Thirty Eight Moffat Limited v Auckland Council

[2021] NZHC 2978

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001747

[2021] NZHC 2978

UNDER

the Declaratory Judgments Act 1908

IN THE MATTER OF

the Auckland Water Supply and Wastewater Network Bylaw 2015

BETWEEN

THIRTY EIGHT MOFFAT LIMITED
Applicant

AND

AUCKLAND COUNCIL

First Respondent

WATERCARE SERVICES LIMITED

Second Respondent

Hearing:

18 – 19 October 2021

Counsel (via VMR):

SJ Ryan for Applicant

PMS McNamara and CJ Ryan for Respondents

Judgment:

8 November 2021

JUDGMENT OF DOWNS J

This judgment was delivered by me on Monday, 8 November 2021 at 11 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Govett Quilliam, New Plymouth. Simpson Grierson, Auckland.

SJ Ryan, Auckland.

THIRTY EIGHT MOFFAT LTD v AUCKLAND COUNCIL [2021] NZHC 2978 [8 November 2021]

An awkward case

[1]    The applicant contends the Water Supply and Wastewater Network Bylaw 2015 is invalid.1 It seeks a corresponding declaration under the Declaratory Judgments Act 1908.2 However, even if the water bylaw is invalid, it is not clear this would address the applicant’s greater concern: codes of practice  issued  by Watercare Services Ltd.3 Nor would it address the dispute between the parties: who  is responsible for the watermain along the private lane at 38A Moffat Road, Orewa? So, to cite the language of the Declaratory Judgments Act, “determining any question as to the construction or validity” of the bylaw would not resolve this case.4 To this I return.5

Some context to make sense of the facts

[2]    Watercare provides water, and water and wastewater services, throughout Auckland. Many homes and businesses connect to the public water network operated by Watercare. Typically, this involves a private watermain on private land, a connection to the public water network at the roadside, and thereafter, the public water network. If a watermain is private, Watercare is not responsible for it.

[3]    Watercare is a hybrid. It is a limited liability company, registered under the Companies Act 1993. It is also a local government and Council-controlled organisation under the Local Government Act 2002. Auckland Council6 is Watercare’s sole shareholder. The Council appoints Watercare’s directors. Both are Auckland water organisations as defined by s 4 of the Local Government (Auckland Council)

Act 2009.7

[4]    When Auckland Council was established 1 November 2010, Watercare inherited eight water services bylaws. The bylaws applied to the former districts of

1      Auckland Council Water Supply and Wastewater Network Bylaw 2015 (25 June 2015); referred to as the water bylaw or occasionally, the bylaw.

2      It is common ground this jurisdiction attracts the principles in Mandic v Cornwall Trust Board Inc

[2010] NZCA 576, (2010)12 NZCPR 34 at [12]–[16]. It is not necessary to say more about these.

3      Watercare.

4      Declaratory Judgments Act 1908, s 3.

5 See [38].

6      Occasionally, the Council.

7      Except for the purpose of s 61 of that Act.

Auckland. Each was different from the others. All were to expire 31 October 2015. So, in 2014, Auckland Council began the process of replacing these bylaws with a new water supply and wastewater bylaw that would apply across Auckland. The water bylaw is that bylaw.

[5]The water bylaw has three purposes.  It exists to:8

(a)Protect the public water supply and wastewater networks from damage, misuse and interference.

(b)Assist the provision of reliable, safe and efficient water supply and wastewater services in Auckland.

(c)Protect the environment and the health of people using the water supply or wastewater network.

[6]Clause 6 of the water bylaw reads:

6     Connection, disconnection and other works

(1)   No person may, without Watercare’s approval:

(a)connect to the water supply network or the wastewater network;

(b)disconnect from the water supply network or the wastewater network;

(c)carry out any other works on, or in relation to, the water supply network or the wastewater network;

(d)open any manhole, chamber, access point, or valve on, or otherwise tamper with, the water supply network or the wastewater network.

(2)   Any person wishing to connect to or disconnect from the water supply network or wastewater network, or to otherwise carry out works on such a network, must make a written application for approval to Watercare, and must provide with that application all information relating to the application as is specified by Watercare.

(3)   Watercare may grant approval to such connection, disconnection or other works, as the case may be, and may impose conditions which must be complied with in the exercise of the approval.

8      The water bylaw, above n 1, cl 4(1).

(4)   Without limiting subclause (3), a condition imposed under that subclause may require that the connection, disconnection or works comply with any relevant code of practice.

(5)   Watercare may refuse an application for approval to connect to a network where:

(a)the applicant has not paid fees or charges associated with the connection (including infrastructure growth charges) that have been required by Watercare, or has refused to provide such information relating to the application as has been specified by Watercare; or

(b)Watercare has a documented record of the applicant's non- compliance with this bylaw or any previous water supply or wastewater bylaws, codes of practice, or approvals granted under such bylaws or codes of practice; or

(c)in Watercare’s reasonable opinion, there is insufficient capacity in the network to accommodate the connection; or

(d)in Watercare’s reasonable opinion, the connection could compromise its ability to maintain levels of service in relation to the water supply or wastewater network; or

(e)the connection is outside the area currently served by the water supply or wastewater network, regardless of its proximity to any specific component of the water supply or wastewater network; or

(f)in Watercare’s reasonable opinion, refusal is necessary to protect the water supply network or wastewater network, the health and safety of any person, or the environment.

