FRIENDS OF MARINELAND OF NEW ZEALAND INCORPORATED v NAPIER CITY COUNCIL HC NAP CIV 2010-441-000825

FRIENDS OF MARINELAND OF NEW ZEALAND INCORPORATED v NAPIER CITY COUNCIL HC NAP CIV 2010-441-000825 [17 May 2012]IN THE HIGH COURT OF NEW ZEALANDNAPIER REGISTRYCIV 2010-441-000825[2012] NZHC 1070UNDER the Judicature Amendment Act 1972 andthe Local Government Act 2002BETWEEN FRIENDS OF MARINELAND OF NEWZEALAND INCORPORATEDApplicantAND NAPIER CITY COUNCILRespondentHearing: 28 March 2012Counsel: P Ross and C Church for the ApplicantM Lawson and M Dineen for the RespondentJudgment: 17 May 2012JUDGMENT OF MALLON JContentsIntroduction ....................................................................................................................................... [1]Background ........................................................................................................................................ [2]Decisions challenged ........................................................................................................................ [41]Statutory provisions ........................................................................................................................ [43]Predetermination ............................................................................................................................. [50]Inadequate consultation .................................................................................................................. [64]Third cause of action ....................................................................................................................... [72]Result ................................................................................................................................................ [73]Introduction[1] Marineland, a marine zoo with a performing dolphin show, was a tourist attraction in Napier from 1965. It was operated by the Napier City Council from a facility owned by the Council. Following the death of the last remaining dolphin at the facility, the Council closed Marineland to the public. Friends of Marineland (the applicant) was established to advocate for Marineland to continue. It has broughtthis proceeding seeking judicial review of the Council's decision to closeMarineland. Because the challenge is by way of judicial review, it relates to theCouncil's decision-making process, rather than the decision itself. The principal grounds claimed by Friends of Marineland for the judicial review are that the Council pre-determined its decision and that its public consultation was inadequate because the information provided to the public was inadequate.Background[2] Marineland opened to the public in 1965. It exhibited marine animals and birds and carried out other activities, but its star attraction was a dolphin show. At its peak there were six dolphins performing in the show. In more recent yearsMarineland also had a popular "Swim with the Dolphins" programme, whichenabled people to swim with the dolphins in the dolphin pools.[3] Over its life there were more than 4.5 million visitors. Attendance figures ranged over the years, with a peak of 200,034 visitors in 1966 and a low of 61,386 visitors in 1992. More generally, patronage has declined over the years: in the years between 1965 and 1984 annual visitors exceeded 100,000 every year; in 1985 and 1986 there were over 90,000 visitors each year; and between 1987 and 2005 visitorsexceeded 60,000 each year. This compares with Napier's population of about 57,700as at 2009.[4] From 1978 Marineland was required to operate under the licensing regime of the Marine Mammals Protection Act 1978. Under that regime, a mammal could notbe held in captivity or be taken from its natural habitat without first obtaining a permit from the Minister of Conservation.1 As attitudes changed over the years, it became difficult to obtain permits to capture dolphins to replace the dolphins at Marineland when they died. The last successful application was made in 1987, when Marineland received approval to capture two dolphins.[5] In late 1990/early 1991 Marineland applied for approval to catch, from the wild, up to six dolphins over a six year period. At that time Marineland had four dolphins.2 The application attracted international attention and there was significant opposition to it.3 The supporting submissions came mainly from local residents.4The application was declined by the Minister by letter dated 19 December 1991. In that letter the Minister expressed his belief that public opinion was swinging against the keeping of dolphins in captivity and that Marineland's proposed breeding facilitywould not comply with new international standards.[6] The Council saw this decision as signalling a definite change in policy by the Department of Conservation in relation to holding marine mammals in captivity for display purposes. After this decision, it made no further applications to replace the dolphins at Marineland (whether by way of capturing wild dolphins or importing dolphins already in captivity).