Waikato Regional Council v Electricity Corporation of New Zealand Limited CA246/04

[2005] NZCA 424

IN THE COURT OF APPEAL OF NEW ZEALAND

CA246/04

BETWEEN  WAIKATO REGIONAL COUNCIL Appellant

ANDELECTRICITY CORPORATION OF NEW ZEALAND LIMITED Respondent

Hearing:         17 November 2005

Court:            Glazebrook, William Young and Panckhurst JJ Counsel:       A R Galbraith QC and T C Stephens for Appellant

D J White QC and L K Sims for Respondent

Judgment:      19 December 2005

JUDGMENT OF THE COURT

A        The appeal is dismissed.

BThe  appellant  is  to  pay  the  respondent  costs  of  $6,000  and  usual disbursements.

REASONS

(Given by William Young J)

Introduction

[1]      This is an appeal against the judgment of Wild J, delivered on 26 October

2004, in which he held that the Electricity Corporation of New Zealand Limited

WAIKATO REGIONAL COUNCIL V ELECTRICITY CORPORATION OF NEW ZEALAND LTD CA CA246/04  19 December 2005

(“ECNZ”) was entitled to recover $2,054,456.34 from the Waikato Regional Council (“the Council”)  for  overpaid  rates  (Electricity  Corporation  of  New  Zealand  Ltd (ECNZ) v Waikato Regional Council HC WGTN CIV 2001-485-728 26 October

2004).

[2]      The Council now appeals to this Court.

Factual background

The parties

[3]      The  Council,  in  its  present  form,  came  into  existence  on  1  November

1989 and levied rates from 1 April 1990 onwards.

[4]      ECNZ was incorporated in 1987 as a limited liability company under the State Owned Enterprises Act 1986.  In the years following its creation, the Crown’s electricity assets were transferred to ECNZ.   As part of this process, ECNZ came into ownership of several power stations within the Waikato region.  Accordingly, it was liable to pay rates to the Council in respect of those power stations from 1 April

1990.

[5]      ECNZ was restructured in 1999 under the Electricity Reform Act 1998.  This involved the transfer of its power stations to three new state owned enterprises (Meridian Energy Limited, Genesis Power Limited, and Mighty River Energy Limited).  The sale contracts provided, however, that ECNZ retained its entitlement to the benefit of any rate refunds from years prior to the sale.  Accordingly, no issue of standing arises, notwithstanding that ECNZ is, in a sense, now a “shell.”

The context of this particular dispute

[6]      ECNZ  took  an  adversarial  (and  sometimes  litigious)  stance  with  local authorities in relation to rating issues and it applied this stance to the Council.  As a result, the pattern of payments made by ECNZ to the Council on account of its rating

liabilities  to  the  Council  did  not  closely  follow  the  statutory  norm.    Nothing, however, turns on the details of the payments made.

[7]      Amongst  the  issues  which  arose  between  ECNZ  and  local  authorities (although, in this instance more particularly with the Valuer-General) was as to the appropriate  method  of valuing  power  stations.    This  led  to  ECNZ  objecting  to valuations  in  respect  of  its  power  stations  and  these objections  were  ultimately transferred from the Land Valuation Tribunal to the High Court, pursuant to s 22(2) of the Land Valuation Proceedings Act 1948. The different proceedings were later consolidated.

[8]      The consolidated proceedings were before Goddard J and Mr I W Lyall.  The Court revised significantly down the values of the power stations, albeit on a global basis,  see  Electricity  Corporation  of  New  Zealand  Ltd  v  The  Valuer-General HC WN M67/93 27 March 1997.  This decision was taken to this Court on appeal and cross-appeal.  ECNZ was successful in its cross-appeal and the valuations were further reduced, but still on a global basis, see The Valuer-General v Electricity Corporation of New Zealand Ltd CA188/97 6 October 1998.

[9]      This general decision was carried into effect (ie in a way which affected the valuations of particular power stations) pursuant to a consent order in the High Court of 20 June 2000.

[10]     ECNZ accordingly sought refunds from, inter alia, the Council in relation to the rates which it had paid to the Council.  The Council considered that it was only obliged to pay refunds for the previous five years and denied liability for the other years.   So the Council duly paid refunds for the 1994/1995 to 1999/2000 rating years.  The balance of the excess paid by ECNZ is $2,054,456.34.

