Mangawhai Ratepayers' and Residents' Assn v Kaipara Council
IN THE HIGH COURT OF NEW ZEALAND
 NZHC 2220
BETWEEN MANGAWHAI RATEPAYERS' AND RESIDENTS' ASSOCIATION INC
AND KAIPARA DISTRICT COUNCIL
Hearing: 16 August 2013
Counsel: M S R Palmer and K R M Littlejohn for the Association
D J Goddard QC and E
H Wiessing for the Council
Judgment: 29 August 2013
JUDGMENT OF HEATH J
This judgment was delivered by me on 29 August 2013 at 4.00pm pursuant to Rule 11.5 of the High Court Rules
Paying for a sewage treatment plant at Mangawhai
 Mangawhai Ratepayers’ and Residents’ Association Inc (the Association) seeks judicial review of certain decisions made by the Kaipara District Council (the Council), all of which arise out of the Council’s resolution, in August 2005, to construct a sewage treatment plant at Mangawhai.1
 The primary focus of the proceeding is on the question whether rates levied to meet the cost of the project were unlawfully struck, in the sense that they were assessed and levied in a manner that was beyond the powers conferred on the Council by the Local Government Act 2002 (the Act) or the Local Government (Rating) Act 2002 (the Rating Act). That challenge necessarily involves a consideration of the circumstances in which the Council resolved to build the plant and to borrow money to pay for it.
 It is now acknowledged that there were irregularities in the rate fixing processes; so much so that the Member of Parliament for Northland has promoted a local bill that is designed, if enacted, to validate the Council’s actions.2
 This proceeding demonstrates how badly things can go wrong when a democratically elected Council assumes significant financial obligations to an arm’s length third party without disclosing the extent of the borrowing to its ratepayers.
 For those reasons, I dismiss the application to strike-out the first cause of action.
 Counsel were agreed that costs should follow the event. Costs are awarded in favour of the Association, on a 3B basis, together with reasonable disbursements. Each shall be fixed by the Registrar. I certify for second counsel and direct that their reasonable travel and accommodation expenses should be included within the disbursements to be fixed.
 I direct the Registrar to set this proceeding down for a case management conference before me at 9am on the first available date after 12 September 2013. I invite counsel to confer about directions that may be required and to confirm the length of time estimated for the substantive hearing. From discussions at the conclusion of the hearing