ENTERPRISE MIRAMAR PENINSULA INCORPORATED v WELLINGTON CITY COUNCIL [2018] NZCA 541

ENTERPRISE MIRAMAR PENINSULA INCORPORATED v WELLINGTON CITY COUNCIL [2018] NZCA541 [3 December 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA218/2018[2018] NZCA 541BETWEEN ENTERPRISE MIRAMAR PENINSULAINCORPORATEDAppellantAND WELLINGTON CITY COUNCILFirst RespondentTHE WELLINGTON COMPANYLIMITEDSecond RespondentHearing: 22 August 2018Court: Asher, Clifford and Gilbert JJCounsel: D A Laurenson QC and M S Smith for AppellantN M H Whittington and P I C Comrie-Thomson for FirstRespondentP J Radich QC and T P Refoy-Butler for Second RespondentJudgment: 3 December 2018 at 10 amJUDGMENT OF THE COURTA The appeal is allowed.B The first respondent's decision granting resource consents is quashed.C The second respondent's application for resource consents is remitted to thefirst respondent for reconsideration. The first respondent should considerwhether or not to exercise its power under s 34A of theResource Management Act 1991 to appoint independent commissioners.D The respondents are jointly and severally liable to pay the appellant costs fora standard appeal on a band A basis and usual disbursements. We certify fortwo counsel.E The High Court costs award made against the appellant is quashed.F If the parties cannot agree on costs in the High Court, the High Court is tofix costs in that Court in the light of this judgment.____________________________________________________________________REASONS OF THE COURT(Given by Asher J)Table of ContentsPara NoIntroductionShelly BayPlanning backgroundThe Housing Accords and Special Housing Areas Act 2013BackgroundThe relevant provisionsTWCL's applicationGround one — misinterpretation/misapplication of ss 4 and34(1) of HASHAAThe purpose of HASHAAWeighting the purpose of HASHAASection 34(1)(b)–(e)Ground two — infrastructureGround three — apparent bias and conflict of interestAnalysisSection 34AGeneral conclusionsReliefResult[1][4][7][11][11][15][21][27][28][32][40][60][68][73][89][94][96][99]Introduction[1] This appeal arises from a refusal by the High Court to grant judicial review andquash a decision to grant resource consents for the building of a significantdevelopment in Shelly Bay, Wellington.1 The decision to grant the resource consentsis challenged on the basis of errors of law, leading in turn to a failure to considerrelevant considerations, and apparent bias or conflict of interest.1 Enterprise Miramar Peninsula Inc v Wellington City Council [2018] NZHC 614, [2018] NZRMA269.[2] The appellant, Enterprise Miramar Peninsula Inc (Enterprise), is anincorporated society representing the interests of members of the business communityin Miramar. Its objects are to foster and promote the welfare of Miramar, and toadvocate for the improvement of utilities, transport services and other infrastructure.2The first respondent is the Wellington City Council (the Council), which made theresource consent decisions. The second respondent is The Wellington Company Ltd(TWCL), which is the holder of the resource consents.[3] The resource consents were issued under the Housing Accords and SpecialHousing Areas Act 2013 (HASHAA), which creates a streamlined resource consentingprocess for residential developments in areas identified as having housing supply andaffordability issues. The issues arising in the appeal relate in considerable part to theinteraction between HASHAA and the existing resource consent regime under theResource Management Act 1991 (the RMA).Shelly Bay[4] Shelly Bay is located on the western side of the Miramar Peninsula. It has adistinctive two-bay form and is a major feature of the Peninsula's coastline. It containsan area of flat land, much of it reclaimed, up to the water's edge and is bounded by asteep vegetated escarpment to the east. The site is about eight kilometres from theWellington central business district.[5] European activity at Shelly Bay has been dominated by various militaryconcerns. It was the site of a depot to accommodate torpedo boat and submarinemining operations from 1887. During World War II the Royal New Zealand Navyestablished a dedicated naval base and armament depot on the site, includingaccommodation buildings and a wharf and slipway. Following World War II the sitewas adapted and used by the Royal New Zealand Air Force until 1995, when it wasdeclared surplus to military requirements. Since the area ceased to be actively usedfor military purposes approximately 25 years ago, there has been little maintenance onthe 26 remaining structures on the land, and several are in a state of significantdisrepair.2 There was no challenge to Enterprise's standing to seek judicial review.[6] The Māori name for the Peninsula is Te Motu Kairangi. It has been occupiedby various iwi for many centuries. Taranaki Whānui hold mana whenua status.Since 2008 the Port Nicholson Block Settlement Trust (PNBST), the entity thatrepresents Taranaki Whānui, has owned two separate parcels of land at Shelly Baytotalling 5.0445 ha. The land was acquired by PNBST pursuant to itsTreaty of Waitangi settlement with the Crown. The other significant land holding is1.6 ha of land in an irregularly shaped parcel on the waterfront, owned by the Council.Planning background[7] Under the District Plan, Shelly Bay is zoned partly Open Space B and partlyBusiness 1. In broad terms, the flat land immediately abutting the coast next to theexisting wharf structures is zoned Business 1, and the balance of the land either sideof the existing wharf and rising up behind the bay is zoned Open Space B.[8] The Business 1 zoning was effected through a 1999 Environment Courtdecision.3 In that decision the Environment Court stated that:4The future development and protection of Shelly Bay is, we consider, one ofthe most significant environmental issues in Wellington as the City goes intothe Millennium.[9] Consistent with that observation, the Court prescribed a Shelly Bay DesignGuide (the Design Guide) for development of Business 1 zoned land, which isincorporated into the operative District Plan. The Design Guide expressly recognisesShelly Bay's distinctive environmental character, noting its "coastal location andvisually prominent natural setting", in particular its prominence as a "distinct elementwithin the wider panoramic view to the Miramar Headland with a strong contributionto the identity of Wellington Harbour". The purpose of the Design Guide is to"encourage development which recognises and respects the distinctive environmentalqualities that give the area its character", which is achieved by imposing significantrestrictions on building siting, "massing" (including height limits of 8–12.5 metres),scale and design. In a related decision the Environment Court commented that theheight limits "ensure the development will retain a generally low horizontal profile3 Minister of Defence v Wellington City Council EnvC W85/99, 19 August 1999.4 At [3].against the rich backdrop of the hills respecting the site's unique position on the coastalmargin".5 The predominant Business 1 zoning provides for mixed use developmentin the area including residential development.[10] In relation to the Open Space B zoning, the District Plan states that:Open Space B land is valued for its natural character and informal openspaces. It involves areas that are used for types of recreation that, in thebroadest sense, do not involve buildings or structures. The intention is to keepsuch areas in an unbuilt or natural state. This type of open space encompassesboth formal and informal open space elements. It includes walkways, scenicareas and open grassed areas where buildings are inappropriate.Its characteristics are minimal structures, largely undeveloped areas and openexpanses of land. Most Open Space B areas are vegetated and often haveecological values or may buffer Conservation Sites.The Housing Accords and Special Housing Areas Act 2013Background[11] Housing affordability has become a major issue in New Zealand. In 2011 thegovernment instructed the Productivity Commission to undertake an inquiry into thefactors negatively influencing the affordability of housing and potential solutions.One of the key findings of the Commission was that, although there is a relativelyabundant supply of land, policy and planning practices may be constraining its use forresidential development.6 Both the RMA regime and local authorities' consentingprocesses were identified as obstacles to development.7 The Commission observedthat there is "scope for councils, developers, land owners and builders to collaboratein bringing affordable housing to market" and that territorial authorities should "takea less constrained approach to the identification, consenting, release and developmentof land for housing in the inner city, suburbs, and city fringe".8 The Commissionultimately recommended that the government consider the case for a review ofplanning-related legislation to reduce the costs, complexity and uncertainty associatedwith the interaction of planning processes.95 Minister of Defence v Wellington City Council EnvC W66/99, 22 June 1999 at [157].6 Productivity Commission Housing Affordability (March 2012) at 5.7 At 120.8 At 102.9 At 268.