Footsteps Trustee Company Limited v Auckland Council
[2016] NZHC 1669
•21 July 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-844 [2016] NZHC 1669
UNDER Section 289 and 290 of the Companies Act
1993
IN THE MATTER OF
An application to set aside a statutory demand
BETWEEN
FOOTSTEPS TRUSTEE COMPANY LIMITED
Applicant
AND
AUCKLAND COUNCIL Respondent
Hearing: 11 July 2016 Appearances:
Mr L Herbke for Applicant
Ms K Quinn for RespondentJudgment:
21 July 2016
JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE
This judgment was delivered by me on
21.07.16 at 3.30 pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
FOOTSTEPS TRUSTEE COMPANY LIMITED v AUCKLAND COUNCIL [2016] NZHC 1669 [21 July 2016]
[1] The respondent (“the Council”) served a statutory demand on the applicant dated 12 April 2016 making demand for the payment of rates totalling $165,738.26 payable in regard to property that the applicant owns at 15 Karaka Street, Newton, Auckland. The unpaid rates date back to 2012.
[2] The position that the Council takes is that the applicant has not established that there is a substantial dispute as to whether or not the rates are payable. The grounds upon which the Council relies in its notice of opposition are as follows:
a. There is no substantial dispute as to whether or not the debt is owing.
i. Any issue between the applicant and the respondent in respect of Resource Management Act 1991 issues such as the properties’ use does not affect the applicant’s liability pay rates under section 60 of the Local government (Rating) Act 2002.
ii. There is no outstanding valid objection made by the applicant as to the rating valuation.
iii. Even if there was a valid objection as to the quantum of rates the applicant’s liability to pay is not affected by the fact that correction of a rates invoice is required.
[3] I accept that the following statement, set out in the submissions of Ms Quinn, correctly states the legal test required to be applied when the court is considering an unopposed application for orders setting aside a statutory demand:
6.The relevant legal principles relating to statutory demand are well settled. In relation to s 290(4)(a) Companies Act 1993 (CA93):1
a.The applicant must show that there is arguably a genuine and substantial dispute as to the existence of the debt.
b. The mere assertion that the dispute exists is not sufficient.
Material short of proof is required to support the claim that the debt is disputed.
c.If such material is available the dispute should normally be resolved other than by means of proceedings in the Court’s Companies Act jurisdiction.
d.It is not usually possible to resolve disputed questions of fact on affidavit evidence alone, particularly when issues of credibility arise.
e.The residual discretion whereby the Court finds that the statutory demand should be set aside on other grounds is a residual discretion which enables the Court to do justice between the parties. However, it has been held that the residual discretion set out in s290(4) only relates to situations where it would be unjust for non-compliance with a statutory demand to give rise to the presumption of insolvency. It is a relatively confined discretion and is not as wide as the discretion that a Court may exercise on an application for liquidation.2
What is the substantial dispute?
[4] The application which has been filed states simply that there is a substantial dispute between the applicant and the respondent. This bland statement of the basis upon which the applicant considers that the statutory demand ought to be set aside is not at all informative.
[5] I agree with the Council that the following are the issues which arise in this proceeding and which the applicant relies upon as giving rise to a substantial dispute:
(a) Council has failed to notify Footsteps of its decision in relation to an objection Footsteps has lodged under s 39(1) of the [Local Government (Rating) Act 2002 (“LGRA”)].
(b) That Council has not commenced proceedings against Footsteps to recover the outstanding rates.
(c) That the rates are not due because the rates cannot be determined while there is an outstanding objection to the annual value, capital value and land value.
(d) That Footsteps has lodged a valid objection under the Rating Valuations Act 1998 (RVA) to the valuation of the properties and Council has not given Footsteps written notice of its decision as it is required to do under the RVA.
(e) That rates are not due while an objection is being considered by
Council.
[To that I would add the following issues:
(i) Did the Council have valid grounds to reject the objection because it did not contain the required particulars?
(ii) Does the Council have a discretion whether or not to reject a notice that does not contain the particulars stated in reg 8or is the rejection mandatory?]
