WALLACE & Ors v THE AUCKLAND COUNCIL & Anor [2022] NZHC 1299

WALLACE & Ors v THE AUCKLAND COUNCIL & Anor [2022] NZHC 1299 [3 June 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-439[2022] NZHC 1299UNDER The Judicial Review Procedure Act 2016IN THE MATTER of sections of the Resource Management Act1991 in relation to statutory decisions togrant a resource consent on a non-notifiedbasis under the RMA.BETWEEN GARY WALLACE AND VICKI WALLACEFirst ApplicantsRICHARD BRABANT AND ELEANORBRABANTSecond ApplicantsJASON ORR AND LESLEY ORRThird ApplicantsDAVID PEDERSEN AND TRACYPEDERSENFourth ApplicantsAND THE AUCKLAND COUNCILFirst Respondent44 VENTNOR LIMITEDSecond RespondentHearing: 26 May 2022Appearances: M Williams for the ApplicantsNo appearance by or on behalf of First RespondentA R Galbraith QC and C F Timbs for the Second RespondentsJudgment: 3 June 2022JUDGMENT OF POWELL JThis judgment was delivered by me on 3 June 2022 at 10.30 am pursuant toR 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:[1] The applicants, Gary and Vicki Wallace, Richard and Eleanor Brabant, Jasonand Lesley Orr and David and Tracy Pedersen, seek interim orders to prevent thecompletion of a development at 44 Ventnor Road, Remuera, Auckland ("thedevelopment"). Specifically, they seek an order which prevents the developer, thesecond respondent 44 Ventnor Limited from:(a) requesting the issue of record of title under s 12 of the Land TransferAct 2017 for each of the 13 units approved under the development; and(b) settlement of the sale of any of the 13 units in the development at 44Ventnor Road, Remuera, Auckland.pending final determination of the applicants' judicial review proceedings.[2] The applicants' opposition to the development is long-standing. After44 Ventnor Ltd obtained a non-notified resource consent to develop 13 dwellings onthe site at 44 Ventnor Road in March 2021, the applicants commenced judicial reviewproceedings in respect of both the notification decision and the substantive decisiongranting consent. No interim orders were sought however, and 44 Ventnor Ltdcontinued construction up until the release of the High Court judgment on17 November 2021. In that decision, van Bohemen J identified that two errors of lawhad been made by the Auckland Council when determining whether the applicationshould have been notified and in granting the consent for the development.Specifically:1 the Council did not properly consider the adverse effects of the buildingintensity of the development on the neighbourhood character, residentialamenity, safety and the surrounding residential area because, in assessingthose effects on the environment and on who may be affected persons:(i) the Council considered matters which are not part of theexisting environment and which are not permitted as of rightunder the AUP;2 and(ii) the Council did not turn its mind to the effects of buildingintensity neighbourhood character and residential amenity in1 Wallace v Auckland Council [2021] NZHC 3095 at [193(b)].2 Auckland Unitary Plan.its consideration of the assessment criteria in H4.8.2 of theAUP.[3] His Honour proceeded to set aside the notification decision and 44 VentnorLtd's consents and directed Auckland Council:3 to reconsider the application, subject to any amendments the applicant maywish to make, and to reconsider who may be affected persons for the purposesof s 95E of the Resource Management Act.[4] In accordance with the judgment, 44 Ventnor Ltd ceased work on thedevelopment. A slightly amended application which incorporated some additionalanalysis on the issues identified by van Bohemen J was lodged with the AucklandCouncil on 9 December 2021. Following various requests for further information,Commissioners appointed on behalf of the Auckland Council again determined thatthe development should proceed on a non-notified basis ("the notification decision"),albeit that the notification decision was limited to the land use consent required for thedevelopment, leaving the notification decision on the subdivision consent that had alsobeen applied for to be determined at a later date.[5] Following the issue of the notification decision, on 4 March 2022 the sameCommissioners granted the land use consents for the development ("the land useconsent decision").[6] Following the release of the land use consent decision, 44 Ventnor Ltd resumedwork on the development. This resulted in the present proceedings, filed on 23 March2022. As by that point it was apparent to the applicants that the development was notfar from completion, the applicants sought undertakings from 44 Ventnor Ltd to enablethe substantive judicial review proceedings to be heard before the development wascompleted. As no undertakings were provided the present application for interimorders was filed on 12 April 2022.