[12] On 15 April 2013 the Ministry of Business, Innovation and Employmentreleased a Regulatory Impact Statement analysing options to increase the supply ofland for housing development in the short term, in order to reduce pressure on housingsupply in areas experiencing severe housing affordability problems.10 It recommendeda collaborative approach between central and local governments whereby specialhousing areas would be identified in which local councils would exercise more flexibleresource consenting powers for residential developments.11 It was envisaged that theregime would enable the granting of "consents for large housing developments andredevelopments that might not otherwise proceed under the rules and conditions ofexisting plans".12[13] On 7 May 2013 the Minister of Housing, Nick Smith, sought the CabinetLegislation Committee's approval to introduce and commence the first reading of theHousing Accords and Special Housing Areas Bill.13 The purpose of the Bill wasdescribed as being "to enhance housing affordability by facilitating an increase in landand housing supply in regions or districts with housing supply and affordabilityissues".14 This would be achieved through five main components: scheduled regionsor districts, housing accords, special housing areas, qualifying developments and morepermissive resource consenting powers.15 The usual matters to which a consentauthority would be required to have regard in considering an application underthe RMA would be subordinated to the purpose of HASHAA, and the RMA wouldonly apply to the extent that its provisions were expressly incorporated into theHASHAA regime.16 It was stated that "in the case of any inconsistencies or conflicts,the purpose of the HASHA Act will override other considerations".1710 Ministry of Business, Innovation and Employment Regulatory Impact Statement: Creating SpecialHousing Areas (15 April 2013).11 At 25.12 At 14.13 Office of the Minister of Housing Housing Accords and Special Housing Areas Bill: Approval forIntroduction (7 May 2013).14 At [2].15 At [4].16 At [17].17 At [18].[14] In the explanatory note to the Bill it was stated:18More permissive resource consent powersThe Bill provides for resource consent applications for qualifyingdevelopments to be considered according to more permissive resource consentpowers. In considering an application for a resource consent under this Act, theauthorised agency must reach a decision that is consistent with, and giveseffect to, the purpose of the Act. The agency must also be satisfied thatsufficient and appropriate infrastructure will be provided to support thequalifying development and take into account the matters set out in Part 2 andsections 104 to 104E of the Resource Management Act 1991 and the Ministryfor the Environment's New Zealand Urban Design Protocol (2005).The relevant provisions[15] The purpose of HASHAA is stated at s 4 to be "to enhance housingaffordability by facilitating an increase in land and housing supply in certain regionsor districts identified as having housing supply and affordability issues". Theregions or districts to which the Act applies are listed in sch 1.[16] The permissive consenting regime under HASHAA is only available to anapplicant where the proposed activity involves a qualifying development in a specialhousing area. A number of steps must occur before a site can be established as aspecial housing area:(a) The Minister responsible for the administration of the Act and aterritorial authority whose district is listed in sch 1 must enter into ahousing accord that prescribes targets for residential development.19The accord must set out agreed targets for residential development inthat district and how the parties will work together to achieve thepurpose of the Act.20(b) Once the housing accord is in force, the territorial authority mayrecommend to the Minister that an area be established as a special18 Housing Accords and Special Housing Areas Bill (117-1) (explanatory note).19 Housing Accords and Special Housing Areas Act 2013, s 10.20 Section 11.housing area.21 In considering that recommendation the Minister musthave regard to various matters including the relevant district plan22 andmust be satisfied that there is adequate infrastructure to servicequalifying developments in the proposed special housing area.23(c) If the Minister so recommends, the Governor-General may, byOrder in Council, declare an area to be a special housing area for thepurposes of HASHAA.24[17] Once a special housing area has been established, a person can apply for aresource consent in relation to any qualifying development in that area. Section 14 ofHASHAA defines a "qualifying development" as one that will be "predominantlyresidential" and where dwellings and other buildings will not be higher than six storeysor a maximum of 27 metres.25 The proposed development must also contain no fewerthan the prescribed minimum number of dwellings and the prescribed percentage(if any) of affordable dwellings set when the special housing area was declared (or setsubsequently by an Order in Council).26[18] If a person chooses to apply for a resource consent under HASHAA,27 ratherthan the RMA, the local authority must give effect to the more permissive resourceconsenting regime under pt 2 of HASHAA. In a significant departure from the RMAregime, notification and a hearing are prohibited save for certain limitedcircumstances.28 The local authority must consider the application in accordance withs 34. Given the importance of this provision to the appeal, we set it out in full:34 Consideration of applications(1) An authorised agency, when considering an application for a resourceconsent under this Act and any submissions received on thatapplication, must have regard to the following matters, giving weightto them (greater to lesser) in the order listed:21 Section 17(1).22 Section 16(2).23 Section 16(3)(a).24 Section 16(1).25 Section 14(1)(a)–(b).26 Section 14(1)(c)–(d).27 Section 20.28 Section 29.(a) the purpose of this Act:(b) the matters in Part 2 of the Resource Management Act 1991:(c) any relevant proposed plan:(d) the other matters that would arise for consideration under—(i) sections 104 to 104F of the Resource ManagementAct 1991, were the application being assessed underthat Act:(ii) any other relevant enactment (such as the WaitakereRanges Heritage Area Act 2008):(e) the key urban design qualities expressed in the Ministry forthe Environment's New Zealand Urban Design Protocol(2005) and any subsequent editions of that document.(2) An authorised agency must not grant a resource consent that relates toa qualifying development unless it is satisfied that sufficient andappropriate infrastructure will be provided to support the qualifyingdevelopment.(3) For the purposes of subsection (2), in order to be satisfied thatsufficient and appropriate infrastructure will be provided to supportthe qualifying development, the matters that the authorised agencymust take into account, without limitation, are—(a) compatibility of infrastructure proposed as part of thequalifying development with existing infrastructure; and(b) compliance of the proposed infrastructure with relevantstandards for infrastructure published by relevant localauthorities and infrastructure companies; and(c) the capacity for the infrastructure proposed as part of thequalifying development and any existing infrastructure tosupport that development.(4) In considering an application for a resource consent under this section,the authorised agency—(a) may direct an affected infrastructure provider to provide anyinformation that the authorised agency considers to berelevant in the circumstances to its consideration of theapplication; and(b) if the authorised agency is the chief executive, may also directany local authority to provide any information that theauthorised agency considers to be relevant in thecircumstances to its consideration of the application.(5) If an authorised agency makes a direction under subsection (4), theinfrastructure provider or local authority must provide the informationrequested as soon as is reasonably practicable.