Archive | Mangawhai

Ratepayers get small court victory in scrap over Mangawhai sewer scheme levies

High Court judge Ailsa Duffy has brought to an end an episode in the scrap over the secretively funded & heavily over cost Mangawhai Ecocare sewerage scheme.

The Mangawhai Ratepayers’ & Residents’ Association & its chair, Bruce Rogan, fought the imposition of rates to pay for the sewerage system after its cost blowout was exposed – the district council secretly borrowed $58 million for its capital cost – resulting in a Validation Act being passed as the association was heading to court for a judicial review.

In 2014, Justice Paul Heath found the Validation Act passed to make those rates lawful did just that – made them lawful.

Some ratepayers, led by Mr Rogan, refused to pay Kaipara District Council rates, and refused to pay Northland Regional Council rates when they discovered the regional council had no authority to hire the district council to collect them.

Justice Duffy found in an interim judgment that these regional council rates were unlawful. In a second judgment on that case yesterday, she quashed the regional council’s rates for the rating years 2011-12 to 2015-16 and also set aside the penalties imposed for non-payment.

However, she said the ratepayers’ association & Mr Rogan hadn’t sought reimbursement in their claim and she made no order directing the regional council to refund the relevant rates & penalties.

Attribution: Judgment.

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Updated: 14 out of 23 sell at Bayleys’ Total Property auction, one since

Published 23 September 2016, updated 26 September 2016:
Bayleys had a strong performance at its Total Property auction on Wednesday, selling 14 of the 23 properties on offer, including 4 of the 5 retail outlets in the new Grange development on the southern fringe of Warkworth (pictured above).

Update: The last of those Grange units has been sold post-auction on a 5.6% yield.

Isthmus east

Onehunga

33-35 Selwyn St:
Features: 1272m² under-utilised site in 2 titles zoned town centre – Onehunga (24.5m height limit), 562m² office building, new 6-year lease plus one 6-year right of renewal, to law firm Daniel Overton & Goulding, which has been in occupation since 1973
Rent: $170,000/year net + gst, 2% fixed annual rental increases
Outcome: sold for $4.25 million at a 4.0% yield
Agents: Nigel McNeil, Meredith Graham & Tony Chaudhary

Isthmus west

Grey Lynn

8 Vinegar Lane:
Features: 103m² mixed use-zoned site with resource & building consents for 4-level building, ground-floor retail & 3 levels of residential
Outcome: no bid
Agents: Quinn Ngo James Chan

North

Mangawhai

6 Molesworth Drive:
Features: 4824m² corner site, fully tenanted 2-level 1325m² commercial building
Rent: $243,292 /year net + gst
Outcome: passed in at $3.7 million
Agents: Duncan Napier & Helen Bartrom

Warkworth

The Grange, 67 Auckland Rd, 5 retail units:
Unit 8:
Features: 62m² unit leased to Tank Juice for 10 years, one 5-year right of renewal
Rent: $35,822 /year net + gst, fixed annual 3% rental increases
Outcome: sold for $655,000 at a 5.46% yield
Agents: Matt Lee, James Chan & Jan Hutcheson

Unit 8A:
Features: 48m² unit leased to Noodle Noodle for 10 years, one 5-year right of renewal
Rent: $27,500 /year net + gst, fixed annual rental increases to CPI plus 1% & market reviews every 5 years
Outcome: sold for $475,000 at a 5.78% yield
Agents: Matt Lee, James Chan & Jan Hutcheson

Updated: Unit 10:
Features: 59m² unit leased to Kebabs on Queen for 7 years, one 5-year right of renewal
Rent: $32,450 /year net + gst, fixed annual rental increases to CPI plus 1% and to market in the fourth year of the lease
Outcome: passed in at $550,000 on vendor bid, sold post-auction for $580,000 at a 5.6% yield
Agents: Matt Lee, James Chan & Jan Hutcheson

Unit 17:
Features: Childcare centre licensed for 80 children, 390m² of indoor space, 442m² outdoor play area, new 20-year lease to Educare Group, which has 8 childcare facilities in Northland and is expanding into other parts of the North Island
Rent: $174,400 /year net + gst, fixed annual 3% rental increases, review to market after 10 years
Outcome: sold for $3.35 million at a 5.19% yield
Agents: Matt Lee, James Chan, Jan Hutcheson & Stephen Scott

Unit 21:
Features: 389m² unit, 6-year lease, one 6-year right of renewal to bulk retailer Floorwise
Rent: $100,500 /year net + gst, fixed annual rental increases to CPI plus 1%, 3-yearly market rent reviews
Outcome: sold for $1.55 million at a 6.48% yield
Agents: Matt Lee, James Chan, Jan Hutcheson & Stephen Scott

Whangarei

Onerahi, 1 Whangarei Heads Rd:
Features: 2686m² site, 480m² purpose-built brain rehabilitation facility, Bupa Care Services has renewed leased for 3 years with 2 3-year rights of renewal
Rent: $160,933 /year net + gst
Outcome: passed in at $1.6 million on vendor bid
Agent: Ross Blomfield