(f) The applicant’s inability to use its land impacts on the annual value, capital value and land value such that Council is unable to levy rates on the properties.
(g) Footsteps is unable to judicially review the validity of the rates under s 60 of the LGRA.
Notification of the Council decision regarding s 39(1) objection
[6] The applicant says that an objection to valuation has been lodged by the applicant in relation to the rates assessments and it produces a copy of the alleged objection. The ground of objection which is stated on the notice is:
The valuations do not reflect the use to which the units may be put. Our objection has been notified previously to previous valuations and [eligible] the same grounds.
[7] On an adjoining sheet the comment is made:
The values are based upon incorrect information.
The Capital Values do not reflect the use to which the units may be put by reason Council objects to the units being used for any purpose (whether commercial and/or residential) upon the basis there are no carparks.
[8] The Council noted receiving the objection on 5 January 2015 and pointed out to the applicant that it had not provided all of the information required under reg 7 of the Rating Valuations Regulations 1998 (“RVR”). Regulation 7 provides:
7 Information to be contained in objection
An objection must contain the following information: (a) The relevant valuation reference number:
(b) The capital value, land value, annual value, [ ], and value of improvements of the land (whichever 1 or more is applicable) as stated in the notice of valuation:
(c) The reason for objecting:
(d) The relevant value contended for by the objector:
(e) The name, postal address, and contact telephone number of the objector, and the objector's address for service:
(f) The capacity in which the person is objecting (whether as owner, [ratepayer, both owner and ratepayer], or neither):
(g) If the objection is by an agent, the name of the person who the agent is representing
The notice of objection
[9] By s 32 of the RVA it is provided that an owner or ratepayer may object to any information contained in the notice of valuation but the objection must be made within the time and in the manner specified in regulations made under that Act. By reg 7 of the RVR further provision is made for what must be contained in the notice of objection. Included in that list of requirements is the obligation to provide the relevant value contended for by the objector. The applicant does not dispute that the objection which it sent to the Council did not include that information. Regulation 10 further provides that a local authority “may” refuse to consider an objection if it does not contain all of the information required by reg 7.
[10] There is no dispute that the objection in this particular case did not contain all of the information required by reg 7. The position that the applicant takes is that this did not justify the rejection of the objection by the Council. Its position was that where a notice not containing all the information required was filed, the Council had a power or discretion to reject the notice of objection.
[11] I do not agree. Given that the RVA states in mandatory terms that the objection shall contain all of the information, including that which was missing on this occasion, and the fact that the regulation itself expresses the requirement for the information in mandatory terms, it would be surprising if a failure to so provide the information did not justify the rejection of the notice of objection. No submissions were made to me regarding why such an outcome was likely to be required having regard to the structure and subject matter of the regulation. No submissions were made as to what matters the Council would relevantly need to consider when a non-complying notice of objection had been filed.
[12] Nor is there any demonstrated requirement for such power in order to prevent hardship because the regulation itself provides that where a non-complying objection has been filed, the local authority is to notify the ratepayer of the further information which is required. That will have the effect of alerting the ratepayer that the notice of objection has been rejected and giving it a chance to supply the missing information which it is mandatory to provide. The effect of the regulations is that a review cannot proceed until all the information is to hand. In those circumstances, the contention of the ratepayer in this case that the local authority has a discretion whether to reject the non-complying objection would not seem to be right. There is no apparent dispensing power, for example, for the local authority to determine that even though the mandatory information that the RVA requires has not been provided, the review should go ahead anyway. For these reasons I consider that the use of the word “may” in reg 10 of the RVR does not confer a discretion on the local authority. While it is correct that in some circumstances the use of the word “may” will indicate that the person invested with the power has a discretion whether or not to use it, examples are also familiar of
cases where the word is intended to be the equivalent of “must”.3
[13] It seems clear that the respondent was on firm ground when asserting that the applicant had not provided the information required by reg 8. Having regard to the above considerations, I am of the view that the Council was entitled to reject
the objection to valuation and to refer it back to the objector, the applicant. It was agreed that the applicant had not taken any further steps following the rejection of the valuation.
