Alleged issues with invoices no excuse for non-payment of rates: Court of Appeal

Jonathan Salter

Simpson Grierson Partner Jonathan Salter and Senior Associate Lizzy Wiessing discuss the recent case of Rogan and Anor v Kaipara District Council and Anor [2018] NZCA 478 where the Court of Appeal confirmed that ratepayers cannot refuse to pay rates because of alleged issues with rates assessments and invoices. 

Lizzy Weissing

The Court of Appeal’s latest decision in a string of proceedings concerning rates in the Kaipara District is that:

1. a challenge to the validity of rates assessments and invoices is not a challenge to the validity of the rates themselves; but

2. any issues a ratepayer has with the rates assessments and invoices is not a valid basis for refusing to pay the rates when they are due.

This is a welcome outcome for all local authorities in New Zealand as it should ensure that rate recovery in the District Court continues to remain relatively straightforward and expeditious. It also means that in most circumstances rate recovery proceedings do not need to be put on hold if the ratepayer is also bringing proceedings challenging the validity of the rates, rates assessments or invoices.


Kaipara District Council and Northland Regional Council sued some ratepayers for unpaid rates in 2014. The ratepayers defended the proceedings on the basis that the Councils had not issued valid rates assessments and invoices for the rates. In Northland, the territorial authorities deliver combined rates assessments and invoices for their own, and the regional council’s rates, hence the allegation that the defects were with the documents for both councils.

The District Court did not accept the defence broadly on the grounds that the ratepayer’s challenge was to the validity of the rates and section 60 of the Local Government (Rating) Act 2002 (Rating Act) prevented such issues being raised as a defence in the District Court. The District Court awarded judgment for unpaid rates to the councils.[1] The ratepayers appealed the decision to the High Court, and were also unsuccessful before that Court for similar reasons as expressed by the District Court. [2]

After the ratepayers obtained leave to appeal, the appeal was heard before the Court of Appeal in September this year. The Court of Appeal has now dismissed the ratepayers’ further appeal.[3]

Based on the way the issue was dealt with by the Courts (whether defects could be raised as a defence) they were not actually required to consider whether there were in fact defects with the documents.

What the Court of Appeal said

The Court said there is only a limited ground for ratepayers to refuse to pay rates in section 60 of the Rating Act, and that is that the local authority is not empowered to set or assess the rates on the particular rating unit. The example the Court gives of where section 60 might be engaged is that a local authority has assessed rates on a rating unit that is outside the local authority’s boundary.[4]

In the Court’s view, a challenge to the validity of rates assessments and invoices was not a challenge to the rates themselves, and therefore it was not caught by section 60.[5]

This means ratepayers can challenge the validity of rates assessments and invoices but it does not suspend the obligation to pay the rates, meaning issues with rates assessments and invoices cannot be raised as a defence in rate recovery proceedings.

The Court reached this conclusion after examining the sections in the Rating Act concerning the assessment and invoicing of rates, and found that the scheme of the Rating Act does not entitle ratepayers to refuse to pay rates if there is any error or omission in the documents. Rather, the information requirements for rates assessments and invoices support one of the purposes of the Rating Act, which is to provide information to enable ratepayers to understand their liability for rates.[6]

The Court noted that the interpretation contended for the ratepayers would enable ratepayers to seize on any alleged defect to justify their stance not to pay the rates, and this would be contrary to another of the purposes of the Rating Act which is to provide local authorities with flexible powers to set, assess and collect rates to fund their activities.[7]

Wider context

Through this and the related judicial review cases[8], rating practices in this country have been intensely scrutinised and upheld. The ratepayers have ultimately failed to secure any tangible success. These cases demonstrate that the higher Courts in particular look to the intent of the legislation, and will apply a purposive approach to interpreting it.

Local Government can take significant comfort from these decisions. The Courts have shown an unwillingness to grant relief on points that they regard as overly technical or which cause no prejudice to ratepayers.

For more information about this case or any rating matter, please contact the authors.

Partner Jonathan Salter leads the firm’s local government and environment group in Wellington. He is widely regarded as New Zealand’s leading expert on the structures, powers, processes, and funding of local authorities, advocating for the sector’s interests through periods of dramatic reform and on specific major projects for over 30 years. Jonathan primarily acts for local authorities and their organisations, but also for those dealing with, or regulating for, local government. He is also sought out by private sector and governmental bodies looking to joint venture with local authorities. Jonathan’s team advises and assists with everything from day-to-day processes of a local authority to major projects, litigation, and reforms; lobbying, drafting, and promoting legislation, and judicial review proceedings. Jonathan frequently leads legal teams dealing with complex commercial initiatives within a local government context. He regularly facilitates and mediates in governance and restructuring matters, and provides governance training and new council inductions. Jonathan is cited in Chambers Asia-Pacific Public Law 2018 as a Leading Lawyer. Contact Jonathan at

Lizzy Wiessing is a senior associate in the firm’s local government and environment work group. Lizzy advises on a range of local government and resource management issues. She has a particular interest and expertise in local government funding and financing issues, including rates and development contributions. She regularly presents at seminars for the local government sector on rating and funding issues, and reviews good-practice guides on a range of subjects before publication. She has experience acting for councils in judicial review proceedings, and as applicant and decision-maker in resource consent matters, and district planning processes. Her court appearances include in the District, Environment and High Courts, Court of Appeal and Supreme Court. Lizzy commenced her career in local government as a strategic policy analyst before working in a regional law firm as a resource management and civil litigation solicitor. Her background acting for and against local government allows her to see both sides of an issue so that she can target her advice to be most effective. Contact Lizzy at or connect via LinkedIn

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[1] Kaipara District Council v Rogan [2015] NZDC 21698.

[2] Rogan and Anor v Kaipara District Council and Anor [2017] NZHC 2329.

[3] Rogan and Anor v Kaipara District Council and Anor [2018] NZCA 478.

[4] At paragraph 26.

[5] At paragraph [27].

[6] At paragraphs [29] to [33].

[7] At paragraph [31].

[8] Simpson Grierson acted for the Councils in related judicial review proceedings challenging the validity of the rates they sought to recover. The judicial review proceedings were commenced by the ratepayers after the hearing of the recovery proceedings in the District Court and before the decision was received. These proceedings were resolved in the Council’s favour in August this year when the Supreme Court declined the ratepayers leave to appeal the Court of Appeal’s decision in the Councils’ favour. Northland Regional Council v Rogan [2018] NZCA 63; [2018] NZSC 69.