(6) The Ministry must ensure that a copy of the document referred to insubsection (1)(e), or a link to that document, is on the Ministry'sInternet site and that members of the public can easily access thedocument via that site, free of charge, at all reasonable times.[19] We also note that, although there are no general appeal provisions,29 judicialreview was not ousted by HASHAA, and was in fact envisaged in the material leadingup to the legislation.30[20] The Minister of Housing and the Council entered into a housing accord forWellington City on 24 June 2014. The Council recommended to the Minister that2.79 ha, and subsequently a further 7.32 ha, of Shelly Bay be established as a specialhousing area. The Minister, being satisfied there was likely to be adequateinfrastructure and sufficient demand, recommended that designation.Orders in Council were made by the Governor-General on 29 June 2015 and7 December 2015 declaring Shelly Bay to be a special housing area.TWCL's application[21] On 15 September 2016 TWCL applied to the Council for consents to redevelopand subdivide Shelly Bay, and to use a potentially contaminated site (the Application).[22] The Application proposed the construction of some 350 dwellings made up of12 multi-level residential apartment buildings containing approximately280 apartments, 58 townhouses, and 14 individual dwellings. The maximum heightof the proposed apartments would be the 27 metres permitted under HASHAA, up tosix storeys high. There was provision for a 50-room boutique hotel, and for thepossible construction of an aged care facility accommodating some 140 residentsacross 120 living units comprising approximately 68 independent apartments,20 serviced apartments and 32 care suites. There was also provision for adapting29 Section 78 provides that there is no right of appeal against a decision by an authorised agency ona resource consent application made under HASHAA except in the limited circumstances providedfor in ss 79 and 81.30 Regulatory Impact Statement: Creating Special Housing Areas, above n 10, at 22.three of the existing buildings for commercial and community activities, with allothers to be demolished or relocated off site. TWCL also proposed the developmentof a village green public open space, and for the realignment of the road throughShelly Bay.[23] As we have set out above, the Council owns a small portion of the land in thespecial housing area. TWCL's proposal makes use of that land. Therefore, in order toproceed, TWCL would need to buy or lease the Council-owned land. There was somecontest between the parties as to the extent to which agreement on that issue hadalready been reached between TWCL and the Council. As we understand it, theCouncil has not yet made any binding agreement with TWCL in that regard, althoughthere is at least an understanding that the Council may sell or grant a 125-year lease toTWCL.[24] In accordance with s 29 of HASHAA, the Application was neither notified, norwas a hearing held. The Application was considered by the Council's ResourceConsents Manager and a Senior Consents Planner acting under delegated authority.The Application was granted subject to conditions on 18 April 2017.Enterprise subsequently filed proceedings in the High Court seeking judicial reviewof two decisions. The first was the Council's decision not to engage independentcommissioners to determine the Application. The second was the Council's decisionto grant the resource consents. The application for judicial review was declined byChurchman J on 9 April 2018.31[25] On appeal Enterprise contends that the Council's decision to grant TWCL theresource consents is vitiated on three grounds:(a) Error of law in the form of misconstruction/misapplication of ss 4and 34(1) of HASHAA, whereby the purpose of s 4 was misunderstoodand improperly used to trump any and all considerations telling againstthe consents being granted or reduced in scope or scale.31 Enterprise Miramar Peninsula Inc v Wellington City Council, above n 1.(b) Error of law in relation to the proper approach to applying s 34(2) ofHASHAA, which concerns the adequacy of infrastructure.(c) Apparent bias or conflict of interest on the part of the Council, as aresult of their pecuniary or other interest in the outcome of theApplication and their collaboration with TWCL.[26] We analyse each of these in turn.Ground one — misinterpretation/misapplication of ss 4 and 34(1) of HASHAA[27] Enterprise contends that the Council, and Churchman J, made three errors oflaw in relation to ss 4 and 34(1) of HASHAA:(a) First, the Judge wrongly concluded that the Council had notmisunderstood the purpose of HASHAA as being to "maximise"housing yield.(b) Second, even if the Council did not misunderstand the purpose ofHASHAA, the Judge wrongly upheld the Council's approach toweighting the purpose of the Act in the overall balancing exercise.In particular, the Council failed to consider the extent to which theApplication met that purpose, including how long it would take for theproposed development to increase housing supply and aspects of thedevelopment that would not be used for residential housing.(c) Third, the Judge wrongly concluded that the Council did noterroneously use the purpose of HASHAA to effectively neutralise thematters that arise for consideration under s 34(1)(b)–(e), with the resultthat those matters were not properly acknowledged and weighed.The purpose of HASHAA[28] Having described the purpose of HASHAA as set out in s 4 near the beginningof its decision, the Council later stated "the purpose of HASHAA is to maximisehousing yield". The Judge determined that, upon consideration of the Council'sdecision as a whole, this was an isolated error and the Council had accurately identifiedthe purpose of HASHAA as being to enhance housing affordability by facilitating anincrease in land and housing supply in certain regions or districts, and measured theproposal against that purpose.32[29] Enterprise referred to a number of excerpts from the Council's decision that,in its submission, demonstrated that the Council had erroneously understoodHASHAA's purpose to be to "maximise" housing. It noted that the Council adoptedTWCL's assessment of relevant planning instruments as "accurate", which in turnrelied on a statement in an urban design assessment for the development that "[h]eightlimits have been breached to fully utilise the potential of the site to provide housing togive effect to the purpose of the HASHAA". It also referred to a conclusion bythe Council that the adverse open space effects of the proposal were no more thanminor as they are "limited to what is required to provide housing to meet the intent ofHASHAA".[30] We agree that the Council misstated the purpose of HASHAA when itdescribed it as being to "maximise" housing yield. However, in our view, the otherexcerpts from the Council's decision relied upon by Enterprise do not go that far andare reconcilable with the correct HASHAA purpose of enhancing housing affordabilityby facilitating an increase in housing supply. We note other aspects of the decisionthat indicate that the purpose was properly understood. The purpose of HASHAA wasdescribed accurately elsewhere in the Council's decision as "increasing housingyield", "to provide housing to the Wellington Market" and to "increase housingaffordability and supply". Overall, we do not consider that the Council erred in itsconstruction of the purpose of HASHAA.[31] However, as we will set out, the Council's reference to a need to "maximise"housing yield occurred in the context of what we see as a different error of law.3332 At [174].33 See [40]–[59] below.Weighting the purpose of HASHAA[32] Enterprise submitted that it is implicit in s 34(1) of HASHAA that the weightto be accorded to the purpose of the Act under s 34(1)(a) will vary according to theextent to which the proposed development meets that purpose. For example, the fasterthat new housing supply is introduced to the market as a result of a proposeddevelopment, and the more that the proposed development comprises buildings usedfor residential rather than commercial purposes, the more the proposal meets thepurpose of HASHAA, and the more weight that should be given to that purpose in theweighing exercise that s 34(1) envisages. Enterprise submitted that neitherthe Council nor the Judge adopted that approach, resulting in an error of law and afailure to consider mandatory relevant considerations. Enterprise noted in particularthat the Council failed to take into account that the proposed development would bestaged over 13 years, and included significant non-residential aspects, such as aboutique hotel.