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Rates Dispute Heads To High Court

Rates Dispute Heads To High Court

A dispute over unpaid rates by the New Zealand Defence Forces looks set to go to court.

Waitakere City Council has decided to take High Court action against the crown over unpaid rates on Defence houses around the Whenuapai and Hobsonville airbases.

The Council is seeking to recover $591,977 in unpaid rates and penalties.

The dispute springs from the fact that Defence stopped paying the uniform annual general charge for the 2001 and 2002 rating years. Defence claimed that this should not be applied to their 300 or so houses because they should not be separately rateable, notwithstanding the separate entry of these properties on the valuation roll.

The Council has since made changes to the roll to reduce the number of separate entries for Defence land. However, the Council maintains that Defence is still liable to pay the Uniform Annual General Charge for the 2001 and 2002 rating years, on the basis of the roll as it existed then.

Defence are continuing to withhold the Uniform Annual General Charge portion of the rates for this period.

The Council has given Defence until May 9 to make full and final payment. After that date legal proceedings will be issued unless the matter can be settled.



To advise elected members of the intention to issue proceedings in the High Court at Auckland against the Crown (New Zealand Defence Force) to recover $591,977.47 arrears of rates owing with respect to Defence Force housing at Whenuapai and Hobsonville Airbases for the rating years ending 30 June 2001 and 30 June 2002 respectively.


On 19 September 1983 New Zealand Defence Force wrote to the District Valuer requesting that each of the houses at Whenuapai and Hobsonville Airbases be separately valued. The request was actioned, and each house was then shown as a separate entry on the Valuation Roll. As a result, Waitemata City Council (and subsequently Waitakere City Council) made and levied rates based upon the Roll in each succeeding year, including a separate Uniform Annual General Charge with respect to each property, in accordance with the rating systems applicable from time to time.

Rates were paid on that basis until the years ending 30 June 2001 and 30 June 2002 respectively, when the UAGC component was withheld in each instance, resulting in part payment only of the levy, and causing penalty charges to be incurred.

At the 2001 Roll revision Defence lodged notices of objection in relation to the housing areas, and sought that the Valuation Roll be amended to consolidate those 300+ entries into 20 or so entries coinciding with the boundaries of the proclamations taking the land originally for defence Purposes. Consistent with the Rating Valuations Act 1998 that step was taken and the Roll adjusted and rates made and levied from 1 July 2002 (including the UAGC) have been paid in full.

Although Defence have in the intervening period awaited the outcome of the Privy Council decision given last October in proceedings between the New Zealand Local Government Association and the Crown, the outcome of that case has in fact strengthened Council’s position and it appears clear that there is not even a reasonably arguable defence to Council’s claim for payment of the outstanding rates. Kensington Swan have again made demand upon New Zealand Defence Force on Council’s behalf earlier this month, and sought confirmation that payment will be made without further delay.

It is necessary to bring this outstanding issue to a head, and it is now appropriate to issue summary judgment proceedings in the High Court for that purpose. Costs will also be sought.


Under Section 137(3) of the Rating Powers Act 1988 the Chief Executive or any other person authorised by Council to collect rates can authorise proceedings for recovery. This is an exception to the general rule that High Court proceedings require a Council resolution, however it is desirable that the circumstances are reported to Council and authority obtained to proceed given the Crown involvement. The sum owing is substantial and any ongoing contentions can be resolved in context. There is also the necessity, for audit purposes, to initiate active recovery/collection measures.


1. That the information be received. 2. That in the event the outstanding rate arrears have not been paid by New Zealand Defence Force by Friday, 9 May 2003, that Council commence proceedings against the Crown in the High Court in the sum $591,977.47 being arrears of rates properly made and levied in accordance with the Rating Powers Act 1988.

Report prepared by: John Mackenzie, Revenue Services Manager and Andrew Pollock, Director: Finance.

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