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Another look at the perils of council decision-making

Another look at the perils of council decision-making

By Linda O’Reilly, Brookfields.

Since its enactment, the constraints on the power of general competence provided by Part 6 of the Local Government Act 2002 have provided a tight-rope style balancing act for local authorities.

In a recent case the High Court had to consider the application of those provisions in circumstances where it was questionable whether the Council concerned had any substantive decision-making role at all.

In Hauraki Coromandel Climate Action Incorporated v Thames-Coromandel District Council [2020] NZHC 3228 an incorporated society of ratepayers partially succeeded in an application for judicial review against the council in relation to its decision not to approve the mayor to sign the Local Government Leaders’ Climate Change Declaration 2017 (the Declaration).

This Declaration is an initiative of larger urban councils approved by the National Council of Local Government New Zealand (LGNZ) that was circulated for execution to mayors and chairs of regional councils.

By 25 June 2019, 65 mayors and chairs had signed the Declaration, some on their own recognisance, and others with the direction or approval of their councils. The Declaration references an urgent need of responsive leadership and a holistic approach to climate change and records various intended actions under the heading Council Commitments.

These include developing and implementing ambitious action plans to reduce greenhouse gas emissions and supporting resilience within councils and for their local communities.

The Declaration is expressed in its opening words to reflect a declaration of the, “Mayors and Chairs of New Zealand”, and the signatories of those individuals appears under the words, “The following Mayors and Chairs support this Declaration”.

This raised the question of whether in fact a decision to sign, or not, was one for the council or the mayor (or chairperson in the case of regional councils).

In this instance the mayor referred the decision whether to approve the mayor to sign the declaration to the council for consideration with a report outlining her concerns that the Declaration was potentially committing the council to implement certain courses of action.

She expressed the view that there was a financial and legal risk if it were signed and the council did not then honour all the initiatives promoted by future governments.

On her recommendation the council resolved to receive the Declaration and continue to take action, following robust decision making processes, in response to climate change for our communities, but added a rider requiring staff to remain attentive to the climate change issues raised. An alternative resolution moved by one of the councillors to execute the Declaration was defeated.

It was argued that the decisions both to reject the alternative resolution and to approve the mayor’s resolution were unreasonable and that the decision was procedurally flawed as the council had failed to observe the relevant decision-making provisions in Part 6 of the Local Government Act 2002, and its own Significance and Engagement Policy.

The Council argued that its decisions were not reviewable because the Declaration would simply have involved the mayor making a non-binding political statement, and to intervene would have been an interference with her political discretion.

The Court did not agree.

It found that that the evidence had established that the potential and likely effects of climate change, and the measures required to mitigate those effects, were of the highest public importance, and were likely to implicate a wide range of dimensions of social, economic, and environmental well-being in the District.

Consequently, the decision not to execute the Declaration was reviewable because it could directly affect the rights and duties of citizens and ratepayers of the Thames Coromandel District.

The existence of a policy dimension did not immunise the council from judicial review, rather the reverse; the court noting that there was a strong public interest in decision-making by the council being subject to judicial review.

The council argued further that even if the Decision were reviewable, it was neither unreasonable, nor procedurally flawed because it is the council’s responsibility to make judgements about how to comply with sections 77 and 78 of the LGA in proportion to the significance of the decision being made.

On the issue of ‘reasonableness’, the court followed the test in Hu v Immigration and Protection Tribunal [2017] NZHC 41, and found the decision was not so insupportable or untenable that proper application of the law required a different answer: Applying the reasoning in the mayor’s report that the Declaration was a potentially binding document and that the commitments had unknown financial consequences both informed and logically supported the council’s decision.

The court noted that if the Declaration had been signed by the mayor with the approval of and  on behalf of council, it is possible that could create a legally enforceable legitimate expectation that the council would abide by the procedural commitments.  Therefore, the Decision was not so unsupportable or untenable that the law required a different answer and was not unreasonable.

However, the council’s decision-making process was found to be flawed. The Court said that process was unlawful because the council failed to turn its mind to the requirements at Part 6 of the Local Government Act, and its Significance and Engagement Policy, which required it to go further.

The significance of climate change generally and on the district, both the council’s climate change strategy generally and any proposed decision engaging with climate change issues at a strategic level, were found to be significant.

The question of whether to sign the Declaration was found to raise salient strategic issues about the council’s climate change strategy, meaning  whether to approve the mayor to sign the Declaration was a significant decision requiring the council to at least expressly consider how it would comply with sections 77 and 78 of the Act in proportion to the significance of those matters.

The Court found it had failed to do so.

The Decision was quashed, and an order made that the council reconsider the decision, although  the court expressly did not require the council to approve or require the mayor to sign the Declaration on any such reconsideration of the decision.

Future implications

While the case serves as a reminder to local authorities of the need to  actively address compliance with Part 6 of the Act when addressing significant decisions, it is the finding that the Decision was significant that is perhaps most interesting.

The wording and form of the Declaration is undoubtedly ambiguous, but the council’s argument that it was merely political or aspirational in its interpretation and had no broader implications for signatories, was rejected.

This means that those councils that approved of or directed their mayor or chair to sign may in the future be held to account in the courts by interested parties claiming a legitimate expectation interest in the performance of those obligations.


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