(6)   Without limiting subclause (5), Watercare may refuse approval to connect to a network work where:

(a)in the case of the water supply network, connection may detrimentally affect its ability to supply water at the volume and/or pressure required for firefighting;

(b)in the case of the wastewater network, connection would or may give rise to wastewater overflows.

[7]Clauses 9 and 10 read:

9      Standard of water supply or wastewater infrastructure

(1)   Any person responsible for the construction of water supply or wastewater infrastructure which is to vest in Watercare and become part of the water supply or wastewater network (whether on the deposit or approval of a survey plan or at any other time) must comply with all relevant codes of practice and standards relating to such infrastructure.

(2)   Any person responsible for the construction of water supply or wastewater infrastructure which is to connect to the water supply or

wastewater network must comply with all relevant codes of practice and standards relating to the connection.

Explanatory note: the relevant standard as at the date this bylaw is made is Watercare Services Limited’s Water and Wastewater Code of Practice for Land Development and Subdivision 2014.

(3)   To avoid doubt, Watercare is not required to accept the vesting of water supply or wastewater infrastructure, or a connection to the water supply or wastewater network, which does not comply with subclauses (1) or (2).

10   Point of supply

(1) Watercare may from time to time and by resolution define the point of supply, and make information as to the point of supply publicly available on its website.

[8]    As will be apparent from these clauses, the water bylaw refers to codes of practice. Clause 5 of the bylaw defines “code of practice” to mean “an approved code of practice that sets standards in relation to water supply or wastewater infrastructure that is to vest in Watercare or connect with the water supply or wastewater network”.

[9]    Watercare issued its first code of practice in 2012. It issued new or amended codes of practice in 2014, 2015, 2017, 2018, 2019 and 2021.

[10]   Watercare’s codes seek to ensure, among other things, infrastructure created by developers is: (a) acceptable to Watercare; and (b) consistent, so that the infrastructure can become part of the public water network, for example, newly constructed watermains throughout roads in a new subdivision. When this happens, the infrastructure vests in Watercare. It becomes owner.

Key facts

[11]   On 15 July 2016, the owners of 38A Moffat Road, Orewa applied for resource consent to develop the property into 22 residential lots (or sections) served by a jointly owned access lane.9 Importantly, the lane is private property, not a legal road. The owners submitted detailed plans. The plans showed 22 private watermains—one for each lot or section—running along the lane; a single water metre within the lane; a

9      The private lane or occasionally, the lane.

public firemain within the lane; and a connection from the water metre to the existing public watermain under Moffat Road.

[12]   On 13 January 2017, Auckland Council granted resource consent. The consent was subject to conditions. These included a requirement the development be carried out in accordance with the plans submitted with the application. The owners did not appeal or otherwise contest the decision.

[13]   On 26 October 2017, Thirty Eight Moffat Ltd, which I shall continue to call the applicant to avoid confusion with the location, bought the property. The applicant continued  to  develop  it,  using  the  same  engineers  as   the  previous   owners, AR & Associates.

[14]   On 22 December 2017, the applicant sought engineering plan approval for works to be undertaken pursuant to the resource consent. This approval was another condition of the resource consent.

[15]   The applicant submitted plans (through AR & Associates) differing from those used to obtain resource consent in one important respect: rather than showing 22 individual watermains and a separate firemain, the plans showed a single, combined watermain and firemain. By now, the applicant understood it was not practicable to locate 22 individual watermains within the lane, hence the change.

[16]   This change meant Auckland Council could have required the applicant to apply to vary the resource consent. The Council chose not to require this; it agreed to consider the change within the context of the engineering plan approval process. The Council asked Watercare to review the plans as part of that process.

[17]   On 5 April 2018, Watercare recommended to the Council that engineering plan approval be granted, albeit with conditions.10 Watercare required a “Bulk Water Meter in [the] public berm” and said the “Water main from water meter to lots … [is] to be private”. In short, Watercare said the now single watermain along the lane would be private, not public, hence not its responsibility.

10     Identified by annotations to the plans.

[18]   The same day, the Council granted engineering plan approval, subject to the conditions recommended by Watercare. Herein lies the real dispute between the parties. The applicant considers the single watermain along the lane should comprise part of the public water network, and thus be Watercare’s responsibility even though it is on (actually, under) private property.

[19]   On 7 February 2019, the applicant raised this with Auckland Council and Watercare. Andrew Taylor, the applicant’s director and part-owner, says he did not do so earlier as he did not receive Watercare’s 5 April 2018 letter until 7 February 2019. The respondents contest this, noting among other things, the Council sent Watercare’s letter to AR & Associates and Mr Taylor by email 5 April 2018. I return to this topic later too.

[20]   On 12 February 2019, the parties met but did not agree. Thereafter, the applicant paid the costs associated with the private watermain on a “without prejudice” basis.

[21]   On 25 September 2020, the applicant filed the first iteration of this claim. It later amended this, twice.

[22]   I earlier mentioned Watercare’s codes of practice. That applicable is Watercare’s Water and Wastewater Code of Practice for Land Development and Subdivision 2015.11

[23]   Like Watercare’s other codes, the 2015 code is heavily technical. It contains rules about trenches, manholes, backflow prevention devices, pipes and many other things. The 2015 code relies heavily on a New Zealand Standard, NZS 4404:2010 Land Development and Subdivision Infrastructure,12 which it modified “to accommodate local variations”.13 This introduces the applicant’s first argument.

11 Watercare Services Ltd Water and Wastewater Code of Practice for Land Development and Subdivision (May 2015); referred to as the 2015 code or occasionally, the code. I later address the applicant’s alternative argument the 2015 code is not the applicable one.