The effect of the outstanding objection to the annual value capital value and land value
[14] Ms Quinn additionally submitted:
Section 44 of the LGRA provides that a ratepayer is liable for rates on a rating unit when Council delivers the rating assessment.
3 See for example Far North District Council v Local Government Commission [1994] 3 NZLR
78 (HC).
[15] From that starting point it was essentially the submission for the Council that in the absence of any provision suspending the liability to pay rates in the case where an objection had been filed, the applicant in this case remained responsible to pay the rates.
[16] Ms Quinn pointed out that s 41A sets out the mechanism that is to be applied in the event that an amended assessment is made in respect of a particular ratepayer’s property. The local authority will either refund the extra amount that was contained in the original assessment or alternatively may recover the excess rates payable on the amended assessment.
[17] Had the objection in this case been proceeded with and had it resulted in a different level of rates being applicable, I agree that an amended assessment would have been required with the result that the mechanism stated in s 41A would have applied if the amount of the rates had been reduced.
[18] These matters are persuasive of the conclusion that it was not open to the applicant to withhold the payment of the rates. Even if that option had been available, any right to the suspension of the obligation to pay rates would have come to an end when the non-complying objection was rejected. Further, given that there is an express statement in the legislation that the obligation to pay rates takes effect from the point where the assessment is delivered, then the plain language of the statute could only be departed from if there was an express derogation from that obligation or if it was impliedly obvious that the legislature intended that in the event of an objection being filed, the ratepayer could withhold payment of rates in their entirety. This would not seem to be a just or reasonable outcome from the point of view of other ratepayers. It was not explained how such an approach could be justified. The submission of the applicant was silent on the question of why, where there was an objection to part of the rates only (that is, an objection to the quantum of the rates claimed), the legislature must have intended that the applicant would be absolved from having to pay any amount, whether bona fides objected to or not, until the objection had been resolved.
Enforcing rates arrears by issuing a statutory demand
[19] Counsel for the applicant further submitted that another ground for setting aside the statutory demand was that there had been a contravention of the provisions of 63 of the LGRA which reads as follows:
63 Legal proceedings to recover rates
(1) A local authority may commence proceedings in a court of competent jurisdiction to recover as a debt rates unpaid for 4 months after the due date for payment.
(2) In any proceedings under subsection (1), the local authority may recover unpaid rates in respect of the same rates unit if the rates became due not earlier than 1 month before the proceedings were commenced.
(3) A court constituted under the District Courts Act 1947 has jurisdiction to hear and determine proceedings under this Act for the recovery of rates, whatever the amount of debt involved.
[20] The suggested relevance of this section relevant to the current application was explained by Mr Mr Herbke for the applicant as follows:
[25] It is no doubt common ground in this case that the issuing of the statutory demand is the only step the respondent has taken in respect of the claimed rates. It is submitted that the issuing of a statutory demand does not constitute legal proceedings in respect of the rates claimed. Associate Judge Sargisson considered this exact point in Auckland Council v Forest Trustee Limited.4 At paragraph [12] it was held:
[12] … I turn to my reasons, starting with the question whether the making of a statutory demand constitutes the commencement of proceedings in Court; and (if it does), whether the statutory demand served on Forest Trustee was made for the recovery of rates as a debt;
(a) The Council did not commence court proceedings by making a statutory demand on Forest Trustee because the mere making of such a demand does not, of itself, mark the commencement of a court proceeding.
…
[21] In Auckland City Council v Forest Trustee Ltd it was asserted for the applicant, in response to an application to place the company into liquidation, that
the statutory demand had been served less than four months after the due date and
4 Auckland Council v Forest Trustee Ltd [2014] NZHC 3392.
therefore that s 63 had been breached. The High Court took the view that the service of a statutory demand did not fall within the definition of a commencement of proceedings with which the LGRA was concerned.
