Part 1: Statutory and Related Legal Requirements

Public Consultation and Decision-making in Local Government.

What Is Consultation?

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“To consult” means to seek information or advice, or to take into consideration. In the present context, consultation is essentially a tool or mechanism for citizens’ participation – which can inform and assist the local authority in its decision-making.

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If we consider that there is a “spectrum” of decision making (as illustrated), consultation sits somewhere between notification and negotiation. While it may require something less than negotiation, it nevertheless encompasses a broad range of situations in which the public may have some input.

Figure 1.

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Whether consultation is required and, if so, the nature of the consultation that is required, needs to be determined by reference to the factual and legal circumstances of each particular situation.

When Is Consultation Required?

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A local authority’s obligation to consult with the public on particular issues, or with particular persons or organisations about a particular subject, is generally derived from express statutory provisions. These provisions may stipulate a particular procedure, which must be followed,1 or may require consultation with particular persons or organisations about a particular subject.2

105
However, a local authority’s obligation to consult may also arise other than from express statutory requirements. For example:

  • statutes may contain an implied obligation to consult; or
  • such an obligation may arise out of a “legitimate expectation” of the public that consultation will occur.

106
In exercising their functions, powers and duties, local authorities are also subject to the New Zealand Bill of Rights Act 1990.3 This Act gives every person the right to observance of the principles of natural justice when a public body is making a determination in respect of that person’s rights, obligations or interests protected or recognised by law.4 The right to natural justice may require local authorities to consult people whose legal rights or interests are affected by a policy or decision.

Nature of the Obligation to Consult

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Legislation requiring or implying consultation does not help to determine the nature of the obligation to consult. However, the courts have considered the nature of that obligation.

108
The concept of consultation was discussed by the Court of Appeal in the Wellington International Airport Limited case (26). At issue in that case was the airport company’s obligation to fix charges after “consultation with airlines that use the airport”.

109
The Court identified certain principles or elements of consultation. These can be summarised as follows:

  • Consultation is not to be equated with “negotiation”. The word “negotiation” implies a process that has as its objective arriving at agreement. However, “consultation” may occur without those consulted agreeing with the outcome.
  • Consultation includes listening to what others have to say and considering the responses.
  • The consultative process must be genuine and not a sham.
  • Sufficient time for consultation must be allowed.
  • The party obliged to consult must provide enough information to enable the person consulted to be adequately informed so as to be able to make intelligent and useful responses.
  • The party obliged to consult must keep an open mind and be ready to change and even start afresh, although it is entitled to have a work plan already in its mind.
  • Consultation is the statement of a proposal not yet fully decided upon.

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The Court’s discussion of the meaning of “consultation” is useful in considering the nature of the obligation to consult, and provides a general guide to when a decision can properly be seen as having been made after “consultation”.

Consultation in Local Government

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The Local Government Act 1974 imposes significant obligations for public participation, openness and accountability in local authority decisionmaking. For example:

  • As part of the annual planning process, and in a number of specific circumstances, the Act requires local authorities to use the special consultative procedure set out in section 716A in making their decisions.
  • In other specific circumstances, local authorities must use the special order procedure set out in section 716B.

Statutory Framework – Local Government Act 1974

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The special consultative procedure was introduced to the Local Government Act 1974 (the Act) in 1989 as part of a package of accountability reforms. New provisions introduced by these reforms included:

  • Section 37K – setting out the purpose of local government as including:
    • recognition of the existence of different communities in New Zealand;
    • recognition of the identities and values of those communities;
    • scope for communities to make choices between different kinds of local public facilities and services;
    • recognition of communities of interest; and
    • providing for the effective participation of local persons in local government.
  • Section 223C – setting out general principles applying to the conduct of local authority affairs, including that:
    • its business is conducted in a manner that is comprehensible and open to the public;
    • its performance is regularly measured by it in relation to its stated objectives and is capable of being so measured by persons and organisations interested in the performance and activities of the local authority; and
    • its local communities are adequately informed about its activities.
  • Section 223D – the annual plan:
    • is to be adopted each year in accordance with the special consultative procedure, setting out the intended policies, objectives, significant activities, performance targets and measures; indicative costs and sources of funds; forecast financial statements; and significant trends.
  • Section 223E – the annual report, reporting on performance against the annual plan.
  • Sections 247C and 247D and Part XXXIVA – authorising the performance of council functions through council-owned structures or private structures, but with decisions about divestment subject to the special consultative procedure.

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Financial accountability was further improved in 1996 by the new Part VIIA of the Act that deals with financial management. The key financial management documents – the long-term financial strategy and the funding policy – must be adopted at least every three years using the special consultative procedure. These documents build on the accountability structure already established by the annual plan.

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In this context, the purpose of a special consultative procedure is reflected in the new section 122B:

  • to provide a structured framework for council decision-making on financial management; and
  • to provide an effective and appropriate avenue for public participation in council financial policies and funding decisions.

The Special Consultative Procedure

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The special consultative procedure is a key element of the accountability arrangements. It provides a process by which communities can be better informed about and participate in local authority decisions.

What Does the Special Consultative Procedure Require?

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The procedure is set out in section 716A of the Act, and requires:

  • Notice of the proposal (e.g. draft plan) to be placed before a council meeting.
  • Public notice (and any other specific notice which the council considers appropriate) of the period in which a person may make a submission on the proposal. The period must be at least one month and may not be more than three months unless the council decides otherwise.
  • Any person who makes a written submission must be given a reasonable opportunity to be heard in person.
  • Any meeting where the proposal is considered or the submissions are heard must be open to the public unless exclusion is permitted under the Local Government Official Information and Meetings Act 1987.
  • All submissions must be available to the public unless there is good reason for not making them available.
  • The council may choose to have submissions heard either by the council itself, a community board, or a committee of the council.
  • The final decision on the proposal (e.g. adoption of the plan) must be made at a council meeting.

