Part 2: Application of Administrative Law

Public Consultation and Decision-making in Local Government.

Principles of Administrative Law

As with any decision of a local authority, a decision to consult or not to consult, and any decision made after consultation, must be made in accordance with the principles of administrative law. These principles form the grounds for judicial review of decisions. Put simply, they require that local authorities act:

  • in accordance with law;
  • reasonably; and
  • fairly.

Decisions not made in accordance with these requirements may be challenged on procedural grounds. Of the three broad grounds of review, the requirement that decisions be made fairly impacts most directly on the consultative process. However, a decision to consult or not to consult, and a decision as to what to consult on, could be challenged on the basis that the decision is unreasonable or illegal.

“In Accordance with Law”

All decisions of a local authority must be made in accordance with law. A decision will not be in accordance with law if:

  • it is not made in accordance with any procedural requirements to be followed; or
  • the decision is ultra vires the council in that it did not have authority to make the decision; or
  • the decision is made for a purpose other than that for which the power to make the decision was conferred.


The question of reasonableness is relevant at a number of different levels throughout a consultative process. Most obviously, the decision ultimately made after consultation, or upon which representations or submissions were invited, must not be “unreasonable”. However, any decision made as part of a decision-making process may also be challenged as being unreasonable.

For example, if there is no express requirement to consult, a decision either to consult or not to consult may be challenged as unreasonable. If a council decides or is required to consult, the decision as to the matter to be consulted on, and the form of consultation, may be unreasonable if it is too wide or too specific, such that it does not result in meaningful consultation.

Where there are no express criteria which a council has to take into account when determining the kind of issue upon which it will consult, it is for the council to determine that issue. Unless the decision to consult upon a particular issue is so unreasonable as to be absurd or beyond contemplation by a reasonable council properly considering relevant issues, then the decision will not be unreasonable (South Taranaki (10)).

The approach of New Zealand courts to the question of unreasonableness is more or less settled, particularly as regards local authorities, following the decision of the Court of Appeal in the Wellington City Council v Woolworths case (13). That case involved a review of the Council’s differential rating system. Richardson P, delivering the judgment of the Court, stated:

For the ultimate decisions to be invalidated as “unreasonable”, to repeat expressions used in the cases, they must be so “perverse”, “absurd” or “outrageous” in [their] defiance of “logic” that Parliament could not have contemplated such decisions being made by an elected council.


The final broad ground of review is the requirement that decision makers act fairly in coming to any decision. This ground requires decision makers to act in accordance with the principles of procedural fairness and natural justice. This requires that:

  • parties be given adequate notice and an opportunity to be heard; and
  • decisions be made free from bias and predetermination.

A local authority’s decision to consult, or the consultation process, or a decision made after consultation, could be challenged on the ground of lack of “fairness” if these requirements are not met.

Procedural Fairness – Obligations

Where a council is obliged to undertake some form of consultation, the first requirement is that interested parties must be notified so as to enable them to take part in the consultation process. Open consultation cannot occur if interested parties are not aware of their right to be involved in the process.

Generally, public notice will be sufficient notification, although some situations may require notice to be given to a party that may be particularly affected by the outcome of the consultation. This special interest may arise either by statutory provision or from a legitimate expectation held by that party that they will be consulted.

Procedural fairness requires that, once notified, the interested parties must receive a “fair hearing”. What amounts to a fair hearing will depend largely on the statutory context.

A “fair hearing” does not necessarily mean that there must be an opportunity to make oral submissions. Where the legislation simply imposes a duty to consult, or where such a duty arises from the existence of a legitimate expectation, it is generally sufficient that the public or interested parties are given an opportunity to make written submissions or comments on the proposal in question. Similarly, if the legislation simply gives a right to make submission or representations, there may not be an obligation to hear oral submissions.7

Where the legislation allows for a “hearing” or “an opportunity to be heard”, it usually imposes an obligation on the consulting party to conduct a hearing at which oral submissions may be made.8 Where there is a right to make oral submissions, or oral submissions are allowed to be made, this right should be extended to all parties. Such an opportunity must also be a real opportunity that is not unreasonably constrained by time limitations or any other restrictions.

Rule Against Bias

As part of the right to a fair hearing, procedural fairness requires that the decision maker should not be biased or prejudiced in such a way that prevents him or her from giving fair and genuine consideration to the submissions received.

There are at least three elements of public policy underlying the rule against bias:

  • accuracy in public decision-making;
  • ensuring impartiality on the part of the decision maker; and
  • public confidence in the decision-making process.

Justice should not only be done, but should manifestly and undoubtedly be seen to be done.

The rule against bias is primarily concerned with preventing the appearance of bias (apparent bias) rather than “bias in fact” (actual bias). While bias in fact will invalidate a decision, it is often difficult to determine whether a decision maker was actually biased so as to be prejudicial against, or in favour of, one outcome.

Actual Bias

Actual bias arises if the decision maker has a pecuniary or proprietary interest in the outcome of the proceedings or the decision. It does not matter that the decision maker was not in fact biased, or could not reasonably have been suspected of having allowed himself or herself to have been influenced by the pecuniary interest.