[11]     ECNZ brought proceedings to recover what it regards as the outstanding

$2,054,456.34.

The key statutory provisions

[12]     Section 24 of the Valuation of Land Act 1951 (“the 1951 Act”) provides:

24       Valuation may be acted on while appeal pending

The fact that an appeal is pending shall not in the meantime interfere with or affect the decision of the Land Valuation Tribunal which forms the subject- matter of the appeal; and rates and taxes may be made, levied, and recovered on the valuation fixed by the decision in like manner as if no appeal were pending:

Provided that, in the event of the valuation being altered on appeal, a due adjustment shall be made, for which purpose amounts paid in excess shall be refunded, and amounts short paid shall be recoverable as arrears.

25       Application Of Last Preceding Section

The provisions of the last preceding section shall apply, with the necessary modifications, in the event of an alteration of any valuation being made by the Land Valuation Tribunal, or by the Valuer-General acting under the authority of section 35 or section 36 hereof.

To put this in context, the valuation objections by ECNZ were initially to be determined by the Land Valuation Tribunal but those proceedings were transferred to the High Court.  By reason of 22(3) of the Land Valuation Proceedings Act 1948, the  reference  in  s  25  of  the  1951  Act  to  “Land  Valuation  Tribunal”  must  be construed as a reference to the High Court.   The reference in s 24 to “an appeal” is to an appeal from the Land Valuation Tribunal to the High Court.  So, the operative section, on the ECNZ argument, is s 25 which, on its face, would appear to provide for ECNZ to recover the excess rates paid in respect of the valuations which were later revised downwards.

[13]     Section  22  of  the  1951  Act  required  the  Valuer-General  to  correct  the relevant valuation rolls to give effect to the consent judgment of 20 June 2000.

[14]     The other key provisions are ss 116 - 118 of the Rating Powers Act 1988 (“the 1988 Act”) which provide:

116      Objections to rate records

(1)       Any ratepayer may object to the rate records of a local authority on any of the following grounds:

(a)       That any rateable property in the district is not included in the valuation roll, or that any rateable property on the valuation roll is not included in the rate records of the local authority:

(b)       That any rateable property is rated in the rate records on a rateable value different from that appearing in the valuation roll:

(c)       That  any  person  appearing  in  the  valuation  roll  as  the occupier of any rateable property is omitted from the rate records:

(d)       That the description of any person or property is erroneously copied from the valuation roll:

(e)       That a property is incorrectly allocated to any type or group of property under any system of differential rating adopted under Part 5 of this Act:

(f)       That  the  rates  on  any  rateable  property  are  incorrectly computed:

(g)       That  any  alteration  lawfully  made  in  the  valuation  roll relating to particulars included in the rate records has not been transcribed into the rate records:

(h)       Where any rate is made and levied on the area system, that the area of any property, or of any part of any property, is different from the area thereof set out in the valuation roll.

(2)       Every such objection shall be lodged with the local authority which, if it determines that the objection should be upheld, shall correct the rate records accordingly.

(3)       The  local  authority  shall  advise  every  objector  in  writing  of  its decision on an objection under this section.

117      Errors in rate records may be corrected without prior objection

Any local authority may from time to time correct any errors in its rate records, notwithstanding that no objection in respect thereof has been made.

118      Amended assessment on correction of error in rate records or valuation roll

(1)       Where a local authority has made an assessment of rates for any year and, within 5 years after the assessment being made, -

(a)       A relevant error in its rate records is corrected in accordance with section 116 or section 117 of this Act; or

(b)       A relevant error in the valuation roll is corrected, -

the local authority shall make an amended assessment of rates for that year in substitution for the original assessment.

(2)       Where any such amended assessment is for an amount of rates less than the amount originally assessed, the local authority shall refund to the

person by whom the rates were paid any rates paid in excess of the amount payable pursuant to the amended assessment.

(3)       Where any such amended assessment is for an amount of rates in excess  of the  amount  originally  assessed,  the  following  provisions  shall apply:

(a)       Where the amended assessment is made and delivered to the ratepayer in the rating year in which the original assessment was made and the same person was the ratepayer at the time of the making of each assessment, he or she shall be liable for payment of the amount of the excess:

(b)       Except  as  provided  in  paragraph  (a)  of  this  subsection, neither the ratepayer nor any other person shall be liable for payment of the amount of the excess.

