File photo. Photo: RNZ
Three councils who sought to have their property rights declared by a court over the Three Waters reforms have had their bid rejected by the High Court.
In a judgment this morning, Justice Mallon also ruled the councils' attempt to seek the declaration - while carefully phrased - in effect sought to influence the legislative process, a breach of the principle of Parliamentary sovereignty.
The Timaru, Waimakariri and Whangārei District councils had wanted the court to make three declarations*:
- That local government is an important and longstanding component of the democratic governance of New Zealand
- On long-standing principles of democratic governance, including that local infrastructure assets are owned or controlled, related services are provided by local councils, councils are responsive and democratically accountable for the provision of assets and related services, that they owe "fiduciary-like" obligations to the communities, and local infrastructure assets have been wholly or materially funded by communities.
- That councils own their infrastructure assets and have rights to prevent others interfering, to manage and operate the assets, to enter into contracts relating to those assets, to use the assets as security for borrowing, and to compensation if their ownership is removed by legislation.
This was in response to the government's plan to shift management of Three Waters assets from 67 local councils to four large regional purpose-built entities, with the aim of being able to borrow much greater sums and prioritise infrastructure investment than councils could achieve alone.
Timaru's mayor Nigel Bowen argued in the council's affidavit that the reforms overlooked the importance of council ownership and control of three waters assets to the local community who funded them, and there were serious concerns about ownership, governance and accountability.
He was also concerned about the multiple degrees of separation between its communities and the board of the new entity, and feared areas with larger populations would be prioritised for investment.
Former Whangārei mayor Sheryl Mai's submission said the district's assets were in good condition and and fit for purpose, and were being taken without fair compensation, and despite government assurances and funding the council would be left worse off.
Waimakariri mayor Daniel Gordon said the potential loss of responsive local decision-making and influence was a major concern, and disputed the Department of Internal Affairs' estimates of how much funding would be needed for investment - having already put $100 million towards three waters infrastructure.
In the judgment, Justice Mallon found the court did have jurisdiction over the matter, but such a declaration was outside the court's proper role because it infringed the principle that the court does not interfere with the legislative process.
"While the declarations had been carefully framed in an attempt to avoid that principle, they were nevertheless aimed at that legislative process ... in effect, they sought to influence the legislative process. The Court was not satisfied that this was a role it properly should have."
She also found Parliamentary sovereignty meant the changes enacted in the Three Waters suite of legislation could be made even though it would change local democratic governance and accountability, and local authorities would lose ownership without receiving compensation.
"Although relief is declined, it is undoubtedly the case that the Three Waters reforms will alter the role that local government has historically held in the provision of Three Waters services and this has major significance for our communities.
"Whether that is desirable is of course for Parliament. The Parliamentary process is there to ensure that the important issues at stake are carefully considered. It is not the court's role to interfere in that.
"The legislative reforms can proceed if the government wishes to proceed with them, and a majority of the House votes in favour of the legislation that gives effect to them. This is not contrary to fundamental legal principles of our law. Rather, it reflects that Parliamentary
sovereignty is a fundamental principle of our law."
The declarations sought were also found to be "expressed in general and abstract terms that deprive them of usefulness".
"Importantly, the relief was framed without reference to the legislative framework under which local councils performed their functions in relation to the Three Waters services."
The court dismissed the application for the declarations.
In a statement on behalf of the councils, Bowen said the ruling exposed the government's position that councils would still own their three waters assets as a "legal nonsense", and he urged the government to either properly recognise council ownership rights or pay fair market compensation.
"The judgment indicates that under the current plan community assets are being taken out of local ownership against the clearly expressed wishes of the community," he said.
"The fact the government were seeking to undermine basic property rights without proper acknowledgement was one of the most concerning aspects of this law."
"We'll be looking thoroughly at the judgement, consulting with our advisers and seeing what the next steps we can take."
* Declarations sought paraphrased for brevity
Learn more about three waters:
Three waters on the boil as elections loom