[22] I do not read s 63 as being an enactment that is intended to be prescriptive about the legal means by which a local authority is able to pursue unpaid rates. That is, it does not mean that the only way in which rates arrears can be pursued is by court proceedings. The section is designed as I see it to make provision for certain aspects of enforcement proceedings and in particular providing a pause period that must expire before unpaid rates can be pursued. It was not suggested that there is any distinctive policy reason which would have justified the legislature excluding what is usually regarded as a valuable tool in the armoury of devices that are able to be used for enforcement of unpaid debts in this way.
[23] In any case, while it is correct that a statutory demand is not a court proceeding, it is however an adjunct of a court proceeding in the sense that it is designed solely for the purpose of assisting a party to a liquidation proceeding to establish insolvency. A statutory demand which is not responded to gives rise to a rebuttable presumption which will, where available, assist a claimant creditor to establish insolvency without the requirement of producing specific evidence establishing that fact. Such an approach is consistent with the submission for the respondent in which Ms Quinn pointed out that this was the essence of part of the decision which Randerson J gave in Volcanic Investments Limited v Dempsey and
Wood Civil Contractors Ltd.5 In that case, the Judge stated in the context of the
Construction Contracts Act 2002 that:
[20] Where the debtor is a company, there is nothing in the Act to suggest the issue of a statutory demand under the Companies Act is not a proceeding contemplated by s 79 for recovery of a debt. It is an integral step in the winding up process and is the usual preliminary to a winding-up application under Part 9A of the High Court Rules. An application to set aside a statutory demand is a “proceeding” under the High Court Rules. It is brought as an originating application under r 458D(1)(a)(vi) and falls within the definition of a proceeding under r 3. An application to wind up a company is also a proceeding under the High Court Rules (rr 700A and
700C). I conclude that recovery of a debt by the lawful process of the issue
5 Volcanic Investments Limited v Dempsey and Wood Civil Contractors Ltd (2005) 18 PRNZ 97 (HC).
of a statutory demand and the bringing of winding up proceedings against a debtor company are “proceedings” contemplated by s 79. Indeed, it was not submitted otherwise.
[24] I note that Volcanic Investments does not appear to have been cited to the
Court in Auckland City Council v Forest Trustee Ltd.
[25] I would prefer to base my decision upon the purpose and effect of s 63 as I have stated above, namely, that the object of that section was not to limit the remedies that the respondent could avail itself of to only those which involve filing a proceeding in the court. I do not consider that that was the subject matter that the section was concerned with. I consider that it was enacted for the purpose of fixing the time before which a local authority would not be able to take enforcement processes, rather than controlling or defining what processes were permissible for enforcing the debt.
[26] There is nothing inherently unjust or wrong in principle in a local authority seeking to enforce rates demands by means of a liquidation proceeding in the High Court, with, as necessary, a precursor statutory demand being served on the party that owes the rates.
[27] For those reasons I would not construe s 63 in such a way that it excludes liquidation proceedings as a legitimate means of recovering unpaid rates. It follows that I reject Mr Herbke’s submission that the issuing of a statutory demand in the present case did not constitute the issuing of legal proceedings and that the statutory demand was at least implicitly ruled out as an enforcement process available to the council because of the terms of section 63.
Relevance of the inability to use land as desired
[28] It would seem from looking at the evidence which the applicant has filed that the dispute raised under this heading is along the following lines. The applicant says that it acquired the property following extensive internal subdivisions being made to the property pursuant to subdivision consent and building consent which the previous owner had obtained from the territorial authority, which happens to be the respondent.