[7] By 2000 Marineland had just two dolphins, Shona and Kelly, and Kelly had only recently survived what was thought to be a terminal illness. It was in this year1 Section 4 of the Marine Mammal Protection Act 1978.2 The Department of Conservation's report to the Minister in respect of Marineland's applicationrecords that over the years Marineland had caught 76 dolphins, of which 57 had died, 15 werereleased or transferred, and 4 remained.3 The opposition came from such organisations as Cousteau Society, Wildwatch Inc (Australia),the World Society for the Protection of Animals, the Dolphin Circle, International Fund forAnimal Welfare, the Working Group for the Protection of Marine Mammals (Switzerland),Whale and Dolphin Conservation Society (England), the South Carolina Association for MarineMammal Protection, Care for the Wild (England), Australian and New Zealand Federation ofAnimal Societies Incorporated, the Royal New Zealand Society for the Prevention of Cruelty toAnimals Incorporated, the Royal Society for the Prevention of Cruelty to Animals (SouthAustralia) Incorporated, the Bellerive Animal Welfare Society (Switzerland), the HumaneSociety of Western Australia Incorporated, and Robin Des Bois ( Paris).4 The Department of Conservation's report to the Minister, on which the Minister's decision wasbased, noted that the total submissions received were split 52% in opposition and 47% in supportof the application; and that of the supporting submissions 70% were from Hawke's Bay, and thatof the opposing submissions 84% were from elsewhere in New Zealand and from internationalsources.that Marineland first began to make losses.5 That year the Council established a working party to consider the future of Marineland. Confidential enquiries were made into possible options for the mammals at Marineland if the Council determined it needed to exit from the business. At this time, the Marineland business was overseen by a Council trading enterprise (Tourism Services Ltd). Its view was that, with declining visitors and increasing costs, Marineland would trade into a regular pattern of loss that would require a subsidy in future years. Its view was that if one dolphin died the net loss would increase to $200,000 per annum, and if both dolphins died the net loss would increase to $300,000.[8] The Council's working party met on 10 May 2001. The public were excludedfrom the meeting on the basis that the discussions could prejudice commercial activities and negotiations.6 According to the minutes of that meeting, the tworemaining dolphins were considered old by international standards. The Council's view at that time was that it would be "impossible" to obtain replacement dolphinsunder the current government.[9] At this meeting, the working party recommended that the Council adopt theChairperson's recommendations, which included the following:a) That Marineland remain open while both the current dolphins were alive, and that the cost of operation be reviewed between the Council and TSL on an annual basis.b) That when one of the two remaining dolphins died, Marineland be closed to the public.c) That a strategy be put in place which would be actioned at the same time of the next dolphin death, and include:i) Discussions and agreement of procedure with DOC, MAF and any other relevant organisation.ii) Deciding upon individuals who would make appropriate public announcements, deal with the media, the tourism industry and the public of Napier.iii) Staffing structure necessary for the ongoing care of the animals that remained at Marineland.5 The loss in 2000 was small – just $10,000. Thereafter further losses were incurred each year. Insome years the losses remained at this small level. In other years (2004, 2006 and 2007) thelosses were more than $100,000.6 Section 7(2)(h) of the Local Government Official Information and Meetings Act 1987.iv) Liaison with DOC on the immediate future of the remaining dolphin. The Chairperson had been advised that DOC would not make any decisions prior to the death of the first dolphin.v) Identification of any redundancies or movement of staff to any other TSL managed facilities.vi) Identification of any repatriation opportunities for animals to any other facilities in New Zealand.vii) The overall future of exiting Marineland from housing of all animals over an identified period.viii) Relevant costs.d) That due to the age and condition of the current dolphins, a clear future strategy be completed as soon as possible, to enable Council to make clear decisions.e) That in conjunction with the future strategy report, serious consideration be given to relocating a selection of animals to the southern end of the National Aquarium of New Zealand at the time of closure, subject to the reinvestment funding being available.f) That an opportunity be given to research future options for the Marineland site, (TSL as the appropriate vehicle), taking intoconsideration Council's Marine Parade, inner City, and feasibility ofidentified options.[10] On 27 June 2001, in a meeting closed to the public, the Council adopted those recommendations.[11] From about 2003 the Council and its operating arm (Tourism Services) reviewed and analysed the options for Marineland. This included an August 2003 review substantially authored by Mr MacDonald (a long time employee of Marineland and superintendent from 1977). This review presented three options, which were summarised as being:Redevelop on existing siteThe infrastructure is already in place, contributes to and fits existing tourism zone, retains jobs. Rebranding and fresh marketing would counter loss of attendance revenue as a result of dolphins dying.Relocate to AquariumComplements and adds value to aquarium attraction, cost savings through shared administration, opportunity to create modernised marine zoo. Downsides are the high costs of developing new facilities for seals, sea lions, penguins, otters, and the many other marine creatures, a dual ticket price might discourage visitors.Permanent ClosureFrees up current, crucial site on Marine Parade, inexpensive option. Negatives are forced loss of jobs and redundancy costs, issue of caring for remaining animals, loss of key tourist attraction and impact on city marketing.