What is a Pecuniary Interest?

A pecuniary interest or proprietary interest can be considered to exist in situations where the decision maker personally stands to benefit or suffer from, or has a personal financial interest in, a particular outcome of the hearing. Examples include where the decision maker owns shares in a company that is a party to the proceedings, or owns property which is the subject of the proceedings.

Local Authorities (Members’ Interests) Act 1968

Section 6(1) of the Local Authorities (Members’ Interests) Act 1968 prohibits members of local authorities from discussing or voting on matters in which they have a direct or indirect pecuniary interest, other than an interest in common with the public. The Act sets out a number of situations that are deemed to be pecuniary interests – thereby disqualifying the member from voting on or discussing the matter under consideration.

Judgments in cases under this Act have taken a strict approach and have ruled that a pecuniary interest is a disqualifying interest “however remote” it may be. Further assistance on this topic can be obtained from our publication A Guide to the Local Authorities (Members’ Interests) Act 1968.9

Apparent Bias

Apparent bias may emerge from conflicts of interest of various kinds. A decision maker may appear to be biased if he or she:

  • participates in an appeal against a decision which he or she made;
  • has any relationship to a relevant party;
  • has any personal prejudice towards a party or a party’s case; or
  • has predetermined the issue (by making his or her mind up before hearing all the relevant information).

The line between what is a permissible interest and what is not is flexible and depends on the particular factual and legal circumstances of each case. The test for apparent bias is whether, in all the circumstances of the case, there exists “a real likelihood or danger of bias” on the decision maker’s part (Auckland Casino(1)).


A decision in the consultative process could be challenged if a decision maker has predetermined the question on which comment was sought. The rule against predetermination requires decision makers to remain open to persuasion and to not commit themselves to a decision until after having heard all the evidence. Predetermination on the part of one councillor alone may be enough to invalidate a decision.

The law recognises that in matters of policy and politics it is to be expected that decision makers, and democratically elected members in particular, will have particular views on a matter, and may have made those views public.

Even strong expressions of views do not necessarily disqualify a person from hearing the matter. This was recognised by the Court of Appeal in the Devonport Borough Council case (3). There, Cooke P said:

They may have provisional views and policies, but they must keep open minds in the sense that at the time or period of decision they must genuinely consider the issues, applying any prescribed criteria, and not merely go through the motions. In other words ... they must remain amenable to argument. Fairness obviously requires as much.

The very nature of consultation contains an inherent element of “predetermination”. Before a council or a decision maker is able to consult, they must first formulate a proposal or an issue that is to be the subject of the consultation. Even if the proposal is phrased in neutral language and is not predicated towards a particular option, it is unreasonable to expect that the council as a whole, and the individual councillors, have not formed some view about the proposal.

Provided decision makers consider the issues with open minds and remain amenable to persuasion, the fact that they hold existing views on a matter will not disqualify them. In this sense, the Courts draw a distinction between a “blank mind” and an “open mind”.

The cases clearly establish that the section 716A special consultative procedure is a situation in which a council will naturally have some form of pre-existing view (South Taranaki (10) and Auckland City Council (14)).

However, in taking any preliminary steps or making any provisional decisions, a council must be careful not to get itself into a position from which it cannot move. This situation occurred in the case of Lower Hutt City Council v Bank,10 where it was held that the Council effectively predetermined the matter by entering into a contract binding it to a particular outcome.

The fact that a council has resolved to undertake certain action if a proposal is confirmed following a special consultative procedure does not amount to predetermination. It is open to a council to refuse to confirm the proposal, if the consultative process indicates that it should not be confirmed, and begin the procedure afresh with a new proposal.

Bias/Predetermination by Officers

Although it is the decision maker who is required to retain an open mind, a decision may be challenged if an officer who is involved in the decisionmaking process – although not making the decision – improperly influences the minds of those considering the matter.

In the Gough case (6) it was alleged that there was bias on the part of a magistrates’ clerk. After setting out the test for apparent bias, Goff LJ stated:

Though in a case concerned with bias on the part of a magistrates’ clerk, the court should go on to consider whether the clerk has been invited to give the magistrates advice, and, if so, whether it should infer that there was a real danger of the clerk’s bias having infected the views of the magistrates adversely to the applicant.

On this basis, it is arguable that a decision by a council could be challenged if an officer who is biased or has predetermined the matter “infects” the minds of the decision makers.

Clearly, a line must be drawn between a decision maker being influenced by an officer’s bias, and genuine recommendations and reports given by the officer as part of his or her functions. However, it will not always be evident to a decision maker that the recommendations of an officer are motivated by bias rather than based on evidence.

7: Ealing B.C. v Minister of Housing and Local Government [1952] Ch 856.

8: Local Government Board v Arlidge [1915] AC120.

9: Revised edition, October 1998, ISBN 0 477 02856 X.

10: [1974] 1 NZLR 545.

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