The Council’s position is that s 118 of the 1988 Act is a controlling provision and that, in accordance with its terms, its liability to refund excess rates is confined to the period of five years prior to the correction of the valuation roll.

The proceedings in the High Court

[15]     In the High Court, ECNZ structured its argument around the provisions of the

1951 Act.  It argued that because the valuation had been “altered on appeal” a “due adjustment” was required under the proviso to s 24 of the 1951 Act.  The effect of a due adjustment was that “amounts paid in excess shall be refunded.”   We note in passing that, as already noted, the case in fact falls to be determined by reference to s 25, albeit that this is of no particular moment.

[16]     The argument for ECNZ was that the applicable limitation period on its action ran from the date that the Valuer-General corrected the valuation roll (and ECNZ thereby became entitled to a “due adjustment”).  The refunds to which ECNZ was entitled were “recoverable by virtue of [an] enactment, other than a penalty or forfeiture” within the meaning of s 4(1)(d) of the Limitation Act 1950.   On this argument, the limitation period began to run only from 20 June 2000 when the final order  affecting  the  values  of  the  power  stations  in  question  was  sealed  in  the High Court.  On ECNZ’s view of the applicable limitation provisions, there could be no suggestion that the present proceedings are time-barred.

[17]     The  Council,  on  the  other  hand,  maintained  that  the  dominant  statutory provision is s 118 of the 1988 Act and that there is, in effect, a five year limitation period from when the rates in question were struck.

[18]     As to the potential applicability of s 118, the Council’s case was supported by the remarks of Tompkins J in Whakatane District Council v Lysaght (1986) 6 NZAR

161 at 167:

Section 59(1) [an equivalent to s 118] in both paragraphs (a) and (b) refers to “a relevant error.”   Although this may at first sight seem to be an inappropriate expression to embrace a correction in the roll resulting from a successful objection, I consider that this is clearly the statutory intention.  In a sense a valuation that proves on objection to be incorrect, could be said to result in a “relevant error” in the valuation roll.  To interpret the expression in that sense is entirely consistent with the statutory scheme.

[19]     Wild J rejected the Council’s proposed interpretation of s 118.  He concluded that the words “relevant error” referred to a clerical error in the information on the valuation roll.   Such an interpretation made practical sense and accorded with the fact that s 116(1)(g) distinguished between an alteration lawfully made to the valuation roll and a clerical error.

[20]     In  Wild  J’s  view,  the  statutory  obligation  to  refund  under  s  118  was altogether different from the “right a ratepayer has at general law to recover rates it has overpaid.”   “In short,” Wild J concluded, “s 118 was not intended to be the recovery vehicle for overpaid rates” ([57]).

[21]     In the result, Wild J found in favour of ECNZ.

[22]     Wild J also took the view that ECNZ was entitled to recover the overpaid rates on general restitutionary principles.  ECNZ had not pleaded such a claim and, in this Court, did not seek to support the judgment on this ground.  Accordingly we need say no more about this aspect of Wild J’s reasoning.

Evaluation

Overview

[23]     The key argument advanced by Mr Galbraith QC for the Council in this

Court was expressed in these terms:

65.The  Valuation  of  Land  Act  deals  with  the  processes  by  which valuations  are  made  and  may  be  altered,  and  with  when  the valuations may be relied on.  Section 24 was just such a provision. Having provided that a valuation subject to appeal was effective and could be relied on for the purposes of making and recovering rates and taxes, the proviso in section 24 did no more than acknowledge that due adjustments should be made under those rating and taxing regimes in the event of the valuation being altered on appeal.

66.The Rating Powers Act 1988 (and before it the Rating Acts of 1967 and 1925) provided the comprehensive code for rating itself:

(a)Rates were to be levied by the delivery of an assessment which was to include specified matters (section 122).

(b)Rates were to be levied in accordance with the valuation roll corrected as at the end of the financial year immediately preceding the beginning of the financial year in respect of which the rate was made (section 123).

(c)       Section   118   was   the   only   provision   providing   for amendment of an assessment.

(d)Unless the original assessment was amended, there was no legal  basis  under  the  rating  legislation  either  to  make  a refund or to claim an additional payment, that is, either payment would be inconsistent with the existing assessment which levied the rate on the ratepayer and established the liability.