[33] We do not consider that a timeframe of 13 years is out of the ordinary giventhe scale of the development, or that this should be viewed as a matter overlooked bythe Council in carrying out a s 34(1) evaluation. There was expert evidence that suchtimeframes are not uncommon for significant developments. The timeframe does nomore than reflect the challenges of the site and the scale of what is to be developedthere. In itself we are unable to see this as a factor that the Council was obliged toacknowledge and consider under s 34(1)(a).[34] The inclusion of the hotel in the proposal was considered by the Council in thecontext of assessing whether the proposal was a qualifying development under s 14 ofHASHAA. The Council expressly mentioned the hotel and acknowledged that theproposed development includes non-residential activities. However, it considered thatthese were "ancillary to the residential development" and "[t]he primary and dominantuse of the site is for residential activity by creating approximately 352 residentialdwellings".[35] We do not consider that the Council was obliged to make a further assessmentabout the extent to which the proposed development provided housing under s 34(1)(a)at the resource consent stage. Such matters are assessed at the prior stage ofdetermining whether the proposal is a qualifying development such that an applicationfor consent can be made under HASHAA rather than the RMA. A qualifyingdevelopment is one that is "predominantly residential".34 Under s 14(2), adevelopment is "predominantly residential" if:(a) the primary purpose of the development is to supply dwellings; and(b) any non-residential activities provided for are ancillary to qualityresidential development (such as recreational, mixed use, retail, ortown centre land uses).[36] The Council assessed the proposed development against those criteria anddetermined they were met. We see no error in that assessment.[37] In our view, to suggest that the non-residential aspects of a proposeddevelopment should be considered again under s 34(1)(a) would be contrary to thescheme of the legislation and the threshold Parliament has set for a qualifyingdevelopment under s 14.[38] We also agree with the following conclusion of the Judge:35[197] However, s 14(2) of HASHAA specifically contemplates that SHAswill contain recreational, mixed-use, retail or town centre activities. There isno premium in the Act on the creation of purely dormitory developmentsdevoid of the normal features that make a residential area a pleasant place tolive.[39] We therefore find that neither the Council nor the Judge made a reviewableerror in their weighting of s 34(1)(a).Section 34(1)(b)–(e)[40] We have set out how s 34(1) of HASHAA deliberately and explicitly creates a"hierarchy" of matters that must be taken into account when considering an applicationfor resource consent under the Act. The weight given to each factor is greatest for thefirst, with lesser weight to be applied in descending order down to the fifth and last34 Housing Accords and Special Housing Areas Act, s 14(1)(a).35 Enterprise Miramar Peninsula Inc v Wellington City Council, above n 1.factor. We set out the hierarchy of matters to be taken into account again for ease ofreference:(1) An authorised agency, when considering an application for a resourceconsent under this Act and any submissions received on thatapplication, must have regard to the following matters, giving weightto them (greater to lesser) in the order listed:(a) the purpose of this Act:(b) the matters in Part 2 of the Resource Management Act 1991:(c) any relevant proposed plan:(d) the other matters that would arise for consideration under—(i) sections 104 to 104F of the Resource ManagementAct 1991, were the application being assessed underthat Act:(ii) any other relevant enactment (such as the WaitakereRanges Heritage Area Act 2008):(e) the key urban design qualities expressed in the Ministry forthe Environment's New Zealand Urban Design Protocol(2005) and any subsequent editions of that document.[41] The plain words indicate, therefore, that greatest weight is to be placed on thepurpose of HASHAA, namely enhancing affordable housing supply in certaindistricts. That said, other considerations have been deliberately included.Decision-makers must be careful not to rely solely on the purpose of HASHAA at theexpense of due consideration of the matters listed in (b)–(e).[42] Enterprise argued that when considering s 34(1)(d)(i), the Council assessed theenvironmental effects of the proposal as being "no more than minor" in terms ofs 104D of the RMA by balancing those effects against the purpose of HASHAA.Section 104D(1)(a) of the RMA provides that a consent authority may grant a resourceconsent for a non-complying activity only if it is satisfied that the adverse effects ofthe activity on the environment will be minor. Enterprise acknowledged that, underHASHAA, s 104D of the RMA does not directly apply, and is relegated to the statusof a consideration under s 34(1)(d)(i). Nonetheless, it is a matter that must be takeninto account. Enterprise submitted that, by using the purpose of HASHAA, which hasalready been considered separately under s 34(1)(a), to restrict the weight given to thematters in s 34(1)(d)(i), the Council "double-counted" the purpose of HASHAA in away not envisaged by the text or scheme of s 34(1).36 Moreover, the purpose ofHASHAA is not logically relevant to determining whether effects on the environmentare more or less than minor.[43] The Council, after having stated the proposal's consistency with the purposeof HASHAA under s 34(1)(a), went on to consider the other matters set out in s 34(1).In relation to s 34(1)(d)(i) it stated:As the proposal is for a Non-Complying Activity the gateway test ofsection 104D must be considered, namely that whether the adverse effects willbe minor or that the proposal is not contrary to the objectives and policies ofthe Wellington City District Plan.As will be discussed below, I consider that the adverse effects of the proposalwill be no more than minor. Accordingly, the proposal meets this limb of the"gateway tests". I have also assessed the relevant objectives and policiesbelow and consider that the proposal is not contrary to them.[44] The Council then proceeded to assess the adverse effects of the proposalindividually. On heritage effects it stated:There are no buildings or structures on the application site that are heritagelisted under either the District Plan or by Heritage New Zealand.Notwithstanding that, a number of buildings on the site do hold heritage value[45] The Council noted a report from its Senior Heritage Advisor, Ms Tanner, whostated that the proposed destruction and relocation of historic buildings could not besupported from a heritage perspective. She also expressed concerns regarding effectson the archaeological value of the site.[46] The Council's decision then states:While I concur with Ms Tanner's assessment that because a building is notlisted it does not mean it does not hold heritage value, the purpose of HASHAAis to maximise housing yield. Therefore, a balanced approach is needed inproviding much needed housing to the Wellington housing market while[taking] into account the heritage value of the site. In my opinion, the desirefor housing to the market which would require the removal of existingbuildings onsite outweighs the impact on heritage value.36 We do not consider that the term "double-counting" accurately describes the error, therefore wedo not use that terminology in our analysis.(Emphasis added.)[47] On that basis, the Council considered the "adverse effects on heritage to be nomore than minor".[48] The Council stated in relation to open space effects:Overall, the proposal will result in a change to the Open Space zone butwill not significantly affect its wider landscape values and is limited towhat is required to provide housing to meet the intent of HASHAA. Assuch, I consider Open Space effects to be no more than minor.(Emphasis added.)[49] Finally, it was concluded:Overall, for the reasons above, and in the context of the expectation forresidential development as identified by the District Plan Business 1 and OpenSpace B Areas and against the HASHAA provisions, the overall effects fromthe proposed development are considered to be acceptable and the effects onthe environment no more than minor.[50] Under s 34(1)(d)(i) of HASHAA, the Council was also obliged to have regardto the relevant provisions of any plan or proposed plan under s 104(1)(b)(vi) ofthe RMA. In doing so, the Council adopted as accurate TWCL's Assessment ofEnvironmental Effects, which itself stated that the Shelly Bay Design Guide buildingheight limits "have been breached to fully utilise the potential of the site to providehousing to give effect to the purpose of the HASHAA".