Local Government New Zealand has announced it will be progressing its appeal from the Court of Appeal decision in Rodney DC v. Attorney-General [2002] 3 NZLR 678 (often known as 'the apportionments case').

As we have previously reported in earlier articles, this case is significant because it deals with the question of what is 'separately rateable property' for rating purposes. The Court of Appeal in Rodney DC said 'separately rateable property' meant a property as defined by a certificate of title, whereas LGNZ has argued a more realistic, occupation-based approach should be taken.

The result has huge ramifications - including the possibility that local authorities may have to refund millions of dollars of rates. The appeal has been provisionally set down for July 3-4 this year - with a decision expected in August or September. The move by LGNZ to progress its appeal suggests that the proposal for a legislative amendment to validate the rates has not been taken up.

We have also previously reported another recent case in this area - Neil Construction v. North Shore CC [2001] 3 NZLR 533 - which was decided after the Court of Appeal decision in Rodney DC. The High Court in Neil Construction said the certificate of title approach did not apply to allotments in a subdivision, ie once a subdivision plan deposited, each lot was separately rateable property even though no certificate of title had been issued for individual lots.

Unfortunately, the appeal was not pursued so the apparent inconsistency with the Court of Appeal's decision in Rodney DC has not been resolved. Accordingly, the decision needs to be treated with some caution - particularly as the comments about untitled lots were outside the issues that needed to be decided in the case and are, strictly speaking, not necessarily binding in later cases.

The new Local Government (Rating) Bill - currently before the Committee of the House and intended to take effect for the rating year beginning 1 July 2003 - confirms the principle that the 'rating unit' (the modern name for 'separately rateable property') is to be based on the concept of a certificate of title.

However, the Bill allows the Valuer-General to set out specific exceptions to this general principle in rules. The rules will cover the 2 types of situations discussed above, ie several blocks of land owned and used jointly by the same owner (as in the Rodney DC case) and land without a certificate of title (as in the Neil Construction case). The proper treatment of these situations will continue to be an issue in the future!

This is a general summary only and should not be taken as a substitute for specific advice.

For further information, please contact Dean Knight, solicitor:
dean.knight@phillipsfox.com

Web site: Phillips Fox