[24]     If s 24 of the 1951 Act and s 118 of the 1988 Act are construed as a coherent whole, there is much to be said for the arguments which Mr Galbraith QC for the Council advanced in this Court.  We say this for the following reasons:

(a)      It might be thought to be appropriate that the liability of a ratepayer should be as expressed in the relevant rate records of the local authority.

(b)      As will become apparent (see [45] – [48]), we think that s 118 of the

1988 Act provided a statutory basis for amendments to rating and valuation records following ECNZ’s successful objection proceedings and thus a statutory basis for refunds, albeit one which was subject to the five year period provided for by that section.

For the sake of completeness we note as well that the relevant statutory scheme has changed significantly with the repeal of both the 1951 and 1988 Acts.  It is perhaps of interest that the successor to s 24 of the 1951 Act (s 40 of the Rating Valuations Act 1998) no longer provides for a financial adjustment and it is clear that this change was made on the assumption that the successor to s 118 of the 1988 Act (s 41 of the Local Government (Rating) Act 2002) covers the ground and provides authority for whatever financial adjustment is necessary in a case where a valuation objection/appeal succeeds.

[25]     As will become apparent, however, we consider that it would be artificial to seek to identify a single unified parliamentary intention in respect of the relationship between s 24 of the 1951 Act and s 118 of the 1988 Act.  To seek such a composite intention would ignore a clear parliamentary intention which we consider to be discernable in relation to s 24 of the 1951 Act and, at the same time, would inappropriately attribute to the legislature which passed s 118 of the 1988 Act an intention which we are satisfied it did not have.

[26]     In our opinion the key issues in the present case are as follows:

(a)      Does  the  proviso  to  s  24  of  the  1951  Act  create  a  stand-alone entitlement to payment?  And, if so;

(b)Does the subsequent enactment of s 118 of the 1988 Act create a limitation period in relation to claims available under ss 24 and 25 of the 1951 Act?

Does the proviso to s 24 of the 1951 Act create a stand-alone entitlement to payment?

General

[27]     A little legal history is critical.  We will, however, attempt to deal with the relevant legal history as succinctly as possible.

The evolution of the valuation and rating legislation

[28]     A national system for the valuation of land was first provided for by the Government Valuation of Land Act 1896.  This statute was amended extensively by the  Government  Valuation  of  Land  Amendment  Act  1900  (“the  1900  Act”). Sections 14 - 25 of the 1900 Act provided for objections to valuations to be heard by an Assessment Court (s 15), with the Valuer-General to correct the valuation roll to give effect to decisions of the Assessment Court (ss 16 - 17).  There was a right of appeal to the Supreme Court confined to questions of law.  Section 24 then provided:

The fact that an appeal is pending shall not in the meantime interfere with or affect the decision of the Assessment Court which forms the subject-matter of the appeal; and rates and taxes may be made, levied, and recovered on the valuation  fixed  by  such  decision  in  like  manner  as  if  no  appeal  were pending:

Provided that, in the event of the valuation being altered on appeal, a due adjustment shall be made, for which purpose amounts paid in excess shall be refunded, and amounts short-paid shall be recoverable as arrears.

[29]   The Assessment Court, for present purposes, corresponded to the Land Valuation Tribunal.  The 1900 Act, however, did not contain a provision equivalent to s 25 of the 1951 Act.

[30]     It is clear that s 24 of the 1900 Act was applicable only in a case where an appeal was pending to the Supreme Court from the Assessment Court.   Possible reasons why s 24 was expressed in this way can perhaps be discerned (albeit a little obliquely) from the second reading debate in the House of Representatives (see

1900 111 NZPD 615 and following).   It appears that challenges in the Supreme

Court to valuation rolls under the 1896 Act had resulted in local authorities being

unable to collect their rates.  In that context s 24, along with its proviso, looks rather like a compromise under which local authorities were permitted to collect  rates pending the determination of an appeal to the Supreme Court, but subject to there being a subsequent financial wash-up later to give effect to any alteration in the valuation resulting from the Supreme Court judgment on the appeal.