12 NZS 4404.

13 Foreword to the 2015 code.

The first argument

[24]   The applicant contends the water bylaw is  invalid  because  it  refers  to  NZS 4404, and the requirements of s 22(2)(a) of the Standards Act 1988 were not met when the bylaw was created. Section 22 of the Standards Act reads:

22 Regulations, etc, may be made by  referring  to  or  incorporating New Zealand standards

(1)   Where regulations or bylaws may be made under any Act prescribing, defining, or making other provision in relation to goods, services, processes, or practices of any kind, any such regulation or bylaw may be made by referring to or incorporating in whole or in part, and with or without modification, any New Zealand standard relating to goods, services, processes, or practices of that kind.

(2)   Where a bylaw is made or proposed to be  made  by  referring  to  a New Zealand standard,—

(a)no resolution making the bylaw and no copy of the bylaw shall be deemed to be complete unless it has attached to it a copy of the standard or the part of the standard referred to (together with any text that the standard or part incorporates by reference) and states or shows any modification made to it by the person or body making the bylaw:

(b)the object or purport of the bylaw shall be deemed to be sufficiently stated for the purposes of any enactment requiring that public notice be given of it if the notice refers to the standard by the title and number given to it by the Council and, in the case of a bylaw referring to part only of a standard, states the number and heading of the part referred to.

[25]   The water bylaw was adopted by Auckland Council 25 June 2015 and came into force 1 July that year. It is common ground NZS 4404 was not attached to the bylaw throughout its genesis.14

[26]   An applicant seeking to argue a bylaw is invalid has a persuasive onus.15 And, Courts interpret bylaws benevolently.16 However, an insuperable problem with the applicant’s argument arises irrespective of these principles: the bylaw does not refer to NZS 4404 even once.

14     Neither was the 2015 code.

15     Parlane v Waipa District Council [2007] NZRMA 283 (HC) at [21].

16 At [21]. But see Philip A Joseph Joseph on Constitutional and Administrative Law (5th ed, Thomson Reuters, Wellington, 2021) at 1221.

[27]   On behalf of the applicant, Mr Ryan contends this ought not be decisive because the 2015 code refers extensively to NZS 4404 and the bylaw repeatedly refers to codes of practice. Mr Ryan contends, in substance, this chain brings the case within the rule in s 22(2)(a). In other words, Mr Ryan argues a bylaw that refers to a document which in turn refers to a New Zealand Standard is caught by s 22(2)(a).17

[28]   The problem with this argument is the section itself. The section does not say what Mr Ryan says it does. Section 2 of the Standards Act defines:

(a)“New Zealand Standard” as “a standard promulgated by the Council as a New Zealand Standard under this Act …”;

(b)“Council” to mean “the Standards Council continued in existence under s 3”; and

(c)“standard” as “a specification relating to goods, services, processes, or practices approved or adopted by the Council or another standards organisation”.

All this means that when s 22(2)(a) speaks of a bylaw referring to a New Zealand Standard, it means just that.

[29]   Section 22 was plainly intended to authorise a convenient method of incorporating standards into regulatory documents without having to reproduce the standard in full. The standard has regulatory effect as a result of being made part of the bylaw or regulation. Section 22(2)(a) is a procedural requirement the standard be “attached” to the bylaw when there is a resolution making the bylaw, perhaps to ensure the bylaw is sufficiently certain. The provision also appears to contemplate a copy of the bylaw not being “complete” unless a copy of the standard is attached to the bylaw. So, for example, if a person requested a copy of the bylaw from a Council, the provision appears to envisage they also be given a copy of the standard referred to or adopted by the bylaw.

17  The chain is longer than Mr Ryan’s submission anticipates, for, the water bylaw does not refer to the 2015 code. Rather, it refers to codes of practice (a class of document), anticipating these may change over time.

[30]   There is no reason to expand s 22(2)(a) to situations beyond its face. And, good reason not to. The Standards Act has now been repealed by the Standards and Accreditation  Act  2015.18     The  new  Standards  Act  contains  no  provision  like  s 22(2)(a). This is hardly surprising. The Standards Act was enacted in 1988, replacing like legislation enacted in 1965 (s 27 of the Standards Act 1965 was similar to s 22). Throughout these times, New Zealand Standards were not readily accessible using the internet, let alone by doing so with ubiquitous mobile phones or devices. So, it made sense to have rules to promote certainty and access.

[31]   This conclusion makes it unnecessary to analyse the considerable litigation involving James Parlane, a councillor of the Waipa District Council who defended fire lighting charges by arguing, among other things, the  bylaw  and  an  associated  New Zealand Standard had not been proved in evidence, because each was produced as a separate exhibit rather than being “attached” to each other.19

The second and primary argument

[32]   More context is needed to understand this. Watercare’s 201220 and 201421 codes of practice contained clauses about the location of watermains, and when a watermain on private property would vest in Watercare. These codes were similar. It is sufficient to record what the 2014 code said:

6.3.8.1 General

Watermains are usually located in the road reserve. The location shall be specified by the Auckland Council or Watercare, within the road reserve or space allocation nominated by the Corridor Manager. Where approved by the Auckland Council or Watercare, watermains may be located in private property or public reserve, and in this case easements shall be required. …

6.3.8.4 Watermains in private property

18 The new Standards Act.

19 See Waipa District Council v Parlane DC Te Awamutu CRI-2004-072-235, 6 December 2004; Parlane v Waipa District Council [2005] NZAR 589 (HC); Parlane v Waipa District Council [2006] NZRMA 457, [2007] NZAR 16 (CA); Parlane v Waipa District Council [2006] NZSC 73; and Parlane v Waipa District Council, above n 15.

