NEW ZEALAND FOREST OWNERS ASSOCIATION INC v WAIROA DISTRICT COUNCIL [2022] NZHC 761

NEW ZEALAND FOREST OWNERS ASSOCIATION INC v WAIROA DISTRICT COUNCIL [2022] NZHC 761 [28 April 2022]IN THE HIGH COURT OF NEW ZEALANDGISBORNE REGISTRYI TE KŌTI MATUA O AOTEAROATŪRANGANUI-A-KIWA ROHECIV-2021-416-000016[2022] NZHC 761BETWEEN NEW ZEALAND FOREST OWNERS ASSOCIATION INCApplicantAND WAIROA DISTRICT COUNCILRespondentHearing: 14-15 February 2022Appearances: L Clark and J Bell-Connell for Applicant M Lawson for RespondentJudgment: 28 April 2022JUDGMENT OF GRICE JContentsIntroduction [1]Background [4]The claims [9]Judicial review principles [16]Local authorities and rating decisions [20]Personal characteristics [33]Mistake [53]Mandatory considerations [54]The scheme of the legislation [58]The process of the review of the rating system [71]The Statement of Proposal for the rating change [75]Submissions on the Statement of Proposal [100]The decision [105]The evidence in this case [111]The issues [114]The negative impact of forestry on community wellbeing [119]The lack of constraints on the forestry industry to pay rates [136]Redistributing rates to rural and forestry ratepayers with an intention of making rates more affordable for residential and commercial ratepayers [142]Discouraging forestry as land use in the Wairoa District [162]Taking into account the apparent ability of landowners to pay rates [187]Failure to take into account climate change and the environmental wellbeing of the community [194]Failure to take into account the work of the Equitable Rates Working Group [215]Conclusion [220]Summary — the claims [221]First ground of review: improper purpose [222]Second ground of review: taking into account legally irrelevant considerations[225]Third ground of review: failure to have regard to relevant considerations [227]Fourth ground of review: mistake of fact [231]Fifth ground of review: unreasonableness [234]Costs [237]Introduction[1] The New Zealand Forest Owners Association Inc (NZFOA) represents seven forestry owners who between them own a substantial portion of the total forestry land in the Wairoa District.1[2] In 2021 the Wairoa District Council overhauled its rating system and introduced five categories of land use to which various differential rates would apply. This resulted in substantial rates increases for the NZFOA members. They say that the rating decision was unfair and unreasonable and in particular improperly targeted forestry because they were wealthy. In addition, the Council used its rating powers to try and discourage the conversion of farmland to forestry because it believed use of land for forestry was detrimental to the wellbeing of the district.[3] NZFOA also says the Wairoa District Council failed to take into account mandatory relevant considerations, namely environmental wellbeing and climate change, as well as making mistakes of fact. Those mistakes included the assumption that forestry was a cause of "negative wellbeing" for the district and that forestry owners had no constraints on their ability to pay disproportionately more in rates than other ratepayers. NZFOA also says the Council acted unreasonably.Background[4] The Wairoa district has a small rating base with a population of 8,367. 2 Over the last 20 to 30 years there have been substantial changes in the Wairoa community. Its population now has a high level of unemployment and low median income. The Council had been struggling with a complex rating system which was the result of tinkering over the years. The parties agreed that the rating system needed an overhaul.[5] The Council adopted the special consultative process under the Local Government Act 2002 to undertake the review of the rating system. It was not1 Between them, they own 51,839 hectares of approximately 77,000 hectares land recorded by the Wairoa District Council as forestry land. When I refer to NZFOA I refer to both the organisation and those members.2 First affidavit of Keith Malcolm Dolman, 12 October 2021.required to adopt that process in order to strike rates in the ordinary course, but it considered the significance of the review justified its adoption.3[6] The preparation of a Statement of Proposal followed the Council decision in July 2020 to undertake a review of the rating system. The preparation of the Statement of Proposal followed a series of pre-engagement meetings with the community which provided information to feed into the drafting of the Statement of Proposal.[7] The Council approved a Statement of Proposal setting out a basis for a new rating system on 3 November 2020. Consultation followed and Council hearings on 15 and 16 of December 2020. The Council deliberations process took place in December 2020/January 2021.[8] NZFOA and its members made submissions along with many others. NZFOA had also been involved in a group working with the Council referred to by NZFOA as the Equitable Rates Working Group. That report was completed about 27 November 2020.The claims[9] The first ground of review alleges that the Council acted unlawfully because it focussed on the nature and characteristics of the ratepayers rather than the property being rated. It used its powers under the Local Government (Rating) Act 2002 (the Rating Act) to redistribute the burden of providing services from one group of ratepayers onto another (the forestry owners). In addition, it used its powers under the Rating Act to discourage conversion of productive land to forestry because it had no powers to regulate against conversion of farmland to forestry use.[10] The second ground of review is that the Council took into account a legally irrelevant consideration in that it took into account the wealth or ability to pay of forestry landowners as a personal characteristic, rather than the characteristics of the land.3 Affidavit of Craig Little (Mayor of Wairoa), dated 18 November 2021, at [33].[11] The third ground of review is that the Council failed to take into account mandatory relevant considerations, being environmental wellbeing and climate change.[12] The fourth ground of review is that the Council relied on a mistakes of fact, namely that forestry use was a cause of "negative wellbeing" for the district and that forestry owners had no constraints on their ability to pay disproportionately more than other ratepayers.[13] The fifth ground of review is unreasonableness. Again, this ground is largely based on allegations that the Council unfairly targeted the forestry sector and that there was no "credible evidential foundation" for the Council's view that forestry creates negative impacts on the Wairoa community.[14] The applicant accepted that the Council has authority to levy rates in accordance with the Rating Act and that its members who live or own property in the district are ratepayers who should pay their fair share of rates.[15] No issue is taken with the implementation of the special consultative process, nor is there any issue raised in relation to consultation on the Statement of Proposal. Additionally, no grounds were advanced based on bias or predetermination of the mayor or Council in relation to the rating decisions.Judicial review principles[16] There was little dispute between the parties as to the law in general in relation to judicial review and in particular as it related to local authorities and rating decisions. It was the application of the law to the facts on which the parties disagreed.[17] In New Zealand the courts have approached judicial review bearing in mind that it is a supervisory jurisdiction to ensure that powers are exercised in accordance with law.[18] In Coromandel Watchdog of Hauraki (Inc) v Minister of Finance, Simon France J noted that judicial review was intended to be a comparatively simpleprocess of "testing that public powers have been exercised after a fair process, and in a manner, which is both lawful and reasonable." 4[19] To ascertain the relevant powers, it is necessary to consider the statute or other regulation to identify the limitations as a matter of statutory interpretation. 5 The extent of the decision-making freedom given by the particular powers ultimately depends on the statute or other instrument that bestows them.6 As Cooke J said in Patterson v District Court, Hutt Valley: 7 In every judicial review case the Court's role is to review whether a decision is made in accordance with law. In all cases it does so in the same dispassionate way. The intensity with which it performs that task does not change. But the extent to which powers are substantively or procedurally controlled by legal limits varies considerably. It is the nature and extent of the legal controls that vary between cases, not the intensity with which the Court assesses compliance with them.Local authorities and rating decisions[20] In the Wellington City Council v Woolworths New Zealand Ltd (No 2) case, a differential of 68:32 commercial to residential contribution to the rates applied under the council's new differential rating system.8 The High Court had made a declaration that the Council acted unreasonably and unfairly towards the respondents. It had granted relief, directing the Council to determine the lawful rates and refund the excess rates paid by the respondents.[21] The Court of Appeal allowed the appeal. It took the view that for the ultimate decisions of the local authority to be invalidated as "unreasonable", 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."9 In that case it was common ground that Council had: weighed all the relevant considerations; not had regard to irrelevant considerations; consulted adequately;4 Coromandel Watchdog of Hauraki (Inc) v Minister of Finance [2020] NZHC 1012 at [13], citingBNZ Investments Ltd v Commissioner of Inland Revenue HC Te Whanganui-a-Tara | Wellington CIV-2006-485-697, 7 December 2006 at [15].5 Patterson v District Court, Hutt Valley [2020] NZHC 259 at [14].6 At [15].7 At [16].8 Wellington City Council v Woolworths New Zealand Ltd (No 2) [1996] 2 NZLR 537 (CA) at 539.9 At 552.followed all the appropriate statutory procedures and processes; and made its rating decisions in good faith and what it judged to be the best interests of the city and its ratepayers. 10[22] The Court noted that as a matter of statutory interpretation a reading of the statutes (the Rating Powers Act 1988, the Local Government Act 1974 and the Valuation of Land Act 1951) showed that the powers for the making and reviewing of rates were to enable the local authority to undertake its statutory functions and to perform the relevant activities for the benefit of the community.11 A territorial authority had very wide rating powers and the exercise of those powers inevitably affected and was intended to affect the relative incidence of rates on properties within the district.12 The Court emphasised that rating required the "exercise of political judgment by the elected representatives of the community" and that: 13 [t]he economic, social and political assessments involved are complex. The legislature has chosen not to specify the substantive criteria but rather to leave the overall judgment to be made in the round by the elected representatives.[23] The Court of Appeal emphasised that rating authorities must observe the purposes and criteria specified in the legislation. They needed to call their attention to matters they are bound by statute to consider and they must exclude considerations which on the same test are extraneous. The Court of Appeal went on to say that: 14 discretion is not absolute or unfettered. It is to be exercised to promote the policy and objectives of the statute. Even though the decision maker has seemingly considered all relevant factors and closed its mind to the irrelevant, if the outcome of the exercise of discretion is irrational or such that no reasonable body of persons could have arrived at the decision, the only proper inference is that the power itself has been misused.To prove a case of that kind requires "something overwhelming" [24] The Court of Appeal emphasised that the approach did not require: 1510 At 552.11 At 540–544.12 At 544.13 At 553.14 At 545 (citations omitted).15 At 546. a close correlation between benefits provided to the particular sector and rates levied on that sector. Given the nature of the imponderables involved it does not call for an elusive search for a direct relationship between services and benefits.[25] The services "may give rise to benefits which are public rather than private and are for the benefit of the district in general." 16[26] The commercial ratepayers said that they were inequitably being required to pay a share of the taxes that was not commensurate with the benefits they received from the local authority's services. The Court of Appeal said that other factors were also relevant to the Council's decision, emphasising the complexity and "inherent subjectivity of any benefit allocation" by the Council.17 A relative benefit analysis as a definitive criterion was rejected. The Court of Appeal said: 18 The relative interdependence of the commercial and residential sectors suggests a degree of artificiality in any such exercise. The various assessments in this case, so apparently intuitive and unable to be supported by empirical data as they are, demonstrate this.[27] The Council's assessment was a very broad-brush measure of relative benefits. 19 The Court also emphasised that the Council was not required to adopt a clean slate approach. Rather, it was: 20 entitled to have regard to the starting position, to weigh the impact of changes on the types of properties and, looking to the interests of its ratepayers (its fiduciaries), to consider the acceptability to ratepayers of change and sudden change in response to quite extraordinary changes in capital values. Also relevant were the tax effect and the ability to pass on rates.[28] The Court of Appeal has also emphasised that in a judicial review, the Court does not substitute its own decision for that of the decision-maker. 21 In C P Group Ltd v Auckland Council, adopting the approach of the Court of Appeal in Waitakere County Council v Lovelock, the Court said that it first examined the scheme of the legislation16 At 546.17 At 552.18 At 552.19 At 552.20 At 552.21 C P Group Ltd v Auckland Council [2021] NZCA 587 at [83].and the nature and scope of the rating powers and statutory processes and then the decision.22[29] In Waitakere City Council v Lovelock, the Court of Appeal considered a challenge to the rating differential applied to high value properties. 23 The High Court had set aside as unreasonable the rating decision to introduce a differential rating for higher valued, inner city residential properties.[30] The Court of Appeal allowed the appeal and set aside the decision of the High Court. It confirmed that the Wellington City Council v Woolworths New Zealand (No 2) decision stated the law. The Court of Appeal found that the rating committee had thoroughly canvassed the issues and it was aware, as was the Council, of the steepness of the rating curve and the inequities alleged by the high value property owners. The appellate court noted that the decision made by the Council was not beyond the bounds of reasonableness. 24 It noted the test for impugning the rating determination was a high one on the grounds on unreasonableness. 25 The Court held that the High Court had erred in its interpretation of the Wellington City Council v Woolworths New Zealand Ltd (No 2) case and only in an extreme case would the Court would interfere. The Court reiterated that proper respect has to be given to the role and responsibilities of democratically elected councils. 26[31] The Court of Appeal noted a Court could intervene only if the decision of the Council was irrational or such that no reasonable body of persons would have arrived at that decision. A review was not an appeal on the merits. Blanchard J noted: 27 the inappropriateness of judicial intervention in the rate-striking process of a local authority save where it is obvious that the council's process and its outcome is indefensible.[32] His Honour said that a less restrained approach may be taken against other types of Council decision, but that rate fixing was a "peculiarly inappropriate area for22 At [84], citing Waitakere City Council v Lovelock [1997] 2 NZLR 385 (CA).23 Waitakere City Council v Lovelock, above n 22.24 At 397.25 At 397 and 419.26 At 396–397 and 419.27 At 419.the involvement of Judges, as a consideration of the rating problem confronting the local authority amply revealed to us." 28Personal characteristics[33] I now turn to an issue that the applicant raised concerning the prohibition on taking into account the personal characteristics of ratepayers, such as wealth, as opposed to characteristics or attributes of the land.