[31]    The 1900 Act did not make specific provision for financial adjustments associated with rates which may have been paid pending the determination of an objection by the Assessment Court.   The reasons for this apparent lacuna are not clear but they may have been associated with the following considerations:

(a)      Rates levied by local authorities were based on the district valuation roll on 31 March preceding the date of the relevant levy.   This, in itself, provided some reasonable time for the determination of any objections to the district valuation roll before rates on those rolls were levied and collected.   In this regard Dwan v Lower Hutt Borough Council [1918] GLR 188 (which is discussed in a little more detail later in the judgment) is perhaps illustrative of a likely course of events.    The  relevant  valuation  was  as  at  31 March  1917.    The objection was heard by the Assessment Court on 11 June 1917 and the valuation was upheld.   The Council struck its rate 13 August

1917.

(b)The legislation was administered on the basis that any adjustment to the valuation roll made by the Assessment Court would be retrospective  to  the  effective  date  of  the  original  valuation,  ie

31 March preceding the date of the relevant levy.   This is apparent from Dwan.

(c)      Accordingly  it  was  reasonable  to  assume  that  a  ratepayer  who challenged the valuation of his or her property could be expected to resist payment of rates up until the point when the objection was heard and determined.  No such assumption, however, could safely be made that an appeal to the Supreme Court would be able to be dealt

with so quickly.  This would explain why s 24 was addressed to the phase in the statutory process between the decision of the Assessment Court and the determination of the appeal to the Supreme Court.

[32]     Section 22 of the Valuation of Land Act 1908 (“the 1908 Act”) corresponded to s 24 of the 1900 Act but it was in effect amended by s 5 of the Valuation of Land Amendment Act 1921 – 1922 Act which provided:

The provisions of s 22 of the principal Act shall apply, with the necessary modifications, in the event of an alteration of any valuation being made by the Assessment Court, or by the Valuer-General acting under the authority of section thirty or section thirty-one of the principal Act.

(Emphasis added)

This section therefore corresponds to, and is the precursor of, s 25 of the 1951 Act.

[33]     Section 30 of the 1908 Act provided for the Valuer-General, if dissatisfied by the decision of the Assessment Court, to give notice to the owner identifying a different value which, if the owner accepted it, would become the statutory value of the property.   If the owner did not accept that value, then the Government could acquire the property at the nominated value (which by definition would be higher than the capital value contended for by the owner, who presumably therefore could not fairly complain).  Section 31 conferred on owners of land who contended that the valuation of the Assessment Court was too high a corresponding “put your money where your mouth is” option.  These provisions correspond to ss 35 and 36 of the

1951 Act.

[34]     At this point, it is of assistance to refer again to Dwan.  It will be recalled that the valuation in question was upheld by the Assessment Court on 11 June 1917.  On

21 June 1917 Dwan gave notice under s 31 of the 1908 Act requiring either that the Valuer-General reduce the valuation of the land to the figure he stipulated or, alternatively, that the Government purchase the land at that value.  The Government declined the invitation to purchase the land and accordingly, on 5 September 1917, the Valuer-General reduced the valuation of the land to the amount stipulated by the appellant.  That was 23 days after the rate had been struck.  The Lower Hutt Borough Council, however, sued for the rate levied on 13 August 1917 assessed as against the

value of Dwan’s land as recorded on the valuation roll on 31 March 1917 and this claim succeeded in both the Magistrates Court and, on appeal by Dwan, in the Supreme Court before Stout CJ.   The Chief Justice made it clear that s 22 of the

1908 Act did not apply in the case of changes to valuations affected under ss 30 and

31 and further that a change in such a valuation was not to be treated as retrospective to the preceding 31 March.

[35]     Section 5 of the 1921 - 1922 Act was passed as a direct result of Dwan.  But its terms went further than what was necessary to reverse the result of that case. Presumably the lacuna as to changes in valuations affected under ss 30 and 31 of the

1908 Act highlighted the corresponding lacuna in relation to changes in valuation affected by the decision of the Assessment Court in circumstances where rates may have been paid before that decision was made.

[36]     In any event, the scheme of s 5 was obvious - if a valuation was altered by the Assessment Court, or subsequently under ss 30 and 31, a “due adjustment” was required with excess rates to be refunded, and this independently of any correction to the underlying rating records for the year in question.   Dwan shows that an amendment  to  a  valuation  effect  under  ss  30  or  31 was  not  backdated  to  the preceding 31 March and this part of the judgment was not affected by the 1921 -

1922 Act.  But, despite the valuation and rating records not requiring correction, a

“due adjustment” was nonetheless required.