North-east

Albany

75 Corinthian Drive, unit C:
Features: 117m² ground-floor unit compromising 4 private offices, reception, kitchenette & bathroom, 43m² rear courtyard, 4 exclusive parking spaces, part of a commercial development adjoining the district court
Outcome: sold with vacant possession for $650,000
Agents: Jane Sims & Tonia Robertson

231 Dairy Flat Highway, in Albany Village.

231 Dairy Flat Highway, in Albany Village.

231 Dairy Flat Highway:
Features: 809m² freehold site, local centre zoning, in the centre of Albany Village, fully leased 2-level 905m² commercial building; 16 retail & office tenancies; IEP seismic assessment 99% of new building standard
Outcome: sold for $3.5 million at a 7.19% yield
Rent: $251,613 /year net + gst
Agents: Alex Strever, Dean Gilbert-Smith & Eddie Zhong

300 Dairy Flat Highway:
Features: vacant 3193m² high exposure corner site, rezoned to mixed housing suburban under the unitary plan
Outcome: no bid
Agents: Oscar Kuang & Owen Ding

Belmont

157-159 Lake Rd, Belmont.

157-159 Lake Rd, Belmont.

157-159 Lake Rd:
Features: 306m² corner site, local centre zoning, 197m² single-level retail building; anchor tenant Belmont Liquor Centre, income also from a Thai takeaway and a Spark telecommunications tower
Rent: $57,400 /year net + gst
Outcome: sold for $1.4 million at a 4.1% yield
Agents: Simon Aldridge & Michael Nees

Milford

29 Shakespeare Rd, sold at a 4.4% yield.

29 Shakespeare Rd, sold at a 4.4% yield.

29 Shakespeare Rd:
Features: 1105m² light Industry-zoned site, 664m² building; new 4-year lease to panelbeater; 330m² of undeveloped land used for parking
Rent: $90,000 /year net + gst
Outcome: sold for $2.025 million at a 4.4% yield
Agents: Simon Aldridge & Chris White

Rosedale

27-29 William Pickering Drive, unit D3:
Features: 225m² roadfront corner first-floor office unit, 6 exclusive parking spaces, new 3-year lease
Rent: $62,490 /year net + gst
Outcome: passed in on vendor bid at $850,000
Agents: Ryan Dannhauser & Gilbert-Smith

Wairau Valley

59-61 View Rd, unit 9:
Features: 162m² industrial unit, tenant Goodstore NZ Ltd occupies multiple units in the block and has recently signed a new 4-year lease
Rent: $23,000 /year net + gst
Outcome: sold for $483,000 at a 4.8% yield
Agents: James Kidd & Ashton Geissler

49 Porana Rd, units 3 & 4:
Features: 2 industrial units on one title, 128m² & 129m², over 80% warehousing, occupied on short-term leases
Rent: $41,600 /year net + gst
Outcome: passed in for $650,000
Agents: Ranjan Unka & Adam Watton

North-west

Whenuapai

8 Kawakawa Place:
Features: 1743m² on one title freehold industrial site in 14-lot Neil Group subdivision opposite Westgate Town Centre with resource consent for 4-unit development
Outcome: sold with vacant possession for $862,000 at $495/m²
Agents: Grant Miller & Laurie Bell

South

Howick

25-33 Picton St:
Features: 539m² site in the heart of Howick Village’s commercial precinct, fully leased 957m² 2-level retail & office building, 7 tenancies
Rent: $246,137 /year net + gst
Outcome: passed in at $4.9 million on vendor bid
Agents: Chris Bayley & Tony Chaudhary

116-118 Vincent St:
Features: 1618m² industrial site in 2 titles, 430m² of vacant buildings
Outcome: passed in at $1.5 million
Agents: Dave Stanley & Nick Bayley

Papakura

1 Croskery Rd:
Features: 6334m² corner site, 1442m² industrial building, 10-year head lease to a construction company from May 2011
Rent: $150,000 /year net + gst
Outcome: sold for $2.51 million at a 5.97% yield
Agents: Mike Adams & Peter Migounoff

Papatoetoe

320 & 322 Great South Rd, Papatoetoe.

320 & 322 Great South Rd, Papatoetoe.

320 & 322 Great South Rd:
Features: 1459m² site in 2 titles zoned Papatoetoe town centre (24.5m height limit) and surplus land at rear on its own 595m² title; 2-level 1040m² commercial building, 4 tenants including long-term occupants Li’l Abner Takeaways & the Village Foodmart, new 5-year lease on top floor to night club
Rent: $119,415 /year net + gst
Outcome: sold for $3.31 million at a 3.6% yield after being declared on the market at $2.5 million
Agents: Matt Lee, James Chan & Tony Chaudhary

Wiri

11 Bolderwood Place:
Features: 3087m² site, 1540m² industrial building – 1070m² warehouse with 3 gantry cranes, 140m² canopy, 320m² office, 150m² mezzanine, 660m² yard
Outcome: sold vacant for $3.235 million
Agents: Nick Bayley & Karl Price

Attribution: Auction.

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Supreme Court rejects Mangawhai Ecocare case

The Supreme Court has declined the Mangawhai Ratepayers & Residents Association’s application for leave to appeal against the Court of Appeal’s dismissal of its claim against the Kaipara District Council, and awarded the standard $2500 costs against the association.