[51] The Judge found that the Council had made no error in its approach to thefactors in s 34(1)(b)–(e):37[187] All of the matters listed in s 34(1)(b) to (e) are subordinate to thepurposes of HASHAA and there is no error in the decision-makers havingregard to those matters in the context of and informed by the purpose ofHASHAA to enhance housing affordability by facilitating an increase in landand housing supply in certain regions or districts.[52] We disagree. We accept the submission for Enterprise that, properlyinterpreted, s 34(1) required the decision-maker to assess the matters listed in37 Enterprise Miramar Peninsula Inc v Wellington City Council, above n 1.subs (1)(b)–(e) uninfluenced by the purpose of HASHAA before standing back andconducting an overall balancing.[53] Section 34(1) instructs the decision-maker to "have regard to" the listedmatters "giving weight to them (greater or lesser) in the order listed". The scheme andplain text of s 34(1) requires individual assessment of the listed matters prior to theexercise of weighing them in accordance with the prescribed hierarchy. The matterslisted in subs (1)(b)–(e) cannot properly be weighed alongside the purpose ofHASHAA under subs (1)(a) if that purpose has first been used to effectively neutralisethe matters listed in subs (1)(b)–(e).[54] We accept that, under HASHAA, ss 104–104F of the RMA do not directlyapply, therefore a development that could not proceed under those provisions ofthe RMA could still be consented under s 34 of HASHAA. However, thoseRMA provisions are still mandatory considerations under s 34(1)(d)(i), and cannot beneutralised by reference to the purpose of HASHAA. We also note the instruction ins 34(1)(d)(i) to consider the matters that arise under ss 104–104F of the RMA "werethe application being assessed under that Act". The Council's approach, whichconsidered the matters in ss 104–104F of the RMA by reference to HASHAA, isinconsistent with that instruction.[55] Moreover, we agree with the submission for Enterprise that the purpose ofHASHAA is not logically relevant to an assessment of environmental effects.Environmental effects do not become less than minor simply because of the purposesof HASHAA. What changes under HASHAA is the weight to be placed on those morethan minor effects. They may be outweighed by the purpose of enhancing affordablehousing supply, or they may not.[56] Mr Whittington for the Council submitted that there is no meaningfuldifference between the two approaches. We disagree. The impact of the Council'serroneous approach is that the matters the Council must consider under subs (1)(b)–(e), particularly subs (1)(d)(i), were not properly recognised or acknowledged, orconsidered in any detail. For example, the Council used the purpose of HASHAA toneutralise open space effects by enabling them to be categorised as no more thanminor. As a consequence, no consideration was given to the extent to which theproposed buildings, some extending to the maximum height limit under HASHAA of27 m, significantly exceeded the height and extent of development contemplated bythe Shelly Bay Design Guide or the Open Space B zoning of the land. As we have setout, the Design Guide sets a height limit of 12.5 m, and Open Space B zoningcontemplates "minimal structures". Considered in that light, and although it is a matterfor the decision-maker, we note that we have difficulty understanding how theinstallation of buildings of the height and bulk proposed by TWCL could have a "nomore than minor" effect on this open space. That was not necessarily fatal to theApplication and, when ultimately weighed against the purpose of HASHAA, may nothave prevented the Application being granted. Yet the extent of the proposeddevelopment's adverse effect on open space should have been properly acknowledgedand weighed.[57] The error of approach can be also be seen in the Council's treatment of theheritage effects of the proposed development. The Council's assessment of heritageeffects is significantly more thorough than its assessment of open space effects.For example, the Council's decision acknowledges Ms Tanner's concerns about therelocation or destruction of existing historic buildings, and notes that TWCL proposedincorporating aspects of the heritage buildings into the development. However,the Council's decision states that the purpose of HASHAA means that any heritageeffects are no more than minor. Again, we consider that this prevented the heritageeffects of the proposed development from being properly acknowledged and weighedin the overall balancing exercise in s 34(1).[58] We consider that the Council also gave no substantive consideration to thematters in pt 2 of the RMA. Part 2 of the RMA sets out the purposes and principles ofthat Act, and is a mandatory consideration under s 34(1)(b) of HASHAA.The preservation of the natural character of the coastal environment and the protectionof outstanding natural features and landscapes are matters of national importanceunder s 6(a)–(b) of the RMA. So too is the protection of historic heritage frominappropriate use and development under s 6(f). The maintenance and enhancementof the quality of the environment is also a matter stated as warranting particular regardunder s 7(f). These pt 2 considerations were required to be considered under s 34(1)(b)of HASHAA, second in weight only to the purpose of HASHAA itself. Whilstthe Council's decision refers to the matters in ss 5–7 of the RMA, its analysis is limitedto an adoption of TWCL's assessment of those provisions. TWCL's assessment is briefand concludes:Overall, the proposed activity will result in a high quality development locatedin an appropriate location for residential development. Substantial expertanalysis has been provided in support of the application. The proposeddevelopment will provide much needed housing stock in Wellington whilemanaging external and internal effects. The outcome will be a high qualityurban design outcome.Therefore, it is considered that the proposal is consistent to the purposes andprinciples of the RMA as defined by Part 2.[59] The Council's adoption of this conclusion and its reference to "housing stock",and its cursory analysis of the matters arising under pt 2 of the RMA, are a furtherexample of the Council having allowed the purpose of HASHAA to neutralise orminimise the other matters that arise for consideration under s 34(1)(b)–(e). As inrelation to s 34(1)(d)(i) discussed above, the consequence is that the matters arisingunder s 34(1)(b) were not given due consideration and weight. Rather than justtreating the purpose of HASHAA as the most important and influential matter to beweighed, the Council used the purpose of HASHAA to eliminate or greatly reduce itsconsideration and weighing of the other s 34(1) factors. For the reasons we have setout, this was a significant error of law resulting in a failure to take into account relevantconsiderations. We allow the appeal on that basis.Ground two — infrastructure[60] Section 34(2)–(3) of HASHAA provides:(2) An authorised agency must not grant a resource consent that relates toa qualifying development unless it is satisfied that sufficient andappropriate infrastructure will be provided to support the qualifyingdevelopment.(3) For the purposes of subsection (2), in order to be satisfied thatsufficient and appropriate infrastructure will be provided to supportthe qualifying development, the matters that the authorised agencymust take into account, without limitation, are—(a) compatibility of infrastructure proposed as part of thequalifying development with existing infrastructure; and(b) compliance of the proposed infrastructure with relevantstandards for infrastructure published by relevant localauthorities and infrastructure companies; and(c) the capacity for the infrastructure proposed as part of thequalifying development and any existing infrastructure tosupport that development.[61] Enterprise argued that the Council erroneously substituted a lower test thanthat set out in s 34(2) when assessing whether there was sufficient and appropriateinfrastructure to support the proposed development. It submitted that the Council haderroneously applied a standard of satisfying itself that appropriate infrastructure "canbe supported", "can be provided" and "will be possible". This was said to be asignificantly lower standard than that required by s 34(2), which is that sufficient andappropriate infrastructure "will be provided". Enterprise further submitted that theevidence and information relied upon by TWCL, consistent with the conceptual andhigh-level nature of the proposal, could only show that the necessary infrastructurewas feasible or possible. That was insufficient for the Judge to be satisfied unders 34(2).