Mangawhai Ratepayers and Residents Association Inc wins at High Court

v Kaipara District Council

Brilliant ~!!!

Case webpage:

The decision (date of judgment 28 May 2014):
(PDF, 332 KB)

● Decision is not sealed.

Posted by Elizabeth Kerr


Filed under Business, Democracy, Economics, Events, Inspiration, Name, New Zealand, People, Politics, Project management

18 responses to “Mangawhai Ratepayers and Residents Association Inc wins at High Court

  1. The Decision [20 – 21]

    [20] “…In his report to Council, Mr McKerchar [KDC chief executive], said that Modification 1 “basically doubled the size” of the [wastewater treatment] project. Its fiscal effect was to increase the cost to an estimated sum of $57.7 million.

    [21] The Auditor-General said that this increase “was not appropriate”. That is a gross understatement. I find it incomprehensible that a democratically elected Council (in conjunction with its executive team) could decide to increase the cost of a major infrastructure project by approximately $22.1 million without consulting with its constituents; namely, the ratepayers who were to pay for it. It must have been blindingly obvious to the Mayor and Councillors that while ratepayers might (given that the project did not enjoy universal approval) have been prepared to pay increased rates to meet a cost of $35.6 million, it could not be said confidently that they would agree to pay $57.7 million for a similar facility. ”

    Ding ding! DCC stadium…..

    Bonus: Auditor-General slapped.

  2. Mike

    yes ‘stadium’ indeed – of course the main difference is that while Mangawhai’s project was $22m over budget the DCC’s stadium is costing the ratepayers more than $100m more than was promised

  3. “Not appropriate” increase! Does that ring a bell or bells? You betcha!

  4. jeff dickie

    The Whangerei High Court judgement is good news and holds some hope for justice for Dunedin ratepayers. The parallels with Dunedin are obvious, with a continued culture of incompetence and lack of accountability.

    The Auditor General’s comment [for what little that may be worth] at least describes the Kaipara District Council as having “lost control”. Think CST, DVML, Delta and DVL, along with the DCC itself.

    I paraphrase the Whangerei High Court Judgement: [the judgement] “has exposed a high degree of incompetence among those those who were elected to serve on the council, and also their executive officers. At a human level, it has caused a great deal of stress, anxiety and financial hardship to many ratepayers, who will now be required to pay rates at a significantly higher level than they might reasonably have expected. They might also be at risk of significant capital loss, if they were to sell their properties……”

    I congratulate the Mangawhai Ratepayers’ and Residents’ Association on a determined and unified effort to expose Kaipara’s scam. It should be used as a template to expose the incompetents and devious who have mired Dunedin in massive debt for foolish, vanity, ego-fed projects. The sheer lack of basic commonsense, the abuse of the “commercially sensitive” argument, the astonishing conflicts of interest and the “no accountability” of the current Cull administration, begs litigation.

  5. Russell Garbutt

    A well-considered finding I would have thought.

    So, the Council acted illegally and the Government passes retroactive legislation with no effective oversight by the Auditor General.

    Now compare that to Dunedin’s case.

    Did the Council consult properly? Did it conceal facts that it knew from the ratepayers? Was there effectively a “private/public” project going on? Was there incompetence of Councillors and Officers? Did the cost of the wretched project escalate hugely? Were the effects of any incompetence felt by increased debt from what had been proposed? Did the Auditor General and Audit NZ do their job properly?

    Seems to me that Dunedin has a very good case to go to this learned Judge, but where is the Dunedin Ratepayers Group? And where are all the politicians?

    No doubt in my mind that these less than 20 people that caused the stadium to happen should be starting to feel nervous. While the stadium may have been built and the local politicians all say just take it on the chin and make it happen, the same can be said of the Mangawhi poo plant. And that ain’t going away at all. Nor is the stadium fight.