[34] The Court of Appeal in Wellington City Council v Woolworths New Zealand Ltd (No 2) observed that rates are levied on property and "not on ratepayers as such". 29It noted that the criteria specified under s 81 of the Rating Powers Act were directed to the characteristics of property rather than of ratepayers. 30[35] The applicant pointed to the Australian Queensland Court of Appeal decision in Xstrata Coal Queensland Pty Ltd v Council of the Shire of Bowen.31 In that case the Court was considering an appeal from an unsuccessful judicial review. The Court of Appeal found that the primary Judge had taken the individual wealth of the ratepayers into account as a factor when determining the differential rates in that case. 32 The Court went on to say that direct consideration of the attributes of the owner, rather than the land, as a separate and distinct criterion was an irrelevant consideration. 33 The appellate court found that the primary court had decided that the basis of capacity to pay was imputed to the appellants by reason of their status as coal miners but that was irrelevant to the process of determining rates. 34 It noted that the wealth of the landowner, not the value or some other attribute of the property to be rated, had been the basis for the rates determination by the primary court.[36] The primary Judge in Xstrata had also said it was "implicit in a progressive tax system" that the personal attribute be taken into account.35 The Court of Appeal said28 At 420.29 Wellington City Council v Woolworths New Zealand Ltd (No 2), above n 8, at 546.30 At 546.31 Xstrata Coal Queensland Pty Ltd v Council of the Shire of Bowen [2010] QCA 170.32 At [29].33 At [31].34 At [35]–[36].35 At [38].this was not an appropriate reason as there was no basis upon which the council could make valid comparisons of wealth. Another reason given by the primary Judge was that the unimproved value of land to some extent was reflective of the assets owned by a taxpayer. The appellate court said the value of land said nothing about ability to pay. 36 A local authority had limited ability if any to assess the financial capacity of its ratepayers. In addition, wealth fluctuates from time to time and so a criterion based on wealth was inconsistent with Council land valuations, which formed the stable basis for setting local authority budgets.37[37] Personal wealth as a factor in the setting of rates was again considered by the Queensland Court of Appeal in Island Resorts (Apartments) Pty Ltd v Gold Coast City Council.38 The appeal was on the grounds that the primary Court had taken into account the personal characteristics of the owner and occupant to set differential rates. In that case, the differential rating imposed on land used for accommodation for workers or itinerants was higher than that imposed on land used for public accommodation. The question was whether the rates had been set on the basis of personal characteristics or characteristics of the land. The primary Judge had dismissed the judicial review. The Court of Appeal upheld that decision on appeal. Jackson JA for the Court noted that Xstrata was not binding authority requiring rating categories to be decided by reference only to the attributes of the land. 39 He also noted that general rates are for services, facilities and activities that are supplied for the benefit of the community in general, rather than a particular person such as an owner or occupier of the land. 40[38] The Appellate Court said that the levy of differential general rates is "inexorably connected" to and informed by the subject of the tax, being the ownership of the rateable land and the value of that land.41 The Court referred to the "seminal case" of Wellington City Council v Woolworths New Zealand Ltd (No 2).4236 At [39].37 At [41].38 Island Resorts (Apartments) Pty Ltd v Gold Coast City Council [2021] QCA 19, (2021) 7 QR 84.39 At [65].40 At [58].41 At [50].42 At [46].[39] While the Court of Appeal in Island Resorts did not specifically reconsiderXstrata it made it clear that while personal characteristics such as wealth of the owner cannot be the determining factor when setting a rate differential, it was a proper consideration in general terms.[40] A case approved by the Queensland Court of Appeal in Island Resorts was the decision of the Supreme Court of Queensland in Ostwald Accommodation Pty Ltd v Western Downs Regional Council.43 In that case Jackson J had noted that the use of land is a valid criterion to establish a rating category, and that substantial latitude was to be allowed to a local authority to choose criteria for determining rating categories of land. 44 In that case it was argued the Council had wrongly taken into account higher demands on its services due to the itinerant accommodation land use. The Court noted that Xstrata was based on a factual finding by the local authority that the claimants had the personal capacity to pay independent of any quality of the subject land. 45[41] Jackson J in Island Resorts said the use of the land was a relevant consideration. 46 He went on to say that the Court in Xstrata had accepted the argument that relevant considerations include "the use to which the land might be put, the burden that the land or its use may have upon the Council's budget and the value of the land including its potential to earn income for the land owner." 47[42] Jackson J noted the Court of Appeal in Xstrata had accepted the respondent's submission that a relevant consideration was the financial capacity to pay that could be taken into account if it was derived from the potential of the land to generate wealth. 48 The economic use and value of the land may be taken into account as a relevant factor.49 In particular, the use of land for a major earning activity is a relevant consideration in making a decision to establish a rating category as well as levy differential general rates. 5043 Ostwald Accommodation Pty Ltd v Western Downs Regional Council [2015] QSC 210, (2015) 2 Qd R 14.44 At [57] and [63].45 At [117].46 At [112].47 At [114].48 At [115].49 At [120].50 At [125].[43] Jackson J noted that the relevant considerations the local authority is required to consider may depend on the matters raised during consideration of the exercise of the power. 51[44] The parties did not explore in any depth the differences between the relevant Queensland rating law and that in the present case. Therefore some care must be taken when considering those cases. In addition, the Queensland cases are fact-specific. The decision in Xstrata turned on a finding of fact by the primary Judge. Subsequently, the Court of Appeal decision in Island Resorts clarified that the financial capacity to pay was a relevant consideration if it was derived from the potential of the land to generate wealth. The ownership of the land and the value of the land were "inexorably connected." 52[45] In any event, as Jackson JA noted in Island Resorts, Xstrata is not authority for proposition that the capacity of the owner to pay the different rate is an irrelevant consideration "except in the sense that it is the personal capacity of an owner independent of any quality of the land or its use." 53[46] The applicant also referred to the recent Court of Appeal decision in C P Group Ltd v Auckland Council.54 In that case a targeted rate that had been openly referred to by the Council as a "bed tax" was under scrutiny. It was common ground that the Council did not have the power to impose a "bed tax" per se. Instead it had attempted to do so by setting a targeted rate on some accommodation providers. The appellants claimed that the Council had failed to adequately identify and measure the benefits arising from the activity, "both generally and for those to be subject to the targeted tax". 55 The appellants argued the Council did not assess the benefit with any rigour "because it assumed accommodation providers could pass the cost of the increased rate to their guests in the same way as bed taxes or visitor levies are applied overseas." 5651 At [133].52 Island Resorts (Apartments) Pty Ltd v Gold Coast City Council, above n 38, at [50].53 At [42].54 C P Group Ltd v Auckland Council, above n 21.55 At [9].56 At [9].[47] It was common ground that four other categories of ratepayers benefitted to a significantly greater extent than the targeted group did from the benefits said to accrue to the targeted providers. 57[48] The appellants' evidence in that case was that the rate could not be passed through to guests due to the structure of the market and its sensitivity to room rate increases.58 As a matter of fact the Court agreed that the "passed through" assumption was fundamentally flawed.59 The Court of Appeal found that the Auckland Council had a: 60 fundamental misconception about pass through, which was not relevant under the statute in any case, [which] diverted attention from a proper assessment of the distribution of the benefits and corrupted the analysis.[49] The Court concluded the Council had not adequately considered the benefit of the funded activity to the targeted group, nor the distribution of the benefits across the community, including other identifiable groups, who were not visited with the "bed tax". 61 This was because the assessment was carried out at the end of the process to: 62 reverse engineer a justification for a scheme that had been formulated without regard to these criteria in an attempt to achieve an outcome that was beyond the proper scope of a rating mechanism, namely to obtain an additional source of revenue from non-ratepayers, being visitors to Auckland.[50] The Court of Appeal said the failure of the Council to consider the mandatory relevant consideration (the benefit of the funded activity to the targeted group and the distribution of benefits across the community including other identifiable groups) was an error which went to the heart of the decision.63[51] The claim based on unreasonableness claim had a considerable overlap with that based on non-compliance with the relevant provision of the Act. 64 The Court of57 At [9].58 At [69].59 At [111].60 At [111].61 At [123].62 At [123].63 At [124].64 At [141].Appeal indicated that had it been necessary for it to determine the ground of unreasonableness, it would likely have found it made out, given the combination of the failure to consider adequately the distribution of benefits and the imposition of such a disproportionate burden on the targeted group.65[52] In the course of the decision, the Court of Appeal in C P Group Ltd v Auckland Council referred to the decision in Wellington City Council v Woolworths New Zealand (No 2) saying: 66[136] While Woolworths should continue to be regarded as the leading authority on the exercise of general and differential rating powers, we consider the broad policy considerations that were at the forefront in that case do not apply with equal vigour here. In Woolworths this Court emphasised that there are constitutional and democratic constraints on judicial intervention in cases involving wide public policy issues. The larger the policy content, the more the decision-making is within the customary sphere of those entrusted to make it, the less inclined the Court should be to interfere. The Court applied those principles in declining to interfere with complex and inherently subjective decisions about benefit allocation affecting the general rate and differential rating. In contrast, here we are dealing with a narrowly targeted rate that imposed a substantial burden on a very small subset of ratepayers. The only effective check on local authority decision-making for the small group is through recourse to the courts on judicial review. The courts may be expected to scrutinise more closely a decision that disproportionately affects only a small group of ratepayers and for whom the democratic process offers little protection.Mistake[53] The application also raises mistake as a ground of review. In E v Secretary of State for the Home Department the Court of Appeal of England and Wales noted that a mistake of fact giving rise to unfairness is a separate head of challenge. 67 "Without seeking to lay down a precise code", the Court listed the "ordinary requirements" under this head as follows: 68 First, there must have been a mistake as to an existing fact, including a mistake as to the availability of evidence on a particular matter. Secondly, the fact or evidence must have been "established", in the sense that it was uncontentious and objectively verifiable. Thirdly, the appellant (or his advisers) must not been have been responsible for the mistake. Fourthly, the65 At [141].66 C P Group Ltd v Auckland Council, above n 21. Footnotes omitted. Emphasis added.67 E v Secretary of State for the Home Department [2004] QB 1044 (CA) at [66].68 At [66].mistake must have played a material (not necessarily decisive) part in the tribunal's reasoning.Mandatory considerations[54] Finally, in relation to mandatory considerations, counsel cited Secretary for Justice v Simes, in which the Court of Appeal stated: 69[48] It is not in dispute that, if the statute conferring the relevant discretion expressly or by implication identifies considerations required to be taken into account by the decision maker as a matter of legal obligation, then regard must be had to those matters.70[55] The Court in that case then cited Cooke J's description of the limits of judicial review on this ground from CREEDNZ Inc v Governor-General, 71 in which Cooke J said: 72What has to emphasised is that it is only when the statute expressly or impliedly identifies considerations required to be taken into account by the authority as a matter of legal obligation that the Court holds a decision invalid on the ground now invoked. It is not enough that a consideration is one that may properly be taken into account, nor even that it is one which many people, including the Court itself, would have taken into account if they had to make the decision.Questions of degree here can arise and it would be dangerous to dogmatise. But it is safe to say that the more general and the more obviously important the consideration, the readier the Court must be to hold that Parliament must have meant it to be taken into account.[56] The Court went on to note: 73[50] In cases where the criteria stipulated are not exhaustive, or where none is specified, the considerations governing the exercise of discretion must be ascertained from the subject matter as well as the scope and objects of the relevant legislation: Keam v Minister of Works and Development. Decision makers must approach mandatory relevant considerations with due deliberation and an open mind. Mandatory considerations may not be "rebuffed by a closed mind so as to make the statutory process some idle exercise". However, the weight to be given to mandatory considerations is a matter for the decision maker.69 Secretary for Justice v Simes [2012] NZCA 459, [2012] NZAR 1044 at [48]–[50] (some citations omitted).70 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 228, [1947] 2 All ER 680 (CA) at 682 per Lord Greene MR.71 Secretary for Justice v Simes, above n 69, at [49].72 CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 (CA) at 182–183.73 Secretary for Justice v Simes, above n 69.[57] Following the approach adopted by the Court of Appeal in both Wellington City Council v Woolworths New Zealand Ltd (No 2) and Waitakere City Council v Lovelock, 74 I now set out the scheme of the legislation to determine the nature and scope of the rating powers and the statutory processes governing their exercise, before reviewing the relevant facts, including the processes followed by the Council and the decisions in question, to determine whether it discharged its legal responsibilities.The scheme of the legislation[58] The Council is entitled to charge rates under the Rating Act. The Local Government Act 2002 and the Rating Valuations Act 1998 are also relevant. Any rating decision of a local authority involves the interplay between the Local Government Act and the Rating Act.[59] In reviewing the predecessors of those pieces of legislation in Wellington City Council v Woolworths New Zealand Ltd (No 2), the Court of Appeal said: 75Reading the statutes together it is obvious that the provisions for making and reviewing rates are to enable the local authority to carry out its statutory functions and to perform the activities which it undertakes for the benefit of its community. A territorial authority has very wide rating powers. The exercise of those powers inevitably affects and is intended to affect the relative incidents of rates on properties within the district.