[37]     Sections  34  and  35  of  the  Valuation  of  Land  Act  1925  correspond  to ss 24 and 25 of the 1951 Act.  The provision requiring a “due adjustment” appeared as s 34 of the Valuation of Land Act 1925 Act.  What is most interesting about this statute,  in  the  present  context,  is  that  it  was  enacted  on  the  same  day  as  the Rating Act 1925.   In light of that, it seems sensible to treat the two statutes as comprising a comprehensive legislative scheme.

[38]     The most directly relevant provisions of the Rating Act 1925 are ss 51 – 58. Section 52 provided for by the keeping of a rate-book and s 52(3) was in these terms:

All alterations lawfully made on the valuation roll should be transcribed into the rate-book, and initialled by the Chairman and by the Clerk of the local authority.

[39]     Section 56 provided:

Any ratepayer may appeal to the local authority against the rate-book on any of the following grounds: -

(a)       That any person is rated in the rate-book on property not appearing in the valuation roll for the time being in force, or for a different value than that stated in such roll:

(b)       That any person or property appearing by the valuation roll to be liable to be rated is omitted from the rate-book:

(c)       That the description of any person or property is erroneously copied from the valuation roll:

(d)       That  the  rate  on  any  rateable  property  is  incorrectly computed:

(e)       That any alteration lawfully made in the valuation roll has not been made in the rate-book.

[40]     Section 57 provided:

(1)       The local authority may correct any such errors in the rate-book, and every such correction shall be initialled by two members thereof; but, except as above provided, no appeal shall be allowed against any part of the rate.

(2)       The local authority may from time to time correct any errors in the rate-book although no appeal in respect thereof has been made, and notwithstanding that a demand for rates may have been previously made, and in the latter case the local authority may make an amended demand for any rates in substitution for the original demand.

[41]     Section 58 provided:

The rate-book so signed, with corrections (if any) so initialled, shall be conclusive evidence in all Courts of the correctness of the contents thereof without proof of such signatures, and that the same has been duly made.

[42]     The context of the legislative scheme created by the two 1925 statutes, along with  the  legislative  history  to  which  we  have  already  referred,  confirms  that ss 34 and 35 of the Valuation of Land Act 1925 conferred a direct right of recovery and that the phrase “due adjustment” means and includes a financial adjustment independent of any correction to the underlying rating records:

(a)      Adjustment to the valuation roll was provided for by ss 25 and 26 of the Valuation of Land Act 1925.  It stands to reason therefore that the “adjustment” referred to in ss 34 and 35 was something else.

(b)Any alterations to the rate-book associated with decisions made by the Assessment Court were adequately provided for in s 52 of the Rating Act 1925 and thus there is no need to treat the “adjustment” referred to in the proviso to s 34 as referring to that process.

(d)That a financial “adjustment” was contemplated is, in any event, clear from the language of the proviso and in particular the words “for which purpose”.   In other words, for the purpose of making a “due adjustment” amounts overpaid were to be refunded and amounts short paid were to be recoverable.

(e)      There was no provision in the Rating Act 1925 providing for the refunding  of  overpaid  rates.    Indeed,  as  Julian  v  Auckland  City Council [1927] NZLR 453 indicates, a claim for overpayment of rates against a local authority would otherwise have been difficult to sustain and subject to extremely tight time constraints (by reasons of s 353 of the Municipal Corporations Act 1920 and s 14 of the Counties Amendment Act 1927). Given those provisions a claim to recover overpaid rates where a valuation had been revised by the Assessment Court (or the Supreme Court for that matter) would have been legally doubtful to say the least.

The land tax context

[43]     Government  valuations  provided  the  basis  for  land  tax  assessments  and ss 24 and 25 of the 1951 Act (and their precursors) were applicable not only to rates but also land tax.  Accordingly counsel took us to the relevant statutory provisions as to refunds of land tax.

[44]     Having  considered  the  statutory  provisions  as  to  land  tax  identified  by counsel, we are of the view that they throw no real light on the issues which we have to determine, and, for that reason, will not burden this already dense judgment with further reference to them.

Conclusion

[45]     Given the statutory history we think it inescapable that ss 24 and 25 of the

1951 Act were intended to confer an entitlement to a refund of overpaid rates in the case  of  a  successful  objection  to  a  valuation  and  that  this  entitlement  was independent of any rights associated with corrections to the underlying valuation roll and waiting records.