The ratepayers association lost its case in the High Court primarily because of the Kaipara District Council (Validation of Rates & Other Matters) Act, passed in December 2013. The association’s case was heard in February 2014 and was unable to overcome the validation act.

In the High Court, Justice Paul Heath said he was satisfied that, had the validation act not been passed, the association would have succeeded in obtaining the relief it originally sought in relation to the council rating decisions over the Mangawhai Ecocare wastewater system.

But the validating law was passed, the illegal borrowings were deemed to be protected transactions under the Local Government Act, and neither Justice Heath nor the 3 Court of Appeal judges could see their way past those barriers.

The Supreme Court bench of Chief Justice Dame Sian Elias & Justices Terence Arnold & Mark O’Regan said the association sought to argue that the operation of the protected transactions provisions didn’t affect the lawfulness of rates set by the council. The association said those provisions affected only the contractual relationship between the council & the creditor, and had no effect on the statutory relationship between the council & the ratepayer. “That then provides the foundation for an argument that rates that have been set by the council for the purposes of meeting its obligations in respect of the protected transactions are unlawful because the purpose for which they are set is, itself, unlawful. The association wishes to argue that its interpretation becomes clearer when the protected transactions provisions are interpreted in a manner that gives effect to the right of review in section 27(2) of the NZ Bill of Rights Act.”

From there, the Supreme Court gave its answers on the 3 points the association raised:

“The question as to whether a local authority can set rates to service the performance of obligations under a protected transaction is a question of general or public importance, as the council accepts. But, in the face of the clear wording of section 118, the association’s argument cannot succeed. There is no scope for a narrower interpretation. We do not therefore see this case as an appropriate one to address the proposed question. Nor do we see any risk of a miscarriage if leave is not given on this point.

“The second point relates to the 2013 act. The association wishes to argue that the validation of rates effected under section 5 of that act, which declares that the rates ‘are valid & declared to have been lawfully set by the council’, has a narrower meaning than appears on its face, particularly if the provision is interpreted in a manner which is consistent with the right of judicial review under section 27(2) of the Bill of Rights.

“The association says that the effect of the 2013 act is to validate only the irregularities listed in the preamble to the 2013 act, and the fact that the rates were assessed in relation to illegal borrowings and that the council failed to consult with ratepayers were not specifically referred to in that preamble. The association wishes to argue that its narrow interpretation is more consistent with the Bill of Rights.

“Legislation validating illegally struck rates is not uncommon, and therefore the interpretation of the 2013 act could be a matter of general importance. However, we see the 2013 act as unique, and the arguments relating to its interpretation as specific to the present facts.

“Nor do we see any risk of miscarriage in the event that leave is not granted on this point. We are not persuaded that it is arguable that the 2013 act can be interpreted other than as a validation of all irregularities, not just those recited in the preamble. We are not persuaded there is room for a narrower Bill of Rights-compliant interpretation.

“The third matter concerns the costs award made in the Court of Appeal. The association submitted in that court that costs should lie where they fell because the litigation was public interest litigation. The Court of Appeal did not consider that there was any proper basis to depart from the normal rule that costs follow the result. It said that, although the association was motivated by considerations of principle, its members had a private interest in the outcome it pursued in the Court of Appeal.

“The association wishes to argue that the fact that, as ratepayers, members of the association would benefit from a favourable outcome should not have led to a conclusion that a concessionary approach to costs should be applied because the litigation was public interest litigation. We see this as a facts-specific inquiry and not a matter that can be classed as of public significance. We also see no risk of a miscarriage of justice if leave is not granted on this point.”

Rogan reaction

Association chair Bruce Rogan commented on the Kaipara Concerns website: “The champagne corks will be popping in every council office in New Zealand because it now means that when a council borrows money it no longer has to comply with the Local Government Act or the Local Government (Rating) Act. Even monies raised for an unlawful purpose become the responsibility of ratepayers.

“It is also a sad reflection on the attitudes of our courts that the High Court, the Court of Appeal & the Supreme Court adopted with some gusto the meaning of 2 enactments – the Mangawhai Validation Act & the protected transaction provisions in the Local Government Act – that endorsed the approach of local government, but which could not be justified on the plain meaning of the words or on the basis of the legislative history.

“In spite of the Supreme Court stating that there has been no miscarriage of justice, a great injustice has been perpetrated on the people of Kaipara. That also applies to the people of New Zealand, but they remain in ignorance of the true significance of the decisions that have been made. It is also a very sad day for the rule of law in New Zealand.”

I began covering this case, including the High Court hearing in Whangarei, because clear injustice was overruled by the validation act, and I was curious to see if any other approach might see the ratepayers recover any of the $58 million of Ecocare debt that was mostly raised on their behalf but in their ignorance.

The only avenues appeared to be to argue that lenders hadn’t undertaken adequate due diligence and that the office of the Auditor-general was negligent in its auditing.

In March, the council, run by commissioners since 2012, reached a settlement with the office of the Auditor-general for a payment of $5.375 million.