When Must the Special Consultative Procedure be Used?

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The special consultative procedure must be used when expressly stated as necessary in legislation. In certain situations voluntary compliance may be appropriate. For example, while not required to do so, the Papakura District Council used the procedure when it considered franchising its water and waste water services.5

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Since 1989, the range of circumstances in which there is a statutory obligation to use the special consultative procedure has expanded significantly. Statutes requiring the special consultative procedure to be followed in particular circumstances include:

  • the Local Government Act 1974;
  • the Resource Management Act 1991;
  • the Rating Powers Act 1988;
  • the Building Act 1991; and
  • the Energy Companies Act 1992.

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The three most common applications of the special consultative procedure are:

  • As part of the ongoing accountability process; i.e. for the annual plan, long-term financial strategy or funding policy (“Accountability”).
  • To deal with specific proposals, particularly divestments of significant public assets (“Specific proposals”).
  • As a legislative process. This reflects a move towards a more consultative process being required when local authorities are “legislating”. Previously, special orders were used for this purpose (“Legislative process”).

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The legislation requiring the special consultative procedure to be used is listed in Appendix B on pages 60-61.

Special Orders

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A special order is a resolution of the council made in accordance with subsections (2) to (7) of section 716B of the Local Government Act. The most common situations where a special order must be used concern the exercise of local authority powers in relation to rates, bylaws, roads, water supply, and drainage. The special order process is different from the special consultative procedure because it is effectively a law-making process rather than a consultation process.

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The particular situations requiring a special order are listed in Appendix C on pages 62-64.

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Special orders require:

  • A resolution to be passed at a special council meeting, or at an ordinary meeting, if proper notice of intention to consider the subject matter of the resolution has been given to all council members before the meeting.
  • A second resolution confirming the first resolution, passed at a council meeting held no later than the 70th day after the first meeting.
  • In the period between the two meetings, a copy of the resolution to be confirmed must be placed at the offices and libraries of the council and be open for public inspection during normal office hours.
  • Two public notices must be given before the date of the second meeting setting out specified details of the proposal and meetings. The first public notice must be at least 21 days before the second meeting, and the second public notice must be no more than 14 days nor less than 7 days before that date.

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Statutory provisions requiring special orders frequently specify additional procedural requirements.6

Special Order Procedure and Consultation

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The only explicit consultation-related obligation imposed by section 716B is public notification. The courts have recognised that the section anticipates that some form of consultation is required, but that the level of consultation required is something less than that required by the special consultative procedure (the Begley case (21)).

Alteration of Special Order

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The public notification and confirmation processes would be of little value if there were no opportunity for the public to comment on the special order resolution and for the council to respond. Unlike section 716A, section 716B expressly provides (in subsection (8)) for the special order resolution to be modified by the council as necessary following representations. However, if the modifications which the council considers necessary are such that the confirming resolution is substantially different than the initial resolution adopted, the proper procedure for the council is not to confirm the resolution but to recommence the special order process.

Legitimate Expectation

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Our comments to this point have focused on the provisions in the Local Government Act concerned with public participation in local authority decision-making. However, as already noted, an obligation to consult may arise other than from express or implied statutory requirements. In some situations, such an obligation may arise out of a “legitimate expectation” on the part of the public that consultation will occur.

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The doctrine of legitimate expectation was recently considered in the Te Heu Heu case (11). There the High Court accepted that a duty of consultation might arise in public law from a legitimate expectation of consultation based either on a promise or on an established practice of consultation. In the particular case before him, Robertson J stated that the test was:

whether objectively the Council by conduct or assurance had created a situation which gave rise to a legitimate expectation as to consultation about matters affecting the mutual interests of the two groups.

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Generally, it will be evident where a duty to consult arises from a legitimate expectation based on a promise. Where it is alleged that the previous conduct of the consulting party gives rise to such a duty, the existence of that duty will obviously depend on the previous conduct. Robertson J in Te Heu Heu expressed caution in the courts too readily finding a legitimate expectation of consultation:

One is concerned that because of the experience of this Council in this litigation local authorities may tend to shy away from tentative exploration of means of better achieving an open, frank and sympathetic relationship. It is important that the Courts do not quickly find a willingness to talk is deemed to have given rise to a legitimate expectation when all it has done is demonstrated an openness of process and a willingness to be receptive to ideas.

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Any attempt by a local authority to involve the public in the consultation and decision-making process is beneficial to the interests of participatory democracy. However, councils should ensure that any such efforts do not create a precedent that was not intended. Councils should inform all parties with whom they consult of the parties’ role in the consultative process, and ensure that those parties are aware that the decision on the matter is ultimately to be made by the council.

1: For example, the special consultative procedure and the special order procedure in sections 716A and 716B of the Local Government Act 1974.

2: Examples of the relatively few statutory provisions imposing a duty on local authorities to “consult” are listed in Appendix A on page 59.

3: New Zealand Bill of Rights Act 1990, section 3(b).

4: Ibid, section 27(1).

5: Report of the Controller and Auditor-General on Papakura District Council: Water and Wastewater Franchise, April 1998, ISBN 0-477-02852-7.

6: For example, sections 84 and 100 of the Rating Powers Act 1988.

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