How Do I Object to Charges and Costs Issued by Council?

Councils have the power to charge for costs incurred for the work they carry out under the Resource Management Act 1991 (RMA), including for costs such as staff time spent processing or reviewing resource consent applications.[1]

Any charge set by a council must follow a prescribed consultative process.[2] A council must ensure that fixed charges are reasonable and reflect what is proportionate to the size and extent of the benefit obtained by the applicant, are set out in a clear, easily understandable manner and set either as specific amounts or calculated using a scale or formula adopted by the council.[3]

Most charges set by a council are straight forward to determine. Generally, what is stated in the fees and charges schedule is what will be charged. The Local Government Act 2002 (LGA) also requires that these charges be published and maintained in a manner that is accessible to the public.

However, when it comes to charges under the RMA the position is not always as clear cut. For example, a council may set a fixed charge for what it expects to be a straightforward consent application, but where an application is more complicated, it may involve hearings, the preparation of reports, and ongoing monitoring throughout the development. These costs are not always predictable.

As a result, these costs cannot be fixed and in order to recover the actual and reasonable costs incurred by council for its work, a council may invoice additional charges for the additional work completed, on top of the fixed charge.[4]

When Charges Can Be Objected To

Fixed charges cannot be objected to if they were correctly set and can only be challenged by way of judicial review on the basis of an error of law.

Only additional charges can be formally objected to under section 357B of the RMA.[5] Importantly, any additional charge must be supported by an initial fixed charge; if council fails to set a fixed charge, the additional charge can be deemed invalid.

Challenging Additional Charges

When challenging additional charges, a council must be able to show that:

• the original fixed charge was inadequate to recover its actual and reasonable costs;
• the person required to pay the additional charge is the same person who was liable for the original fixed charge; and
• the additional charge was calculated using the same principles applied when the original charge was set.

In doing so, a council must consider:

• What are the council’s actual costs incurred in relation to the activity (including costs charged to it by external consultants)?
• Are those (actual) costs reasonable in relation to the activity, that is, do they meet the section 36(5) threshold in the LGA?
• Are those costs satisfied by the fixed charge?
• If not, what “additional charge” should be levied to recover the balance of the actual and reasonable costs?
• Can the person who initiated the activity be required to pay that charge because they satisfy one of the criteria in section 36AAA(3) of the LGA?
• Is it a case where, in the exercise of the council’s absolute discretion under s 36AAB of the LGA, either the whole or part of the fixed charge or the additional charge should be remitted?

The Objection Process

An objection clearly stating the reasons must be made in writing to council within 15 working days of being notified of the charge, unless a council allows a longer timeframe.[6]

A council must consider the objection as soon as reasonably practicable and if the matter is not resolved, council must give at least five working days’ notice of the date, time, and place of the objection hearing.[7]

Council will appoint someone internally to consider the costs (at no cost to the objector).  Following this if there are still concerns about the charges, there is the option to have a commissioner independently review the charges, although this usually comes at an additional cost.

Cost Estimates and Escalating Charges

If you are dealing with a matter likely to result in higher costs than expected, you are entitled to request a cost estimate.[8] While councils are not subject to a strict statutory obligation to proactively update applicants on costs, the courts have indicated that it is good practice for councils to keep applicants informed as costs escalate.[9]

If you are not satisfied with the outcome of your objection, you may also appeal the decision to the Environment Court within 15 working days of the objection decision being notified.[10]

If you have concerns about council charges and are considering an objection, please get in touch with a member of our Environmental team.

[1] RMA, s 36.

[2] LGA, Section 36(3).

[3] LGA, Sections 36(2) and 36AAA.

[4] LGA, Section 36(5).

[5] RMA, Section 357B.

[6] RMA, Section 357C.

[7] RMA, Section 357C.

[8] LGA, Section 36(6).

[9] Shirtcliff v Timaru District Council [2020] NZEnvC 178; [2020] ELHNZ 259 at [58].

[10] RMA, Section 358.

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.