Does the subsequent enactment of s 118 of the 1988 Act provide a limitation period?

[46]     This gives rise to two sub-issues:

(a)      Does s 118 of the 1988 Act apply at all?  And, if so;

(b)Does s 118 of the 1988 Act operate so as to limit the entitlement to recovery under the proviso to ss 24 and 25 of the 1951 Act?

Does s 118 of the 1988 Act apply at all?

[47]     The Council asserts that the present case is within s 118(1)(b) but suggests that in the context provided by ss 116 - 117 (and particularly given s 116(1)(g), the sort of correction to the valuation role which was made necessary by the decisions in favour of ECNZ under the Valuation of Land Act proceedings is within what is contemplated by s 118(1)(b).   Subsequent legislative history suggests that this is consistent  with  the  view  of  the  legislature  (as  the  proviso  to  the  successor  to s 24(1) of the 1951 Act was repealed in 2002 leaving the successor to s 118 of the

1988 Act as the only provision.

[48]     In the context of the legislative provisions referred to in [13] – [14], changes resulting from objection proceedings are carried on to the valuation roll and one would expect such changes to be duly reflected in the rating records of the local authority, cf Dwan above.  Sections 116 - 118 would appear to permit this.  So, for present purposes, we accept Mr Galbraith’s argument on this issue.  In this regard we see the reasoning of Tompkins J in Whakatane District Council v Lysaght as correct.

Does s 118 of the 1988 Act operate so as to limit the entitlement to recovery under the proviso to s 24 of the 1951 Act?

[49]     Section 59 of the Rating Act 1967 (“the 1967 Act”) for the first time placed a time limit on corrections and, also for the first time, provided for refunds within the context of rating legislation.   This section broadly corresponded to s 118 of the

1988 Act save that, as first enacted, it precluded the recovery of underpaid rates.  As amended in 1970, the section permitted such recovery providing the amended assessment was made and delivered to the ratepayer in the same rating year as the original assessment was made and the relevant ratepayer was the same at the times of both assessments, but otherwise precluded recovery.   Section 118 of the 1988 Act re-enacted s 59 of the 1967 Act as amended.

[50]     There  is  nothing  in  the  background  to  either  the  1967  or  1988  Acts suggesting that there was an intention to amend or repeal s 25 of the 1951 Act. Neither s 118 nor its precursor in the 1967 Act looks like a limitation provision.  We are satisfied the most sensible and straightforward way of construing both sections is that they provide for an entitlement to the recovery of overpaid rates which in part parallels that provided for in ss 24 and 25 of the 1951 Act.

[51]     In this context it is important to note that there is far from a complete overlap between s 118 of the 1988 Act and ss 24 and 25 of the 1951 Act:

(a)      The entitlement to refunds provided for in the 1967 and 1988 Acts was  not  confined  to  “corrections”  associated  with  objections  or appeals in relation to valuations being allowed.

(b)Sections 24 and 25 provided for local authorities to recover underpaid rates, something which was addressed in very different terms in the

1967 and 1988 Acts (albeit that s 142 of the 1988 Act did provide for a six year limitation period in relation to actions to recover rates).  It is perhaps arguable that the 1967 and 1988 Acts, by necessary implication,  affected  the  rights   of   local   authorities   to   recover underpaid rates save in respect of the circumstances which were expressly provided for.  But the necessary untidiness associated with this aspect of the case shows, clearly to our way of thinking anyway, that when the legislature enacted and amended s 59 of the 1967 Act and s 118 of the 1988 Act it did not have ss 24 and 25 of the 1951 Act in mind.

[52]     Given  these  considerations,  we  think  it  impossible  to  attribute  to  the legislature in either 1967 or 1988 an intention to amend ss 24 and 25 of the 1951

Act.   Had there been such an intention, it would have signalled this clearly and ironed out the incongruities to which we have referred in respect of underpaid rates.

[53]     For the sake of completeness we also note that that the 1967 and 1988 Acts are not material to the true interpretation of the 1951 Act, see R v Barnet London Borough Council Ex parte Nilish Shah [1983] 2 AC 309 at 348H per Lord Scarman.

Result

[54]     Accordingly we dismiss the appeal and order the Council to pay ECNZ costs of $6,000 together with usual disbursements.

Solicitors:

Simpson Grierson, Wellington for Appellant

Chapman Tripp, Wellington for Respondent