20 Watercare Services Ltd Water and Wastewater Code of Practice for Land Development and Subdivision (November 2012); referred to as the 2012 code.

21 Watercare Services Ltd Water and Wastewater Code of Practice for Land Development and Subdivision (December 2014); referred to as the 2014 code.

Watermains in private property will require specific approval by Watercare.

Watermains located within private property will require an appropriately sized and registered easement in accordance with Watercare’s approval.

C6.3.8.4

For Watercare, an easement over private property is not the preferred option and may only be used as a temporary solution for landlocked subdivisions pending future permanent supply within a road.

[33]The 2014 code also contained a dispensation clause:

The requirements of the [code] are intended to assist Watercare to ensure it is able to meet its obligations under the RMA and other legislation. Certain requirements may be included by law, but regardless of whether this is the case, Watercare will not approve connections to its networks or accept vesting of new infrastructure in Watercare, unless the requirements of the [code] are met or written dispensation is provided. Attention is drawn to section 1.1.4 of this [code].

[34]   Again, the 2015 code applies to this case. It too has clauses about the location of watermains, and when a watermain on private property would vest in Watercare. These read:

6.3.8.1 General

Watermains shall be located in the road reserve. The location shall be specified by the Auckland Council or Watercare, within the road reserve or space allocation nominated by the Corridor Manager. Where approved by the Auckland Council or Watercare, watermains may be located in a public reserve, and in this case easements shall be required. …

6.3.8.4 Watermains in private property

Watermains shall only be installed in the public road reserve. Public watermains in private property, right of ways (ROW), private roads, etc will not be permitted.

[35]The 2015 code also has a dispensation clause:

The requirements of the [code] are intended to assist Watercare to ensure it is able to meet its obligations under the RMA and other legislation. Certain requirements may be included by law, but regardless of whether this is the case, Watercare will not approve connections to its networks or accept vesting of new infrastructure in Watercare, unless the requirements of the [code] are met or written dispensation is provided. Attention is drawn to section 1.1.4 of this [code].

[36]   As will be apparent, the 2015 code requires watermains to be on the road reserve. Absent dispensation, public watermains on private property are not permitted. This change was made because Watercare experienced difficulties accessing public watermains on private property, even when an easement had been created to allow access.

[37]   The applicant takes exception to this change, and to Watercare’s codes of practice more generally. Mr Taylor says on its behalf:

Investigating the underlying codes of practice approved under Council’s Water Supply Bylaw 2015 has taken considerable research. It appears the codes of practice are a ‘moving feast’ and are being approved and amended by Watercare without any form of Council or public approval. The codes of practice have substantially changed over time so that allowance of watermains in private roads or rights of way is now effectively prohibited.

I believe the prohibition introduced by Watercare in 28 May 2015 has led to a departure from well-established engineering  principles  expressed  in  a  New Zealand standard (NZS 4404) which was the substantial basis for the Watercare code of practice.

A review of Auckland Council’s Council-controlled organisations occurred in 2019/2020. The submission made to the review by my lawyer expressed concern that the exercise of powers under the Auckland Council’s water supply bylaw were open to abuse. A copy of the submission made on my behalf to the review panel dated 21 April 2020 is attached as exhibit “G”.

I believe that there is good reason to make declarations in relation to interpretation of the Council’s Water Supply Bylaw 2015 and related codes of practice.

[38]   I now come to the concerns I foreshadowed at [1], concerns I raised at the hearing. The applicant assumes Watercare’s codes of practice are made under the water bylaw. The applicant assumes if the water bylaw is invalid, the codes must be too. The applicant also assumes if the codes are invalid, Watercare must accept the watermain along the lane as public, not private, in turn resolving the parties’ dispute. These assumptions are ambitious.

[39]   As observed, Watercare is a hybrid. It is a limited liability company; a local government and Council-controlled organisation; and an Auckland water organisation. As a company, Watercare has its own legal personality,22 and, subject to law, full

22     Companies Act 1993, s 15.

capacity to carry on or undertake any business or activity, and for these purposes, “full rights, powers, and privileges”.23 Many companies have codes of practice to inform their business. Some deal with internal matters, such as employment; gender, diversity and inclusivity; and business-related travel. Some deal with external matters, including what is expected of clients. It is not clear why Watercare could not have codes of practice irrespective of the water bylaw. Unarguably it did: the 2012 and 2014 codes both predate the bylaw. No one argues these are invalid for that reason.

[40]   The functions in question take the point further. There is no right, as such, to water from the public water system; Watercare must agree. The phenomenon of agreement is something with which most Aucklanders are familiar: a contract between customer and Watercare. Similarly, there is no right, as such, to connect a watermain to the public water system. Again, Watercare must agree. Equally, no one can insist Watercare accept infrastructure as its own; there is no “right” to vest assets in Watercare. Approached another way, Watercare could decline to accept a watermain as part of the public water system—provided, of course, it acted reasonably in doing so—quite apart from the existence of an associated code of practice, let alone bylaw.

[41]   The assumption Watercare’s decision (declining to accept the watermain as part of the public water system) is ultimately traceable to the bylaw rests on yet another assumption: that Watercare’s decision must reflect “positive authorisation of law”.24 In other words, the applicant assumes Watercare must identify a positive basis for its authority to decline to accept the watermain.