Link:
Kaipara Concerns

Earlier stories:
31 March 2016: Auditor-general settles with $5.375 million payment to Kaipara council
18 December 2015: Resounding Appeal Court defeat for Mangawhai ratepayers
27 August 2014: Kaipara council to sue ex-ceo & Audit NZ, looking at ex-mayors, councillors & consultants
28 July 2014: Judge tells Mangawhai ratepayers to pay up, also awards them indemnity costs in more elaborate decision
28 May 2014: Judge to issue hamstrung Mangawhai ratepayer group indemnity costs, accepts new validation law, wants more debt options considered
23 June 2014: Kaipara commissioners get debt report, obliged to adopt annual plan, and Mangawhai group says it will appeal case
30 May 2014: Commissioner says Mangawhai rates liability now “crystal clear”

Attribution: Court decision, Kaipara Concerns.

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Auditor-general settles with $5.375 million payment to Kaipara council

Auditor-general Lyn Provost at Mangawhai in 2013.

Auditor-general Lyn Provost at Mangawhai in 2013.

The Auditor-general, Lyn Provost, has agreed to pay Kaipara District Council $5.375 million to settle their dispute over audit issues concerning the Mangawhai EcoCare community wastewater scheme.

The agreement to pay comes without any admission of liability. The council & government office will bear their own costs for the litigation to date.

$58 million of the Kaipara District Council’s $80 million of projected 2015 debt was attributable to the Mangawhai scheme & debt loaded against installing it. The blowout resulted in resignation of the councillors in 2012 and their replacement with Government-appointed commissioners, an ongoing court case and an act of Parliament legitimising transgression.

The Mangawhai Ratepayers & Residents Association went to court against the council over liability for the escalating bill, but its case reached the courtroom in February 2014, 2 months after Parliament had passed the local bill validating illegal action, which greatly reduced the association’s prospects of winning. The association’s case is now before the Supreme Court.

The commissioners appointed in 2012 to run the district council in place of elected councillors accepted a staff recommendation in 2014 that there were sufficient grounds to mount a legal case against Audit NZ for negligence in the 3 years from 2006-09. Mrs Provost became auditor-general in October 2009.

John Robertson.

John Robertson.

John Robertson, who chairs the commissioners, said in a release last year: “In December 2013, the current Auditor-General, Lyn Provost, admitted that work undertaken for Kaipara prior to 2010 did not meet professional audit standards or the standards she herself expected. At community meetings, she apologised unreservedly to the people of Kaipara.”

Mr Robertson said the council had accepted her apology, but that was not enough: “The fact is, Kaipara District Council engaged Audit NZ to carry out a professional service for which Audit NZ was paid. The service the council received was extremely poor and there have been far-reaching consequences for this district.

“As a result of Audit NZ’s negligence, huge costs have been imposed on the Kaipara District Council & its ratepayers. The simple fact is that Audit NZ did not identify the Mangawhai community wastewater scheme project as a key audit risk, or even an area of focus. It should have done so, and that was made very clear in the report released by the current auditor-general last year [2013].”

The settlement (including gst, if any) announced yesterday has been reached through mediation conducted by retired High Court judge Rod Hansen QC. In a joint statement on the settlement, the council & auditor-general said: “As that inquiry [in 2013] established, the council failed to adequately perform its responsibilities to the community in connection with the wastewater scheme.

“The council’s claim alleged that the auditor-general failed to identify these failings in a timely manner and take appropriate steps to bring them to the attention of the council. The council alleged that some of the poor decisions made by the council in this period could have been averted if the auditor-general’s office had performed its responsibilities appropriately.

“In the inquiry report, the auditor-general offered an unreserved apology to the Kaipara District community for the failings in some audit work carried out by her office. However, the auditor-general disputed the council’s claim for damages arising out of those failings. In particular, the auditor-general considered that it was the council that had the responsibility to comply with its statutory obligations, and its failure to do so is not attributable to the auditor-general’s office.”

Earlier stories:
27 August 2014: Kaipara council to sue ex-ceo & Audit NZ, looking at ex-mayors, councillors & consultants
4 December 2013: Auditor-general releases Mangawhai report – and audience as disbelieving as ever

Attribution: Joint release.

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Resounding Appeal Court defeat for Mangawhai ratepayers

The Mangawhai Ratepayers & Residents Association has been resoundingly defeated in its Appeal Court attempt to overcome the effect of validating legislation on illegal acts by the Kaipara District Council.

The rising cost of the Mangawhai EcoCare sewerage scheme over the period 2006-12 wasn’t fully revealed at the time. When it was finally out in the open, the mayor & councillors were replaced by commissioners and, at the end of 2013, Parliament passed the law validating past illegal acts – shortly before the ratepayer group’s case was due to start in the Whangarei High Court.

In August 2014, $58 million of the council’s $80 million of projected 2015 debt was attributable to the Mangawhai scheme & debt loaded against installing it.

In the High Court, Justice Heath said he was satisfied that, had the Validation Act not been passed, the association would have succeeded in obtaining the relief it originally sought in relation to the council rating decisions over the wastewater system.

But the validating law was passed, the illegal borrowings were deemed to be protected transactions under the Local Government Act, and neither Justice Heath nor the 3 Court of Appeal judges who issued their ruling yesterday – Justices Forrest Miller, Rhys Harrison & Mark Cooper – could see their way past those barriers.