    • Peter

      Russell. I am sure those people you refer to will indeed be feeling nervous. The cat is out of the bag and can’t be stuffed back in. Never did they think it would come to this….that people would be so outraged that they have still kept on their case for years now. When you get away with bad stuff for so long, arrogance takes over and, at that point, you lose control. Cockiness brings about the downfall.
      Maybe time to close John Wilson Drive again….. to prevent escape?!

  6. Lack of sealed decision. High Court judge says Kaipara District Council’s position is “precarious” and it will need to negotiate with creditors.

    ### NZ Herald Online Thu, 29 May 2014 at 8:16AM
    Ratepayers win – for now
    By Imran Ali – Northern Advocate
    Mangawhai ratepayers secured a short-term victory over the Kaipara District Council when the High Court ruled the town’s controversial wastewater project breached the Local Government Act. In a judgment released yesterday – nearly four months after hearing the case in Whangarei – Justice Paul Heath said legal costs should be awarded to the Mangawhai Residents’ and Ratepayers’ Association [MRRA] but invited further submissions to discuss that and other issues. But association chairman Bruce Rogan said his members had spent $200,000 to $250,000 in legal costs so far. The association applied for a judicial review into the Mangawhai EcoCare wastewater treatment scheme and asked the High Court to rule that the council acted against the Local Government Act and its responsibilities to its ratepayers by supporting the Kaipara Validation Act.
    Read more

  7. Cars

    The critical issue for Dunedin ratepayers taking on a similar case is :

    Was the $155 million dollar cost “accepted” by ratepayers?
    Therefore an actual cost of $240 million was clearly a similar problem to that of the Kaipara council.

    Who would institute, back and fund the action?

    Is it the DCC or the trust headed by Malcolm Farry, the respondent?

    Is the DCC culpable by taking on the debts of the trust?

    • Cars, good questions and a few more sloshing around as we await news of what the parties in discussion return to the Court with. MRRA were to some extent empowered yet hindered in their cause by the Kaipara Validation Act – however, the Judge’s working through of legal definitions, commonsense understanding, and time-honoured precedents is extremely useful. Legal analysis of the non-sealed decision and its aftermath, including the application(s) will intrigue.

  8. Substitute Stadium for ‘Waste Water Project’ and Carisbrook Stadium Trust for Eco Care, Dunedin City Council for Kaipara District Council and bingo! What’s not to like?

  9. I hope it’s at ‘the front’ of Mr Lothian’s mind as Audit NZ grapples with the scale and complexity of the Stadium transactions, which very few ratepayers understand or have access to the detail of – importantly, neither do councillors or most council staff. Teetering on that cliff. The warm breeze from Northland, worse than a southerly blast.

  10. How RNZ News reports it:'-favour

    The story is accompanied by a view of sparsely populated coastal Mangawhai.

  11. Days in court described at MRRA’s website:

    This plain language account is a useful adjunct to the technicalities of the Judge’s non-sealed decision.

  12. Visit KaiparaConcerns:

    Dunedinites should consider this quotation at the KaiparaConcerns website:

    “It is a convenient fiction for those indoctrinated in the ways of local government that ratepayers have to bear all the financial burdens of a local authority even though they arise from the incompetence or the illegal actions of those in power.” –Legal Eagle


    Mention at KaiparaConcerns | Latest News

    Dunedin, like many districts in New Zealand, has its own council created white elephant in the shape of the Dunedin stadium. The local action group has kept close tabs on the developments in Kaipara and the comments on their website in respect of the High Court judgment can be viewed here.

  13. Jed Hermit

    Good luck Dunedin, stick it to them hard and withhold rates payments, put that money into Bonus Bonds.
    best regards Chipa in Kaipara

    • Thanks Jed. Exactly.

      People (ratepayers) have been working on the total cost of the stadium per annum (debt servicing and operationals) – the numbers are currently being aired at DCC and will appear here sometime soon.

  14. John P.Evans, concerned citizen

    The most refreshing part is that Kaipara ratepayers stood up.

    My feeling is that Dunedin ratepayers will stand down.

    Please prove me wrong.

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