[42]This assumption is misplaced for reasons explained by Professor Joseph:25

The legal position is clear where public action impinges upon legally recognised private interests. A specific power must derive from the law where the government or a public body imposes a liability or detriment on a citizen, or interferes with a citizen’s liberty or property.

23     Section 16.

24     Joseph, above n 16, at 723.

25     At 226 (emphasis added).

[43]   The italicised term highlights the problem. This case does not involve an interference with private property. Indeed, the applicant’s complaint is the inverse: that Watercare will not accept private property as public property.

[44]   Given all this, it would be open to me to go no further. However, in deference to the thoughtfulness and sincerity of Mr Ryan’s submissions on behalf of the applicant, I continue. In doing so, I presuppose Watercare’s decision was made under or in connection with the water bylaw.26 I also presuppose, somewhat heroically, a declaration of invalidity would resolve the dispute between the parties.

[45]   This brings me to the second and primary argument itself. The applicant seeks a declaration the water bylaw is invalid because:27

(i)It is outside the powers of Auckland Council and Watercare to make;

(ii)It is uncertain and/or unreasonable, and/or repugnant to the laws of New Zealand in purporting that Watercare may revoke, amend or make changes from time to time to the standards and codes of practice referred to or incorporated in the 2015 Bylaw without any formality or undergoing proper amendment.

(iii)It contravenes other statutes, namely section 22(2)(a) of the Standards Act 1988; section 61 of the Local Government (Auckland Council) Act 2009, and section 14(1)(a)(i) Local Government Act 2002.

[46]   Unfortunately, Mr Ryan’s extensive written submissions do not mirror the pleading. The submissions do not distinguish (i) and (ii), at least cleanly. In relation to (iii), the submissions advance only s 22(2)(a) of the Standards Act. This I have already addressed.28 I begin with the first discernible limb of the argument in relation to (i) and (ii), which concerns consultation.

26 Watercare’s letter of 5 April 2018 provides some support for this as it cited the water bylaw. However, that someone believes she or he is acting under a bylaw is not determinative of whether they are.

27 Second amended statement of claim.

28 At [24]–[31].

Inadequate consultation?

[47]   When a local authority considers a bylaw “is likely to be a significant impact on the public” or concerns  something  in  the  local  authority’s  statutory  policy  “of significant interest to the public”, the authority must use “the special consultative procedure”.29 The special consultative procedure must also be used if Watercare proposes a bylaw to Auckland Council and the latter proposes to adopt the bylaw.30

[48]   Mr Ryan argues the procedure was not complied with because while Watercare’s 2012 code was made available to the public during the consultative phase, the 2014 and 2015 codes were not, and the “prohibition” in the 2015 code was adopted after public consultation had closed in relation to the water bylaw. Mr Ryan argues it therefore follows Watercare’s prohibition of public watermains on private property by the 2015 code escaped public consultation.

[49]   This argument presupposes the 2015 code is substantially different from the 2012 code in relation to public watermains on private land, when it is not. As with the 2014 code, the 2012 code made clear “an easement over private property is not the preferred option and may only be used as a temporary solution for landlocked subdivisions pending future permanent supply within a road”.31 And, as observed, the 2012, 2014 and 2015 codes each had a dispensation clause.

[50]   The case Mr Ryan cites is distinguishable. In Telecom New Zealand Ltd v Christchurch City Council, it was conceded a city plan could not include a rule referring to a New Zealand Standard and then state “or any replacement New Zealand Standard”, for, this “would be to delegate to a third party powers to alter the plan … avoiding the notification provisions of the Resource Management Act 1991”.32 The concession reflects the code created by that enactment.

29     Local Government Act 2002, s 156(1)(a).

30     Local Government (Auckland Council) Act 2009, ss 61 and 62.

31     The 2012 code, C6.3.8.4; and the 2014 code, C6.3.8.4.

32     Telecom New Zealand Ltd v Christchurch City Council [2003] NZRMA 280 at [28].

Ultra vires, or void for uncertainty or unreasonableness?

[51]   Mr Ryan expresses this argument in a variety of ways. Central is a contention the water bylaw allows Watercare to create codes of practice, hence rules, “without any formal process”. Mr Ryan says this “open-ended ability” to create codes under the bylaw infringes the principle bylaws must be certain. Watercare, he says, may create these codes as often as it likes. Associated potential for “rapidity” is contrary to law. Similarly, Watercare’s discretion under the bylaw “to update the codes … without any formal requirements amounts to a discretion so great as to be unreasonable” in terms of s 13 of the Bylaws Act 1910, which reads:

13 Bylaw not invalid because of discretionary power left to local authority, etc

(1)   No bylaw shall be invalid because it requires anything to be done within a time or in a manner to be directed or approved in any particular case by the local authority making the bylaw, or by any officer or servant of the local authority, or by any other person, or because the bylaw leaves any matter or thing to be determined, applied, dispensed with, ordered, or prohibited from time to time in any particular case by the local authority making the bylaw, or by any officer or servant of the local authority, or by any other person.

(2)   This section shall not apply to any case in which the discretion so left by the bylaw to the local authority, or to any officer, servant, or other person, is so great as to be unreasonable.