[60] These comments remain relevant. The purpose of the Rating Act, set out at s 3 of that Act, is as follows:3 PurposeThe purpose of this Act is to—(a) promote the purpose of local government set out in the Local Government Act 2002 by—(i) providing local authorities with flexible powers to set, assess, and collect rates to fund local government activities:(ii) ensuring that rates are set in accordance with decisions that are made in a transparent and consultative manner:(iii) providing for processes and information to enable ratepayers74 Waitakere City Council v Lovelock, above n 22, at 390.75 Wellington City Council v Woolworths New Zealand Ltd (No 2), above n 8, at 544.to identify and understand their liability for rates; and(b) facilitate the administration of rates in a manner that supports the principles set out in the Preamble to Te Ture Whenua Maori Act 1993.[61] Section 14 of the Act defines categories of rateable land for the purposes of setting general rates under s 13(2). It provides:14 Categories of rateable land for setting general rate differentiallyFor the purposes of section 13(2)(b), categories of rateable land are categories that—(a) are identified in the local authority's funding impact statement as categories for setting the general rate differentially; and(b) are defined in terms of 1 or more of the matters listed in Schedule 2.[62] Ratepayer information is entered on the rating information database and district valuation role.76 Section 27 of the Rating Act requires the Council to keep the rating information database. It is searchable and the official record of the information contained therein.77[63] Schedule 2 of the Act identifies the matters that may be used to define categories of rateable land. These are similar to the former provisions of s 81 of the Rating Powers Act. The first matter that may be used to define categories of rateable land is the use to which the land is put.[64] Section 23 of the Rating Act requires rates to be set by resolution of the local authority. The rates set must relate to a financial year or part of a financial year and be set in accordance with the relevant provisions of the local authority's long-term plan and funding impact statement for that financial year. 78 The public consultative processes associated with the development of the long-term plan and associated funding impact statement are governed by the Local Government Act.76 Local Government (Rating) Act 2002 [the Rating Act], ss 10–11.77 Section 134 of the Rating Act states that a copy of the rating information database signed by the Chief Executive is deemed evidence of the correctness of the database unless the contrary is proved.78 Section 23(2).[65] Turning to the Local Government Act, the purpose of local government is set out in s 10:10 Purpose of local government(1) The purpose of local government is—(a) to enable democratic local decision-making and action by, and on behalf of, communities; and(b) to promote the social, economic, environmental, and cultural wellbeing of communities in the present and for the future.[66] Section 11 requires the local authority to give effect to the purpose of local government as stated in s 10 and to perform the duties and exercise the rights conferred by the Local Government Act and by any other enactment (thereby including the Rating Act).[67] There is a power of general competence granted to the local authority under s 12. Such a power did not exist in the earlier legislative regime in force at the time of the Wellington City Council v Woolworths New Zealand Ltd (No 2) decision. However, the purpose of the Rating Act expressly refers to providing local authorities with flexible powers to set, assess and collect rates. 79 There has been little relevant change in that regard since the time of the comments by the Court of Appeal that a territorial authority had "very wide rating powers".80[68] Section 14 of the Local Government Act requires local authorities to act in accordance with specified principles in performing their role. Relevantly in the present case, s 14 provides:14 Principles relating to local authorities(1) In performing its role, a local authority must act in accordance with the following principles:(a) a local authority should—(i) conduct its business in an open, transparent, and democratically accountable manner; and(ii) give effect to its identified priorities and desired outcomes in an efficient and effective manner:79 Section 3(a)(i).80 Wellington City Council v Woolworths New Zealand Ltd (No 2), above n 8, at 544.(b) a local authority should make itself aware of, and should have regard to, the views of all of its communities; and(c) when making a decision, a local authority should take account of—(i) the diversity of the community, and the community's interests, within its district or region; and(ii) the interests of future as well as current communities; and(iii) the likely impact of any decision on each aspect of wellbeing referred to in section 10:(d) a local authority should provide opportunities for Māori to contribute to its decision-making processes:(g) a local authority should ensure prudent stewardship and the efficient and effective use of its resources in the interests of its district or region, including by planning effectively for the future management of its assets; and(h) in taking a sustainable development approach, a local authority should take into account—(i) the social, economic, and cultural wellbeing of people and communities; and(ii) the need to maintain and enhance the quality of the environment; and(iii) the reasonably foreseeable needs of future generations.[69] Section 14(2) states that if any of these principles, or any aspects of wellbeing referred to in s 10, are in conflict in any particular case, the local authority should resolve the conflict in accordance with the principle that it conduct its business in an open, transparent, and democratically accountable manner.[70] The setting and assessing of rates are components of the Council's financial planning and management under pt 6 of the Local Government Act. Local authorities are required to have a long-term plan and to use the special consultative procedure set out in s 83 of the Act in adopting or amending its long-term plan. 81 The purpose of that plan is to describe the activities to be undertaken by the local authority over a 10-year period, the community outcomes within the local authority's district, provide for integrated decision-making and co-ordination of resources of the local authority,81 Local Government Act, s 93.provide a long-term focus for the decisions and activities of the local authority and provide a basis for the accountability of the local authority back to the community.82The process of the review of the rating system[71] The mayor, Mr Little, describes the review of the rating system as involving fundamental changes. It moved the system from a mix of rateable values based on capital and land value to rateable values based solely on capital value. In addition, significant changes were proposed to the use of targeted rates and differentials.[72] The Council wanted to ensure community participation in the decision-making process. The significance of the decision on rating was why the special consultative process was adopted. 83[73] The mayor said that the Council could have included the proposed changes to the rating system in its consultation and decision-making on the long-term plan 2021-2031 but it was concerned that the review of the rating system might get lost in that long-term plan process.84[74] The rates review was commenced before the long-term planning processes so that the rate review could be used in pre-engagement consultation before the process for the amendment of the Revenue and Financing Policy which flowed into the long-term plan being prepared for 2021–2031. That was to be adopted by 30 June 2021 and would also use the special consultative procedure set out in the Local Government Act.85The Statement of Proposal for the rating change[75] The Statement of Proposal for the rating change was approved by the Council and adopted at a meeting on 3 November 2020. 8682 Section 93(6).83 Affidavit of Craig Little, 18 November 2021, at [10].84 At [11].85 At [13].86 Wairoa District Council Rating Review 2020 Statement of Proposal.[76] In the Proposal, under the heading "Why Do We Need A Rates Review?", the Proposal noted that the rating system was complex, confusing and out of date. It had been developed in the 1990s, when Wairoa had a bigger population, the commercial sector was larger and comparatively thriving and forestry was smaller and more local.[77] The demographics had since changed. The population had decreased by 1,000people and Māori now made up two-thirds of the district. The Proposal noted that the current rating system was unaffordable for many residential and commercial property owners and did not serve the community well.[78] In the Overview, the Statement of Proposal recorded: 87(a) The Proposal was about "how we distribute our rates across the Wairoa district".(b) The proposed changes would "improve rates affordability for many people, by reducing the rates for many residential and small commercial properties across the district. These proposed changes would however increase the rates for high value properties, rural and forestry, in some cases by a large amount."(c) The Council would not collect any more money from the proposals if adopted but the changes reallocate what each group of ratepayers paid.(d) The review was driven by three major themes: simple, affordable and appropriate.[79] The Proposal was to create a new general rate which would be on capital value, simplify to four general rate differentials, move 10 per cent of the water, wastewater, stormwater and waste management rates to the general rate, and move 50 per cent of the uniform annual general charge (UAGC) to the general rate.[80] The Statement of Proposal said the overall reason for the proposal was to simplify the existing complex system, which split costs between urban and rural and87 At 2.reallocated those costs 34 different ways (known as differentials). The proposal then set out the reason behind the "affordable" theme as follows: 88AFFORDABLE: The current rating system uses a high proportion of fixed rates, which are impacting on townships. The Local Government Rates Inquiry 2007 recognised that when rates are greater than 5% of household income, they become unaffordable. In Wairoa township, most properties are above this level.[81] The proposal went on to note that it was the view of the Council that the current rating system was not allocating an appropriate amount of cost to the parts of the district and that "[u]rban properties are paying an unaffordable share of the costs."89[82] The Proposal went on to say: 90The Local Government Act 2002 asks that Council decide what is the appropriate share of the rates allocation. This is a complex balance of considering community outcomes, benefits, the effects of individuals or groups actions or inactions, transparency, and community wellbeing.[83] The Proposal noted that fundamentally rates were a tax and not an exchange of money for a service.[84] The statistics provided in the Proposal in relation to the Wairoa town population showed that the Wairoa town median rates taken as a percentage of the median household income amounted to 7.4 per cent. This exceeded the stated affordability threshold of 5 per cent. The Council noted that for many district councils in New Zealand the median affordability benchmark was lower at between 3.8 and 4.2 per cent, but it was always more challenging for small populations looking after large areas.[85] The Statement of Proposal then set out the proposal and considerations in some detail. The Overall impacts were described as follows: 91OVERALL IMPACTSWe are proposing changes to how we share our rates across Wairoa.88 At 3.89 At 3.90 At 3.91 At 5.To assist in deciding what is appropriate we must consider the statutory framework when making funding choices. We have considered:• How funding choices will help us achieve our community outcomes?• Who benefits from our services and when?• Who creates extra costs through their actions or inactions?• Are the funding choices efficient to implement in the rating system?Having considered these matters we have looked at the overall allocation of rates on the current and future cultural, social, environmental and economic wellbeing of the community.[86] The Statement of Proposal said that the proposed large decrease in the residential sector's rates was due to the result of reducing the capital UAGC and transferring 10 per cent of the funding for water, wastewater, stormwater and waste management to the general rate. It noted that 1,068 properties would get an increase and 2,061 properties a decrease. 92 The adjustments it said directly increased the affordability of rates for those on the lowest incomes. The decrease in the commercial differential was to support many small businesses that were currently paying very high rates.[87] The overall impacts of the proposal on rural and forestry were explained in the Statement of Proposal as follows: 93RuralThe move to more capital value rating (the new general rate) and the reduction in the UAGC would increase the amount collected from the rural sector substantially.Compared to townships the rural and forestry sectors have the greatest ability to pay. 1,861 ratepayers would get in [sic] increase and 576 would get a decrease.This increase would help to increase the affordability of rates for those on the lowest incomes.ForestryThe move to capital value rating (the new general rate) impacts forestry the most. The increase of $334,000 is from 115 ratepayers in the forestry sector.92 At 5.93 At 5.There are three factors impacting the forestry rate. The change to more capital value rating reduces forestry rates. Adjusting the forestry differential for the additional costs to roading maintenance and an increase to reflect the negative community wellbeing impacts of the industry on the district (explained page 9).This increase would help to address the affordability of rates for those on the lowest incomes.[88] The changes to the then current rating system were shown in pie charts in the Statement of Proposal as follows: 94Figure 2: The rates pie as it is for 2020/21 and the rates pie as it would be if the proposal is adopted.[89] The Proposal explained: 95Figure 2 shows two main things changes [sic] to the general rate (Blue) and fixed rates (green).The general rate grows from $0.3M to $9.7M because the roading, services and recreation rates are added to it and because 10% of water, wastewater, stormwater and waste management ($0.55M) and 50% of the UAGC ($1.85M) are added to it. This means the variable rates (land value and capital value) go from 44% of total rates to 59%.94 At 6.95 At 6.$0.3M$4.2M$1.8M$1.0M$9.2MRates Current 2020/21General Rate LV Roading Rate LVServices CV Recreation CVFixed rates$9.7M$6.8MRates Proposed 2020/21General Rate CV Fixed rates$16.5M$16.5M[90] A further pie chart on that page showed the split of the then current rating system variable rates as follows: 96Figure 3: 2020/21 variable rates charged to all properties in the district (excludes fixed rates).[91] The Proposal indicated that the creation of a general rate based on a capital value was to simplify the rates charged to everyone for the general and roading rates (land value) and services and recreational rates (capital value) to a single new general rate (capital value).[92] The Proposal went on to set out the proposal in relation to the different land use categories and the differentials. Residential was the base category with a differential factor of 1. Every other category was adjusted compared to the base. The differentials proposed for each category were commercial at 1.60, rural at 1.00, and forestry at 3.32.[93] The explanation in the Proposal was that for every dollar in rates that residential pays, commercial pays $1.60, rural $1.00 and forestry $3.32. The document noted that differentials are linked to each other and if one differential was to decrease then the others would increase.96 At 6.$0.3M$4.2M$1.8M$1.0MCurrent 2020/21 variable ratesGeneral Rate LVRoading Rate LVServices CVRecreation CV[94] The Proposal noted that commercial properties would be asked to contribute 60 per cent more (at 1.60) than residential because of their ability to generate income to pay the rates and to get the GST portion refunded and deduct costs. In other words, "those rates are more affordable."