Justice Miller wrote the appeal judgment, with some additions by the other 2 judges.

Justice Miller said the local government protected transactions regime was designed only to shield creditors from invalidity arguments that councils might advance to exploit defects in their own processes. It reduced councils’ costs of borrowing by relieving creditors of the burden & associated risk of inquiring into local authorities’ internal management to ensure that all Local Government Act requirements had been complied with.

One of the Mangawhai group’s claims was that the validation law didn’t validate future rates-setting to repay the EcoCare borrowings, but Justice Miller asked who the association meant to hold to account by contesting the council’s authority to set rates, and how: “There are 2 candidates, the council & the lender. I look first to the council, which the association wants to hold to account by establishing that its members need not pay rates set to fund EcoCare borrowings. But that form of accountability is foreclosed by section 115 of the Local Government Act.

“Rates will be set & recovered to repay the EcoCare borrowings, by a receiver if not the council. The appointment of a receiver would ordinarily be a public humiliation for council officials, but this council is already in the hands of commissioners. Accountability of those responsible for the council’s past failings can be exacted in other ways, as has happened here with the issue of proceedings against some of those involved. In such circumstances, little is achieved by denying the council the ability to set rates itself.

“I look next to the lender. It may compromise, the association suggests, rather than appoint a receiver whose activities will affect the lender’s reputation and likely cause hardship for the district through loss of non-essential services. I have recorded my understanding that section 115 rates must be set on a uniform basis, which would shift much of the burden to non-Mangawhai ratepayers.

“However, this is a commercial or reputational consideration and it must be considered a weak & speculative form of accountability. After all, the receiver has express statutory authorisation to rate. And there is, so far as I know, no suggestion that the lender transacted with the council in bad faith so as to justify being held to account in the first place…..

“In my view, the decisive consideration is that the legislation recognises that a lender may need access to rates to secure repayment of a loan made as a protected transaction. Put another way, the ultimate legislative objective of reducing borrowing costs by protecting lenders may require that ratepayers be forced to pay, notwithstanding the transaction’s original unlawfulness. Loss of the right to challenge council-set rates for illegality is a necessary consequence, and the loss must be set against costs that a receiver’s appointment would impose on the community.

“The strategic considerations that appear to motivate the Mangawhai association derive from the unacceptable impact of some of these costs, which may include loss of democratic participation in rate-setting decisions. Finally, I accept Mr Goddard’s submission [David Goddard QC, counsel for the council] that if a lender may recover only by appointing a receiver, the legislative objective will be defeated to the extent that it reintroduces transaction costs that the legislature wanted to eliminate.

“For these reasons, I conclude that the limitation to which the protected transactions regime subjects the Bill of Rights Act right to judicial review is proportional to the legislative objective.”

On the question of writing a law to override a claim in court, Justice Miller said Parliament could have waited for the Mangawhai association’s case to be decided first, but there was urgency: the council needed to put its finances in order.

“The scheme’s costs had been incurred and nothing could be done about that. They now had to be paid somehow and, given the rates strike & pending litigation, which might result in the council having to disgorge specified rates paid since 2006, there was a degree of urgency about it.

“There was not, so far as I know, any suggestion that the lender who advanced the capital cost of the scheme had transacted with the council in bad faith, but if it did the act left the courts free to decide what should happen. Others, including the auditor-general, might be liable to make compensation, but that too could be left to the courts.

“The justification for subjecting Mangawhai Ratepayers & Residents Association members to the legislation despite their pending litigation is that the Validation Act affects all district ratepayers and especially those at Mangawhai. Non-Mangawhai ratepayers are affected not because they were subject to the specified rates, which… were targeted at Mangawhai ratepayers, but because they would likely be called upon to pay more if the Validation Act were not passed. The district as a whole is not well placed to absorb the cost if it were distributed on a uniform basis….

“I have accepted that the Validation Act limits judicial review in a very substantial way. It confronts not only ratepayers’ existing right to judicial review but also the presumption against retrospectivity and, because proceedings were already in train, the principle of comity. However, I am satisfied that the legislative objectives required that the Validation Act be enacted in that form and at that time, and specifically that it should include Mangawhai Ratepayers & Residents Association members, who could not be excluded without undermining the legislative objectives.”

Justice Miller finished his judgment by awarding costs against the association as for a complex appeal on a band A basis with usual disbursements.

In the High Court, Justice Heath had awarded the association indemnity costs up to 16 January 2014, after it had secured some declarations of unlawfulness. Next, Justice Heath awarded the association scale costs from 16 January until delivery of his third judgment in May 2014 and held that costs should lie where they fell thereafter. The Court of Appeal agreed with that course.

Earlier stories:
28 July 2014: Judge tells Mangawhai ratepayers to pay up, also awards them indemnity costs in more elaborate decision
30 May 2014: Commissioner says Mangawhai rates liability now “crystal clear”
28 May 2014: Judge to issue hamstrung Mangawhai ratepayer group indemnity costs, accepts new validation law, wants more debt options considered
6 October 2013: Commissioners reject “unfair” Mangawhai ratepayer proposal, seek sewage options, adopt annual plan
25 September 2013: Kaipara commissioners seek help to fight ratepayers over illegal rate collection
20 September 2013: Kaipara commissioners try to sweet-talk ratepayer group as they appeal judicial review decision
30 August 2012: Minister names 4 commissioners to run Kaipara council

Attribution: Judgment.

