AUCKLAND COUNCIL v 184 MARAETAI ROAD LTD [2015] NZHC 2254

AUCKLAND COUNCIL v 184 MARAETAI ROAD LTD [2015] NZHC 2254 [17 September 2015]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2014-404-001340[2015] NZHC 2254UNDER the Resource Management Act 1991IN THE MATTER OF an appeal from a decision of theEnvironment Court pursuant tosection 299 of the Resource ManagementAct 1991BETWEEN AUCKLAND COUNCILAppellantAND 184 MARAETAI ROAD LIMITEDRespondentHearing: 20 August 2015Counsel: W S Loutit and S J Mitchell for the AppellantS J Simons and K A Mulcahy for the RespondentJudgment: 17 September 2015JUDGMENT OF EDWARDS JThis judgment was delivered by Justice Edwardson 17 September 2015 at 4.30 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors: Simpson Grierson, AucklandBerry Simons, AucklandIntroduction[1] In 2002 the Auckland Council granted a "Concept Development Consent"(CDC) for a 15 lot development over four parcels of land in Clevedon. The lapse date for the CDC was extended by the Council on two occasions so that the final lapse date was 29 November 2010.[2] By its decision dated 13 May 2014, the Environment Court declared that theCDC had been "given effect to" before its final lapse date within the meaning ofs 125(1A)(a) of the Resource Management Act 1991 (RMA).1[3] The Council appeals from that decision. It says the Environment Court erred in law by applying the wrong legal test, taking into account irrelevant factors and failing to have regard to relevant factors. It invites this Court to quash the decision and substitute its own judgment for that of the Environment Court.Background[4] The land the subject of the CDC is located at the eastern end of Umupuia Beach in Clevedon. It comprises several parcels of land each owned by different parties.[5] The application for the CDC was for "a concept subdivision to create 15 ruralallotments and the setting aside of land for road, private ways, recreation andesplanade reserves purposes".2[6] The Council granted the CDC in March 2002. It is a "land use" consentwithin the meaning of s 87(a) of the RMA. The underlying purpose of the CDC is to allow development to proceed on a staged basis in which consent to develop the land is first obtained with each stage of the development proceeding by way of a subdivision consent.3 Rule 9.8.2 of the District Plan provided for the grant of such a1 184 Maraetai Road Ltd v Auckland Council [2014] NZEnvC 105.2 Minute No 169/02 – Commissioners' Decision, 1 March 2002 (the CDC).3 Manukau Operative District Plan 2002 (District Plan), r 9.5.1.1.consent and the Environment Court proceeded on the basis that this rule, and the CDC, was valid for the purposes of the proceeding.4[7] Ms Simons for the respondent described the CDC as similar to a "framework plan" and referred to evidence given on behalf of the Council to the Independent Hearings Panel on the Proposed Auckland Unitary Plan which described the purpose of CDCs as follows:In broad terms, the [concept development consent provisions] were a method to ensure integrated and comprehensive development of greenfield and brownfield land in certain areas. The provisions addressed matters including transport networks, three waters infrastructure (water, wastewater and stormwater), urban design and open spaces. The key thrust of the legacy provisions was to avoid ad hoc development and to achieve an integrated and coordinated approach to the provision of infrastructure and urbanisation or intensification.[8] As condition 2 to the CDC makes plain, a further application for a subdivision consent is required to authorise the subdivision of the land. It was common ground that the effect of the CDC was to make an application for subdivision in accordance with the CDC a controlled activity as opposed to a restricted discretionary or non-complying activity within the meaning of s 87A of the RMA.[9] There are 41 separate conditions attaching to the CDC. Those conditions deal with a range of matters including LINZ approval to title boundaries; the creation of public and private roads; the design of a centralised wastewater treatment plant; the vesting of recreation and esplanade reserves; the installation of network utilities; and the provision of pedestrian access to the regional park. Some of these conditions require compliance at the time subdivision consent is applied for, or upon completion of the full subdivision.