By BRIAN RUDMAN
The only problem with three weeks holiday is that you come back with the strange notion that the world is not quite as mad as you left it.
But it is. Take the silliness between Watercare Services and its 41 per cent owner, Auckland City Council, over rates.
The council has a policy of rating any utility it can, and nothing escapes its eagle eyes, be it a manhole cover, letterbox or even the buried pipes of its fully owned subsidiary Metrowater.
Last year, emboldened by High Court and Court of Appeal backing for its action in levying rates on Telecom facilities, the city's tax collectors turned their sights on the region's publicly owned water and wastewater reticulator, Watercare.
After a quick measure-up of the company's pipes, the council lumbered Watercare with a rates demand of $2.2 million for the year ending June 2000. The stunned water company paid up to avoid late-payment penalties, then took the issue to the High Court.
On November 10, Justice Peter Salmon bloodied the city tax collectors' noses with a ruling comprehensively rejecting the city's case and ordering it to pay back the $2.2 million, plus costs. He endorsed Watercare's contention that it had inherited statutory rating exemptions dating back to the Auckland Metropolitan Drainage Act 1960. The city had argued that these exemptions had somehow been lost in 1992 when the old Auckland Regional Council transferred its sewerage and bulk-water undertakings to Watercare. The judge saw no merit in this argument.
The city's finance director, David Rankin, said at the time that an appeal was unlikely.
And that, thought Watercare, was that until a few days before Christmas, when, amid the seasonal cards, came the news that the council was appealing "on the grounds that the decision is wrong in fact and law."
Now call me old fashioned, but to me the idea of publicly owned bodies scrapping with each other through the courts benefits no one but the high rise lawyers involved.
This case is even more unacceptable as the aggressive party is the biggest single shareholder of the company it's dragging back before the court. (The other main shareholders are Manukau City (25 per cent), Waitakere City (16.7) and North Shore City (11.5).)
Mr Rankin is playing it down by arguing the council hasn't made "a substantive decision" whether to appeal.
He says the documents lodged before Christmas were "a pro forma" appeal made before the appeal period expired to protect the city's ability to proceed later.
He says the city has received an opinion from city solicitor David Kirkpatrick, of Simpson Grierson, indicating there were grounds for a review. Which perhaps is not unexpected, as Mr Kirkpatrick was the lawyer defeated in the first courtroom tussle.
On Mr Kirkpatrick's recommendation, another opinion has been sought. It's then up to Mr Rankin to make a recommendation to the politicians of the finance committee, who meet on February 1.
Mr Rankin says it's all been non-confrontational. Over at Watercare, they don't quite see it that way.
They're reluctant to criticise their owners publicly, but privately the mood is one of outrage.
While Mr Rankin says the appeal is "pro forma," Watercare has to treat it as the real thing, whether the city eventually goes to court or not.
In the meantime, it's still waiting for its $2.2 million rates refund. Mr Rankin says it is on its way.
Watercare had not seen it by yesterday afternoon. If the cheque hasn't been written out, it should be. The council should also call its legal dogs off Watercare. This is a fight where only the lawyers will prosper.
As Mayor Christine Fletcher said after yesterday's equally crazy decision by the city's investment committee to appeal over the Vector refunds case: "It is indefensible to be spending more of our ratepayers' money in pursuing this.
"We lost the case and should leave it at that."
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