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Kaipara commissioners ditch claim against Beca

Kaipara District Council – run by Government-appointed commissioners since August 2012 – said today it would not take action against Beca Carter Hollings & Ferner Ltd over its involvement in the Mangawhai community wastewater scheme.

The council issued a brief statement today: “This concludes one aspect of the accountability workstream which the council has been undertaking since the release of the Auditor-general’s report on her inquiry into the scheme.

“At its meeting on 24 February, commissioners determined not to pursue a claim against Beca for its actions or those by members of its consortium. The decision was made because of the Limitation Act issues, limited chance of success and significant costs & risks that would be associated with initiating a dispute resolution process. The council received & considered legal advice before making its decision.”

The chairman of the commissioners, John Robertson, said the council had given the matter extensive consideration: “Having considered the matter, including taking technical & legal advice, the commissioners decided the cost of pursuing a claim with a limited chance of success was not a productive use of ratepayer funds and that it was reasonable to call time on this workstream.”

He said the council would make no further comment.

Earlier stories:
27 August 2014: Kaipara council to sue ex-ceo & Audit NZ, looking at ex-mayors, councillors & consultants
4 December 2013: Auditor-general releases Mangawhai report – and audience as disbelieving as ever
30 August 2012: Minister names 4 commissioners to run Kaipara council

Attribution: Council release.

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Mangawhai campaigner challenges political propriety in by-election

While political parties are jostling for position in the Northland by-election to replace National MP Mike Sabin, who resigned on 30 January after disclosure that he was being investigated over an assault complaint, one candidate is standing to promote a local cause.

Bruce Rogan, the 69-year-old chairman of the Mangawhai Ratepayers & Residents Association, is standing in the election as an independent, doesn’t want to win but does want to use the platform to enlist support from party political candidates in its campaign against the lower Northland Kaipara District Council & the commissioners who took over running it following a major cost blowout on the Mangawhai community wastewater scheme.

The election takes place on 28 March.

Mr Rogan told members of the Mangawhai association on Monday: “In June I turn 70. I have no desire to be a politician. Generally, with some exceptions, I despise them, and since they passed that Kaipara Validation Bill I despise them more than ever.

“We have identified 5 goals that we would like to achieve, and we think that getting on the ballot paper might help us.

  1. Repeal of the Kaipara validating legislation
  2. An independent forensic (fraud) inquiry into what has been going on at Kaipara District Council
  3. Removal of the unelected commissioners and elections to replace them
  4. A binding referendum on the Local Government Commission’s proposal to smash all of Northland into one corporate entity
  5. The rail link to Marsden Point completed before anything is done to build a toy train set for Len Brown, or a fast road for John Key to get to his bach.

“Our intention is to identify the candidate with a real chance of winning who most closely identifies with our goals, and we will endorse that candidate. I do not want anyone to vote for me unless all of the other candidates refuse to acknowledge our agenda.  One credible candidate has already signed up for the above 5. The others will be given the chance to do the same….

“Why are we doing this? We have a fixture date in the Court of Appeal in Wellington on 25 August. We have been sued by Kaipara District Council for arrears of rates that the Court of Appeal might well declare to be illegal. They (the council) are counting on the idea that if they can get the money into their hands, the courts won’t do anything to reverse that…

“We believe the council has little prospect of succeeding against us in the district court [over arrears], and the only reason they keep bleating on about how we should withdraw our Appeal Court proceedings is because they are terrified that they will lose there too….

“This fight is by no means over, but it must be waged both in the courts, and in the court of public opinion. The election campaign gives us access to the court of public opinion.”

Earlier stories:
27 August 2014: Kaipara council to sue ex-ceo & Audit NZ, looking at ex-mayors, councillors & consultants
28 July 2014: Judge tells Mangawhai ratepayers to pay up, also awards them indemnity costs in more elaborate decision
4 December 2013: Auditor-general releases Mangawhai report – and audience as disbelieving as ever

Attribution: Newsletter.

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Weiti site & 2 northern consented subdivisions sold

88.5ha of the former Weiti station at Redvale and 2 consented residential subdivision sites at Kaukapakapa & Orewa have been sold in the latest sales report from Bayleys (which would have appeared earlier if I hadn’t lost it somewhere between the space bar & the mouse).