[62] Given our conclusion that the appeal must be allowed as a result ofthe Council's error in relation to s 34(1)(b)–(e), we have not considered thissubmission in as much detail as we otherwise would. Nonetheless, we make thefollowing comments.[63] We are not persuaded that there has been an error in the Council's approach toinfrastructure matters. Although we accept that the Council's decision uses languageimplying a lesser standard, the decision-makers had before them a large number ofreports that contained what we consider to be sufficient detail for the Council to besatisfied under s 34(2). Mr Whittington took us to a number of these throughout hisoral submissions. We agree with the submission for the Council and TWCL that torequire a higher standard of detail at the pre-consent phase would be costly andimpractical.[64] The Judge observed that one of the techniques used by the Council in order tobe satisfied that sufficient and appropriate infrastructure would be provided was toimpose conditions.38 The Council's decision imposed a large number of conditions inrelation to infrastructure matters. Many require TWCL to formulate plans as toinfrastructure and submit them to relevant experts for approval before proceeding.For example, in relation to water supply:57. The development must be provided with water supply which meetsthe specifications of the Wellington City Council Code of Practice forLand Development; at locations approved by the Wellington WaterLand Development Team.58. Unless an alternative proposal is approved, a new reservoir, watersupply pipe work and associated infrastructure works will be required.This will include the removal of existing reservoir and pipe asrequired. The reservoir and pump station proposal shall be inaccordance with the Council's reservoir and pump stationrationalisation policy. Calculations are to be provided to confirm thatthere is sufficient pressure and flow for the development to meet theCode of Practice for Land Development requirements. Upgrading ofthe existing water infrastructure may be required if the Code'srequirements cannot be achieved or if the proposal will have adetrimental effect on existing users. All calculations and designs,including structural elements related to water supply, must beendorsed by an appropriately qualified chartered engineer andsubmitted with a design statement.[65] Enterprise submitted that the information as to water and other infrastructurewas inadequate and it was inappropriate for the Council to use consent conditions toaddress this. It submitted the Council's approach would mean that s 34(3) has nopractical impact. If infrastructure matters can be dealt with only by the imposition ofconditions, there will never be any meaningful assessment of the matters in s 34(3)before a resource consent is granted.[66] We are unwilling to accept those submissions. We agree with the submissionfor TWCL that the purpose of the s 34(2) test is to ensure that developments are notconsented to when infrastructure cannot be provided. The consent conditions requireTWCL to provide what the Council has determined to be sufficient and appropriateinfrastructure. If the conditions are not fulfilled, the resource consents will not be ableto be exercised. Therefore, as a matter of logic, by attaching the conditions,the Council could properly be satisfied that sufficient and appropriate infrastructurewould be provided to support the development.38 At [220].[67] In the end we have not been satisfied that there was an error in the Council'sapproach to infrastructure matters.Ground three — apparent bias and conflict of interest[68] It was submitted for Enterprise that the Council, after receiving the Applicationon 15 September 2016, should have appointed independent commissioners todetermine the Application because a fair minded and informed lay observer wouldhave had a reasonable apprehension that the Council could not bring an impartial mindto its consideration of the Application. Enterprise submitted that, at the time theApplication was lodged, the Council was "interested" in the success of the Applicationin three ways.[69] First, it was submitted the Council had a pecuniary interest in the Application.It owned land proposed for the development and TWCL would need to buy or leasethat land from the Council after resource consents had been granted. The Council'sland could be presumed to have a higher market value should consents be granted, andthere was the prospect of a significant improvement in the income from that land.Furthermore, the Council needed to spend significant money to maintain the existingageing infrastructure at Shelly Bay. That was a liability that could be avoided or offsetthrough development contributions and development agreements and otherarrangements, if the development went ahead.[70] Second, the Council had publicly promoted and supported the development inits 2015 Urban Growth Plan: Implementation Plan, which identified the Shelly Bayredevelopment as a four-year project. Resource consents could be seen as anticipated.[71] Third, in a related submission, it was argued that the Council had privatelypromoted and supported the proposed development. It made commitments to PNBST,TWCL's joint venture partner, which included that the Council would work withPNBST "co-operatively to ensure the former Shelly Bay air force base is integratedinto a development that will benefit Taranaki whanui ki te Upoko o Te Ika and thecitizens of Wellington and visitors to the capital city". Enterprise submitted that theCouncil had also entered into pre-application agreements with TWCL allowing for aflexible and high-level approach to the Application, and Council staff had providedadvice to report writers for TWCL on what they should assess and conclude in orderto improve the Application's prospects of success. Enterprise submitted that,ultimately, the Council adopted an approach whereby declining the consents was notan option, and its consideration of the Application was limited to what conditions toimpose.[72] Enterprise's appeal on this ground can be seen, on an overview, as having twoaspects. First, it was submitted that the Council's decision is vitiated by apparent biasor an unacceptable degree of conflict of interest. Second, in light of that apparent biasor conflict of interest, the Council erred in failing to consider whether to appointindependent commissioners to determine the application under s 34A of the RMA, andin ultimately failing to appoint such commissioners.Analysis[73] It is a key part of the argument put forward for Enterprise that the test forapparent bias set out in Saxmere Co Ltd v Wool Board Disestablishment Co Ltdapplied.39 That test was formulated in relation to judges, and states that if afair-minded lay observer might reasonably apprehend that a judge might not bring animpartial mind to the resolution of a question the judge is required to decide, the judgeis disqualified.40 Enterprise argued that resource consenting is a quasi-judicial processtherefore the Saxmere test is appropriate. The Council and TWCL strongly resistedthat submission, arguing that such a test is unworkable in relation to councils, whichperform both regulatory and commercial roles.[74] In assessing bias the particular circumstances are of supreme importance.41The statutory context and the practical reality of the task given by Parliament to thedecision-making body will be critical.42 We do not consider that the test set out inSaxmere should be applied to local authority decisions on resource consents. Saxmerewas concerned with apparent bias by judicial officers. The principles set out in thedecision do not set standards that can be appropriately applied in the case of local39 Saxmere Co Ltd v Wool Board Disestablishment Co Ltd [2009] NZSC 72, [2010] 1 NZLR 35.40 At [3].41 Man O'War Station Ltd v Auckland City Council (No 1) [2002] 3 NZLR 577 (PC) at [11].42 Jeffs v New Zealand Dairy Production Marketing Board [1967] NZLR 1057 (PC) at 1066.authorities exercising statutory powers of decision in the RMA and HASHAA context.As Kós J said in Back Country Helicopters Ltd v Minister of Conservation in relationto the exercise of powers by a Minister:43The proposition that a Minister could effectively discharge his or her duties inthe same way that a Judge does need only be stated to be rejected as unsound.The accountabilities, and standards applicable, are altogether different.[75] So here in relation to a council. A council administers its assets and carries outits duties for the benefit of ratepayers. It is controlled by an elected body responsibleto ratepayers, and has accountability and standards altogether different from those ofa judge.