Articles

An Important Look at Local Government Decision-Making and Climate Change

In Hauraki Coromandel Climate Action Incorporated v Thames-Coromandel District Council [2020] NZHC 3228 an incorporated society of ratepayers from the Thames-Coromandel District partially succeeded in an application for judicial review against the Thames Coromandel District Council in relation to the Council’s decision not to approve the Mayor to sign the Local Government Leaders’ Climate Change Declaration 2017 (the Declaration).

Following a hearing in the Hamilton High Court, Justice Palmer found that the Council’s decision not to approve the Mayor to sign the Declaration was a significant decision in terms of 76 of the Local Government Act 2002 (LGA), and that the Council had acted unlawfully by failing to go through the proper decision-making process outlined at Part 6 of the LGA, and in particular sections 77 and 78. 

The Judge considered that signing the Declaration may have legal implications for councils in terms of creating legitimate expectations that they act in accordance with the obligations it describes, but did not go further to determine precisely what those obligations might be.  However, the Judge found in favour of the Council that the decision not to sign the Declaration was not “unreasonable” considering the Mayor’s concerns about the potential legal and financial implications of becoming a signatory.

The Judge's decision serves as a reminder to councils of their strict decision-making obligations under the LGA, but also as a warning to those councils and entities who have signed up to the Declaration or similar climate change initiatives.  Actions that councils may interpret as merely political or aspirational may have legal and financial consequences and create binding obligations in favour of interested parties, including ratepayers.  Given the likely financial and political impacts of climate change on New Zealand in coming decades, the Judge’s comments should not be taken lightly by any local government decision maker.

How the matter came before the Court

The Declaration was an initiative of larger urban councils but was approved by the National Council of Local Government New Zealand (LGNZ).  It was circulated in draft to mayors and chairs of regional councils in October 2015, in the lead up to the 21st Conference of the Parties to the 1992 United Nations Framework Convention on Climate Change in Paris in December 2015 (COP21).  Over time, and after COP21, the draft was amended, and more mayors and chairs signed the Declaration. By 25 June 2019, 65 mayors and chairs had signed the Declaration.

The Declaration is a three page document declaring an “urgent need of responsive leadership and a holistic approach to climate change”  It records various intended actions under the heading Council Commitments, including developing and implementing ambitious action plans that reduce greenhouse gas emissions and supporting resilience within councils and for their local communities.  The text of the Declaration can be found on the LGNZ website: The Declaration.

Guiding principles are described in the Declaration as including stewardship/kaitiakitanga and equity/justice, which are said to be based on established legal and moral obligations placed on Government when considering the current and future social, economic, and environmental well-being of the communities they represent.

The decision whether to approve the mayor to sign the declaration came before the Council for consideration at a meeting on 2 April 2019.  The Declaration was sent  to the Council by the Mayor following earlier community interest.  Her accompanying memorandum outlined her concerns that the Declaration was potentially committing the Council to implement certain courses of action and that there was [financial and legal] risk to Council if it did not then uphold all the initiatives promoted by future governments.  The Mayor outlined in her memorandum that:

  • the decision making provisions in the LGA needed to be followed.

  • the Council was already committed to working on many of the initiatives within the Declaration; and
  • the Council should resolve to simply receive the Declaration and continue to take action, following robust decision making processes, in response to climate change for our communities.

At the Council meeting, a councillor tabled an alternative resolution proposing that the Council approves the Mayor signing the Declaration.  The Council voted against this amendment, and in favour of the Mayor’s proposed resolution, albeit adding a third limb that the Council: requests staff take a broad view of the actions undertaken to mitigate the drivers of climate change and scan how other councils are responding to carbon management and reduction of greenhouse gas emissions.

The arguments before the Court

The applicant, Hauraki Coromandel Climate Action Incorporated (HCCA), applied for judicial review of the Council’s decisions both to reject the alternative resolution and to approve the Mayor’s resolution (together, the Decision).   It argued that the Decision was unreasonable given the global consensus on anthropogenic climate change impacts, because of the likely impact of climate change on the Thames Coromandel District, and because the Mayor’s personal views had influenced the Decision.  It also argued that the Decision was procedurally flawed as Council had failed to observe the relevant decision making provisions at Part 6 of the LGA and its own Significance and Engagement Policy, including the requirement for proper consultation with the community.

The Council defended the application, arguing the Decision was not amenable to judicial review because it would have simply amounted to the Council authorising the Mayor to make a non-binding political statement, and to do so would be to interfere with the Mayor’s political discretion.  Further, it argued the decision to receive a report, which it had ultimately decided to do via accepting the Mayor’s proposed resolution, was not reviewable.

The Council argued further that even if the Decision were reviewable as a whole, it was neither unreasonable nor procedurally flawed because it is the Council’s responsibility to make judgements about how to comply with sections 77 and 78 of the LGA in proportion to the significance of the decision being made.  It argued that the Decision was not significant (and simply related to whether to interfere with the Mayor’s political discretion) and had no binding impact on the community (the Declaration being political rhetoric).  It was therefore lawful for the Council to make the Decision without fully applying Part 6 of the Act step by step, and open to the Council to consider that it had complied with the LGA.

What the Court had to say

Reviewability of the Decision

The Judge rejected the Council’s argument that the decision was not amenable to judicial review and found that it was reviewable because it could directly affect the rights and duties of citizens and ratepayers of the Thames Coromandel District. 