[7] Since the filing of the application for interim orders 44 Ventnor Ltd hasconfirmed the development will be completed around 6 June 2022, with settlement ofthe 13 units likely to take place within five working days of that date.3 Wallace v Auckland Council, above n 1, at [215(c)].Legal principles[8] The interim order sought is pursuant to s 15 of the Judicial Review ProcedureAct 2016 (JRPA) which states, as relevant:(1) At any time before the final determination of an application, the courtmay, on the application of a party, make an interim order of the kindspecified in subsection (2) if, in its opinion, it is necessary to do so topreserve the position of the applicant.(2) The interim orders referred to in subsection (1) are interim orders—(a) prohibiting a respondent from taking any further action that is, orwould be, consequential on the exercise of the statutory power:(b) prohibiting or staying any proceedings, civil or criminal, inconnection with any matter to which the application relates:(c) declaring that any licence that has been revoked or suspended inthe exercise of the statutory power, or that will expire by thepassing of time before the final determination of the application,continues and, where necessary, that it be deemed to havecontinued in force.(4) An order under subsection (2) or (3) may—(a) be made subject to such terms and conditions as the court thinksfit; and(b) be expressed to continue in force until the application is finallydetermined or until such other date, or the happening of suchother event, as the court may specify.[9] The legal test for determining an interim order application under s 15 of theAct is well established, as set out in Carlton & United Breweries Ltd v Minister ofCustoms.4 The Court must be satisfied that the orders sought are necessary to preservethe position of the applicant for interim relief, "which must mean reasonablynecessary".5 The Court has a wide discretion to consider all the circumstances of thecase, including the apparent strengths or weaknesses of the claim, the statutoryframework, the public interest, and the private and public repercussions of granting4 Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 (CA).5 At 430.relief. Consideration must also be given to the purpose of interim relief power, beingto:6(a) Relieve the applicant from the adverse effects of a challenged decision untilthe challenge is heard and determined; and(b) Reserve the ability of the Court to grant effective relief if the challenge issuccessful.[10] Although the strengths and weaknesses of the claim are relevant to the Court'sdiscretion, a detailed discussion of the merits of the application, beyond the limitedpurposes for which the merits are relevant to interim relief, is not required.7[11] Relevantly in the context of this case the High Court in Te Rūnanga-Ā-Iwi ONgāti Kahu v Far North District Council stated that while an undertaking as todamages is not mandatory, there are some cases where the Court may require one as acondition of granting interim relief.8 A lack of merit may point to an undertaking beingrequired, although this must be exercised sparingly where judicial review is sought inrelation to public law issues, so as to avoid fiscal barriers in relation to possiblymeritorious claims to review administrative decisions. This is particularly relevantwhere there is a high degree of public interest.[12] On the other hand, a failure or refusal to provide an undertaking may weighagainst the Court's decision to grant an interim order.9 Furthermore, where a party hasin good faith carried out work and incurred cost in reliance upon a particular decisionhaving been made lawfully and appropriately, it is appropriate for the applicant toundertake to bear any losses suffered by that party if the claims are not made out on asubstantive basis.106 Greer v Chief Executive, Department of Corrections [2018] NZHC 1240 at [24].7 Criminal Bar Association of New Zealand Inc v Attorney-General [2012] NZHC 400, (2012) 21PRNZ 221 at [21].8 Te Rūnanga-Ā-Iwi O Ngāti Kahu v Far North District Council HC Whangarei CIV-2010-488-348,13 September 2010 at [33].9 At [33].10 Videbeck v Auckland City Council [2002] NZRMA 481 (HC) at [28].The case for the applicants[13] On behalf of the applicants Mr Williams submitted that an interim order was"clearly necessary to preserve the applicants' position" to the extent that "this pointcannot seriously or credibly be contested". In Mr Williams submission, if thedevelopment is completed and the individual units subdivided and sold, thedevelopment becomes "essentially irreversible". At that point, even if the substantivejudicial review proceedings are successful, there will be no prospect of the applicantsobtaining the remedy provided in the initial proceedings, and therefore the prospect ofeffective relief would be "essentially if not entirely thwarted". In the applicants'submission, this would mean "there is no realistic prospect that a lesser number (i.eintensity) of units would ultimately be approved on reconsideration of the matter bythe Council, following intervention by this Court".