[29] A number of abatement notices were issued which set out the substance of the alleged breach in the following terms:
AUCKLAND COUNCIL gives notice that you must take the following action:
a. cease using the commercial units situated at your property at
15Z1 Karaka Street, Newton, Auckland (at the basement level 3 of 15 Karaka Street , Newton, Auckland) as a
residential unit
[30] Further on in the abatement notice, there is a statement of the grounds which are set out as follows:
a) you are the owner of 15z1 Karaka Street, Newton, Auckland
b) the site is zoned Business Mixed Use under the Auckland District
Plan…
c)The existing use of your property was a commercial unit, approved under Subdivision Resource Consent [number]
d) …….
e)District Plan Rule 8.8.10(10) states the parking and access development controls for the Business Mixed Use zone. The Rule states the parking and access development controls for the Business Mixed Use zone. The Rule states are residential unit with either a studio or one bedroom of less than75sqm gross floor area would require one parking space. However no parking space was available on site, therefore Resource Consent and approval would be required as a “discretionary activity”. A review of the council’s property files confirmed that no such resource consent has been obtained.
f) This abatement notices issued because such activities are contraventions of Section 9(3) Resource Management Act 1991 (unless you appeal and the notices stayed as explained below)
[31] The applicant considers that at the time of purchase, 25 of the 28 units which comprised the property were used for residential and commercial purposes. It is at least implicit in the applicant’s claim that the use by its predecessor for commercial and residential purposes gave rise to the existing use rights to continue that type of activity.
[32] Therefore, the position which the applicant takes is that the abatement notices were wrongly issued. There are two subissues that call for discussion as a result, and they are whether there is a substantial argument available to the
applicant that the abatement notices were wrongly issued; and even if they were, whether that provides a defence to the applicant so that it is excused from paying the rates.
[33] The assumption that underlies this submission is that but for the abatement notices the applicant would, legitimately, be permitted to make income from the premises by letting them out for residential use. That is to say, the premise behind the argument is that the abatement notice is preventing it from doing something which it could legitimately be entitled to do, but for the service of the notices.
[34] In a letter that the Council sent to the solicitors acting for the applicant on 1
March 2013 it stated:
The existing and intended use of the units was stated as a commercial studio and noted as being light industrial. Neither of these applications approved any residential use of the site.
I would like to reiterate Council’s position that residential use of the site is not permitted and that existing use rights for commercial use of the site have been lost due to the discontinued use of the site for such activity for a period longer than twelve months.
[35] There is no evidence which contradicts these assertions that were made by
the Council’s officers. They may be taken as correct.
[36] The result would appear to be, then, that while the Council was prepared to concede that there was a previous or existing use of the property as a commercial property and that, presumably, such a use was at least conditionally permitted, there was no entitlement to use the properties for residential purposes.
[37] The applicant filed an appeal against the abatement notice to the
Environment Court but the appeal was withdrawn by consent on 13 December
2012.
[38] The evidence is that the applicant never applied for resource consent to cover the car parking shortfall which might otherwise satisfy the requirements for residential occupation.
Inability to use property in way that owner would wish to
[39] The submission is further apparently made that the rating in this case was based upon the annual value of the property as defined in s 2 of the RVA which provides as follows:
Annual value, in relation to any rating unit, means the greater of—
(a) the rent at which the unit would let from year to year, reduced by—
(i) 20% in the case of houses, buildings, and other perishable property; and
(ii) 10% in the case of land and other hereditaments: (b) 5% of the capital value of the fee simple of the unit[.]
[40] In the evidence which Mr Lyon has filed, he says:
15.Despite the inability of the Applicant to use the units, the council has continued to assess the rates on the basis of the capital value for each unit, to charge a “Transition Adjustment Businesses Increase” for each unit and to charge for the provision of services to the units which are not utilised.
[41] The submission is subsequently made that the annual capital and land values have not been set properly, in a manner which would account for the applicant’s inability to use the land due to the effect of the abatement notices.
[42] I do not accept that this ground is one that a ratepayer can use as a basis for refusing to pay rates. The value which is attached to a property for the purposes of rating is an objective value.6 The subjective intentions of a particular ratepayer in regard to the use to which he hoped to put property and the derivation of income that he would obtain from that activity are irrelevant.
Contention that the applicant ought to be entitled to let units for residential purposes
[43] It is apparently the contention of the applicant that the Council has proceeded in error in attempting to stop the applicant from letting the properties for
residential purposes. Such a contention is misplaced.