[95] It noted that the differential rate set at this level would result in 85 per cent of businesses getting a reduction in rates, which was good for the economic wellbeing of the commercial sector. Rural properties would be asked to contribute the same as residential properties, which was a substantial increase from the existing differential calculations. The Proposal noted that in setting differentials for rural properties it considered the greater benefits to that sector, such as from a large roading network, and the lesser benefits often associated with distance from services like sports grounds and libraries. The tax benefits for rural land users were also considered, as were tax benefits for the commercial and forestry sectors.[96] The Proposal also noted that community outcome and wellbeing factors had been considered in setting the rural differential and that the affordability of rates in the township was on balance more important for the district. A thriving Wairoa was of benefit to the rural community.[97] The factors impacting forestry rate were set out as follows: 97There are three factors impacting the forestry rate. The change to more capital value rating reduces forestry rates. Adjusting the forestry differential for the additional costs to roading maintenance and an increase to discourage the negative community wellbeing impacts of the industry on the district.[98] More detail on the Proposal was provided in charts at the back of the Statement of Proposal document. The information in the charts indicated that according to Council records, 1,655 rural land units would see an increase in rates, including 284 units where rates would be increased by $1,000 or more per unit. A bar chart of the forestry land use indicated 115 units faced increases, including 78 which would see increases of $1,000 or more. 9897 At 5.98 Extraordinary Council Meeting, 15 December 2020, at 28.[99] The Statement of Proposal also contained links to the briefing papers for Council members and revised Funding Needs Analysis workpapers. The Proposal provided a reference to a report on the socio-economic effects of forestry on the district as follows: 99Report: "Socio-economic impacts of large-scale afforestation on rural communities in the Wairoa District"https://www.consultations.nz/wdc/rates-review-2/We are aware there are many reports on the economic benefits of forestry, both from the Government and the forestry sector. We have placed weight on this report as it is a specific case study on Wairoa. It addresses our particular circumstances.We also acknowledge that some of the statements made in this report are challengeable. We recognise that any economic impact report will include assumptions and areas of judgement which ultimately make the assessment subjective. Different authors will come to different answer [sic] due to their own bias. Our experience – what we see and hear in our community – supports an overall view that the expansion of forestry from marginal land to productive rural land has significant negative impact on the future wellbeing of the district.Submissions on the Statement of Proposal[100] A large number of written and oral submissions were made, including from forestry landowners and representatives. For instance, NZFOA filed a written submission signed by Mr David Rhodes as Chief Executive. Pan Pac Forest Products Ltd (Pan Pac) made both an oral and written submission, as did Mr Dolman, the Chief Executive of the Hawkes Bay Forestry Group New Zealand, who provided affidavit evidence as the representative of the New Zealand Forest Owners Association in these proceedings. Some forestry representatives made submissions on behalf of more than one party. For instance, Mr Roger Dickie filed a submission on behalf of 36 listed forestry blocks. An oral submission was made in relation to that written submission by Mr Will Dickie.[101] The submissions made by the forestry representatives and owners adopted similar themes. In summary:99 At 23–24.(a) The proposed capital value rating resulting in substantial increases in rates for the forestry units. This was on top of a shift in the 2018 charges by an increase in the rating differential. 100(b) The negative weighting attached to "wellbeing" for forestry was subjective and did not acknowledge forestry's contribution to GDP or local benefit. 101 This submission emphasised the number of people employed by forestry. For instance, the Pan Pac submission noted it had 400 direct employees in Hawkes Bay and engaged approximately 400 contract workers who largely worked for Pan Pac. 102(c) There were unfilled jobs in the local Wairoa area. 103(d) That an equity funding model should be adopted which should be finalised in the equitable funding report. 104 There should be a roading component reflecting only the actual forestry industry damage to roads. 105(e) There was a failure to take into account the value-added production generated by the forestry value chain compared to the lesser value created by beef and sheep farming. 106(f) There was a failure to take into account the community contributions by forestry owners. Pan Pac gave examples including construction of two specific roads for forest access which had been provided on an as-required basis and contributions to the local sponsorship grants.107Hawkes Bay Forestry Group contributed to the Hawkes Bay Rescue Helicopter Trust. 108100 Submission of Hawkes Bay Forestry Group.101 Submission of Hawkes Bay Forestry Group.102 Submission of Pan Pac Forest Products Ltd.103 Submission of Pan Pac Forest Products Ltd.104 Submission of Pan Pac Forest Products Ltd.105 Submission of Rayonier Matariki Forests – Matthew Croft.106 Submissions of Pan Pac Forest Products Ltd and NZFOA.107 Submission of Pan Pac Forest Products Ltd.108 Submission of Pan Pac Forest Products Ltd.(g) NZFOA emphasised the sector's long-term contribution to developing a sustainable industry in forestry, the mitigation to erosion, improvement of water quality and greenhouse gas sequestration as well as encouraging biodiversity.109(h) NZFOA criticised the local authority's reliance on the BakerAg report (to which I refer later) rather than a more recent PwC report. 110(i) The forestry sector had already sustained a significant rates increase.(j) Concern about further changes and escalations when the long-term district plan was reviewed in the near future. 111(k) One submitter accepted that forestry should pay more as "absentee" landowners but disagreed with the amount and the framing of the Proposal. 112 Referring to the revised Opus report on roads, the submitter criticised the Council's reliance on the report commissioned by the beef and lamb industry (the BakerAg report).(l) NZFOA also offered to work with the District Council to seek a grant for additional funding from Government. 113[102] Submissions made by ratepayers in other sectors also complained about the level of the increase of their rates. For instance, submitters from the rural sector complained that the landowners already had paid substantial amounts for their own sewerage and related services. 114[103] There were a number of submissions in support of increasing rates for forestry land, in particular because of roading damage. 115109 Submission of NZFOA.110 Submission of NZFOA.111 Submission of NZFOA.112 Submission of David Janett.113 Submission of NZFOA.114 For example, submission of Shayne Pattison.115 For example, submission of David Charles Bath.[104] A number of submitters also complained about having to pay for water, wastewater, stormwater and waste management as part of the general rates, as those particular ratepayers did not use any of those. 116The decision[105] The decision on the rating system was made by the Council at an Extraordinary Council Meeting on 12 January 2021. As a result of the submissions received in the consultation, the Council had decided to consider a fifth category of land for differential rating and to amend both the rural and forestry land categories. The final decision was recorded as follows:Simplify to five general rate differentials as follows:[106] The Council created a new general rate (capital value), moved 10 per cent of the water, wastewater, stormwater and waste management rates to the general rate and moved 50 per cent of the UAGC to the general rate. 117[107] As a result of its consideration of the submissions, the Council created an additional residential category for properties with a capital value in excess of $399,999. The rate for the differential category was 0.8. The Council minutes note that it was a figure that could be adjusted in future as capital value changes. It also116 For example, submission of Frances Emily Whale.117 Minutes of Wairoa District Council Extraordinary Council Meeting, 12 January 2021, at 1–2.Sector VariationCommercial 1.6Forestry 4.0Residential 1.0Rural 0.7Residential properties over $399,9990.8adjusted the rural differential value down to 0.7 from 1.00, which was "indicative of Council understanding and appreciating the issues faced by the rural community."118[108] In a supporting paper that went to that Extraordinary Council Meeting the following comments were made on the proposed adjustments:3.2 Notwithstanding, it was also accepted that blunt the nature of rating tools [sic] can create unintended consequences or excessive outcomes that merit further investigation. Specifically, Council:3.2.1 adjusted the rural differential to 0.8, reflecting that a redistribution of total rates from the urban sector to the rural sector was appropriate, but required tempering,3.2.2 adjusted the forestry differential to 4.0, observing that the existing differential concentrated primarily on the allocation of roading costs and seeking to attribute a value to the relative disbenefit on other community wellbeings.3.2.3 directed that further analysis be undertaken on alleviating the disproportionate impact of a move more towards capital value rating on higher value residential rating units, recognising that the correlation between capital value and income is positive, but imperfect.[109] The paper noted that the changes to rating policy contributed to the following community outcomes: 119[110] The paper outlined the significance of the decision as follows: 120118 At 2.119 Extraordinary Council Meeting Agenda, 12 January 2021, at 8–9.120 At 9–10.Economic Wellbeing Social and Cultural WellbeingEnvironmental Wellbeing1. A strong prosperous and thriving economy2. A safe and integrated infrastructure3. A community that values and promotes its culture and heritage4. Safe and accessible recreational facilities5. Supportive, caring and valued communities6. Strong district leadership and a sense of belonging7. A safe and secure community8. A lifetime of good health, education and wellbeing9. An environment that is appreciated, protected and sustained for future generations6. SIGNIFICANCE6.1 Impact This matter affects all ratepayers6.2 Rating is of perpetual public interest6.3 This decision has no impact on budgets or financial capacity6.4 This decision can only be reversed by initiating a new proposal and consultation6.5 There will be no impact on service levels6.6 There will be no impact on strategic assets6.7 There will be no impact on the way a strategic activity is delivered6.8 Due to the global impact on the community and that rates account for over 50% of Council's revenue, this matter is assessed as high significance.6.9 This matter has no implications for the relationship of Māori toancestral land, water, sites, waahi tapu, valued flora and fauna, and other taonga.The evidence in this case[111] A number of affidavits were filed in this matter. No cross-examination took place and therefore they are untested. Following the usual rule, subject to nuances and exceptions, in judicial review the approach to evidence and fact-finding is that to the extent there are factual disputes between the parties, "generally speaking" they are to be resolved in favour of the defendant. 121[112] In this matter Mr Dolman swore two affidavits as the representative of the applicant. In addition, the applicant adduced evidence on climate change in an affidavit by Dr Alan Glyn Jones. Dr Jones's evidence was provided as an expert in climate change.[113] For the Council, the mayor of Wairoa district, Mr Craig Little, filed an affidavit, as did Mr Gary Borg, who swore two affidavits. Mr Borg is the Group Manager of Finance and Corporate Structure for the Wairoa District Council,121 R v Board of Visitors of Hull Prison, Ex parte St Germain (No 2) [1979] 1 WLR 1404 at 1410 per Geoffrey Lane LJ; and R v Camden London Borough Council, ex parte Cran (1995) 94 LGR 8.who oversaw the development of the Statement of Proposal and implementation special consultative procedure.The issues[114] It is common ground that the Council intended to continue to provide the same level of services for the district but would redistribute the burden of paying for those services by the adoption of the new rating system. This is clearly stated in the Statement of Proposal: 122These proposed changes would improve rates affordability for many people, by reducing the rates for many residential and small commercial properties across the district. These proposed changes would however increase the rates for high value properties, rural and forestry, in some cases by a large amount.[115] It is also common ground that the previous rating system was complex and needed an overhaul. There is no criticism made of the local authority's long-term planning process, of its revenue and finance policy nor of the Wairoa District Council's services and activities. In general terms the applicant accepts that the Council was acting within its powers, for the purposes set by the Local Government Act and consistent with its long-term and revenue plans. In setting the differential rates categories it was exercising its powers under the Rating Act consistent with funding those activities as it was entitled to do.123[116] In general, the processes followed by the Council are not impugned. In this case the focus has been on whether the local authority improperly relied on the wealth of forestry landowners to impose the differential rate and whether there was a failure to take into account climate change. The final issue, in general terms was whether the Council made its decision on the basis of mistakes of fact, including as to the wealth of the forest owners and the net benefits which forestry attracted to the district.[117] In addition, in the course of the hearing some issues arose concerning whether the local authority's assertions as to roading costs and costs attributed to damage and use caused by forestry operations were in fact correct.122 Statement of Proposal, above n 86, at 2.123 Section 3(a)(i) of the Rating Act.[118] I deal with the alleged mistakes of fact which the Council is said to have relied on first, as the information underpins a number of the other grounds and the applicant says that the Council acted unreasonably against forest owners in the district in reliance on their findings in this respect.The negative impact of forestry on community wellbeing[119] The applicant claims that the Council relied on the mistaken fact that forestry was a cause of "negative wellbeing" for the district.[120] The "negative wellbeing" to which the council referred was summarised by the mayor in his affidavit. Mayor Little noted that in the last 30 years there had been a substantial increase in the plantings of forestry in the Wairoa District. The rural sector traditionally made up of sheep and beef farming had changed quite dramatically. He said that the increase in forestry land use in recent years had been driven by a combination of government subsidies and incentives and the ability to claim carbon credits. Mr Little said that in recent sales of farm properties, forestry companies had been prepared to pay almost double what the farm was worth based on an economical turn from traditional sheep and beef farming. He noted that was a market reality. 124[121] The mayor stated that rural production was the major employer directly or indirectly in the Wairoa township due to the Affco freezing works being located there. However, the retail area of the township was a shadow of what it once had been. He said: 125While I cannot say that the proliferation of forestry is the sole cause of this decline in the central business areas of Wairoa, the reality is that whereas there were previously two or three families living on a farm, there is now none. There are also fewer downstream contractors such as shearing contractors and fencing contractors and their associated families supporting rural communities and the community of Wairoa township.[122] The mayor noted that while statistics had been provided demonstrating the amount of employment generated by forestry activities, in reality there were few of those jobs generated in the Wairoa district as the workers travelled from other areas.124 Affidavit of Craig Little, 18 November 2021, at [17].125 At [29].He said the number of Wairoa district residents employed within the forestry was very "limited". There were wider economic benefits in other regions and on a national basis from forestry but the costs in terms of direct costs such as rural roading and the effects on the community "are born[e] locally within Wairoa district." 