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ARC Challenged On Legality Of Charging Penalties

ARC Challenged On Legality Of Charging Penalties On Unpaid Rates.

Monday 1st September is the last day for paying ARC rates for most of Auckland City - and so far no penalty notices have been issued to those ratepayers who have failed to pay by the earlier due dates of 6th and 18th August.

We believe that the ARC does not have the power to now impose penalties on the thousands of ratepayers who have not paid their rates.

Although the first 'default' notices should have been issued soon after 6th August - the 'due date' for Rodney and North Shore ratepayers - so far no penalty notices have yet been received by affected ratepayers.

We have prepared a letter challenging the ARC to produce legal proof that it can impose penalties - and we are circulating copies of the letter to enable individual affected ratepayers to make their own personal. challenge should they receive a penalty notice.

Our challenge is based on new provisions in the Local Government Act which cast doubt on the enforceability of penalties listed in the Annual Plan without the need for additional council resolution.

At the councils meeting on 13th August council's lawyers stated that the issue was one for council 'processes' and we are now challenging the council's processes on the issue of penalties.

The full text of our ratepayer challenge letter is as follows;-

Jo Brosnahan Chief Executive Auckland Regional Council


I challenge the right of the ARC to charge a penalty on my unpaid regional rates.

The rates resolution passed by the council on 1st July 2003 stated only that penalties 'may' be applied. There is no subsequent resolution that I am aware of that resolved that penalties 'will' be applied.

I understand that the Annual Plan states that penalties will be applied, following a resolution to that effect in June as part of the Annual Plan process, leading to the adoption of the Annual Plan on 23rd June 2003.

However I would refer you to section 98 (2) of the Local Government Act 2002 which states,

'A resolution to adopt a long-term council community plan or an annual plan does not constitute a decision to act on any specific matter included within the plan'.

I therefore believe that the June resolution to include the penalties as part of the Annual Plan is not sufficient authority to actually impose penalties.

Any penalties should have been set in accordance with section 57 of the Local Government (Rating) Act 2003. That requires that a resolution to impose penalties must be made no later than the date on which the rates are set. No such resolution was made.

As the rates resolution has now been passed, no penalties may be added for the current year.

I would appreciate a prompt response including any legal advice you may have received giving you authority to impose these penalties, including any case law references.


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