Sales 

North

Mangawhai

The Hub, Molesworth Drive:
Features: 1381m2 commercial building, ground-floor retail & offices above, constructed in 2 stages in 2006 & 2008 on 4824m2, 42 parking spaces; 12 of the 14 tenancies are leased, with Kaipara District Council the anchor tenant
Outcome: sold for $2.9 million
Agent: Duncan Napier

North-east

Albany

Orchard Park, Corinthian Retail Centre, 14 Corinthian Drive, unit 12B:
Features: 149m² site – retail 85m², front yard 38m², rear yard 26m², shared parking
Outcome: sold in October for $715,000 + gst
Agents: Eddie Zhong, Michael Block & Damian Stephen

27-29 William Pickering Drive, unit B1:
Features: 155m² office, 4 parking spaces
Rent: $38,152/year net
Outcome: sold in October for $440,000 + gst at $2838/m² land & building on an 8.6% yield
Agents: Ranjan Unka, Tonia Robertson & Deep Purohit

Orewa

46 Maire Rd:
Features: 2ha with resource consent for a 46-lot residential subdivision
Outcome: sold for $5.25 million at $262.50/m2
Agent: Stephen Scott

Redvale

Part of the former Weiti station, 1575-1595 East Coast Rd:
Features: 88.5ha of bare land
Outcome: sold for $8.8 million at $99,424/ha
Agents: Brian Caldwell, Ranjan Unka & Daryl Devereux

Silverdale

30 Anvil Rd:
Features: 1705m² industrial site, 11 parking spaces
Rent: $115,000/year + gst + opex
Outcome: sold in October for $1.18 million + gst
Agents: Rosemary Wakeman

Takapuna

43 Anzac St:
Features: 21-unit Anzac Court Motel complex with 3-bedroom manager’s home on 1677m2
Outcome: sold post-auction as a freehold going concern for $3.79 million
Agents: Shiona Dyer & Paul Dixon

Wairau Valley

84-90 Hillside Rd, unit E:
Features: 510.1m² building – warehouse 273.3m², office 128.7m², mezzanine 10.1m², shared parking
Outcome: sold in October for $581,000 + gst at $1139/m² land & building
Agents: Trevor Duffin & Laurie Burt

42-44 Porana Rd, unit C:
Features: 560m² industrial building – 420m² warehouse, 140m² office, 7 parking spaces
Outcome: sold in October for $950,000 + gst at $1696/m² land & building
Agents: Ranjan Unka & Trevor Duffin

North-west

Kaukapakapa

34 Peak Rd:
Features: 10ha in 2 titles with consents in place for a 51-lot residential subdivision
Outcome: sold for $3.6 million at $36/m2
Agent: Stephen Scott

Kumeu

4 Shamrock Drive:
Features: 300m2 of office space
Outcome: sold vacant for $635,000
Agent: Grant Miller

Massey

2-10 Triangle Rd, unit 2:
Features: 527m2 retail property forming part of a retail development, fully-leased to Mad Butcher franchise, which has occupied premises for 8 years and has a further right of renewal of 5 years
Outcome:  sold for $1.05 million at a 9.15% yield
Agent: Damien Bullick

New Ly

3029 Great North Rd: 
Features: 868m2 unit in modern building opposite Lynmall, previously occupied by ANZ Bank, quality fitout, high seismic rating, onsite parking
Outcome:  bought by an owner occupier for $4.08 million at $4700/m², for use as office
Agents: Mike Adams, Grant Miller, William Coates & James Appleby

Leases

CBD

Queen St valley

55-57 High St, shop 1A:
Features: 44m² shop
Rent: leased in October at $22,000/year + gst + opex at $500/m²
Agents: Terry Kim

Attribution: Agency release.

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Kaipara council to sue ex-ceo & Audit NZ, looking at ex-mayors, councillors & consultants

Kaipara District Council’s commissioners resolved yesterday to take legal action against Government watchdog Audit NZ and against the council’s former chief executive, Jack McKerchar, over the Mangawhai community wastewater scheme.

Mr McKerchar resigned in 2011 with a financial settlement agreed by councillors, a year before the Government replaced them with the commissioners, headed by John Robertson.

The Mangawhai Ratepayers & Residents Association has appealed against the High Court decision of Justice Paul Heath in its claim against the council over the scheme. That case reached the courtroom in February, 2 months after Parliament had passed a local bill validating illegal action, which greatly reduced the association’s prospects of winning.

Mr Robertson said after a council meeting yesterday the council had decided not to pursue the former mayor & councillors because of the limited chances of success, but had asked the Auditor-general, Lyn Provost (appointed since the Mangawhai events began to unfold), to reconsider her decision not to hold any elected members to account.

The commissioners accepted a staff recommendation that there were sufficient grounds to mount a legal case against Audit NZ for negligence in the 3 years from 2006-09.

Mr Robertson said in a release: “In December 2013, the current Auditor-General, Lyn Provost, admitted that work undertaken for Kaipara prior to 2010 did not meet professional audit standards or the standards she herself expected. At community meetings, she apologised unreservedly to the people of Kaipara.”

Mr Robertson said the council had accepted her apology, but that was not enough: “The fact is, Kaipara District Council engaged Audit NZ to carry out a professional service for which Audit NZ was paid. The service the council received was extremely poor and there have been far-reaching consequences for this district.

“As a result of Audit NZ’s negligence, huge costs have been imposed on the Kaipara District Council & its ratepayers.

“The simple fact is that Audit NZ did not identify the Mangawhai community wastewater scheme project as a key audit risk, or even an area of focus. It should have done so, and that was made very clear in the report released by the current auditor-general last year.”

Mr Robertson said the council would initiate legal proceedings by the end of October.

