Honours even in Brown vs Council row

The Auditor-General has ruled that Mayor Wayne Brown's company Waahi Paraone Ltd. must pay rates and charges that have been in dispute, although neither party escaped the office's inquiry unscathed.

The office's finding noted that council and its Mayor had been in dispute for some time over rates and charges relating to a subdivision in Kerikeri in 2010/11 and 2011/12. The issues were legally and factually complex, Mr Brown refusing to pay the disputed sums until the matter was resolved.

Both parties had sought the Auditor-General's help, Mr Brown indicating that the company would pay any amount that was found to be owed.

"We concluded that the rates payments that the council had been seeking were properly due," the finding, released on Monday, said.

"At May 20, 2012, the company owed the council $19,302.82 in unpaid rates, made up of sewerage rates and penalties. Mr Brown paid this amount on May 26, 2012, after being advised of our conclusion in an earlier draft of this report.

"We also concluded that the other charge that the council had asked to be paid in September 2011 was properly due. This charge was the balance of an agreed $150,000 contribution towards sewage reticulation costs that had not yet been paid. In late May, the figures provided by the council suggested that the amount still owing was $135,833.09. Mr Brown estimated that the amount was closer to $55,000."

It had taken some time to complete the final calculations because neither party had particularly clear or comprehensive records, the finding added. It was also complex because the legal status of some future obligations to pay an amount was not particularly clear.

The Auditor-General concluded that incomplete information meant neither amount was correct. The "best estimate" of the sum owing was $76,487.09.

It was noted that the council has gone outside normal processes several times, and made unusual agreements. Those decisions were made in good faith to help find solutions for Mr Brown, but they left the council in a more uncertain position when things went wrong.

The council had also made a number of administrative and calculation mistakes, which had contributed to uncertainty whether it was charging the correct amounts.

Meanwhile Mr Brown had told the Auditor-General and the council that he would like the council to remit penalties that had accrued while the review was carried out.

"We accept that the complexity of the issues, competing priorities for us and the council, and the problems we had in obtaining accurate information from the council and Mr Brown meant that our review took much longer than anyone expected," it continued.

"There is an argument that it would be appropriate for the council to consider remitting the penalties that accrued between October 2011 and May 2012.

"However, it is also relevant that the council has spent a considerable amount of staff time and money on this dispute, much more than the total penalties. The council must also consider how it would treat any other ratepayer who withheld rates for nearly two years, given that the normal legal obligation ... is to pay rates and then dispute them ... penalties will generally accrue if a person does not pay rates while they are disputed.

"In the end, Mr Brown is entitled to ask the council to remit some or all of the penalties that accrued while the rates were not paid ... Although it is doubtful whether this situation fits within any of the criteria in the council's policy statement on the remission of penalties, we note that the council reserves a general discretion to remit rates and penalties in other situations."