126[123] The impacts of forestry on the wellbeing of the district were detailed in a report attached to the Statement of Proposal on the Socio-economic impacts of large-scale afforestation on rural communities in the Wairoa District. 127 There was an express recognition in the Statement of Proposal that there were many reports on economic benefits of forestry from the forestry sector but that the Council had placed weight on this report as it was a specific case study on Wairoa and addressed its particular circumstances.[124] The report had been commissioned by Beef + Lamb New Zealand as a case study of the district, as is set out clearly in the report.128 The report said that Wairoa district was chosen for the case study as it had a great reliance on sheep and beef farming and was "currently" undergoing substantial land use change. 129 The report found that the typical sheep and beef farm was unable to compete with forestry returns over a 60-year period. 130 However, both the consistency and total amount of direct local expenditure by sheep and beef farms was crucial for local businesses. 131 Forestry expenditure locally occurred at harvest at year 30. The irregularity and lag phase would have a detrimental effect on local communities.132 Similarly, direct jobs came from sheep and beef farms, with 30 per cent of the people in paid employment in Wairoa in that sector.133 Forestry would generate jobs that did not occur until harvest time in year 30, which was a weakness of the forestry industry's contribution to the126 At [32].127 Ed Harrison and Hannah Bruce Socio-economic impacts of large-scale afforestation on rural communities in the Wairoa District (BakerAg, 2 August 2019) [BakerAg Report], cited in the Statement of Proposal, above n 86, at 15. The attachment was contained by way of a click-through link from the Statement of Proposal.128 At 2.129 At 6.130 At 20.131 At 20.132 At 20.133 At 20.wider community. An increase in the conversion from sheep and beef to forestry would, the report concluded, lead to a reduction in direct jobs. 134[125] The Council had also received the PwC report which was relied upon by the applicant. 135 Mr Little said the report confirmed the information already held by Council that "while there are many benefits of forestry experienced on a regional and national basis, the application of those benefits [do] not distinguish between land-based and non-land-based jobs, the pattern of employment and where workers lived."136 He said: 137 This confirmed our experience in Wairoa District that while there are employment opportunities arising from forestry and the value-added chain within the sector, those opportunities arose outside of our district. The allegation that Council failed to consider the PwC report is not correct.[126] The applicant also referred to a further economic report. This report was completed by Berl for one of the forestry companies, Pan Pac, and provided an economic analysis of the contribution of forestry and other sectors to the Wairoa area. 138 However, the date of that report (June 2021) indicates that the particular report that has been produced in these proceedings was not before the Council when it made its decision, as it had not then been published.[127] The Statement of Proposal referred to the Council's experience as follows: 139 Our experience – what we see and hear in the community – supports an overall view that the expansion of forestry from marginal land to productive rural land has significant negative impacts on the future wellbeing of the district.[128] The submissions made by NZFOA and other forestry landowners disputed the negative wellbeing referred to. NZFOA referred to the positive long-term contribution to the region by "mitigating erosion, improving water quality, greenhouse gases134 At 19.135 PricewaterhouseCoopers Economic Impact of Forestry in New Zealand (25 May 2020) [PwC Report] at 18.136 Affidavit of Craig Little, 18 November 2021, at [36].137 At [36].138 Mark Cox and Hugh Dixon Economic and Social Profile of Wairoa District: Final report for Pan Pac (BERL, June 2021).139 Statement of Proposal, above n 86, at 16.sequestration and in forest bio-diversity."140 It referred to it being the only truly sustainable industry in the region and that harvest activity within the Wairoa area would expand for many more years and provide continuous employment and development through "harvesting, roading, transport and forest re-establishment and sylvicultural activities."[129] The forestry landowner Pan Pac disputed that forestry had a negative effect on the wellbeing of the district. It pointed to environmental, economic benefits to "many rural communities both in income and employment terms."141 It also pointed out that the GDP contribution per thousand hectares was greater for plantation forestry than other industries, including sheep and beef farming and permanent carbon forestry. In addition, it submitted it provided social support to over 800 families within Hawkes Bay, and noted the difficulty in engaging workers from the Wairoa area. Pan Pac also pointed to the cultural support it provided, noting that it worked closely with iwi groups to understand their goals and objectives and worked to align with those.[130] The Council had a wide range of views and reports before it, which supported both the comments it made in the Statement of Proposal and the forestry views. In the Statement of Proposal, the Council recognised that some of the statements made in the report were challengeable and that any economic impact report would include assumptions and areas of judgement which ultimately made the assessment subjective. The Council acknowledged the difference of opinions.[131] Ultimately, it was for the Council in making its decision to assess and weigh the information it had before it. This included information about wellbeing and the effects of forestry, including findings that direct local expenditure by sheep and beef farms is crucial for local businesses and that the irregularity and lag phase in forestry expenditure before harvest occurs has a detrimental effect on local communities.142The Council acknowledged and considered other information and reports, including the PwC report.140 Submission of NZFOA.141 Submission of Pan Pac Forest Products Ltd.142 BakerAg Report, above n 127, at 20.[132] The local experience and knowledge of councillors was also relevant. Overall, there was ample evidence as to the effects of the forestry of land on the district, particularly through the lack of specific local benefits. The councillors were well-placed to assess that information and bring their own local knowledge to the discussions.[133] While the Council acknowledged the wider benefits forestry may offer, it is also important to note that the Council was focused on its district rather than the national GDP or the regional area. This is in accordance with the purpose of local government, which includes "promoting the social, economic, environmental, and cultural wellbeing of their communities".143 One of the principles relating to local authority decision-making is that when making a decision it was required to act by taking into account the community's interests "within its district or region".144 The Council was entitled to focus on its own district when making its rating decision.[134] I am satisfied that in making its evaluation of the impacts of forestry on community wellbeing, the Council had a wide range of views and reports before it, which both supported the comments it made in the Statement of Proposal and supported the forestry views.[135] In those circumstances the Council was entitled to weigh up the information and reach the conclusions it did in relation to the benefits or otherwise that forestry land use provided to its district. The Council did not make a mistake of fact in that regard.The lack of constraints on the forestry industry to pay rates[136] The other mistake the Council is claimed to have relied on in making its decision is that forestry owners had no constraints on their ability to pay "disproportionately" more in rates than other ratepayers. The applicant says that the mayor and councillors held the view that forest owners were wealthy. This then enabled the Council to make the unfair rates decision it did.143 Section 3 of the Local Government Act.144 Section 14(1)(c)(i).[137] The Statement of Proposal pointed out that forestry land commanded higher prices than other categories of land and that there were subsidies available to the sector.145 The evidence, including both the BakerAg report and the report by PwC, points to forestry providing much higher returns than rural land used for sheep and beef farming.146 The Proposal also included a comment that it was the Council's view that forestry could afford the extra cost.[138] A local authority is specifically entitled to take into account the use of the land as a factor in defining categories in rateable land as well as the activities that are "permitted, controlled, or discretionary" for the area in which the land is situated.147That allows the local authority to take into account the fact that one use of land, such as forestry, generally generates higher returns than other categories of land, including rural land.[139] Directly related to the consequences of the use of the land is the fact that it attracts subsidies and forestry development and is generally encouraged by central government. Factors related to the use or activities on the land are valid considerations by the local authority Even if not all forestry landowners claimed the subsidies available to forestry owners, the local authority was entitled to take those into account in general terms as being factors that might enhance the attractiveness of land use for forestry.[140] The evidence in respect of the returns from land used for forestry relates to the affordability of rates to a sector, which is a proper factor for the Court to consider, rather than the wealth of the landowners themselves. There is nothing to suggest that the Council then tied that affordability to the wealth of the forestry landowners.[141] In light of this, I am satisfied that the comments on the lack of constraints on the forestry industry to pay more in rates were based on evidence relating to the use of the land and its ability to generate higher returns, which is at a general level related to affordability, as opposed to the wealth of the forestry landowners themselves. The145 Statement of Proposal, above n 86, at 9.146 As referenced by NZFOA in its submission on the rates proposal.147 Schedule 2 of the Rating Act.Council was entitled to take into account the subsidies available to forestry owners as an indirect factor supporting affordability in general terms even if not all forestry landowners claimed the subsidies available to them.Redistributing rates to rural and forestry ratepayers with an intention of making rates more affordable for residential and commercial ratepayers[142] The applicant alleges that the Council acted illegally with improper purpose when it decided to implement a differential regime, in that it acted to make rates more affordable for one category of ratepayers (low-income residents) at the expense of another category of ratepayers (specifically, forestry landowners). Although the applicant does not make allegations of predisposition or bias by the mayor or council members, the applicant says the council had an improper purpose in this respect. By designing the rating differential regime to achieve this purpose, the applicant says, the decision was based on an evaluation of the characteristics of who owned the rateable property rather than the property itself, which is not permitted under the authorising statute.[143] Mr Dolman for the applicant in his first affidavit refers to the increase in rates applied to the forestry land sector due to the rating review. 148 He notes that forest land rates in Wairoa district cost an average of $66.49 per hectare compared with substantially lesser rates in Gisborne and Hastings districts. This was $29.44 per hectare in Gisborne district and $9.57 per hectare in Hastings district.149[144] Mr Dolman said forestry owners in the district faced an average increase per rating unit of 56.19 per cent, 150 which had followed other significant rates increases. He pointed to the five companies with the largest forests in the district area having seen their rates increase by an average of 304 per cent for the period 2017/18– 2021/22.151148 Affidavit of Keith Malcolm Dolman, 12 October 2021.149 At [14].150 Reply affidavit of Keith Malcolm Dolman, 3 December 2021, at [8].151 At [8].[145] Mr Dolman went on to emphasise the economic benefits of forestry at a national level and regional level. 152 Mr Dolman also refers to the work of the Equitable Rates Working Group and suggested that both the Hawkes Bay Forestry Group and the NZFOA were actively participating in good faith in the Equitable Funding Review Working Group whose objective was to find an equitable funding proposal. To this end they had engaged an expert to apply the equitable funding guidelines to help ensure a "win-win outcome for both parties." 153 He also referred to the BakerAg report, the PwC report and the WSP/Opus reports as well as the submissions made by NZFOA and HBFG.[146] Mr Dolman's second affidavit focuses on the increased rates burden on forestry. 154 He says that Mr Little and Mr Borg for the Council had painted a picture that the increase in forestry land use in Wairoa was largely responsible for Wairoa's economic decline. Mr Dolman says this was not supported by evidence as set out in the Business and Economic Research Ltd (Berl) report commissioned and which had been produced to the Council by Pan Pac.155 Mr Dolman also went into some detail about the donations and other voluntary contributions such as providing scholarships for tertiary training made by the forestry member organisations in the Wairoa district.156[147] The mayor said in his affidavit that community wellbeing and the affordability of rates to the Wairoa community "was at the forefront of our decision-making."157He accepted that forestry was a substantial industry in New Zealand but noted the benefits of forestry were largely enjoyed outside of the Wairoa district while many of the costs, including the social costs on the community of Wairoa, were suffered within the district.158 Mr Little noted this was exacerbated by the fact that the costs are to be borne by a "declining, low income ratepayer base."159152 Affidavit of Keith Malcolm Dolman, 12 October 2021, at [20]–[36].153 At [74].154 Reply affidavit of Keith Malcolm Dolman, 3 December 2021.155 Mark Cox and Hugh Dixon Economic and Social Profile of Wairoa District: Final report for Pan Pac (BERL, June 2021).156 Reply affidavit of Keith Malcolm Dolman, 3 December 2021, at [26]–[28].157 At [63].158 At [62].159 At [32].[148] Mr Borg, the official who oversaw the Council's process, provided some statistics in relation to the Wairoa median income.160 The median individual income is $22,600. 161 Household income in Wairoa township is at $42,700, which compares to a national median household income of $75,700. 162 He noted unemployment in Wairoa had climbed from 4.6 per cent in the 2006 to 7.2 per cent in the 2018 census while those in full time employment had declined from 48.5 per cent to 41.9 per cent in the same period. 163 He also noted that forestry plantings had increased in the same period, in some years quite dramatically.[149] Mr Borg said there had been considerable concern prior to 2018 (when there had been a rates increase) that the forestry sector was not contributing its fair share to the cost of maintaining the rural road network. He therefore points out that a comparison of the 2018 rates to previous years is therefore not helpful. 164[150] Mr Borg also noted that in the course of discussions between the Hawkes Bay Forestry Group and the Wairoa District Council on 13 October 2020 (before the Statement of Proposal was adopted by the Council as part of the special consultative procedure), Mr Dolman was supplied with a copy of the BakerAg report which was referred to in the Statement of Proposal. 