6 Franklin District Council v Cryer [2011] 1 NZLR 529 (HC) at [62].
[44] The evidence concerning the history of the use of the property is to be found in the statement of evidence of Ms Bishop, a Council employee, who has summarised the relevant history concerning the zoning of the site. It is significant that the applicant itself put this evidence forward. That means that unless the applicant has expressly pointed to an error in any part of the evidence then it must be taken to agree with the substance of what is stated in that evidence.
[45] In summary, the evidence is that it was likely that after the previous owner of the property carried out the conversion of the property pursuant to the building consent and the resource consent obtained in 1999 and 2000 respectively, the use of the property might have given rise to an existing use right to operate the individual units as commercial premises without any necessity for the occupier/owner to provide a car park per unit. So long as the use of the property continued as a commercial use recognised under the then zoning for business activity and the
subsequent modification of the zoning to Business Mixed Zone,7 then any non-
compliance may have been excused. The assumption that Ms Bishop has made is that the property continued to be used for business type uses until at least 2011 when the present applicant acquired the property and the first information became available to the Council that residential activity was occurring on the site. The view of Ms Bishop is that the use of the property from that date for residential activity did not comply with the then requirements of the plan in a number of respects including the provision of outdoor spaces and car parks. Significantly, the adoption of the new use put an end to the previous business/commercial type use which, although non-compliant with the current iteration of the zoning at the time when the applicant acquired the property, might have been sanctioned on the basis that it was subject to existing use rights.
[46] By embarking upon residential activity, not only did the commercial activity come to an end but the applicant began to carry on letting of the property for purposes which were not lawful. They were not lawful because the premises did not meet the requirements of the Business Mixed Zone (which by now was the relevant permitted activity). The Business Mixed Zone authorised the combined
activities of commercial/business and residential occupation of the property.
7 That change occurred in 2005, according to the evidence of Ms Bishop.
However, in order to comply with the requirements of the zoning, the occupier had to satisfy the requirements as to car parks, common space, balconies, and other matters which self-evidently this property does not offer. Because the applicant could not defend its position which was non-compliant with the zone on the grounds that it had existing use rights for the new activity, it was necessarily acting in contravention of the zone requirements and was therefore in contravention of the Resource Management Act 1991 (“RMA”).
[47] It would seem therefore that it was not surprising that the applicant did not proceed further with its challenge to the abatement notices.
[48] In summary, therefore, even if there were an argument available to the applicant that it is possible to defend a claim for rates on the grounds that the territorial authority to whom the rates are to be paid has proceeded other than in accordance with its statutory obligations when administering the provisions of the District Plan and the RMA, the factual basis for such a claim simply does not exist. The claim, presumably, is that the Council has caused financial loss to the applicant by wrongly issuing abatement notices which prevent it from letting property for residential purposes. The problem in the way of this argument is that, first, it is
trite law that administrative decisions are valid until set aside.8 Therefore it is to be
assumed that the abatement notices were legally justified until a court says otherwise. Secondly, the applicant has had four years within which to bring proceedings seeking a declaration that the abatement notice was incorrect but has not done so. In fact, the attempts to obtain a declaration to that effect were abandoned. The essential point, though, is that even assuming that a dispute with the Council concerning the way in which it has enforced its District Plan would suffice as a basis for asserting that there is a substantial dispute about whether the applicant is indebted to it, such a dispute does not have any prospect of success. That is because on the basis of the evidence before the court, there is no justification for claiming that the Council, by taking steps to enforce the District Plan, has been in breach of an obligation owed to the applicant which could give
rise to such an entitlement.
8 Christchurch City Council v Telecom New Zealand Ltd HC Christchurch CIV-2003-409-2530,
22 December 2003 at [65].
Summary of the effect of abatement notices
[49] Even if the Council was in error in issuing abatement notices, that would not avail the applicant which would still be required to pay its rates. That is because it is not entitled to refuse to pay rates on the ground that the rates are invalid unless it brings proceedings in the High Court to challenge the validity of the rates.9 That section envisages that any attack on the validity of a rate must only be commenced by way of a proceeding for judicial review. The current proceeding is not, of course, such a proceeding.
