Overview of decision-making under the Local Government Act 2002

Environmental / Resource Management

Overview of decision-making under the Local Government Act 2002

The Local Government Act 2002 (“LGA”) requires that all local authorities operate transparently and democratically, making themselves aware of and having regard to the views of the various communities within their district or region. This includes effective decision-making and community consultation, outlined in Part 6 of the LGA.

The recent Court of Appeal decision of Thorndon Quay Collective Incorporated v Wellington City Council [2024] NZCA 316 sheds light on the complexities of local government decision-making and the importance of thorough consideration of options in matters of public interest.

Background

The case arose from a June 2021 decision by the Council to reconfigure parking on Thorndon Quay from mainly angled parking to entirely parallel parking.  The primary aim was to improve cyclist safety along this route, but with a consequence of significantly reducing the number of parking spaces in key business areas.  Other options to improve cyclist safety were proposed, but were not favoured by Council officers.  In the staff recommendations report to Council, two options were identified: the recommended option of reconfiguring parking, or the status quo.  The Thorndon Quay Collective Incorporated (“TQC”), representing local businesses, challenged the decision through judicial review.

Justice Gendall, in the High Court, found that none of TQC’s grounds of review had been made out and accordingly dismissed the judicial review application.  On appeal, the Court of Appeal found that the Council had failed to comply with its obligations under s.77(1) of the LGA.  This section requires local authorities to “seek to identify all reasonably practicable options for the achievement of the objective of a decision” and to assess these options in terms of their advantages and disadvantages.

Key issues identified by the Court included:

1. Insufficient information provided to decision-makers – the Council’s Planning Committee, which made the final decision, was not given comprehensive information about all the options considered by Council staff.  Only the preferred option was presented in detail. 
2. Potential unlawful sub-delegation – the Court expressed concern that the process came “perilously close to an unlawful sub-delegation” of decision-making power.  Council staff had effectively narrowed down the options before presenting them to the Planning Committee.
3. Lack of written information – the Planning Committee received limited oral information about some rejected options during questioning, but had no written information about those alternatives prior to the meeting.

The Court acknowledged the necessity and benefit of Council staff undertaking the majority of detailed work and analysis to support Council decisions, which is essential for the smooth functioning of local government operations.  However, the Court of Appeal disagreed with the High Court Judge's view that if the decision-maker utilises a Council employee to aid in identifying all reasonably practicable options, the employee is only obligated to present those options they believe meet the criteria of being "reasonably practicable" to the decision-maker.  While the reporting officers were within their rights to identify a preferred option and indicate in their report which alternatives they deemed not reasonably practicable, presenting only the preferred option to the Planning Committee deprived the Committee of sufficient information to make an informed assessment of the reasonably practicable options, and to evaluate their advantages and disadvantages as required by s77(1).

 Clarification of s.76 of the LGA

The Court of Appeal  took the opportunity to clarify and confirm the correct application of s76,  namely- that every decision made by a local authority must be made in accordance with such of the provisions of s77, s79, s80, s81 and s82 as are applicable. The compulsory nature of compliance with the decision-making provisions is reflected in the use of the word “must” in these sections. Although compliance is mandatory, the local authority has a wide discretion as to how to best achieve compliance, relative to the significance of the decision in issue in relation to s77 and s78.

The requirement in s76(3)(a) to adopt decision-making processes that “promote compliance” is an additional procedural requirement to facilitate good local authority decision-making. It is not a replacement for substantive compliance with the decision-making provisions of the LGA. Therefore, a challenge claiming that a decision was not made in accordance with one or more decision-making provisions would not be exempt from scrutiny solely because the local authority could demonstrate its adoption of decision-making processes aimed at ensuring compliance with those provisions.

The Court of Appeal accepted TQC’s submission that Glendall J’s description of what s76 requires was inaccurate to the extent that he appears to suggest that s 76 only required the Council to adopt decision-making processes that promote compliance with the decision-making provisions, rather than achieve substantive compliance with those provisions. However, as Gendall J’s analysis extended beyond assessing whether the Council had implemented processes to encourage compliance, the Court concluded that any misstatement regarding the interpretation of s76 did not ultimately affect the outcome of the case.

Conclusion

In what was ultimately a pyrrhic victory for TQC, while the Court declared that the Council’s decision-making process was flawed, it stopped short of overturning the parking changes, noting that subsequent decisions had likely superseded the 2021 decision anyway.

This ruling has several important implications:

1. Guidance for Local Government Decision-Making: The case provides valuable guidance on how councils should approach decision-making, particularly for issues of public interest. It emphasises the need for elected representatives to be fully informed of all reasonably practicable options, rather than relying solely on staff recommendations.
2. Balancing Efficiency and Thoroughness: The judgment highlights the tension between efficient governance and the need for thorough consideration of alternatives. Councils will need to strike a balance between these competing demands when making future decisions.
3. Transparency in Decision-Making: The ruling underscores the importance of transparency in local government processes, ensuring that decision-makers have access to comprehensive information about all viable options.
4. Role of Council Staff: While the Court acknowledged the valuable role of council staff in preparing information, it clarified that the ultimate responsibility for identifying and assessing options lies with the decision-making body.