Rent rise ruled invalid

The High Court has overturned a controversial 24 per cent rent rise imposed by the Christchurch City Council in a ruling likely to give several thousand tenants an early Christmas bonus.

Justice Chisholm ruled yesterday that the council's social housing rent rise in April was invalid and would be quashed a major legal victory for a welfare group, the Council of Social Services (Coss), which took the action.

The judge said the council failed to properly assess the significance of the decision and failed to give proper consideration to the tenants' views.

It had also failed to properly consider the implications of a government funding option to help upgrade the housing.

As a result "the tenants have been substantially prejudiced".

However, Christchurch Mayor Bob Parker did not rule out an appeal.

He said the judgment would result in substandard housing as there would be less money to spend on the needed upgrades.

The ruling means the tenants could be reimbursed any extra rent they have paid since the rise came into effect on July 1.

Coss lawyers will meet council staff to decide if social housing rents will revert to last year's levels or a much smaller 3% rise is applied instead.

The judge said he hoped negotiations could conclude within two weeks.

The controversial 24% rise was passed by a majority of city councillors on March 27 and reconfirmed on April 28.

It was designed to raise more revenue to upgrade the council's 2649 ageing rental units.

Coss executive officer Sharon Torstonson said the High Court decision was a victory for social housing tenants.

"I am absolutely delighted for the tenants and for democracy.

"It is great. I am a bit breathless from the excitement," she said.

"The decision validates what we said all along, that the council did not do the process properly."

Coss counsel Chris Hlavac said tenants could expect a festive bonus.

"I think this case has always been about transparency and the need for local government to really be transparent, and I am pleased the court has found that," he said.

Social housing tenant Kim St Claire, 75, was delighted the rent rise was overturned.

"I am over the moon.

"We have had to watch the pennies and I try to save as much as I can to see family in Australia and I do not get to see them often," she said.

"There was no way I was going to get over there this year.

"This will make a big difference to lots of people.

"I could not understand why the council did it. It was just greed."

Parker said the council would investigate if there were grounds for an appeal.

If not it would have to pay back a "reasonably significant amount".

"It's not an enjoyable moment because one hopes the process is correct when you follow it through," he said.

If the council did not appeal, it may begin the process of introducing another rent rise in the future and make sure it "crossed every T and dotted each I".

"In one sense, there is an element of the Pyrrhic victory about this outcome.

"Effectively what this decision would do is mean we have to pull back on our programme of upgrading these flats. In a way it is sad.

"Although it was a hard decision (to increase rents) it was the right decision," Parker said.

If no appeal was made, the council would apologise. It would also reverse the rent increase and return money "as quickly as humanly possible".

The High Court has also ordered the council to pay Coss's legal costs for the judicial review.

Christchurch Central MP Brendon Burns said the decision was a victory for common sense.

Wigram MP Jim Anderton said the council was found wanting for its failure to make a proper application to the Government for funding.

- © Fairfax NZ News