[10] On 29 November 2004, the Council granted an extension of the CDC lapse date to 29 November 2007. A further extension was granted on 27 September 2007 with a lapse date of 29 November 2010. It is that date which is relevant to this appeal. The Environment Court proceeded on an assumption that through the4 184 Maraetai Road Ltd v Auckland Council above n 1 at [3](a).granting of these two extensions, substantial progress or efforts had been made and continue to be made towards giving effect to the consent when judged in 2004 and 2007.5[11] In July 2010, prior to the lapse date, a subdivision consent was granted for a four lot subdivision of the eastern most parcel at 206 Maraetai Coast Road (July subdivision consent). That consent was also made subject to a number of conditions. Whether the July subdivision consent is able to stand alone, independent of the CDC, is a matter of dispute between the parties.[12] In August 2010 a survey plan approval for the July subdivision consent was granted under s 223 of the RMA, and in September 2011 a s 224 Certificate was issued.[13] The parties were agreed that events after November 2010 should be disregarded for the purposes of the s 125 enquiry. But for completeness, I note that the parcel of land at 200 Maraetai Road (Lot 1, DP 128027) was purchased by the Council in 2013 and now forms part of the Duder Regional Park. In 2012 the respondent purchased 184 Maraetai Road (Lot 2, DP 128027) and lodged an application for subdivision consent. That application was declined on the basis that the CDC had lapsed, and it was that decision which prompted the application for a declaration which is the subject of this appeal.Approach on appeal[14] The appeal is brought pursuant to s 299 of the RMA which allows appeals to this Court on a question of law. The principles relevant to an appeal under that section are well settled and are summarised in Ayrburn Farm Estates Ltd v Queenstown Lakes District Council as follows:65 At [3][h].6 Ayrburn Farm Estates Ltd v Queenstown Lakes District Council [2012] NZHC 735, [2013] NZRMA 126.[33] An appeal to this Court under s 299 is an appeal limited to questions of law.[34] Appellate intervention is therefore only justified if the Environment Court can be shown to have:i) applied a wrong legal test; or,ii) come to a conclusion without evidence or one to which on the evidence it could not reasonably have come; or,iii) taken into account matters which it should not have taken into account; or,iv) failed to take into account matters which it should have taken into account.[35] The question of the weight to be given relevant considerations is for the Environment Court alone and is not for reconsideration by the High Court as a point of law.[36] Further, not only must there have been an error of law, the errormust have been a "material" error, in the sense it materially affected the result of the Environment Court's decision(footnotes omitted)Meaning of "given effect to"[15] Section 125 of the RMA provides:125 Lapsing of consent(1) A resource consent lapses on the date specified in the consent or, if no date is specified,—(a) 5 years after the date of commencement of the consent, if the consent does not authorise aquaculture activities to be undertaken in the coastal marine area; or(b) 3 years after the date of commencement if the consent does authorise aquaculture activities to be undertaken in the coastal marine area.](1A) However, a consent does not lapse under subsection (1) if, before the consent lapses,—(a) the consent is given effect to; or(b) an application is made to the consent authority to extend the period after which the consent lapses, and the consent authority decides to grant an extension after taking into account—(i) whether substantial progress or effort has been, and continues to be, made towards giving effect to the consent; and(ii) whether the applicant has obtained approval from persons who may be adversely affected by the granting of an extension; and(iii) the effect of the extension on the policies and objectives of any plan or proposed plan.(emphasis added)[16] The meaning of s 125(1A)(a) must be ascertained from its text and in light of its statutory purpose. Regard must also be had to the immediate and general legislative context, and the social, commercial or other objectives of the enactment.7[17] In Biodiversity Defence Society Inc v Solid Energy New Zealand Ltd the Court found that the overall purpose of s 125 of the RMA is to address the importance of a consent either being used or lapsing so that other applications for consents were not artificially constrained by uncertainties as to whether previous consents will be put into effect or not.8 The Court considered the following passagefrom Katz v Auckland City Council accurately captured the mischief underlying s 125:9There are compelling reasons of policy why a planning consent should not subsist for a lengthy period