Environmental / Resource Management
The importance of Local Authorities keeping full, accurate and accessible records
The recent High Court decision of Daisley v Whangarei District Council [2022] NZHC 1372 is a significant decision for local authorities – not just because of the quantum of damages awarded against the Council, but also because it recognised that Councils have a duty of care to maintain and make available accurate records about resource consents and can face liability for failing to do so.
Background
The case concerned the purchase of a quarry by Mr Daisley, where the previous owners had asserted the operations had never been contested by the Whangarei District Council (Council). Mr Daisley ordered a LIM from Council prior to the purchase, which did not include any reference to a resource consent for quarrying activities. In 2009, Mr Daisley’s lawyer made a LGOIMA request (not the first) which revealed there was, in fact, a resource consent that allowed quarrying activities on the property.
Abatement notices had been issued to Mr Daisley between 2005 and 2009 to require him to halt all quarrying activities and the Council had also commenced enforcement proceedings in the Environment Court. Mr Daisley sold the property in 2009 and in 2015 bought proceedings against the Council for negligence and breach of duty. These proceedings centred around:
- Loss of earnings;
- Loss of value of the property; and
- Costs associated with the enforcement proceedings bought by the Council.
Common Law duties owed to Mr Daisley
The Court found the Council had common law duties owed to the public which are provided for under section 35 and section 322 of the Resource Management Act 1991 (RMA). Section 35 requires a Council to exercise reasonable care and skill in maintaining records of resource consents, so the public can inspect them at a readily available time. Section 322 requires an enforcement officer to be satisfied that there are reasonable grounds for issuing an abatement notice. The Court held that in order to be satisfied of this, an enforcement officer should exercise due diligence to ensure that there is no resource consent authorising the activity.
Breach of duties
The Court considered whether the Council had breached its duties under these sections. Regarding section 35, Toogood J held:
“Given that the consent ran with the land, it was in my view negligent of the Council to archive the hard copy file without ensuring that some copy or record of it was available in the Council’s current records for the property”.
The Council breached section 35(3)(b) as it did not monitor the necessary consent authorising the quarrying activities which disabled Mr Daisley from participating effectively under the RMA.
Under section 322, the Council failed in its obligations to conduct searches for the relevant resource consent before issuing an abatement notice.
The Court also considered whether the Council had a duty of care when processing requests for information about the use of land under section 10 of the LGOIMA. The Supreme Court has previously held that a local authority owes a duty of care, and can be held liable, when issuing a LIM report under section 44A of the LGOIMA, but the Court had stopped short of recognising that a duty of care arose under standard information requests under section 10 (see Marlborough District Council v Altimarloch Joint Venture Ltd [2012] NZSC 2011, [2012] 2 NZLR 726).
In Daisley, the Council argued that local authorities could not be held liable in respect of section 10 requests because of the privity clause in section 41 of the LGOIMA. However, the Court held that section 41 only protects a local authority in respect of official information that “is made available”. It did not apply to a negligent failure by a local authority to make information available.
The Court observed that where requests are made to the Council for information of a same type that Council is required to provide on a LIM, a duty of care applies when processing that request. While these comments were obiter, they appear to extend the approach that the Courts have previously taken regarding liability under the LGOIMA. While the Court expressed the view that there is no material distinction between a LIM report and a section 10 request for the same information, this seems at odds with the approach taken by the courts in previous cases, such as Altimarloch. In that case, a key factor in recognising a duty of care in processing a LIM request was the proximity created by the contractual relationship between the council and the requester. There is arguably less proximity with a section 10 request because payment of a fee is not usually required and the Act does not expressly set out the Council’s obligations in respect of a section 10 request, in contrast to the more prescriptive approach that applies to LIMs.
The Court determined that from the date that Mr Daisley was denied a consent to quarry in 2006, he suffered continuing damage until the enforcement proceedings were withdrawn.
Damages awarded
Significant damages were awarded against the Council as the Court accepted that Daisley’s loss of income was caused by the inability to quarry on his land, for this Mr Daisley was awarded $4,089,622. As the Council continued in its “stubborn” attitude subsequent to the discovery of the consent and Mr Daisley’s sale of the property in 2009, the Court awarded $90,000 for the loss of value of the property.
The Court found this was one of the relatively rare cases where the Council’s conduct amounted to misfeasance in public office that required additional censure. Exemplary damages were awarded of $50,000 by the Court as the Judge accepted Council had acted in an ongoing unreasonable and obstructive manner even after becoming aware of the consent. The Court held that this amounted to misfeasance in public office and awarded $50,000 exemplary damage.
The Council has since appealed this decision.
Conclusions
This case is a cautionary tale for any local authority, and emphasises the importance in ensuring full, accurate and accessible records relating to resource consents and other property information is kept and maintained. It also highlights the care that must be taken to ensure the full circumstances are properly understood before commencing enforcement action against someone.