165 The comment was in response to Mr Dolman's comment that neither he, the NZFOA or the Hawkes Bay Forestry Group had been provided with an opportunity to review the report which was relied upon by the Council in the Statement of Proposal. Mr Borg noted it was open to the applicant as part of the special consultative procedure to challenge the information on which the Council had relied in preparing the Statement of Proposal and to present its own evidence on the economic benefits/disbenefits issues. Mr Borg noted the applicant took that opportunity as part of its submissions.166[151] Mr Borg's second affidavit responded to the allegations in the applicant's amended statement of claim, dated 23 December 2021. In his second affidavit,160 First affidavit of Gary Borg, 19 November 2021.161 At [10].162 At [10]. Most households have more than one income earner.163 At [11].164 At [37].165 At [76].166 At [78].Mr Borg focuses on the allegations that the rates were levied according to personal characteristics as opposed to characteristics of the land. Mr Borg denies that and says:(a) Undertaking an assessment of the affordability for ratepayers is a key component of assessing the impact of any allocation of liability for Council revenue needs. 167(b) The Council had undertaken "threshold of unaffordability" which was used in the preparation of the proposal. 168(c) For Wairoa the rates for residential properties would be 7.4 per cent of household income if the rates were not assessed differentially as proposed. 169 This would exceed the acceptable affordability threshold, which had been set at 5 per cent, which was lower than many councils which lie between 3.8 and 4.2 per cent of median household income.170(d) Comparing rates paid in Wairoa district to those paid in other districts with different populations, different commercial and industrial land uses, different revenue and expenditure needs, different demographics and different communities is not a valid comparison for rating purposes. 171(e) There was no submission by the applicant or its members that the rating burden on the forestry sector was unaffordable nor did it challenge the lack of affordability of rates for some of the community.172(f) The focus on the forestry sector submissions was on the increase of rates over what was previously paid by the sector in comparisons with other districts.167 Second affidavit of Gary Borg, 8 February 2022, at [13].168 At [14].169 At [16].170 At [14].171 At [20].172 At [22].(g) This contrasted with submissions from rural ratepayers, which in some cases raised the issue of affordability due to the substantial increase in rates arising from the move from a rating system which levied some rates on land value to a capital value rates assessment. 173(h) The rating review had the effect of shifting more of the rating burden to the rural sector through the use of capital values, although that did not impact on forestry land to the same extent due to the fact that the forest itself is excluded from the valuation of capital value under the Rating Valuations Act 1998. This is in contrast to farmland, where most improvements are included in capital value. This was one of the factors identified in the Statement of Proposal.174(i) The increase in the forestry differential was from $425,000 as proposed in the original Statement of Proposal to $512,000. When divided over 77,000 hectares of forestry land that equates to an increase of $6.65 per hectare of forestry per annum.175(j) Rural properties now carry a greater proportion of the rating burden to the extent of $740,000 per annum.176(k) No personal characteristics of the ratepayer were ever considered. Rather: 177 the focus was on the use to which the land was put, the affordability of rates having regard to that land use and the wider impact of those land uses on the district and community of Wairoa.[152] I accept the evidence of Mr Little and Mr Borg in explanation of the Council's decision to reapportion rates.173 At [23].174 At [24].175 At [26].176 At [27].177 At [29].[153] The explanation for the forestry differential was contained on page 9 of the Statement of Proposal as follows:Forestry 3.32As with the other sectors we started with model 1 with no differentials and no UAGC. Under this model 120 forestry properties would pay $703,000 less than they are now. Forestry rating values are low as they have little improvements value and unlike horticulture their trees are not part of the valuation. This rule was set by Government.Council spend a large part of our roading budget maintaining roads to a standard suitable for the forestry industry to thrive. As this cost is caused by the sector and as we did in 2018, we proposed to charge this additional cost to the sector by adjusting the differential up. Forestry will pay the same share of the roading cost as they pay now. Also, in the same way as commercial and rural sectors forestry benefits from commercial tax benefits.There has been a lot of community discussion about the value of the forestry sector to the district. While exotic forestry has some environmental benefits on difficult erosion prone Wairoa land, most of the benefits of this industry is at a regional or national level rather than to Wairoa. It is our job to look after the best interests of our district.We acknowledge the Government's one billion tree programme and the various reports outlining the benefits to New Zealand. For Wairoa, many jobs commute into the district daily and we don't get the downstream benefits of ports and processing available to Gisborne and Napier.We also know that the growth of forestry is having negative impacts on the wellbeing of our community. Wairoa would lose over $517,502 from the economy every year from an extra 10% of forestry (not accounting for the multiplier effect of that money in the community). Council is currently rating 74,229 ha of forestry.The forestry sector is expanding, to acquire more productive land. Forestry activities are a permitted activity under the Government's National Environmental Standards for Plantation Forestry, which makes our options for managing land use choice in our District Plan more difficult. The One Billion Tree Fund and carbon credits subsidies are assisting the forestry sector to buy productive land. The industry does not have constraints on ability to pay.Having considered these negative effects on the wellbeing of the district, and the business benefits the sector gets from subsidies, non-valuation of the trees, the environmental standards and taxation, we have decided that it is appropriate to adjust the differential for forestry upwards.Overall, it is our view that forestry can afford this extra cost.Advantages of creating four general rate differentials• It simplifies the rating system by removing 34 differentials and creating 4 obvious and transparent differentials.• Everyone in a sector is treated the same. This is not the case in the current system.• The share of the general rate is transparent and the difference between sectors is obvious.• It assists making the rates more affordable for the residential sector by allocating cost to where the greater incomes are.• It supports the well-established legal precedent that property rates are a tax and not an exchange for a service.Disadvantages of creating four general rate differentials• Any change in the distribution or rates would impact ratepayers differently and may impact on the wellbeing of some in the community.• Differentials are unpopular with some commentators that believe greater transparency is achieved through targeted rates. We disagree with this view on the basis that transparency can be achieved in other ways.[154] As is apparent from this extract, the Council was weighing the competing considerations and explained the rationale behind the proposal to increase the differential for the forestry sector.[155] In the course of submissions in this hearing on the manner of reapportionment of rates, including those attributable to roading, the Council submitted that the rating differential on forestry land use could in large part be explained by the costs incurred in the repair and maintenance of roads for the benefit or the use of forestry vehicles on those roads.[156] Counsel for the respondent pointed to the pie charts in the Statement of Proposal, which showed that roading costs amounted to $4.2 million dollars of the total rate pie of the $16.5 million dollars.[157] The respondent argued that rural roading was the single largest cost to the Council at 25 per cent of the Council's total expenditure. The pie charts were informed by the analysis that lies behind them. The respondent's submission was that the transfer of the roading costs from fixed rates into general rates meant that the increase in the forestry land use rates was in a not insignificant part attributable to a more accurate apportionment of the cost onto the forestry users group.[158] The applicant criticised the attempts by counsel for the respondent to do calculations on the "back of the envelope". However, it is apparent that even if a detailed analysis was before the Court the apportionment of costs is neither an easy task nor is it black and white — even the Equitable Working Group had noted that issue was complex. The weighting and apportionment of the roading costs was one of several matters for the Council to consider.[159] The Council had information on which it could conclude that forestry and rural use of the roads were responsible for higher roading costs than were the residential users. 178 The Council took into account the information it had. It was not required to precisely calculate the cost of roading including damage and related costs directly attributable to that forestry use.[160] The points raised in the present case amount to matters of assessment and weighting of the evidence and material before the council. These are properly matters for the Council. It had sufficient material before it upon which to reach the decisions it did. The Court is not equipped to undertake the detailed calculations required to undertake a relative cost-benefit analysis across the categories of land use. Neither should it do so. That was a matter for the Council. As is often noted, the rates decision- making process involves public interest and benefit considerations as well as sectorial interests. It is not a user-pays system.[161] All parties agreed that an overhaul of the rates system was past due. In making the rates adjustment the Council was entitled to undertake the review in the way it viewed best for the wellbeing of the community and the funding of services. The Council explained its reasons behind the proposed changes and was entitled to make the rates adjustment it did even though that affected certain sectors more than others. The Council did not act improperly. I am not satisfied that the rating differential decision was made for an improper purpose.178 See for example the Opus Report, above n 218, at 4–5; and the BakerAg Report, above n 127.Discouraging forestry as land use in the Wairoa District[162] The applicant claims that the Council also acted illegally with improper purpose by using its rating powers to try to discourage the conversion of farmland to forestry.[163] The applicant says the Council did so knowing it was relying on its rating powers to circumvent government policy with which the Council disagreed, namely supporting converting farmland to forestry plantations.[164] The draft of the Statement of Proposal which was considered by the Council at its November meeting was amended in minor aspects from the initial draft Statement of Proposal. The applicant says the removal from the draft of the following passages about discouraging forestry showed the true intent of the Council. The words in the draft were: an increase to discourage the negative community wellbeing impacts of the industry on the district.[165] The word "discourage" was later replaced in the full Statement of Proposal to read:... an increase to reflect the negative community wellbeing impacts of the industry on the district (explained page 9).[166] Similarly, there was a word change from the draft to the final Statement of Proposal in relation to control of forestry land. The draft read as follows: which takes land use choice previously controlled in our District Plan out of our hands.[167] The final Statement of Proposal read: which makes our options for managing land use choice in our District Plan more difficult.[168] The applicant says this shows the true intent of the Council was to control land use and discourage forestry.[169] The applicant also says that its suggestions to address any problems caused by forestry appeared to have been completely ignored in the Council's analysis. In its submissions on the Statement of Proposal the applicant had proposed a solution that it would work with Council to make a case to government for additional roading funding to address a "very real problem". NZFOA stated that local forestry companies already worked closely with the Council as harvest approached and contributed significantly to the development and enhancement of key access roads to local forests and it would continue to work with the Council on "specific roads required for forest access on an as required basis".[170] The submission went on to say that it recommended the Council take a similar approach to that of the Hawkes Bay Regional Council, which had stated that it was interested in establishing whether there were opportunities for a small plots of forestry within pastoral farming systems to generate returns on investment and was seeking to find commercial opportunities that optimised land use for environmental and economic outcomes. The applicant says the Council did not appear to have considered this at all.[171] The applicant also says that the mayor's views against forestry use were apparent from a letter signed by both Mr Little as the mayor of the Wairoa District Council and by the mayor of the Tararua District Council, dated 21 September 2020, addressed to other mayors asking for their agreement to work collaboratively on matters relating to the forestry regulations and other issues relating to forestry.179 The letter outlined key points and topics on which the mayors were being asked to work on:Key points and topics we need to work on collaboratively are:• That the National Environmental Standards for Plantation Forestry (NESPF) regulations override powers district councils have.• The work promised by the government around NESPF (pre-election) regarding classes of land use has not been carried out• The negative impact of forestry plantations on our rural communities179 Letter from Craig Little (Mayor of Wairoa) and Tracey Collis (Mayor of Tararua) to other mayors regarding the increase of forestry planting throughout New Zealand and the impacts on communities (2 September 2021).• The impact of forestry on the four wellbeing's [sic] – social, cultural, economic, and environmental• We need to be able to compare our current rating models in relation to different land uses• The effects of forestry on soil quality, especially after forestry rotations• The short-sighted vision around planting land in trees with no long-term plan.• The future of carbon farming, especially once the carbon has been absorbed – what will happen to the land and trees – who will be responsible for the payment of rates?• The environmental damage cause by forestry blocks, eg: waterways and water quality, slash, silting and pollen, pest control, fire risk• The damage caused to our roading network• The fact the Overseas Investment Office streamlines processes which make it easy for overseas investors to buy land in New Zealand to plant in forestry• Impacts to other industries• Looking at Capital Valuation on Forestry, i.e. trees aren't included in capital valuation, where orchard's trees are part of their capital valuation[172] The letter suggests that the mayors work collaboratively on these issues to lobby the government and "hopefully make change". The applicant says this letter represented a "call to arms" that was indicative of the mayor's intention to discourage land use conversion to forestry.[173] The applicant also pointed to a newspaper column written by the mayor. 180 The newsletter, which according to the copy produced appeared in the Wairoa Star on 13 February 2020, includes a "Mayoral Column" by Mayor Craig Little. In that column he commented that "the elephant in the room for our district is the expansion of forestry." The mayor went on to say that preventing blanket forest planting on productive farmland was a "massive concern" and for him preventing that from occurring was a priority. He went on to say wholesale forestry planting poses a real risk to rural communities like Wairoa. He noted that forestry was not all bad and there180 Craig Little "Wairoa District Council In Focus" Wairoa Star (Wairoa, 13 February 2020).were positive spin-offs such as local forestry contractors and East Coast Lumber which processed logs in Wairoa. The mayor noted incentives to move to forestry land use included the "One Billion Trees Programme". He said that a catalyst for the forestry was the "speculative investors" operating outside the programme who believed carbon credits would increase dramatically and would be a major trading currency of the future. He went on to say "[i]t is important Central Government listens and is aware of the consequences of blanket planting – which includes the potential to destroy rural communities."