[52]   In assessing this argument, it is important to recall Watercare’s role as owner of public water infrastructure, and its functions in relation to water. Watercare must be able to tell developers what it requires in relation to public water infrastructure so that built is: (a) compatible with the public water system; and (b) accessible to Watercare. Watercare must also be able to decline to accept infrastructure (as its own) if the infrastructure does not meet these requirements. Were it otherwise, the public water system may not function, thereby imperilling the public interest. So, promulgation of codes of practice (or rules by any other name) is a necessary incident of Watercare’s role and functions.33

33 When determining if something is a necessary incident, “the Courts do not think narrowly. They bear in mind the public nature of the obligations of a local body and the requirements of its community, and they take a liberal view of the power under consideration”. See Attorney-General ex relatione Lewis v Lower Hutt City [1964] NZLR 438 (CA) at 462.

[53]   The water bylaw recognises as much.34 As observed, cl 9 requires those building public water supply infrastructure, or infrastructure connecting to the public water supply, to “comply with all relevant codes of practice”.35 Clause 9 also provides that, to “avoid doubt”, Watercare “is not required to accept the vesting of water supply

… infrastructure which does not comply” with relevant codes of practice.36

[54]   The question then becomes: does the absence of a formal process to make or amend codes of practice invalidate the bylaw? Similarly, does the absence of such a process confer an unreasonable discretion on Watercare?

[55]   The answer to each is no. First, s 13(1) of the Bylaws Act recognises matters and things may be “determined, applied, dispensed with, ordered, or prohibited from time to time in any particular case by the local authority making the bylaw … or by any other person”.37 In other words, a bylaw need not prescriptively provide for everything, and discretion is permissible (provided it is not so great as to be unreasonable).

[56]   Second, the 2015 code is a largely technical document, with little policy content. As observed earlier, the 2015 code contains many rules about trenches, manholes, backflow prevention devices, pipes and other things. Technical matters, by their nature, change from time to time.

[57]   Third, Watercare’s “prohibition” of public watermains on private property is a policy choice, but one that appears unremarkable. If Watercare cannot readily access a public watermain, it may not be able discharge its functions. And, as observed, Watercare has encountered difficulties with accessing public watermains on private land despite the existence of easements. Moreover, Mr Ryan did not identify any other aspect of the 2015 code that constitutes policy.

[58]Fourth, as Mr McNamara observes on behalf of the respondents:

34 It is important to remember this analysis presupposes Watercare’s decision was made under or in connection with the water bylaw; see [44].

35     The water bylaw, above n 1, cl 9(1) and (2).

36     Clause 9(3).

37     To similar effect is s 151(2) of the Local Government Act.

It is not an unreasonable discretion for the Bylaw to leave it to Watercare to decide when it will accept the vesting of assets for which it will then assume responsibility. The fact that this is not a regulatory decision but, as submitted above, a decision as infrastructure-owner, is also relevant to the reasonableness of the discretion.

Improper sub-delegation?

[59]   Mr Ryan next argues the water bylaw is invalid because it involves improper “sub-delegation of powers to Watercare”:

The Auckland Act empowers Watercare (as an Auckland water organisation) to propose bylaws which relate to its functions. Watercare also performs the special consultation process for the development of these bylaws. However, the ultimate bylaw-making power for Auckland is held by Auckland Council (as the territorial authority), not by Watercare.

This means Watercare does not hold power to make amendments to or to revoke bylaws that it proposes.

There is an issue of sub delegation as the ultimate lawmaker (Council) does not have control over the content of the codes of practice which are purported to be automatically incorporated into the Bylaw. The case of Telecom v Christchurch City Council rejected the use of the term “and any replacement standard” as it was stated that this would equate to delegation of powers to alter the plan and avoid the notification process to a third party. This issue was also raised by the LDAC in their legislation guidelines in 2018.

[60]   As will be recalled, Telecom New Zealand Ltd v Christchurch City Council involved a concession and a different statutory context. Again, it is distinguishable. Moreover, the argument overlooks Watercare’s authority, as an Auckland water organisation, to propose “that a bylaw relating to the management or supply of water supply or wastewater services be made by the Council”.38 The bylaw is itself illustrative. Though (necessarily) Council made, the bylaw is about Watercare. Therein lies the point.

[61]And, as Mr McNamara observes:

Watercare is the relevant asset owner and provider of water and wastewater services in Auckland, and therefore it can only be Watercare which decides what is acceptable or not in terms of connections or vesting. In that context it is incorrect to say that the decision to accept or reject infrastructure should be the Council’s decision, or that when making such a decision Watercare is acting under a delegation from the Council. Watercare is not acting as the Council; it is acting in its own right.

38     Local Government (Auckland Council) Act, s 61.

Is Watercare applying the bylaw inconsistently?

[62]On behalf of the applicant, Mr Taylor says yes:

Prior to the development at Moffat Road, I had previously carried out a number of subdivision projects in the Auckland region. In 2016 I was directly involved in the 6-lot subdivision of a neighbouring property at 45 Matija Place, Orewa. A company which I owned (Solan Heights Ltd) purchased the consented development and then undertook the subdivision.

45 Matija Place, Orewa had received subdivision consent from Auckland Council by consent dated 28 July 2015. A copy is attached as exhibit “E”. The consent for subdivision of 45 Matija Place contained a similar water reticulation condition (to Moffat Road). This stated at condition 17(g):

g) (water reticulation) The existing public water supply system which lies within or is contiguous to the land in the development shall be extended to the requirements of Watercare and the Council’s “Standard for Engineering Design and Construction” to serve all lots within the development to become part of the public services of the District.