of time without being put into effect. Both physical and social environments change. Knowledge progresses. District schemes are changed, reviewed and varied. People come and go. Planning consents are granted in the light of present and foreseeable circumstances as at a particular time. Once granted a consent represents an opportunity of which advantage may be taken. When a consent is put into effect it becomes a physical reality as well as a legal right. But if a consent is not put into effect within a reasonable time it cannot properly remain a fixed opportunity in an ever-changing scene. Likewise, changing circumstances may render conditions, restrictions and prohibitions in a consent inappropriate or unnecessary.7 Interpretation Act 1999, s 5. Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [22]8 Biodiversity Defence Society Inc v Solid Energy New Zealand Ltd [2013] NZHC 3283, (2013) 17 ELRNZ 337 at [59].9 At [57], referring to the Environment Court decision in Biodiversity Defence Society Inc v Solid Energy New Zealand Ltd [2013] NZEnvC 195 citing Katz v Auckland City Council (1987) 12 NZTPA 211 (PT).[18] The meaning of s 125(1A)(a) and its predecessor provision have been considered in a number of cases. What is evident from those authorities is that in each case the Court has considered first what the consent requires, and second what has been done in order to meet those requirements.10 That enquiry will vary from case to case. As the Court in Biodiversity Defence Society Inc v Solid Energy New Zealand Ltd noted, the test "given effect to" is a standard upon whichreasonable people may differ.11[19] Consideration of the work done to give effect to the consent is not limited to physical works. Non-physical works, or preparatory works such as the preparation of management plans, letting of contracts and preliminary works is equally relevant.12[20] The reason why work has only reached a certain stage is also relevant as is the continuity of effort.13[21] The questions posed in Goldfinch remain a useful framework for the enquiry as to whether the consent has been given effect to:14Questions such as "What is the nature of the work authorised by theconsent", "What in fact has been done", "Why has it not been completed", "Why has it been discontinued?", "Was this discontinuation voluntary and justified?[22] The issue is whether the Environment Court applied the correct legal test in reaching its decision.10 These authorities include Biodiversity Defence Society Inc v Solid Energy New Zealand Ltd, above n 8; Goldfinch v Auckland City Council [1997] NZRMA 117 (HC); Body Corporate 97010 v Auckland City Council [2000] 3 NZLR 513 (CA); Gus Properties Ltd v The Chairman, Councillors and Inhabitants of the Borough of Blenheim SC Christchurch M3594/75, 24 May 1976; Sandilands v Manawatu District Council EnvC Auckland A 107/97, 10 September 1997;Robinson Developments Ltd v Marlborough District Council EnvC Wellington W74/2004, 17 September 2004.11 Biodiversity Defence Society Inc v Solid Energy New Zealand Ltd, above n 8 at [54].12 Biodiversity Defence Society Inc v Solid Energy New Zealand Ltd, above n 8 at [61];Body Corporate 97010 v Auckland City Council, above n 10 at [69]–[70].13 Biodiversity Defence Society Inc v Solid Energy New Zealand Ltd, above n 8 at [33] and [52]. InGus Properties Ltd v The Chairman, Councillors and Inhabitants, of the Borough of Blenheim,above n 10, the break in continuity was fatal to the developer's argument that the consent hadnot lapsed.14 Goldfinch v Auckland City Council, above n 10 at 124.Did the Environment Court err in law?Wrong legal test/irrelevant matters[23] The appellant submits that the Environment Court did not apply the correct legal test and took into account irrelevant matters. Rather than undertaking a factual analysis of what steps had been taken prior to November 2010 to give effect to the consent, the Environment Court considered the benefits and burdens of the CDC and the consequences of it not lapsing.[24] The respondent says that the benefits and burdens analysis was simply part ofthe Environment Court's enquiry into the nature of the CDC. Ms Simons stressesthat the CDC is a unique form of consent and none of the other cases concerning s 125 of the RMA involved a consent of its type.