[76] A council, as part of its duties, may enter into commercial operations within itsdistrict which may require consents. The council is also in the position of regulator inmaking decisions on those consents. Parliament has chosen to vest the resourceconsent decision-making power in councils in a context where there will always besome sort of notional conflict, if only arising out of a desire to benefit the ratepayerswhom it represents. To address that concern, s 39(c) of the LocalGovernment Act 2002 provides, as a governance principle:(c) a local authority should ensure that, so far as is practicable,responsibility and processes for decision-making in relation toregulatory responsibilities is separated from responsibility andprocesses for decision-making for non-regulatory responsibilities [77] The duality of a council's role is particularly pronounced in the HASHAAcontext, where a council is tasked with establishing and agreeing to certain residentialdevelopment targets, as well as determining resource consent applications.We consider that the Saxmere test of apparent bias would be unworkable in thosecircumstances. We agree with the submission for TWCL, also accepted byChurchman J, that the more appropriate test is whether the Council approached thedecision with a closed mind.4443 Back Country Helicopters Ltd v Minister of Conservation [2013] NZHC 982, [2013] NZAR 1474at [130].44 Enterprise Miramar Peninsula Inc v Wellington City Council, above n 1, at [99] and [152].[78] The two decision-makers that determined the Application for the Councilunder delegated authority both deposed that they approached their task withindependent minds and were free from pressure. Neither was required forcross-examination. The Senior Consents Planner said:I did not experience any pressure from any person within the Council toapprove the resource consent application. Commercial negotiations betweenthe Council and [TWCL] in relation to the proposed development atShelly Bay were carried out by a different part of the Council. I was not awareof the position reached in those negotiations, the role of the Council in theproposed development or the financial implications for the Council of thedecision. I did not take into account these matters when deciding the resourceconsent application.He deposed that he was not aware of any advantage to the Council, pecuniary orotherwise, if the development proceeded.[79] The Resource Consents Manager emphasised that while the pre-applicationprocess may include a great deal of interaction with the applicant:The pre-application process never results in a formal decision and we cannotand do not advise the applicant whether their application will be successful.We do, however, sometimes give indications or initial opinions about whetherthe material provided is likely to be considered sufficient, or about thelikelihood of success in their application.[80] She went on to depose:I am confident that when processing an application for resource consent,regardless of who the applicant is, Council planners exercise their independentjudgment. Where the Council has an interest in the relevant activity ordevelopment, the decision-making process is not influenced by the fact ofthe Council's interest.[81] It should also be recorded that no binding legal agreement has been enteredbetween the Council and TWCL, committing the Council to sell the land necessary forTWCL to proceed with the project as proposed. The Council has wisely decided toavoid such obligations at this stage.[82] As to the Council's public promotion of the development in its 2015Urban Growth Plan: Implementation Plan, it must be assumed that Parliament, inmaking councils the consent decision-makers under HASHAA, contemplated that theywould inevitably bring a policy perspective to their determination. In entering into ahousing accord under HASHAA, a local authority commits to a policy of enhancingthe objectives of the Act. It was stated by this Court in Turner v Allison:45It is not of course enough that the tribunal, or some member of it, hasexpressed a preconceived opinion, even one strongly held, on the matter to betried it must appear that the tribunal intends to adhere to the point of viewwhich has been expressed, uninfluenced by further evidence of argumentafterwards addressed to it.[83] In CREEDNZ Inc v Governor-General this Court was responding to achallenge to the validity of an Order in Council, the effect of which was to bypass theusual statutory planning procedures under the National Development Act 1979 andfast-track the approval process for an aluminium smelter.46 The usual planningprocedures were changed, as in this case. It was alleged that the Ministers haddetermined in advance to advise and consent to approval of the application for theproject to be fast-tracked.[84] Cooke J found that it was a fair inference from newspaper reports that theGovernment had from an early stage favoured using the National Development Actfor the project.47 Cooke J however observed:None of this means, however, that the Government was irretrievablycommitted to advising the necessary Order in Council. What can properly beinferred is that when the question arose in April 1981 the Government wasalready clearly in favour of the company's project and highly likely to decidein favour of an Order in Council.But it is fallacious to regard that as a disqualification. The references in theamended statement of claim to a real probability or suspicion ofpredetermination or bias are beside the point in relation to a decision of thisnature at this governmental level. Projects of the kind for which the NationalDevelopment Act is intended, whether Government works or private works,are likely to be many months in evolution. They must attract considerablepublic interest. It would be naive to suppose that Parliament can have meantMinisters to refrain from forming and expressing, even strongly, views on thedesirability of such projects until the stage of advising on an Order in Council.In relation to decisions under s 3(3) I think that no test of impartiality orapparent absence of predetermination has to be satisfied. Any other approachwould make the legislation practically unworkable. No doubt, if Ministershad approached the matter with minds already made up, the inference would45 Turner v Allison [1971] NZLR 833 (CA) at 847–848.46 CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 (CA).47 At 179.readily be drawn that they could not genuinely have considered the statutorycriteria when advising the making of the Order in Council. But the newspaperreports fall short of showing closed minds. And the terms of the Order inCouncil suggest that the minds of the Ministers were not closed. The other members of the Court adopted similar positions.48[85] We consider that the same or similar considerations apply in the context of alocal authority deciding an application for resource consent under HASHAA.Therefore we do not consider that the Council's incorporation of a proposeddevelopment into its planning documents was unusual or necessarily establishes thatthe Council failed to give genuine open-minded consideration to the Application.[86] Nor do we consider that the Council's pre-application communication withTWCL, and its joint venture partner PNBST, establishes that it brought a closed mindto its decision on the Application. We note the evidence of one of the decision-makers,the Resource Consents Manager, that it is not unusual for councils to give indicationsor initial opinions about whether the material provided is likely to be consideredsufficient, or about the likelihood of an application proceeding. The courts have drawna clear distinction between a council's pre-lodgement advisory functions and its quasi-judicial role as a consent authority. Both can be exercised without giving rise to a riskof predetermination or conflict of interest. In Pring v Wanganui District Council theCouncil assisted the land developer to ensure its application for a certificate ofcompliance was successful.49 The Court rejected an allegation of predeterminationand stated that:50It is perfectly usual and acceptable practice for District Councils to work withdevelopers to ensure that any proposed development meets districtrequirements and is thus able to proceed. And it must be accepted that it is inthe interests of any community for commercial development to occur in itsdistrict.