The former chief executive, Mr McKerchar, left the council in October 2011 after reaching a financial settlement with the council. Mr Robertson said: “Since then, there have been repeated calls from Kaipara ratepayers to hold Mr McKerchar accountable for his role in the botched Mangawhai scheme.”

The commissioners noted yesterday that the statute of limitations meant the council could only try to hold Mr McKerchar to account for his actions during the last 6 years. Legal advice also suggested the settlement agreement Mr McKerchar signed with the former council mighty impact on the success of any legal action.

“Notwithstanding those issues, there is an important principle here. Some members of the community have noted that the council might not get much back from Mr McKerchar in monetary terms, but they still believe it is important that he is held to account, and we agree.

“Elected members & the Kaipara community should have been able to rely on the chief executive’s advice, but in a number of areas it was very poor.”

Mr Robertson said the report released by the auditor-general in December last year clearly identified a number of failings during the time Mr McKerchar led the council.

“In the timeframe we can focus on, the council failed to assess & set rates legally, it failed to ensure a number of statutory requirements were met and it failed to manage its finances prudently. Mr McKerchar should be held to account for his role in those failings.”

Mr Robertson said the council’s legal advisors would be instructed to begin action immediately.

The commissioners also accepted strong legal advice that there was no legal basis upon which the council could bring damages claims on behalf of the Kaipara community against former councillors. On that basis, Mr Robertson said the council would not be taking legal action against the former mayors & elected members involved with the Mangawhai scheme.

Mr Robertson said he accepted some people would be bitterly disappointed, as there had also been strong calls for those people to be held to account: “I accept their disappointment, but we have taken considerable legal advice and have weighed that advice up against the likelihood of the council being successful in any legal action. It seems highly unlikely that we would.

“We are not prepared to launch expensive legal proceedings without a reasonable chance of success.”

However, he said the commissioners would formally invite the auditor-general to reconsider her decision not to hold any elected members to account, particularly given the recent High Court decision which confirmed that the council failed to meet its statutory requirements in approving the Mangawhai scheme.

“There is now a formal declaration from the High Court confirming a number of previous council failings which didn’t exist when the auditor-general made her previous decision. The auditor-general has the best chance to initiate recovery action from former Kaipara elected members, and we will be asking her to review her earlier decision. Whether or not she does so is entirely up to her.”

The council will decide next month on whether or not it will take legal action against consultancies involved in the project, including the Beca consortium.

$58 million of the Kaipara District Council’s $80 million of projected 2015 debt is attributable to the Mangawhai EcoCare wastewater scheme & debt loaded against installing it.

Earlier stories:
28 July 2014: Judge tells Mangawhai ratepayers to pay up, also awards them indemnity costs in more elaborate decision
23 June 2014, 2-part story: Kaipara commissioners get debt report, obliged to adopt annual plan, and Mangawhai group says it will appeal case
2 questions for Kaipara: How to cut debt, and how to allocate it
30 May 2014: Commissioner says Mangawhai rates liability now “crystal clear”
28 May 2014: Judge to issue hamstrung Mangawhai ratepayer group indemnity costs, accepts new validation law, wants more debt options considered
30 April 2014: Mangawhai wastewater court decision scheduled for May
4 December 2013: Auditor-general releases Mangawhai report – and audience as disbelieving as ever
18 November 2013: Minister cites Kaipara debacle in move to new council finance rules
6 October 2013: Commissioners reject “unfair” Mangawhai ratepayer proposal, seek sewage options, adopt annual plan
25 September 2013: Kaipara commissioners seek help to fight ratepayers over illegal rate collection
20 September 2013: Kaipara commissioners try to sweet-talk ratepayer group as they appeal judicial review decision
30 August 2013: Kaipara commissioners fail to stop court challenge to Mangawhai debacle costs
19 August 2013: Judge to make quick decision on attempt to strike out Mangawhai ratepayers’ quest for judicial review
30 August 2012: Minister names 4 commissioners to run Kaipara council

Attribution: Council releases.

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Propbd on Q T26Aug14 – Kaipara council sues ex-ceo & Audit NZ

2.30pm:
Kaipara commissioners go to court against ex-ceo & Audit NZ

Kaipara District Council’s commissioners resolved today to take legal action against Government watchdog Audit NZ and against the council’s former chief executive, Jack McKerchar, over the Mangawhai community wastewater scheme.

Mr McKerchar resigned in 2011 with a financial settlement agreed by councillors, who hadn’t at that stage been replaced.

The Mangawhai Ratepayers & Residents Association has appealed against the High Court decision of Justice Paul Heath in its claim against the council over the scheme. That case reached the courtroom only after Parliament had passed a local bill validating illegal action, which greatly reduced the association’s prospects of winning.

Chairman of the commissioners, John Robertson, said the council had decided not to pursue the former mayor & councillors because of the limited chances of success, but had asked the Auditor-general, Lyn Provost (appointed since the Mangawhai events began to unfold), to reconsider her decision not to hold any elected members to account.

Last story, 28 July 2014: Judge tells Mangawhai ratepayers to pay up, also awards them indemnity costs in more elaborate decision

Attribution: Council releases.

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