APTR  [49]
           Decision  [56]
Decision to impose the APTR for the 2018/2019 year
           Experience with the 2017/2018 APTR
Rates increases  [58]
Pass through  [66]
Rates remissions  [70]                 Proposed modifications to the scheme  [72]
           Decision  [77]
High Court proceedings  [80]
First ground of review — alleged non-compliance with s 101(3)
of the Act
Legal principles  [83]
Distribution of benefits (s 101(3)(a)(ii))
High Court judgment  [90]
  Submissions on appeal  [93]
  Our assessment  [99]
           Costs and benefits of funding the activity
           distinctly from others (s 101(3)(a)(v))
  High Court judgment  [125]
  Submissions on appeal  [126]
  Our assessment  [129]
Second ground of review — unreasonableness
           Legal principles  [132]

High Court judgment  [137]
Submissions on appeal  [138]
Our assessment  [141]
Relief  [142]

Result [144]

Introduction

As one of several initiatives to limit average rates increases for the general ratepayer to 2.5 per cent for the 2017/2018 year, Auckland Council (Council) decided to impose a targeted rate on a selected group of commercial accommodation providers to help fund expenditure on visitor attraction and major events by Auckland Tourism, Events and Economic Development Ltd (ATEED).[1] The objective was to shift the burden of this cost from Auckland ratepayers to visitors, thereby freeing up funds needed to pay for major infrastructure projects.
[1]ATEED was a Council Controlled Organisation (CCO) under s 6 of the Local Government Act 2002. In December 2020, ATEED merged with Regional Facilities Auckland Ltd to become Auckland Unlimited Ltd, which is also a CCO.
Council did not have the power to target visitors directly through…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZCA 587
Decision Date: 10 November 2021 at 9.30 am

CaseChat Overview and Summary

This appeal concerns the validity of decisions by Auckland Council (Council) to impose a targeted rate on a small group of commercial accommodation providers to help fund expenditure on visitor attraction and major events by Auckland Tourism, Events and Economic Development Ltd (ATEED). The appellants are commercial accommodation providers affected by the targeted rate, referred to as the “Accommodation Provider Targeted Rate” (APTR). They applied to the High Court for judicial review of Council’s decision to impose the APTR in each of those years claiming that Council did not properly assess the mandatory relevant considerations in s 101(3) of the Local Government Act 2000 (the Act). They also claimed that the decisions were unreasonable in an administrative law sense. The appeal was dismissed by Moore J in the High Court but the appellants appeal to this Court. The appeal is allowed. The Court finds that Council did not properly assess the distribution of benefits arising from the funded activity between the community as a whole, any identifiable part of the community and individuals. The assessment was carried out at the end of the process to reverse engineer a justification for a scheme that had been formulated without regard to these criteria in an attempt to achieve an outcome that was beyond the proper scope of a rating mechanism, namely to obtain an additional source of revenue from non-ratepayers, being visitors to Auckland. The Council’s failure to adequately consider this mandatory relevant consideration was an error of law going to the heart of the decision. Given the significance of this error to the rating decision in both years, we consider it impeaches the validity of these decisions. This is sufficient to dispose of the appeal. However, for completeness, we will briefly address the remaining grounds. The appeal is allowed. We make declarations that the decisions to impose the APTR in the 2017/2018 and 2018/2019 rating years were invalid. Those decisions are set aside. If the parties are unable to agree on consequential relief, this aspect is to be remitted to the High Court for determination. The respondent must pay one set of costs to the appellants for a complex appeal on a band B basis and usual disbursements. We certify for second counsel. Costs in the High Court are to be determined by that Court in the light of this judgment.

Orders