[87] HASHAA contemplates co-operation between local authorities anddevelopers. The Minister of Housing, Nick Smith, in seeking approval to introducethe Bill, noted that it was envisaged that applicants for resource consents under48 At 192–194 per Richardson J and at 214 per McMullin J.49 Pring v Wanganui District Council [1999] NZRMA 449 (HC).50 At 460.HASHAA may "have established relationships with councils as part of apre-application process".51 Indeed, in the Wellington City Housing Accord thatthe Council entered into with the government under s 10 of HASHAA, the Councilundertook to "increase developer confidence in the Council to encourage a morecollaborative approach between the Council and developers that results in acommitment to bring a continuous supply of land and houses to the market over thelong term". We consider that the Council's interactions with TWCL are consistentwith that purpose.[88] For the reasons stated, we consider that the Council brought an open mind toits decision-making function under HASHAA.Section 34A[89] Section 76 of HASHAA provides that certain provisions of the RMA,including s 34A, apply to a local authority's exercise of its functions under HASHAA.Section 34A relates to the delegation of powers and functions to employees andhearing commissioners. It provides:34A Delegation of powers and functions to employees and otherpersons(1) A local authority may delegate to an employee, or hearingscommissioner appointed by the local authority (who may or may notbe a member of the local authority), any functions, powers, or dutiesunder this Act except the following:(a) the approval of a proposed policy statement or plan underclause 17 of Schedule 1:(b) this power of delegation.(1A) If a local authority is considering appointing 1 or more hearingscommissioners to exercise a delegated power to conduct a hearingunder Part 1 or 5 of Schedule 1,—(a) the local authority must consult tangata whenua throughrelevant iwi authorities on whether it is appropriate to appointa commissioner with an understanding of tikanga Māori andof the perspectives of local iwi or hapū; and(b) if the local authority considers it appropriate, it must appointat least 1 commissioner with an understanding of tikanga51 Housing Accords and Special Housing Areas Bill: Approval for Introduction, above n 13, at [30].Māori and of the perspectives of local iwi or hapū, inconsultation with relevant iwi authorities.(2) A local authority may delegate to any other person any functions,powers, or duties under this Act except the following:(a) the powers in subsection (1)(a) and (b):(b) the decision on an application for a resource consent:(c) the making of a recommendation on a requirement for adesignation.(3) [Repealed](4) Section 34(7), (8), (9), and (10) applies to a delegation under thissection.(5) Subsection (1) or subsection (2) does not prevent a local authoritydelegating to any person the power to do anything before a finaldecision on a matter referred to in those subsections.[90] There is nothing in either the RMA or HASHAA to indicate the circumstancesin which the appointment of commissioners can or should occur.[91] Enterprise submitted that the Judge erroneously held that s 34A could not beused as a recusal mechanism in a conflict situation, as it was designed only to enablecouncils to obtain additional resources. We agree with the submissions for the Counciland TWCL that this mischaracterises the Judge's finding. As we understand hisjudgment, the Judge held that, while the power in s 34A could be used in a conflict ofinterest situation, the Council was not obliged to use it in that way in the circumstancesof this case.52 It is therefore common ground between the parties that the Councilcould have appointed hearing commissioners to decide the application for resourceconsents. The contest was as to whether the Council was obliged to consider whetherto appoint independent commissioners, and whether it had a duty to appoint suchcommissioners in the circumstances of this case.[92] We consider that, if Parliament envisaged that there would be circumstances inwhich a local authority were obliged to delegate its decision-making function to avoida conflict of interest, it would have said so. We consider that the observations of52 Enterprise Miramar Peninsula Inc v Wellington City Council, above n 1, at [148].MacKenzie J in Wakatu Inc v Tasman District Council, in relation to s 34A in the RMAconsenting context, to be apposite.53 He said:54The first question is whether the scheme of the legislation contemplates apotential conflict of interest. The decision is one for the consent authority tomake, and the statutory framework indicates an expectation that that decisionwould be taken at an administrative level within the consent authority.There are powers of delegation which [counsel for the plaintiff] submits, couldhave been adopted to obtain an independent assessment on the question.However, there is in the legislation no indication of an intention that thosepowers should be invoked in respect of all administrative decisions in whichthe Council may be perceived as having a potential interest.[93] Councils almost inevitably will have an interest in a HASHAA resourceconsent application. At the very least, the introduction of new housing will result inan increase in ratings revenue. For the reasons given above, we do not consider thatthe Council can be said to have brought a closed mind to its decision on theApplication. In those circumstances, although it would have been legitimate forthe Council to consider appointing independent commissioners, there could be noobligation on the Council to do so. This ground of appeal must fail.General conclusions[94] We allow the appeal on the basis that the Council erred in law in itsconsideration of the matters set out in s 34(1)(b)–(e). As we have set out, the Councilapplied the purpose of HASHAA to effectively neutralise all other considerations andprevent their being given due acknowledgement in the ultimate balancing under s 34.[95] We do not accept the other grounds of appeal as to the interpretation andapplication of s 34(1), nor the submission that the Council failed to properly considerwhether there was sufficient and appropriate infrastructure under s 34(2). We are alsosatisfied that the Council brought an open mind to its decision on the Application, andwas not obliged to appoint independent commissioners.53 Wakatu Inc v Tasman District Council [2008] NZRMA 187 (HC).54 At [27].Relief[96] We do not consider that there are any discretionary matters that tell againstrelief. The error made in adopting the wrong approach to s 34(1)(b)–(e) appears to usto have been significant, and it is possible that there might have been a differentoutcome to the Application if the correct approach had been adopted. Therefore, thedecision of the Council on the Application is set aside on the basis of error of law.[97] Enterprise submitted that, if the appeal were allowed and the decision remittedback to the Council, this Court should order that the Council appoint independentcommissioners to consider the Application. It was submitted that, even if this Courtrejected Enterprise's arguments as to apparent bias or conflict of interest at the timethe original decision was made, the Council's subsequent defence of its decision inthese proceedings would make it difficult for the Council to bring an open mind to anyreconsideration of its decision.[98] We are unwilling to order the Council to exercise its powers under s 34A toappoint independent commissioners to reconsider the Application. However, giventhe Council's involvement in the present litigation as a party in opposition toEnterprise where Council affairs have been drawn into the dispute and its employeeshave given evidence, the Council should consider whether or not independentcommissioners should be appointed.Result[99] The appeal is allowed.[100] The first respondent's decision granting resource consents is quashed.[101] The second respondent's application for resource consents is remitted to thefirst respondent for reconsideration. The first respondent should consider whether ornot to exercise its power under s 34A of the RMA to appoint independentcommissioners.[102] Although a number of its arguments have failed, the appellant has beensuccessful and we see no reason to reduce an award of costs in this Court.The respondents are jointly and severally liable to pay the appellant costs for astandard appeal on a band A basis and usual disbursements. We certify fortwo counsel.[103] The High Court costs award made against the appellant is quashed.[104] If the parties cannot agree on costs in the High Court, the High Court is to fixcosts in that Court in the light of this judgment. We recognise that there will have beensignificant time spent by the appellant in the High Court on arguments that have failedon appeal, and this may lead the High Court in its discretion to order less than fullcosts.Solicitors:Morrison Kent, Wellington for AppellantMeredith Connell, Wellington for First RespondentMorrison Mallett, Auckland for Second Respondent