[174] The mayor said in that article that natural regrowth in riparian planting is not captured by the Emissions Trading Scheme and the Council was pushing for the government to recognise that. He then went on to mention a visit which Wairoa had hosted of Te Uru Rākau (Forestry New Zealand) and the Ministry for the Environment, which included a field trip visiting farmland which had recently been sold for forestry use and a recent harvest site to capture a "feel for our district, its terrain and landscape." The mayor went on to comment that the visit was a "proactive start" to working together to solve the district's concerns.[175] There are no allegations of predisposition or bias by the mayor or council members but rather that the views of the mayor/council said to be illustrated in the ways set out above support the applicant's claim that the council had an improper purpose in the setting of the differential for forestry land.[176] In his affidavit the mayor denied the allegation that he or the other councillors were anti-forestry. The mayor disclosed in his affidavit that he was a full-time sheep and beef farmer in Wairoa. 181 His time was spent between that farming operation and his duty as mayor. He was the only elected member who was a farmer. Mr Little responded to Mr Dolman's allegation he was anti-forestry and Mr Little noted that Mr Dolman was a passionate advocate for the industry sector. The mayor said:[6] I disagree with much of what Mr Dolman says and in particular his portrayal of the rating decisions that Council was required to make as being somehow anti-forestry.181 Affidavit of Craig Little, 18 November 2021.[177] The mayor also pointed to the diversity of experience skills and background of the councillors. He noted they were all passionate about Wairoa, familiar with the changes that the district faced and the challenges faced by the community. The mayor noted the members bought a wide range of experience and expertise to the table "ranging from senior governance positions, senior corporate management positions, senior positions in education, and senior Iwi and community representation."182[178] The mayor said that the Council had no power to regulate what land was used for forestry as that was a matter dealt with directly by central government. It is apparent he was well aware of that in view of the joint mayoral letter referred to above at [171].[179] Mr Little said that the challenge for the Council was to make decisions to promote the social, economic, environmental and cultural wellbeing of its community. He noted that the decisions were beyond simply consideration of any particular ratepayers use of or need for particular Council services. 183 Mr Little noted that the special consultative process had resulted in 263 submissions expressing a wide range of views.[180] The mayor noted the limited benefits of forestry to the district had been acknowledged in the PwC economic review report presented to the Council as part of the submissions on behalf of NZFOA.184 That report did confirm the benefits of forestry experienced on the regional and national basis but did not distinguish between land based and non-land-based jobs, the pattern of employment, nor where workers actually lived. The experience of those in the Wairoa district Mr Little said confirmed the lack of employment opportunities from forestry within the district.[181] The mayor also said that the Council had first looked at introducing a rating differential for forestry before 2018 because of the groundswell of opinion that the forestry sector was causing considerable damage to the district's rural roading network through heavy traffic use, beyond what would be expected from a traditional rural use182 At [3].183 At [6].184 At [31].of farmland. 185 The mayor said this had led to an increase in rates for forestry in 2018 but that forestry had not been paying a fair share prior to that date.[182] Mr Little said the Council's decisions were: 186 not aimed at discouraging forestry or undertaken for any improper purpose. The decision made did not seek to undertake an empirical calculation of the benefits that accrued from Council's activities and an allocation of rates based on the benefits achieved and the extent to which those benefits were enjoyed by any ratepayer.[183] In Hauraki Coromandel Climate Action Inc v Thames–Coromandel District Council Palmer J noted that the mayor's personal views did not play a part in the impugned process. 187 He said, "[m]ayors are expected to have views. They are elected on the basis of their views, among other things."188 In that case, the applicant had submitted that the mayor's known personal biases had precluded her from approaching the question in issue which involved climate change objectively. Media interviews and emails from the mayor were relied upon to show that she had refused to publicly accept that anthropogenic climate change was real. 189[184] Mayors and councillors are elected for their knowledge of the district and their views. I do not consider the evidence pointed to by the applicant supports anything other than the mayor's interest in promoting the wellbeing of the district. In particular:(a) There is nothing unusual for a draft document such as the Statement of Proposal to be amended following discussions. The draft does not have any special status. It is the final Statement of Proposal which is the important document for the purposes of considering the judicial review in this case. The minor changes in wording pointed to by the applicant go largely to style more than substance. In this case nothing can be taken from these as evidence of improper the purposes by the mayor or the council.185 At [20].186 At [61].187 Hauraki Coromandel Climate Action Inc v Thames–Coromandel District Council [2020] NZHC 3228 at [65].188 At [65].189 At [58].(b) The letter from the two mayors, including Mr Little, seeking support from other interested local authorities to lobby national government for support to deal with the challenges those districts faced similarly does not evidence an improper purpose insofar as the rating decision is concerned. It is consistent with the proper role of the mayor to raise concerns, seek change and support from government on behalf of his community.(c) Insofar as the column in the Wairoa Star by the mayor is concerned, he was entitled to make known the challenges facing the district as he saw them as well as the steps he had taken for the benefit of the district. This column was published after the rates decision was known and, in any event, does not indicate any improper purpose. The mayor was basing his comments on information he had, such as the information in the BakerAg report which showed that 8,486 hectares of land had been converted to forestry. It also showed forestry provided fewer jobs in rural communities than sheep and beef farms, which was borne out by his own experience.[185] In addition, these were the views expressed by only one member of the council. The councillors brought differing experience and expertise to the decision making. The mayor was one voice among many when it came to determining the rating differentials.[186] The Council is made up of a diverse group of people who are elected democratically and bring different views to the decision making, as this Court has reiterated on a number of occasions. 190 The mayor has explained the reasons behind the decision which are reflected in the decision papers in general terms. I am not satisfied that the differential rates were set with a view to discouraging forestry land use.190 Most recently in Hauraki Coromandel Climate Action Inc v Thames–Coromandel District Council, above n 187, at [65].Taking into account the apparent ability of landowners to pay rates[187] The applicant submits that the Council improperly took into account legally irrelevant considerations in its rating differential decision, namely the purported ability of residents and forestry landowners to pay rates.[188] However, as noted above, in Mr Borg's second affidavit, he specifically denies the allegation that rates were levied according to the personal characteristics of the ratepayer. In that affidavit, Mr Borg says that no personal characteristics of the ratepayer were ever considered. Rather: 191 the focus was on the use to which the land was put, the affordability of rates having regard to that land use and the wider impact of those land uses on the district and community of Wairoa.[189] In my view there is an insufficient factual basis to support the claim that the local authority relied on the personal characteristic of wealth to impose the differential on forestry land.[190] Although the Council referred in the Statement of Proposal to the returns from forestry being much higher than for rural land used for sheep and beef farming, as well as the subsidies available to forestry landowners, as I have found above, these were comments about the affordability of rates to a sector and based on the use of and activities on the land, which are proper factors for the Court to consider among others. As noted, the Council was specifically entitled to take into account the use of the land as a factor in defining categories of rateable land as well as activities that are "permitted, controlled, or discretionary" for the area in which the land is situated. This allowed the Council to take into account the fact that use of land for forestry generally generates higher returns than other categories of land, including rural land. 192[191] Affordability is a permitted consideration as long as it is not solely based on the personal characteristics of the landowner. The purpose of local government is to promote the "social, economic, environmental, and cultural wellbeing of their191 Second affidavit of Gary Borg, 8 February 2022, at [29].192 Schedule 2 of the Rating Act.communities".193 Affordability must be a likely consideration by a local authority when looking at rating differential categories. One of the principles relating to local authorities is that when making a decision the local authority must take account of the diversity of the community within its district as well as the likely impact on each aspect of wellbeing referred to in s 10.194 In addition to taking a sustainable development approach, a local authority should take into account the "social, economic, and cultural wellbeing of people and communities".195 All of these statutory pointers indicate that affordability is in general terms a proper factor to be taken into account in a rating decision by the Council.[192] The applicant pointed to the Queensland case of Xstrata as supporting the submission that wealth or ability to pay by an owner was an impermissible consideration. 196 However, as I noted above, the Queensland Court of Appeal inIsland Resorts clarified that the proper approach was that a personal characteristic of the land user could not be the determining factor but it might be relevant in general terms when looking at differentials. In any event, the Court of Appeal decision inXstrata was based on the findings of the primary Judge that the rating decision had been made on the basis of a personal characteristic. That is not the case here.[193] In conclusion, the local authority did not act improperly in making the rating differential decision by taking into account the likely affordability of the rates to the forestry industry. That was a matter the Council was entitled to take into account in the circumstances. The applicant has not made out its claim that the rating differential decision was made for an improper purpose.Failure to take into account climate change and the environmental wellbeing of the community[194] The claim under this head is based on an allegation of a failure to take into account mandatory relevant considerations, namely environmental wellbeing and climate change, both of which were said to be relevant to the rating decision. The applicant says climate change and the need to mitigate the effects of climate change193 Local Government Act, s 3(d).194 Section 14(c)(i) and (iii).195 Section 14(h)(i).196 Xstrata Coal Queensland Pty Ltd v Council of the Shire of Bowen, above n 31.and environmental wellbeing for future communities needed to be considered in setting the rates differentials.[195] The applicant said that not only was the local authority required to consider the likely impact of any decision on current communities but also on future communities, as it related to the four wellbeings (social, economic, environmental and cultural). 197[196] The applicant says the Council failed in that it:(a) failed to take into account the different emissions profiles of the proposed categories of land for differential rating;(b) failed to take into account the way in which each of the proposed categories of land for differential rating would mitigate or exacerbate the manifestations of climate change; and(c) expressly considered only the best interests of the Wairoa District, despite acknowledging the benefits of forestry at a regional or national level.[197] NZFOA submits that in accordance with s 3(d) of the Local Government Act, a local authority is required to promote social, economic, environmental and cultural wellbeing and take a sustainable development approach. It says that the Council failed to take into account the environmental wellbeing of the community in that it failed to consider the impacts that each of the proposed categories of land the differential rating had on the environmental wellbeing of the district, including, but not limited to, climate change mitigation.[198] Mr Bell-Connell for NZFOA argued that the issue of climate change was a significant issue and was recognised as such in the district though its various planning documents. The long-term plan noted climate change would affect the district within this lifetime and action needed to be prioritised to achieving a vision for a prosperous197 Local Government Act, s 14(c)(ii)–(iii).community.198 He said that despite having a climate change commitment the local authority failed to consider that issue in setting the rates differential. The likely potential effects of climate change on the Wairoa district were set out in a report prepared for the Council.199[199] Mr Little says in his affidavit he did not consider climate change was relevant to the decision about how to allocate and levy rates as between ratepayers. 200 The rating review did not involve an assessment of which activities should be undertaken or not undertaken by the Council. He went on to say that that was the function of the long-term planning process and that climate change was taken into account in the long-term plan into which the rating review was incorporated, and which plan was adopted on 30 June 2021. That fact was not challenged by the applicant. 201[200] The evidence in the affidavit of Dr Alan Glyn Jones on climate change was not contested. It pointed to the way in which New Zealand was managing international climate change obligations, including by sequestration by fast growing exotic species, such as those grown on the Wairoa forestry land. 202[201] The international consensus on climate change and the contributions of the forestry industry to its mitigation are not in issue here. Therefore, it is not necessary to traverse the evidence in that regard.[202] In Hauraki Coromandel Climate Action Inc v Thames–Coromandel District Council, Palmer J concluded that decisions about climate change deserved heightened scrutiny on judicial review, but that was dependent on the context. 