The Judge also found that the evidence had established that the potential and likely effects of climate change, and the measures required to mitigate those effects, were of the highest public importance, and were likely to implicate a wide range of dimensions of social, economic, and environmental well-being in the District. 

Further, the Judge found that the Decision could have legal implications, but that even if it did not, the political and policy issues for Council arising from the Declaration were of the highest order.  The existence of a policy dimension did not immunise the Council from judicial review, rather the reverse, noting that there was a strong public interest in decision-making by the Council being subject to judicial review.

Reasonableness of the Decision

Following the reformulated reasonableness test in his own decision of Hu v Immigration and Protection Tribunal [2017] NZHC 41, the Judge found that the Council’s decision was reasonable. 

On that test, three scenarios might arise whereby the decision is so insupportable or untenable that proper application of the law requires a different answer:

  • if the decision is not supported by any evidence.

  • if the evidence is inconsistent with, or contradictory to, the decision; or
  • if the only reasonable conclusion contradicts the decision (i.e., if there is a material disconnect in the chain of logic from a fact or a legal proposition to a conclusion, a decision may be unreasonable and therefore unlawful).

The Judge found that the two reasons set out in the Mayor’s report: that the Declaration was a potentially binding document and that the commitments had unknown financial consequences, appeared to inform and logically support the Council’s decision. 

The Judge also noted that aspects of the Declaration may potentially have binding force in law, depending on the circumstances.  If the Declaration were signed by a Mayor with the approval of a council, on behalf of that council, it is possible that could create a legally enforceable legitimate expectation that the council would abide by the procedural commitments.  For those reasons, the Judge considered the Decision was not so unsupportable or untenable that the law required a different answer.  It was therefore not unreasonable. 

The applicant’s submission that the Mayor’s personal views had influenced the Decision was rejected, with the Judge finding that there was no particular evidence of this, and that Mayors are entitled to hold personal views.

Lawfulness of the Decision Making Process

The Council had adopted a Significance and Engagement Policy (the Policy) in 2014, requiring it to assess the degree of significance of proposals and decisions, and the appropriate level of engagement, in the early stages of a proposal, taking into account specified considerations.

The Judge found the Council’s decision-making process was unlawful in this instance because it did not turn its mind to the requirements at Part 6 LGA, and the Policy, which required it to go further.

Paragraph [62] of the Judgment contains the critical findings on this point.  The Judge considered that because of the significance of climate change generally and on the District, both the Council’s climate change strategy generally and any proposed decision engaging with climate change issues at a strategic level, were significant. 

Further, the Judge found that while the question of whether to sign the Declaration might not implicate all aspects of the Council’s climate change strategy, it raised salient strategic issues about it.  Those strategic issues included whether the Council should implement an action plan to reduce greenhouse gas emissions and the scope of that plan, and whether it should work with communities or central government to understand, prepare for, and respond to the physical impacts of climate change and how to do so.   The Judge found that those salient issues raised in the Declaration meant that whether to approve the Mayor to sign the Declaration was a significant decision requiring the Council to at least expressly consider how it would comply with sections 77 and 78 of the Act in proportion to the significance of those matters, and that it failed to.

The Decision was quashed, and an order made that the Council reconsider the Decision.  Importantly, the Judge expressly did not require the Council to approve or require the Mayor to sign the Declaration on any reconsideration of the Decision.  The same outcome may well occur when the Decision is reconsidered by the Council, given that the Mayor’s concerns about the Declaration potentially creating binding legal obligations on the Council have been endorsed by the Judgment.

Implications

The Judge’s finding of unlawfulness serves as an important reminder to councils to err on the side of caution where a proposed decision of council may potentially be a  significant one in terms of the LGA.   In cases where the decision may possibly be significant, councils should actively turn their minds to how they will achieve compliance with the requirements under Part 6 of the Act, particularly sections 77-78, and then follow those requirements to the extent necessary, in proportion to the significance of the decision.

However, the potentially wider implication of the finding that the decision was significant amounts to a rejection by the Judge of the Council’s submission that the Declaration was merely political or aspirational in its interpretation and had no broader implications for signatories. 

The finding that the Decision was significant is tied to and consistent with the interpretation of the Declaration as not merely aspirational and also the Judge’s comments that the Declaration potentially created binding legitimate expectations on councils.  If the Declaration conclusively created no binding implications for council signatories in terms of climate change policy and the flow on effects of the same, it would be difficult to see how the decision by a Council to approve its mayor to sign it, or not, could truly be significant, despite the matters described in the Declaration.

By signing the Declaration, or other documents of a similar nature held out by their promotors to be political or aspirational, councils should now expect and prepare to be held to account in the Courts by interested parties claiming a legitimate expectation interest if there is any basis for those parties to allege that councils have departed from those obligations.  With resources precious at many councils, and the financial implications of mitigating and addressing climate change impacts projected to be extensive, it may be difficult for councils to practically meet the public expectations created by making such statements or commitments. Caution should be exercised in signing up to such political and aspirational statements.

It remains to be seen whether the judgment will result in councils no longer wishing to remain signatories to the Declaration, or whether it will have a chilling effect on those councils wishing to sign up to other purportedly aspirational statements relating to climate change or other issues.  What appears certain is that there is much more litigation involving councils with a climate change dimension to come.  If you need advice around the extent of your obligations in relation to the LGA, statements in the nature of the Declaration, or other climate change related legal issues, feel free to contact either the resource management or litigation team at Brookfields.

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