[25] I accept that the first part of the analysis required by s 125(1A)( a) involves a consideration of the nature of the consent and what it requires. The Environment Court in this case undertook that first step. It considered the nature of the CDC, the District Plan policies and objectives under which it was granted, and the relationship between the CDC and subsequent subdivision consents.15[26] However, I do not agree that the reference to benefits and burdens of the CDC was part of this analysis. Rather, it formed part of the Environment Court's enquiry into the consequences of the CDC lapsing. That is made clear by the Court'ssummary of its approach at [20] of the decision and the conclusion expressed at [42] as follows:[20] For current purposes the thesis that has been adopted by this Court is that a consent constitutes both benefits and burdens to the consent holder. Where the consent holder has obtained benefits it seems an antithesis of the RMA that they should be able to avoid the burdens (obligations) which go with those benefits, particularly in a case such as the current one, where the application is staged. That is, many of the burdens for the developer and benefits for the public arise in later stages. It seems to us contrary to a proper understanding of the RMA that a party should be able to avoid their obligations by putting into effect only the part of the consent that operates in their favour.15 184 Maraetai Road Ltd v Auckland Council, above n 1 at [4]–[17] and [39]–[40].[42] Our view is that the factual analysis involved is related to the benefits and burdens of the concept consent and the objectives of the Act as a whole. To further this examination we start by looking at the consent from the point of view of its lapsing.[27] The Environment Court's analysis of the consequences of the CDC lapsingwhich followed (at [43] to [50]) underscores that approach. At [50] the Court concludes:[50] The outcome of such a lapsing would be uncertain, disputable and capricious. A consent holder might abandon a consent when costs become too high, still receiving the benefits. Others may expend many millions in preliminary work of public benefit and then never be able to obtain the benefit of the consent. We conclude these outcomes are worse than the potential effect of a partially concluded consent remaining in force.[28] The Environment Court reviewed the principles and relevant approach arising out of the Biodiversity case.16 No issue is taken with that summary. However, as the Environment Court itself acknowledges, it then went on to adopt a different approach to that set out in Biodiversity:[53] We have approached the analysis of this case in a slightly different way, looking at questions of whether benefits which have accrued to the consent holder are such that the burdens which are for the benefit of the general public, or ratepayer, should be visited upon the consent. Nevertheless, it could not be said that the consent holder has not engaged in a process or has put the consents to one side.[55] For our part we have concluded that a useful (but not the only test) is that benefits have accrued to the consent holder which means that the Act is better served by ensuring that the benefits to the public derived through the imposition of conditions should be realised.[29] The passages cited above make it clear that the primary concern driving theEnvironment Court's decision was the consequences which would flow if the consent was held to have lapsed. That enquiry introduces an evaluative component into the test. The Court considered whether or not the CDC should lapse, rather than considering whether it had in fact lapsed. I agree with the appellant that s 125 of the RMA does not allow for such an enquiry.16 At [37], and [51]–[52].[30] By adopting this approach, the Environment Court applied the wrong legal test, and took into account irrelevant matters. I am satisfied that the error of law in this case was material to the decision which the Environment Court reached.Failure to consider relevant factors[31] The appellants say that the Environment Court also erred in law by failing to take into account relevant factors. In the event that my conclusion on the first ground of appeal is wrong, I have considered whether the appeal might otherwise succeed on the second ground.[32] Ms Simons submits that the Court had regard to, as it was entitled to, the fact that the subdivision consent granted in July 2010 gave effect to the CDC. This, she says, is the requisite analysis of what steps were taken to give effect to the CDC. Ms Simons points out that the subdivision consent is linked to the CDC in a way that makes it clear that the subdivision consent is giving effect to the CDC. She relies on [60] of the decision in this regard:[60] Looking at the matter from a broader context, land use consent in this case was essentially an agreement to treat applications for subdivision consent with a special status as controlled activities. That has clearly been relied upon in stage 1. We have concluded that at that point the applicant relied upon the consent and gave effect to the special status by making an application in reliance upon it. Thus, any further development of the land is bound to achieve the public benefits identified in the land use consent of 2002.