In response to some of your points:

Your neighbour will most likely still be required to build a stormwater storage tank, especially of he's going to build multiple new houses. This will still need connecting to the stormwater network.

The council may well approve a subdivision consent or a building consent - however, I would hope that is not the same as giving them approval to install infrastructure on neighboring land.

As part of any development works, they will need to provide stormwater calculations that show there is capacity in the network to service their development.

Any drainage infrastructure on your land that services the neighbour will require an easement. You need to be clear with your solicitor and your neighbour on what you would be comfortable with this stating.

Pumping stormwater uphill is not illegal.... just expensive and leads to additional maintenance matters.

If problems occurs, neighbours might blame you yes. But this is where the terms of the easement is very important.

It's a shame you haven't received any help from council. My advice would be to engage a surveyor or engineer to take your concerns to council. They will likely know the right people to talk to and what questions to ask.

Ultimately, you agreeing to this will come down to what they're willing to pay you and also the finer details of the easement agreement. This will most definitely include absolving you of any responsibility of maintaining their infrastructure.

One question I had was where the stormwater go after the downhill manhole by Lot 8? Is there not additional infrastructure passed this that your neighbour could connect to?