[14] On the basis that the threshold test was therefore met, Mr Williams submittedthat the various errors identified with regard to the notification and consent decisionsare "not only seriously arguable, but at least a prima facie case has been made out".In Mr Williams submission the issues raised demonstrate "a genuine neighbourhoodconcern with broader consequences for administration of the [AUP]".[15] Against that, Mr Williams discounts the "commercial interest" of 44 VentnorLtd, submitting that they elected to take a commercial risk in continuing to work onthe development notwithstanding the operation of the applicants, the previoussuccessful challenge, and the knowledge of the present proceedings. Likewise,Mr Williams also minimised any effects on third parties, noting that the 13 purchasersentered into their respective agreements for sale and purchase with 44 Ventnor "on theclear understanding that the development may not be completed until December 2023"and thus will not be adversely affected by any interim orders.[16] Finally, Mr Williams noted that it is not mandatory for the applicant to give anundertaking and such an undertaking would not be appropriate in the circumstances inany event, given the commercial risks assumed by 44 Ventnor Ltd and the applicants'lack of understanding of precisely what "damages" any undertaking would extend toor embrace.Discussion[17] Having considered the matters raised on behalf of the applicants, I acceptMr Galbraith's submissions on behalf of 44 Ventnor Ltd that interim orders are notnecessary to protect the position of the applicants and such orders are in any eventinappropriate, particularly in the absence of any undertakings provided by theapplicants.[18] First, although there is some superficial logic to the submissions that thesubstantive relief desired by the applicants would be more difficult to obtain if theunits were transferred to the purchasers, ultimately this does not stand detailedscrutiny. Specifically, the development is already substantially complete inaccordance with the consents issued by the Council. It follows that even if theapplicants can show that there is a reviewable error, they must also convince the Courthearing the substantive application to cancel the current decisions on notification andconsent and order that the Council be given a further opportunity to reconsider theconsents in circumstances where:(a) The Commissioners who decided the current notification and consentdecisions have explicitly addressed the issues identified byvan Bohemen J in his previous decision.11(b) The applicants have acknowledged, through Mr Williams, that theyapparently no longer seek the removal of the three buildings thatcomprise the development, but rather all they are trying to do is limitthe number of units contained within those already constructedbuildings, notwithstanding the effect that that will have on the rights ofthe purchasers.(c) Even if the High Court could be persuaded to again refer the consentsback to the Council, the Council would not be able to take into account11 Decision on notification at pages 8, 9, 10, 12 and 14, and decision on consent at pages 3 and 4(Application number: LUC60392244).the fact that the dwellings have been completed, nor the rights of theowners of the units.[19] These obstacles will arise whether or not the interim orders sought are granted.They are a consequence of the advanced stage of the construction of the development,as a result of the applicants not previously seeking interim orders. I therefore concludeinterim orders are not necessary to protect the applicants' position, the thresholdrequirement has not been met and as a result the application must be dismissed.[20] Even if the applicants could satisfy the threshold test, I am otherwise satisfiedthat the wider circumstances of the case do not favour the making of the interim orderssought.[21] In particular, while it is not necessary or appropriate to consider the merits ofthe substantive judicial review application in any detail, the applicants' principalchallenge contained in the first four causes of action does not appear to be strong:(a) The first and second causes of action focus primarily upon the numberof units appropriate for the site and that in the absence of the Councilconsidering the number of dwellings, that dwelling intensity waserroneously assessed. That the number of dwellings is relevant per se,as opposed to the environmental effects of the development, is not atall apparent from either the earlier High Court decision nor fromMr Williams submissions. On the contrary, while van Bohemen J wasclear that the number of buildings and the activities within thosebuildings were relevant,12 there is no suggestion from his judgment thatthe number of dwellings by itself was relevant.