[33] I accept that the Court properly took into account whether the July subdivision consent gave effect to the CDC. The fact that the July subdivision consent was granted in furtherance of the CDC is key evidence to be weighed in the assessment under s 125(1A)(a). Similarly the fact that four of the 15 lots had been developed is also relevant, and clearly the Environment Court took that into account also.17[34] But those are not the only factors which are relevant to the s 125 enquiry.17 At [41].The nature of the CDC is that it is a single consent for a concept development of 15 lots with the provision of centralised services and a coordinated roading and reserve plan. The holistic and integrated nature of the development was a hallmark of the CDC. Its underlying purpose was to avoid ad hoc subdivision and development. Steps taken to give effect to the CDC must be measured in light of that purpose.[35] The degree to which the July subdivision consent is in furtherance of that underlying objective is a matter solely for the Environment Court to weigh and assess. But that factor needs to be weighed together with the other evidence of what was happening (or not happening) prior to November 2010 in respect of the other parcels of land covered by the CDC. In accordance with the questions posed inGoldfinch, that assessment would involve enquiry into why the entire development had not been completed, whether it had been discontinued insofar as the other lots were concerned, and if so, whether the discontinuance was voluntary and justified or whether there were obstacles or hurdles which were legitimately preventing progress in accordance with the consent.[36] The type of evidence that might be relevant would include any planning work related to the subdivision on the other lots, any design commissioned for the centralised services as contemplated by the conditions to the CDC, and any design or other preparatory work relating to the roading network and vesting of reserves. The absence of any such evidence is also a matter which the Environment Court would need to weigh in deciding whether or not the CDC had lapsed.[37] The Environment Court's decision does not refer to any of these factors. It is apparent that these factors were not weighed in the balance, with the focus being firmly on the July subdivision consent and the consequent subdivision of one of the parcels of land. In my view, that narrow focus resulted in the Environment Court failing to take into account relevant factors which also resulted in an error of law material to its decision.[38] Even if wrong on the first ground of appeal therefore, I would allow the appeal on the second ground.Relief[39] The appellant submits that as the Environment Court proceeding involved a declaration, there would be little value in referring the matter back to the Environment Court for its reconsideration. It invites this Court to quash the Environment Court's decision and substitute its own declaration that there is noevidence that the part of the CDC authorising the remaining 11 lots has been given effect to and has therefore lapsed.[40] I do not agree that there is no evidence that the CDC has been given effect to. The July subdivision consent is clearly significant evidence of steps taken to give effect to the CDC. The weight to be attached to that July subdivision consent is a matter for the Environment Court and cannot be disturbed by this Court on an appeal on the question of law.[41] The assessment of the evidence (or absence of evidence) regarding the other factors noted above is similarly a matter for the Environment Court to weigh and assess. The Environment Court, as a specialist Court, is in a much better position to undertake that exercise.18 The application of the correct legal test by the Environment Court may well lead to the same result. That is a matter entirely for the Environment Court.[42] I therefore decline to substitute my own decision for that of the Environment Court.Result[43] The appeal is allowed. The decision is remitted back to the Environment Court to reconsider in light of this decision.18 See Guardians of Paku Bay Association Inc v Waikato Regional Council [2012] 1 NZLR 271 (HC) at [33].[44] If counsel are unable to agree on costs, they are to submit memoranda within 10 working days of the delivery of this decision.___________________Edwards J