In deciding a recent case the High Court has stated that councils cannot delegate certain of their powers to their chief executives. Margo Perpick, a partner of the Christchurch Lawlink firm of Wynn Williams & Co, outlines the case concerned and why the Court made this statement.

A recent decision of the High Court has considered whether certain powers of a council can be delegated to its chief executive. The Court stated that only a council, ie not its chief executive, can appeal a decision of the District Court. This means that councils must be prepared to convene meetings as a matter of urgency before the time to appeal runs out.

In this case, Hamilton City Council v Green (27/11/01, Baragwanath J, Hamilton Registry AP24/00), a High Court appeal brought by the Hamilton City Council was struck out because the appeal had not been approved by way of council resolution before being lodged with the Court.

Mr and Mrs Green had obtained judgment against the council, in the District Court, for flood damage to their property. The council lodged a notice of appeal with the High Court. The decision to lodge that notice of appeal was made by the council’s chief executive. In keeping with the council’s normal procedure, the matter was then referred to council for a decision at one of its regular meetings.

The reason for this procedure was that the time limit for appealing to the High Court is generally 15 working days after receipt of the decision being appealed against, and regular council meetings were held six-weekly. That is, the time for lodging the appeal would usually expire before the matter could be discussed at a regular council meeting.

The chief executive made the decision to lodge the appeal in order to comply with the court’s time limit. The intent was that, at its next meeting, the council could debate the matter and then either ratify the chief executive’s decision, or alternatively, decide to withdraw the appeal. When the matter came before the full council, the decision to lodge the appeal was ratified.

However, the Greens argued that the power to institute proceedings in the High Court (including appeals from the District Court or the Environment Court) is a power of the full council which cannot be delegated to the chief executive. The Greens referred to section 114G(1)(c) of the Local Government Act 1974 in support of their argument.

That section says that a local authority may delegate any of its functions to any committee, except for six specific powers, which include the power to institute High Court proceedings other than injunctions. (The other five powers cover making rates or by-laws, borrowing money, entering contracts and certain activities under the Public Works Act 1981.)

The council argued that section 114G(1)(c) should be interpreted so that the exception for injunctions should extend to any other proceedings which are urgent. It said that the circumstances in this case were urgent, given the strict and short time limits for appealing to the High Court. It argued that it was not practical to expect a full council to convene to deal with the issue prior to the time when the appeal had to be lodged.

The Court rejected this argument; it considered this to be a "strained" interpretation of the statute. The Court was not satisfied that it was impossible, in practical terms, for the council to meet in time to deal with the appeal issue before the time limit expired.

The council argued that, even if it had no power to authorise the chief executive, in advance, to initiate the appeal in the High Court, the chief executive’s decision could be validated by later ratification of the full council. That argument was also rejected by the Court. It stated that the six non-delegable powers stipulated in section 114G(1) are ones that parliament has classified as of such importance that they must be exercised by the council itself, and not by a delegate. As the council could not delegate the power to the chief executive in the first place, it could not, in effect, make a later delegation by ratifying the chief executive’s decision.

The Court’s reasoning was that:

  1. It is the council alone which may exercise the power to initiate proceedings in the High Court. It did not do so before the time for an effective appeal had expired. Accordingly, there could be no effective appeal.

  2. It is human nature for a council to support its officers and sustain a status quo. If ratification were permitted, there would be risk that instead of turning its own mind to the decision, a council would tend to favour a decision of its officer even if it should never have been made.

The effect of the Court’s decision was that the council’s appeal was struck out. There was no ability to lodge a fresh appeal out of time. So, even though the council considered that it had good grounds upon which to challenge the decision of the District Court, it was not able to have those grounds examined by the High Court.

The practical implication for councils is that they must be prepared to convene meetings of the full council within the time for lodging an appeal (ie, within 15 working days of receiving any decision of the District Court or Environment Court). Decisions of the lower courts are not released according to any particular schedule; sometimes a decision will follow within days or weeks of a hearing, and at other times it will be months or even years before a decision is released. Whenever the decision is released, the time for appeal will begin running and the council will have to meet as a matter of urgency to discuss whether or not to lodge an appeal.

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