(b) The third cause of action argues that the Council "irrationally andunreasonably" applied the "permitted baseline concept" in itsassessment of the notification and land use consent decisions. This isa reference to a planning exercise undertaken by 44 Ventnor Ltd'splanning consultants which concluded that three buildings of a similar12 Wallace v Auckland Council, above n 1, at [162].scale to those proposed were permitted under the plan. The applicants'concerns on this issue are clearly difficult to sustain given:(i) the Commissioners explicitly recorded in their decisions thatthey did not rely upon the permitted baseline discount;13 and(ii) in any event, in oral argument Mr Williams accepted, withregard to the site as it is presently contoured, that the permittedbaseline model provided was essentially accurate.(c) The fourth cause of action alleges a "bundling error", in that theCouncil should have considered the necessary subdivision consent atthe same time as the land use consents.14 This was not pursued in thefirst High Court judicial review application, notwithstanding thesubdivision consents were similarly unbundled from the land useconsents in the consent decision. Moreover, the current judicial reviewproceedings did not challenge the subdivision consent until after thehearing of the application for interim orders, although Mr Williamsindicated at the hearing it was intended to do so, while at the same timealso contending/confirming that the applicants' issue was not with thesubdivision consents but rather the land use consents.[22] The remaining causes of action were not as developed, raising a range of whatappear to be relatively minor errors in the way in which the notification and consentdecisions were made.[23] I am likewise satisfied that contrary to the submissions advanced byMr Williams on behalf of the applicants, the likely prejudice to both 44 Ventnor Ltdand the purchasers far outweighs any possible benefits to the applicants of making theorders.13 Decision on notification at pages 14 and 16.14 Instead, the Council deferred the subdivision consent on the basis that they could not make eithera notification or substantive decision on the subdivision until the land use consent had beengranted. While the applicants' accepted that this was factually correct, their submission is that thetwo aspects of the overall proposal "cannot be divorced or segregated". In their submission thiscomprises a further reviewable error in the approach taken to the assessment.[24] In particular it is clear from the evidence of Kurt Gibbons, filed on behalf of44 Ventnor Ltd, that it has expended significant sums to date (some $15 million) andshould settlement of the sale of the units be prevented, 44 Ventnor Ltd will faceimmediate and significant holdings costs on the development. Mr Gibbons hascalculated these costs will amount to approximately $29,003.70 per week, consistingof interest of $20,667.63 per week and holding costs (including security, insurance andrates) of approximately $8,336.07. While, as Mr Williams has submitted, 44 VentnorLtd has taken the commercial risk of construction, at no stage have the applicantspreviously sought interim orders so as to stop 44 Ventnor Ltd from continuing withconstruction in accordance with the resource consents it has obtained. At the sametime, and despite two High Court proceedings, there is no suggestion that 44 VentnorLtd has at any point acted improperly in undertaking the development. In particular:(a) initial construction commenced after the initial consents were obtained;(b) construction paused when the High Court set aside the first notificationdecision and the consents; and(c) only resumed again after the amended resource consent application hadbeen granted by the Council.[25] There is likewise an air of unreality about the applicants' submissions that thepurchasers' interests can simply be disregarded on the basis of the sunset clausecontained in the agreements for sale and purchase and other possible legal avenuesthat would enable 44 Ventnor Ltd to escape liability from the purchasers. Thepurchasers will no doubt be aware that the development is nearly finished and that, allthings being equal, settlement will occur soon. Although there is little evidence aboutthe identity of the purchasers, other than that nine of the 13 are owner-occupiers, it isnot speculative to foresee that any interim orders will not only require alternativeliving arrangements to be made, but also that significantly higher interest rates onborrowings by the purchasers are likely the longer settlement is delayed.[26] When these obvious and substantial effects on both 44 Ventnor Ltd and thepurchasers are coupled with the fact that the applicants are not prepared to even offeran undertaking as to damages it makes it very clear that the wider circumstances ofthis case simply do not favour the making of interim orders.Decision[27] The applicants' application for interim orders is dismissed.[28] 44 Ventnor Ltd is entitled to costs on the application. If these cannot be agreedwithin one month, I will determine the issue following the filing of memoranda._______________________________Powell JSolicitors:Grove Darlow & Partners, AucklandBerry Simons, AucklandCounsel:Martin Williams, Shakespeare Chambers, NapierAR Galbraith QC, Auckland