At engineering approval stage, Watercare required the consultants to amend the engineering drawings regarding water supply to comply with their code of practice. This had the effect of changing the water supply from public to a private supply. The six private supply lines were 32mm PE from the point of supply in the road reserve to each lot. The furtherest distance was 170m. In addition Watercare required a private supply pipe for firefighting purposes at 100mm PE terminating in a hydrant 70m down the [jointly owned access lane].

My consultants presented an easement in favour of Watercare for the firefighting water supply. Watercare rejected this saying that they would not accept an easement in a [jointly owned access lane] under their code of practice. Council ended up accepting the easement for the public water supply for firefighting water to service the subdivision at Matija Place. This easement was later registered on titles. A copy of the registered easement instrument in favour of Auckland Council is attached as exhibit “F”.

Given the similarity of conditions for water supply between 45 Matija Place, and the consent for Moffat Road and Council’s earlier acceptance of an easement providing for public firefighting water supply located in a [jointly owned access lane] at neighbouring 45 Matija Place, I fully expected that Council and/or Watercare would similarly be disposed to accepting an easement for water supply at the subdivision at Moffat Road.

Easements were required for other utilities at both Moffat Road and 45 Matija Place including for gas, power, telecommunications, wastewater and stormwater pipes. My experience is that such easements are common elsewhere throughout New Zealand.

[63]Mathew Telfer, a manager at Watercare, says otherwise:

In his affidavit Mr Taylor refers to his previous development at 45 [Matija] Place, where the Council accepted an easement for a public firemain in a [jointly owned access lane]. My understanding was the consent and [engineering plan approval] for this development were both approved prior to, or just as 2014 [code of practice] was amended to become the 2015 [code of practice]. This is why, even though, the developer of that subdivision was made aware of the change in Watercare’s requirements, the development was allowed to progress on that basis. Watercare does at times need to make allowances for consents approved prior to or as changes are made to the [code of practice], which is allowed for in the [code of practice].

[64]   The relevance of this evidence is not obvious. There is no pleading Watercare has applied the bylaw inconsistently. Indeed, there is no pleading whatsoever about 45 Matija Place. No argument is advanced inconsistent application of a bylaw renders it invalid. So, I decline to address this point.

An alternative declaration

[65]   The applicant seeks an alternative declaration that if the water bylaw is valid, the correct code of practice is the 2014 code, not the 2015 code. The contention is based on the explanatory note to cl 9, which in context reads:

9     Standard of water supply or wastewater infrastructure

(1)   Any person responsible for the construction of water supply or wastewater infrastructure which is to vest in Watercare and become part of the water supply or wastewater network (whether on the deposit or approval of a survey plan or at any other time) must comply with all relevant codes of practice and standards relating to such infrastructure.

(2)   Any person responsible for the construction of water supply or wastewater infrastructure which is to connect to the water supply or wastewater network must comply with all relevant codes of practice and standards relating to the connection.

Explanatory note: the relevant standard as at the date this bylaw is made is Watercare Services Limited’s Water and Wastewater Code of Practice for Land Development and Subdivision 2014.

(3)   To avoid doubt, Watercare is not required to accept the vesting of water supply or wastewater infrastructure, or a connection to the water supply or wastewater network, which does not comply with subclauses (1) or (2).

[66]   The explanatory note was correct during much of the bylaw’s genesis. However, by the time it came into force, the 2015 code had been issued. Mr Ryan contends this error means the applicable code is the 2014 one.39    He notes s 5(2) and

(3) of the Interpretation Act 1999 recognise that “explanatory material” is an example of “indications” that “may be considered in ascertaining the meaning of an enactment”.

[67]   Clause 9(1) and (2) of the water bylaw refer to “all relevant codes of practice and standards”, not any particular code or standard. And, cl 5(4) of the bylaw says:

Any explanatory notes and attachments are for information purposes, do not form part of this bylaw, and may be made, amended and revoked without formality.

[68]   So, the obvious interpretation of the bylaw is that it refers to the code (and standards, if any) in force when the connection or vesting is sought. This excludes, on the facts, the 2014 code.

The final argument

[69]The applicant seeks a declaration under s 3 of the Declaratory Judgments Act:40

g.     The applicant has a substantive legitimate expectation that

i.Auckland Council when approving engineering plans under the resource consent will not act in a way that materially derogates from the conditions of resource consent (specifically condition s6(o)) as granted by Council;

ii.Watercare in exercising its power pursuant to the 2015 Bylaw will not act in a manner that is inconsistent with or derogates from the conditions of resource consent (specifically condition s6(o)) as granted by Council as consent authority.

[70]   The respondents voice a fundamental problem with the pleading. Section 3 of the Declaratory Judgments Act is confined to the validity of a statute, regulation, bylaw, deed, will, agreement, memorandum of association, or any instrument prescribing the powers of any company or body corporate. The section does not encompass the existence or otherwise of “a substantive legitimate expectation”.

39 The declaration assumes the 2014 code is better for the applicant because it does not contain the “prohibition” of public watermains on private property. The assumption is misplaced for the reasons at [49].

40 Second amended statement of claim.

[71]   The applicant seeks to address this problem by substantially amending its pleading. I record my reasons for not allowing it to do so, having made this ruling at the beginning of the hearing.41

[72]   A pleading may be amended after the close of pleadings if it is in the interests of justice; the opposing parties would not suffer significant prejudice; and the amendment would not cause significant delay.42 The first criterion encompasses the likely merit in the proposed pleading.43 Unsurprisingly, a persuasive burden lies on the party seeking to amend.44

[73]   The applicant has not discharged this burden. The respondents identified the problem with the pleading in their written submissions. These were filed and served approximately two weeks before the hearing. The applicant sought to amend the pleading on Friday, 15 October 2021; the hearing commenced Monday, 18 October 2021. Mr Ryan offered no explanation for such eleventh-hour lateness beyond broad reference to COVID-19 related difficulties.45 The applicant has already twice amended its statement of claim.

