Councils face the risk of claims whenever they are involved in any aspect of residential or commercial development that requires some form of regulatory input. This risk is there for metropolitan and rural councils alike. The following lists example circumstances out of which claims typically arise:
a) Over the counter advice given by council officers
A member of the public seeks advice over the counter as to whether they can subdivide a property that they intend buying. The council officer checks the district plan, makes an error and says that the land is sub divisible. It has in fact already been subdivided. The member of the public buys the land, files an application (including costs) which is rejected. They then seek to recover the amount by which they say they paid too much for the property (believing it to be sub divisible) and the wasted costs in making the application for the consent.
b) Pre-lodgment meetings
A developer seeks a meeting with council officers to discuss his plans to develop semi-rural land. He says that he is told at the meeting that there are no particular constraints on the site that would bar him from proceeding with the development in the way he has described to the council officers. There are no written minutes of the meeting. He proceeds to engage a number of consultants and files an application. He is then advised by the council that due to the presence of a water course any development will need to be far more restricted than previously considered. The developer claims that because of the delays that then occur from having to redesign the development, Housing New Zealand withdraws from an agreement to lease back from him the houses it intended to lease.
c) Processing resource consents
The council issues a resource consent allowing owners of land to add additions to their house. It becomes apparent (after building has commenced) that the additions infringe the height to boundary ratio. The neighbors seek an order that work ceases and the offending additions are removed. They succeed. The owners sue the council for the wasted costs.
d) Failing to check dimensions on site
The council issues a resource consent allowing owners of land to build their house. The building control officer does not identify that the house has been built outside of the prescribed building platform and over a mainline sewer. Towards the end of the building process the issue is identified and the council requires the owners to demolish part of the house. The owners sue for wasted costs and lost amenity.
Control of Water
It seems that councils in New Zealand face a number of challenges in management of water. They might seek to control water within their jurisdiction for a community benefit but then receive complaints from others that they are now subject to more inundation than they were previously. The claims more often than not concern large amounts of money.
Typical claims include:
a) Failing to monitor the conditions of a resource consent
A claim is made that the council has failed to adequately monitor the conditions of a resource consent issued to the claimant's neighboring landowner, the result of which is that flooding damage has occurred to the claimant's property.
b) Negligent construction of flood banks
The council carries out flood bank improvements. The flood bank fails causing damage to a farmer's crops. He alleged that the council was negligent in its construction and maintenance of the flood bank.
c) Issue of resource consent
The council grants a resource consent allowing the deposit of clean fill in a swampy gully on a property. The swampy gully in fact forms part of a natural stormwater path. This results in water being discharged onto neighboring properties.
As the subdivision of land in areas perhaps thought previously undesirable to develop occurs, councils become more exposed to claims relating to subdivisions. These claims can result in multiple claims from both the developer and individual land owners.
They typically arise where the land was previously swampy, engineering investigation at the time of the subdivision consent was inadequate and/or it would have been appropriate for further details to be carried out in terms of site investigation at the time individual consents were issued.
Councils are under increasing pressure to ensure that they collate information available to them in an appropriate way and make proper decisions as to what information should be released to the public.
The typical claims that can be made are:
a) Inadequate collation or recording of information meaning that once a land information memorandum is released, it does not contain adequate or accurate information. For example the number and type of water rights in respect of any given property.
b) It becomes aware of information but does not move quickly enough to note the relevant property files. In the interim the property is sold to an unsuspecting purchaser.
Over the years there have been many and varied claims against councils. Typical examples are:
a) Shooting the wrong dog.
b) Entering properties to take enforcement action where the council officer concerned does not have the necessary delegated authority or warrant.
c) Closing down a business due to health concerns.
d) Defamation of a local business.
And the list goes on.