CP Group Ltd v Auckland Council

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000841

[2020] NZHC 89

BETWEEN
CP GROUP LIMITED

First Applicant

MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED
Second Applicant

MLC SCENIC LIMITED
Third Applicant

T & T CLARRY’S HOLDINGS LIMITED

Fourth Applicant

AND

AUCKLAND COUNCIL

Respondent

Hearing: 27 to 31 May 2019 and 4 June 2019

Appearances:

A R Galbraith QC, G S A Morrison and T B Fitzgerald for the Applicants

J A Farmer QC, J W S Baigent and L Wiessing for the Respondent

Judgment:

5 February 2020

JUDGMENT OF MOORE J

This judgment was delivered by me on 5 February 2020 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

CP GROUP LIMITED & ORS v AUCKLAND COUNCIL [2020] NZHC 89 [5 February 2020]

Contents

Paragraph Number

Introduction.............................................................................................................. [1]

The applicants.......................................................................................................... [4]

The first applicant: CP Group Limited................................................................. [5]

The second applicant: Millennium and Copthorne Hotels New Zealand
Limited (“MCK”)................................................................................................ [6]
The third applicant: MLC Scenic Limited............................................................ [7]
The fourth applicant: T&T Clarry’s Holdings Limited (“T&T”)........................ [8]

The commercial accommodation market in Auckland........................................ [9]

Operating and Management Models................................................................... [12]

Owner/operators.................................................................................................. [13]

Management contract.......................................................................................... [14]

Leased property................................................................................................... [15]

Management rights via strata titles..................................................................... [16]

Chronological background and context............................................................... [17]

Organisational constitution and functions structure........................................... [19]

ATEED................................................................................................................ [23]

The Finance and Performance Committee.......................................................... [29]

Council’s financial planning processes
(a)The Long Term Plan.............................................................................. [32]
(b)Annual Plan [37]

Events leading to 2017/2018 annual budget....................................................... [42]

“Pre-election Report” and an APTR.................................................................. [45]

The Mayoral Office and the Mayor’s Proposal................................................... [47]

How the concept of an APTR was introduced..................................................... [51]

The first Mayoral Proposal................................................................................. [57]

Council’s adoption of the Proposal for consultation........................................... [59]

APTR Steering Group......................................................................................... [62]

Other engagement............................................................................................... [68]

The Consultation Documents................................................................................ [71]

Consultation document........................................................................................ [72]

Supporting Document.......................................................................................... [78]

Public consultation phase................................................................................... [84]

Results and analysis of feedback......................................................................... [86]

Feedback analysis and the “Staff Report”.......................................................... [87]

Council consideration of Staff Report................................................................. [93]

FPC meeting on 1 June 2017.............................................................................. [94]

Mayor’s report to the FPC and revised Proposal............................................... [97]

Rates remission for the APTR........................................................................... [101]

The 2018/2019 APTR........................................................................................... [110]

A more targeted remissions scheme................................................................... [112]

The inclusion of informal accommodation providers........................................ [116]

The application..................................................................................................... [121]

Approach to review.............................................................................................. [128]

The Local Government Act 2002........................................................................ [130]

Decision-making................................................................................................ [132]

The Local Government (Rating) Act 2002........................................................ [135]

First ground of review: the standard of unreasonableness

General legal principles.................................................................................... [140]

The applicants’ position..................................................................................... [143]

Council’s position.............................................................................................. [155]

Analysis.............................................................................................................. [157]

(a)First consideration – pass-through....................................................... [173]
(i)Economic viability.................................................................... [174]
(ii)The relevance of pass-through to the Council’s decision         [182]
(iii)Discussion          [194]
(b)    Second consideration – contributions by accommodation providers to

tourism................................................................................................. [203]

Discussion.................................................................................. [211]

(c)Third consideration – benefits provided by ATEED [216]

Discussion................................................................................. [234]

(d)Fourth consideration – horizontal inequity [245]

Discussion................................................................................. [265]

(e)Fifth consideration – a less…

The case of CP Group Ltd v Auckland Council, [2020] NZHC 89, involves a judicial review of decisions by Auckland Council to impose an Accommodation Provider Targeted Rate (APTR) on properties used for commercial accommodation in the 2017/2018 and 2018/2019 rating years. The applicants, which include CP Group Limited, Millennium and Copthorne Hotels New Zealand Limited, MLC Scenic Limited, and T & T Clarry’s Holdings Limited, claim that the Council’s decision to impose the APTR was unreasonable and breached statutory financial planning and consultation obligations. The applicants argue that the APTR was unreasonable because the Council wrongly assumed that accommodation providers could pass through the costs of the rate to their guests, failed to consider the contributions accommodation providers already make to promoting New Zealand as a tourist destination, overstated the benefits ATEED’s expenditure would provide accommodation providers, and did not consider a less discriminatory regime. The applicants also claim that the Council failed to comply with its obligations under s 101(3) of the Local Government Act 2002 and s 82 of the Local Government (Rating) Act 2002.

In dismissing the application for judicial review, the Court found that the decision to impose the APTR was not unreasonable, the Council did not breach s 101(3) of the Local Government Act 2002, and the Council did not breach s 82 of the Local Government (Rating) Act 2002. The Court found that the Council’s decision-making was not flawed in any of the ways complained of and that the Council’s engagement with the factors listed in s 101(3) was entirely sufficient. The Court also found that the Council did not breach s 82 of the Local Government (Rating) Act 2002 because the options for differentiating the APTR based on location were expressly referred to in the Supporting Information and the Miscellaneous Remissions Scheme was already in existence. The Court held that the Council’s consultation process worked as it should and that the adjustment made to the APTR was not outside the bounds of what was consulted on.

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CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established