203 In that case the High Court concluded that the Thames–Coromandel District Council had failed to assess the degree of significance of the issues relating to whether or not the mayor signed the Local Government Leaders' Climate Change Declaration, which contained198 Hāpaitia: uplifting our community – Mahere Pae Tawhiti Long Term Plan 2018–2028 (Wairoa District Council) at 29.199 James Oram The Implications of Future Climate Change on the Wairoa District: A report prepared for the Wairoa District (January 2017).200 Affidavit of Craig Little, 18 November 2021, at [50].201 At [50].202 Affidavit of Dr Alan Glyn Jones, 8 October 2020.203 Hauraki Coromandel Climate Action Incorporated v Thames–Coromandel District Council, above n 187, at [1]."Council Commitments". The Council had not followed its own Significance and Engagement Policy, nor had it met the requirements of ss 76–79 of the Local Government Act, which together with the policy required the Council to assess the degree of significance of the issues. The Council had accepted that its district was likely to be materially affected by climate change.204 The Council's climate change strategy and a decision engaging with climate change issues at a strategic level was a significant issue in terms of the Local Government Act and the Council's Significance and Engagement Policy.205 The Court said that the issue gave rise to significant questions bearing directly on the social, economic, environmental and cultural wellbeing of the district in the present and the future which was the purpose of s 10 of the Local Government Act.206 The Court also pointed to the requirement in the Local Government Act for the Council to assess the degree of significance of issues that came before it and in light of that to identify and assess all reasonably practicable options and to consider the views and preferences of those likely to be affected or having an interest in the issues.207 None of that had been done. 208[203] Palmer J noted whether a factor is a mandatory consideration will depend entirely on the context. 209[204] As Cooke J noted in CreedNZ Inc v Governor-General: 210What has to be emphasised is that it is only when the statute expressly or impliedly identifies considerations required to be taken into account by the authority as a matter of legal obligation that the Court holds a decision invalid on the ground now invoked. It is not enough that a consideration is one that may properly be taken into account, nor even that it is one which many people, including the Court itself, would have taken into account if they had to make the decision [205] Cooke J in CreedNZ Inc went on to say that questions of degree arose in these considerations and the more general and the more obviously important the consideration the readier the Court must have meant that it be taken into account.211204 At [61].205 At [62].206 At [63].207 At [63].208 At [62]–[63].209 At [32].210 CreedNZ Inc v Governor-General, above n 72, at 183.211 At 183.He went on to say that there will be some matters "so obviously material to a decision on a particular project that anything short of direct consideration would not be in accordance with the intention of the Act." 212[206] The decision before the Council in the Hauraki Coromandel Climate Action Inc v Thames–Coromandel District Council decision is a fundamentally different decision to the rating decision made by the present Council. Importantly, the rating decision was not directly concerned with climate change. While climate change is an important issue, it is not a mandatory consideration in every decision made by the Council, nor is the Council required to specifically address climate change, in every decision it makes.[207] The rating review did not involve an assessment of which activities should be undertaken or not undertaken by the Council. That is the function of the long-term planning process. Climate change was taken into account in the long-term plan 2021–2031 into which the rating review was incorporated and which was adopted on 30 June 2021. That decision is not challenged by the applicant.[208] While climate change is an important issue for any local authority, including the Wairoa District Council, how the council addresses it is a decision for it. In the present context the issue was not of such significance that it was a mandatory consideration. That contrasts with the nature of the issue before the council in Hauraki Coromandel Climate Action Inc v Thames–Coromandel District Council.[209] In contrast to the Local Government Act and the Rating Act, the Resource Management Act 1991 requires a decision made to consider climate change. Section 7(i) of that Act requires all persons exercising functions and powers under that Act to have particular regard to the effects of climate change.[210] In this case the rating differential decision was only indirectly if at all related to climate change. In the context of the rating decision, the Council was not required to take it into consideration as a mandatory consideration.212 At 183.[211] A margin of appreciation must be allowed to a local authority in its decision-making. This has long been the approach taken by the courts. For instance, in New Zealand Public Services Association Inc v National Distribution Union Inc, Hammond J was asked to review decisions of the Hamilton City Council in the restructure of the delivery of Council services. 213 In the course of that judgment his Honour noted that the Court needed to ensure it did not interfere with a council's decision by "assessing the council's homework". 214 He declined to interfere with the council's decisions and analysis of the merits.[212] In Hauraki Coromandel Climate Action Inc v Thames–Coromandel District Council Palmer J also reiterated that a Court will not interfere with a discretionary judgment of a council unless it is irrational or made on a wrong principle. 215[213] The context is important. Here, the decision is the setting of rates. These fund the services and work of council, which includes proposed climate change mitigation in terms of the council's strategy. Climate change is therefore only indirectly relevant to the rating decision. The council addressed climate change using other tools such as and including the long-term plan. Using rates differentials to support climate change initiatives would be a blunt and unfocussed instrument to effect climate change mitigation. Climate change was not a mandatory consideration in the rates setting context.[214] Neither was climate change mitigation a matter that the Council was required to take into account under the heading of community wellbeing. Every decision of the Council must address the issue of environmental wellbeing but. context is everything and that factor may not be of great importance in some decisions. In any event, the Council turned its mind to environmental wellbeing, as is illustrated in the table referred to earlier in this decision.216213 New Zealand Public Services Association Inc v National Distribution Union Inc CP52/96, HC Kirikiriroa | Hamilton, 16 September 1996.214 At 19.215 Hauraki Coromandel Climate Action Inc v Thames–Coromandel District Council, above n 187, at [56(iv)].216 See above at [109].Failure to take into account the work of the Equitable Rates Working Group[215] The applicant also pleads that the Council failed to take into account the work of the Equitable Rates Working Group and the resulting Opus/WSP report.[216] Mr Jamie Cox was the Council's representative on the Road Controlling Authorities Forum (New Zealand) Inc and a member of the special interest group which developed the Guidelines for equitable funding of pavement maintenance for low volume roads in 2017.217 Mr Cox, a private consulting engineer had been employed by the Wairoa District Council as Engineering Manager until 2018. He confirmed Mr Little's evidence that the facilitated discussions undertaken by the group were designed, to understand the different viewpoints on the heavy forestry traffic effects on the rural roads but those views were only to be one variable to flow into the special consultative process.[217] Mr Cox produced a copy of the final report produced by Opus/WSP in relation to the Equitable Funding Review.218 Mr Cox says it was never intended nor was it contended by any party that the outcome of the Equitable Funding Review process would be determinative of the final rating system adopted by the Council. The differences of opinion regarding the effects of heavy forestry traffic was an issue to be considered as part of the rates review but it was only one of the issues. 219 The Opus/WSP report itself says that it did not purport to be an assessment of the benefit/detriments to the community of different land uses. The report specifically noted the Council was undertaking a rates review and the cost allocation outcomes of the Equitable Funding Review would inform the calculation of the Council's rates review differential rates. 220[218] The mayor also confirmed that the work of the Equitable Working Group was considered. As he said in his affidavit:217 Road Controlling Authorities Forum (NZ) Inc Special Interest Group on Low Volume RoadsGuidelines for equitable funding of pavement maintenance for low volume roads: Guidance on setting equitable targeted or differential rates for funding pavement maintenance activities (July 2017).218 Adele Jones Equitable funding of pavement maintenance for low volume roads – Te Wairoa: A Case Study – Wairoa District Council (Opus, 10 July 2017) [Opus Report].219 At [16].220 At [13].[51] It is also not correct that Council failed to take into account the discussion that had occurred in the course of the equitable rating working group. Those discussions clearly informed Councils [sic] discussions and the submissions of the Applicant and Federated Farmers as participants in those facilitate consultation discussions as well as in the submissions of those entities' respective members.[219] There is no evidence to suggest that the Council was to do anything other than take the discussions of the group into account in its rating decision. When it made its decision, it had the work of the Equitable Working Group before it and it was entitled to attach such weight to that work and the relevant reports as it considered appropriate.Conclusion[220] The application is dismissed on all grounds.Summary — the claims[221] As is apparent from the above, I have found that none of the claims advanced by the applicant in its application for judicial review are made out. By way of summary, I now turn to address each of the specific claims as alleged in the applicant's amended statement of claim.First ground of review: improper purpose[222] The applicant alleges that the Council acted illegally with improper purpose when making the rates decision, in that it acted for the purposes of:(a) redistributing rates from residential and commercial ratepayers to rural and forestry ratepayers with the intention of making rates more affordable for residential and commercial ratepayers; and(b) discouraging forestry as a land use in the Wairoa district.[223] A local authority is required to act in accordance with principles, including promoting the social, economic, environmental and cultural wellbeing of its community. It was agreed that an overhaul of the rates system was needed. In so doing the Council was entitled to undertake that review to achieve what it viewed asthe best outcome for the wellbeing of its community. The Council undertook a special consultative process and considered the wide range of views that resulted as well as the other evidence it received. The Council explained the reasons behind the proposed changes and was entitled to make the rates adjustment it did even though that affected certain sectors more than others. It made no error in reaching its decision.[224] The applicant did not allege that there was predisposition or bias in terms of the decision made. A mayor is entitled to personal views and to champion the interests of the district, which is what he did in this case. The evidence pointed to as an indication of improper purpose or intention by the Council does not support that allegation.Second ground of review: taking into account legally irrelevant considerations[225] The applicant alleges that the Council took into account the purported inability of low-income residents to pay rates, and the purported ability of forest owners to pay rates, which were irrelevant.[226] Affordability in general terms is a proper factor to be taken into account in the rating decision. There is an insufficient factual basis to support the allegation that the Council relied on the personal wealth of forestry owners in imposing the differential on forestry land. Comments about the forestry industry's ability to afford the extra cost were about the affordability of rates to a sector. The fact that the use of land for forestry generally generates higher returns than other categories of land was a matter the Council was entitled to take into account.Third ground of review: failure to have regard to relevant considerations[227] The applicant says that the Council failed to have regard to mandatory relevant considerations, namely climate change, the environmental wellbeing of the community, and the work of the Equitable Rates Working Group.[228] The Council expressly turned its mind to environmental wellbeing, as evident in the table outlined at [109] in this decision.[229] Climate change is undoubtedly an important issue for any local authority. However, whether climate change mitigation will be a mandatory consideration depends on the context. In this case the rating differential decision was only indirectly if at all related to climate change. In the context of a decision about how to allocate and levy rates as between ratepayers, climate change was not a mandatory consideration.[230] The Council was not required to await the outcome nor was it bound by the discussions and comments in the Equitable Rates Working Group's report. When the Council made its decision, it had the work of the working group before it and was entitled to attach such weight to it and the relevant reports as it considered appropriate.Fourth ground of review: mistake of fact[231] The applicant says that the Council materially relied on mistakes of fact, namely that forestry had a negative impact on community wellbeing and that the forestry industry did not have constraints on its ability to pay rates due to incentives such as the One Billion Tree Fund and subsidies such as carbon credit subsidies.[232] The Council recognised in its Statement of Proposal that there were many reports available on the effects of forestry and acknowledged the differences of opinion, that some of the statements made in the reports were challengeable and that any economic impact report would include assumptions and judgement calls which ultimately made the assessment to some extent subjective. The Council was entitled in making its decision to assess and weigh the information it had before it and was entitled to give greater weight to one study over another. The Council was entitled to reach the conclusions it did as to the benefits or negative impacts that forestry land use provided to the district.[233] As noted, the differential rates were based on the use of the land and its ability to generate higher returns as opposed to the wealth of the forestry landowners themselves. The Council was also entitled to take into account the subsidies available to forestry owners as a factor even if not all forestry landowners claimed the subsidies available to them.Fifth ground of review: unreasonableness[234] The applicant says that the Council's decision was unreasonable in that the evidence it relied on did not logically support the conclusion that forestry negatively affected community wellbeing.[235] The Council was entitled to assess and weigh the information before it, which included information that forestry use of land caused negative effects to community wellbeing. The Council was also entitled to draw on the experience of its members in this regard. Unreasonableness remains a stringent test and the decision in this case does not meet the level required.[236] Rating decisions are fundamentally the exercise of political judgment. The courts are reluctant to intervene on the grounds of unreasonableness. 221 This Court recently in Kidd v Southland District Council noted that there was no movement away from judicial restraint and local authority rating cases and that the Court of Appeal's conclusions in Wellington City Council v Woolworths New Zealand Ltd (No 2)remained appropriate. 222 The test "remains a stringent one" and a high standard of unreasonableness still applies.223 This case does not reach that standard.Costs[237] Subject to hearing from counsel on the matter it appears appropriate that costs follow the event on a 2B basis. If counsel are unable to agree on costs any application and submissions should be filed and served within 10 days of the date of this judgment, a response within a further 10 days and any reply within a further five days.____________________Grice J221 J P McVeagh and others Local Government Law in New Zealand (online looseleaf ed, Thomson Reuters, 2021) at [RAIntro.06].222 Kidd v Southland District Council [2019] NZHC 1947 at [13], citing Wellington City Council v Woolworths NZ Ltd (No 2), above n 8.223 Kidd v Southland District Council, above n 222, at [14].Solicitors:Dentons Kensington Swan, WellingtonLawson Robinson Limited