[50] The obligation to pay rates accrues from the point where the rates assessment is delivered to the ratepayer.10 The statutory obligation must remain in existence until the ratepayer has availed itself of one of the recognised processes for altering its liability to pay rates. That can either be the mechanism under s 32 of the RVA or s 60 of the LGRA.
Abatement notices
[51] The abatement notices are presumed to be legitimate until set aside.11 The Environment Court has jurisdiction to set the abatement notices aside but the applicant has withdrawn the matter from the court and thus ruling out the possibility that the abatement notices will be set aside.
[52] Had the applicant taken steps to set aside the abatement notice in the Environment Court, it is conceivable that it could have required an amended valuation to have been prepared of the premises. In the light of the lifting of the restriction that would follow from the successful abrogation of the abatement notices, the result would have been in all probability that the rateable value of the property would have risen, and therefore the rates would as well. However, beyond that rather remote contingency, the applicant’s contention that the abatement
notices were unjustified has no connection with the present proceedings.
9 Local Government (Rating) Act 2002, s 60.
10 See discussion regarding this point above.
11 Christchurch City Council v Telecom New Zealand Ltd, above n 8, at [65].
[53] It has not been explained how the conclusion which the applicant apparently puts forward that it is excused from paying rates because of the wrongful issue of the abatement notices can be sustained. Given that this court has no jurisdiction to enquire into that matter, the contention founders from the outset.
[54] While that is so, it is possibly helpful if I deal with a connected submission which was made on the part of the applicant by Mr Herbke. It was to the effect that because the applicant could not use its property for either commercial or residential purposes, then there was no way that it could earn income from the property and the property could have no value.
[55] While I repeat that these are not matters that the court has jurisdiction to enquire into on an application of the present kind, there are problems with this line of argument. The first is that the Council at a meeting with the applicant on 1
March 2013 suggested possible uses to which the applicant could put the premises. As Ms Quinn submitted, the fact that no application for a resource consent to facilitate such uses was never made cannot be laid at the feet of the Council. In any case, irrespective of the use of the properties, the land would always have some value even if only as a demolition prospect.
Summary
[56] The Applicant did not put forward any reasoned analysis which would persuade the court that the supposed wrongdoing on the part of the Council acting in connection with its responsibility for enforcement of the District Plan, could be deployed in such a way as to defeat the statutory liability to pay rates.
Result
[57] The application to set aside the statutory demand is dismissed.
Costs
[58] The parties were agreed that costs should follow the event and should be ordered on a 2B basis. That being so, because the applicant has failed in this proceeding it must pay costs on a 2B basis.
[59] There is an additional matter that needs to be considered when fixing costs. The applicant in this case was four days late in complying with its obligation to file synopsis of submissions and bundle of documents. While I accept that the lateness was not the personal responsibility of Mr Herbke, I nonetheless consider that the failure to comply with the obligation is a relevant factor to take into account in fixing costs.
[60] As I pointed out to counsel at the hearing, the structure of pre-hearing timetables ought, if adhered to, to provide sufficient time to the parties to consider each other’s submissions prior to the hearing. That however is not the only reason why timetables are structured as they are. The court, too, benefits from having a space prior to the hearing of the argument during which, if time becomes available to the Judge, consideration can be given to the detailed synopses which have been filed and the Judge may have the opportunity to familiarise himself with the factual background to the dispute before the commencement of argument. Because in this case the applicant filed late, the respondent was that of necessity delayed and filing its synopsis of submissions. As a result, the court did not have the opportunity to consider and evaluate the points made for both sides in any detail prior to the hearing.
[61] Ms Quinn has submitted that the failure of the applicant to comply with the timetable directions on this case could be marked by increasing the costs payable by applying a 15% uplift. While Mr Herbke sought to excuse the applicant for its delays generally, he did not submit that in the event that an uplift was called for that 15% was other than appropriate.
[62] For the foregoing reasons I direct that in addition to the 2B costs the applicant will pay a 15% uplift.
J.P. Doogue
Associate Judge