[74]   The proposed amendments would not have been an improvement. They, and the existing statement of claim, labour under the misapprehension a resource consent overrides the need to meet all other legal requirements (as opposed to merely providing permission for something otherwise contrary to the Resource Management Act).46

[75]   The respondents would have been prejudiced by the amendments, as they would have called (more) planning evidence in relation to Rodney District Council standards. This could only be addressed by an adjournment, and in turn, delay.

[76]Finally, the observations of Muir J are apposite:47

41     I made a second ruling too.  I allowed the applicant to introduce, over the respondents’ objection, a detailed chronology. I did so because the respondents were not prejudiced by the late introduction of the chronology.

42     High Court Rules 2016, r 7.7; and Elders Pastoral Ltd v Marr (1987) 2 PRNZ 383 (CA) at 385.

43     Body Corporate 325261 v McDonough [2014] NZHC 2306 at [13].

44     Elders Pastoral Ltd v Marr, above n 42, at 385.

45     Auckland was at Alert Level 3 throughout.

46     Section 23 of the Resource Management Act 1991 makes clear compliance with the Act “does not remove the need to comply with all other applicable Acts, regulations, bylaws, and rules of law”.

47     ZYXCBA Developments Ltd v Auckland Council [2015] NZHC 1085 at [19].

… amendments to relief in declaratory judgment proceedings are in a different category, typically, to those sought in relation to a damages or analogous claim. The amendments cannot be viewed as minor in the context of a declaratory judgment proceeding where the wording of the proposed declarations is … the critical aspect of the claim. As [counsel] submits, this is not like a normal claim where the essential elements of the cause of action are set out in some detail in the pleadings and the relief might be amended to correspond with proof as it emerges in the course of a trial. In a declaratory judgment claim the relief is paramount to the pleading. So there is a close analogy, in my view, to adding a new cause of action at this stage in the proceeding.

A summary to this point

[77]   The water bylaw is not invalid, assuming the code was made under or in connection with it. Section 22(2)(a) of the Standards Act does not apply as the bylaw does not refer to NZS 4404, and the section should not be extended beyond its face. The bylaw is not a product of inadequate consultation, nor is it ultra vires or void for uncertainty or unreasonableness.

Unclean hands?

[78]   Mr McNamara argues the applicant should not be the beneficiary of declarations even if successful, for, it always knew Watercare would not accept a public watermain on private land. He notes, among other things:

(a)On 5 November 2015, Mr Taylor was told in an email, “we understand [Watercare] now do not allow public watermains on private land”.

(b)On 15 August 2016, Watercare informed Auckland Council by letter “no public water main or water metre shall be located in private property”.

(c)Mr Taylor was copied to the email attaching Watercare’s 5 April 2018 decision and associated letter. Mr Taylor does not explain how he received the email but not the letter.

[79]   Mr McNamara therefore argues Mr Taylor does not have “clean hands” in representing, or implying, he was unaware of Watercare’s position in relation to the watermain until 7 February 2019.

[80]   The point is moot because I have not accepted the applicant’s arguments in support of declarations. But, in fairness to Mr Taylor, I would not have declined relief on the basis of “unclean hands” had I accepted the applicant’s case. While there is evidence Mr Taylor should have known of Watercare’s position well before 2019, I am not persuaded this establishes Mr Taylor’s testimony on this topic is materially inaccurate or worse. Mr Taylor presents as someone who would object, in forceful terms, to a contrary planning or planning-related decision. Moreover, it was in his and the applicant’s interests to make a timely objection.   That he did not tells against   Mr McNamara’s submission. This leaves two matters.

Judicial review

[81]   This judgment does not address the extent to which Watercare’s codes of practice, or their related promulgation, are susceptible to judicial review. This warrants mention, for, this may constitute a more propitious pathway for ventilation of the types of concerns exercising the applicant.

Far too much material

[82]   The following observations are not a criticism of counsel, their instructing solicitors or the parties. What happened in this case happens in many other cases. Therein lies my concern: Courts are routinely given far too much material, including much material they do not need and could not possibly hope to read. Indeed, Judges could be forgiven for thinking the animating principle is the more the better, irrespective of cost, time or implications for accessing justice in the higher courts:

(a)The agreed bundle occupies five large volumes and extends to 2667 pages. At least 95 per cent of this material could have been safely omitted. I was taken to no more than 20 documents at the hearing.

(b)The authorities and statutes occupy a further five substantial volumes. These are not paginated, but again, contain thousands of pages, including hundreds copied from the Local Government (Auckland Council) Act; the Local Government Act; and the Resource Management Act. At least 95 per cent of this material could have been

safely omitted too. Fewer than 10 statutory provisions (meaning sections) were mentioned at the hearing; all in passing. Not more than five cases were mentioned; most, in passing.

(c)A one-and-a-half-day case of simple bedrock fact directed at declaratory relief does not require 5,000 pages (or more) spread across 10 volumes.

Result

[83]The application for declarations is dismissed.

Costs

[84]   I am inclined to award the respondents scale costs unless the parties disagree. If they do, they may file memoranda of not more than seven pages each:

(a)The respondents on or before 22 November 2021.

(b)The applicant on or before 29 November 2021.

……………………………..

Downs J