[12] The review acknowledged that the loss of the dolphins would impact severely upon the viability of Marineland and it was accepted that these would be the last dolphins at Marineland. Although closure was viewed as being the most inexpensive long-term solution, there would be costs arising from closure. It was noted that if Marineland was closed, it was "not simply a matter of putting up the 'Closed' sign and walking away." It was also noted that Marineland had an obligation to assurethe well-being and welfare of the animals at Marineland, and that the penguins, seals, sea lions and otters will cost as much to look after when the dolphins were gone. The review concluded by recommending investigating the option of operating on the existing site, without dolphins, but with redevelopment. The investigation would involve engaging a consultant to complete a feasibility study.[13] After that review, a report was commissioned from 3D Creative Design &Management Ltd ("3D Creative") on a preliminary concept for a revampedMarineland. In providing instructions to 3D Creative, Tourism Services provided cost and income scenarios. In respect of the option of closing the facility, TourismServices noted that this would be a "prolonged exercise" and that there were costimplications however the animals were to be "disposed" of. Reference was made tothe closure of Atlantis Marine Park in Australia, which took three years and cost $5,000,000. Tourism Services advised 3D Creative that much of the information itwas providing was of a "very sensitive nature" and was to be treated in the "strictest confidence". 3D Creative provided its concept report in April 2005.[14] The concept was the subject of a September 2005 report providing a preliminary local economic and tourism perspective. This report considered the strengths and weaknesses, and the opportunities and threats from such a redevelopment. It set out the estimated initial direct expenditure figure of $6 million and the flow-on economic impacts. It provided some information on Council subsidy/contributions including that, in the current and 2006/07 financial years, theoperational subsidy requirement of the Council for Marineland was $306,000 or 23% of forecasted total operational spending at the facility.[15] Alongside these investigations, in 2005 a petition was presented to Parliament by the Member of Parliament for Napier. The petition was aimed at continuing to have dolphins at Marineland. It attracted 13,500 signatures.[16] Also that year, the Minister of Conservation approved the ConservationGeneral Policy 2005, which was the Department's policy statement under a range oflegislation including the Marine Mammals Protection Act 1978. The policy included the following:4.4(k) Whales and dolphins should not be brought into or bred in captivity in New Zealand or exported to be held in captivity, except where this is essential for the conservation management of the species.[17] Along similar lines, a key objective in the Department of Conservation'sMarine and Mammal Action Plan 2005-2010 was "[t]o progressively phase outwhere possible the keeping of marine mammals (especially cetaceans) in captivity."[18] In April 2006 Shona died. Marineland closed for four days to enable the staff to grieve and then reopened. Marineland continued to operate with Kelly and its other animals. By this time, Kelly was estimated to be 36 years old and near the end of her life expectancy.7[19] In May 2006 a councillor, Harry Lawson, wanted to gauge public support for the replacement of the dolphins. He held a series of public meetings. At one of these meetings a former councillor told the audience that a remit to close Marineland had already been passed. In that same month, a seminar was presented to Council on the information obtained to date on the future of Marineland. A number of further reports were commissioned that year and in 2007 and 2008.8[20] While these reports were being obtained, the Local Government and Environment Committee considered the 2005 petition at a hearing in 2007. The7 The Council's submission to the Local Government and Environment Committee dated 22 June2007 says that Kelly was estimated to be 37 years old at that time.8 These reports are detailed in the affidavit of Mr Taylor, the Chief Executive of the Council.Committee's report recorded that the Council had not pursued the introduction ofnew dolphins since 2000 because it believed the Government would not support the acquisition of new dolphins. The Committee asked the Council whether it supportedreplacing the dolphins. The Council's response was recorded as being:The council informed us that affordability would be an issue as it believesthat the Government would require Marineland's facilities to be upgraded ifnew dolphins were introduced. The council told us that it could not commit itself to the process of replacing the dolphins without knowing the details of such requirements. Unless it had a clear commitment from the Government that a permit to introduce new dolphins would be provided the council would not consult the community on the matter, and has not included it in its long term community council plan. The council does not want to raise thecommunity's expectations if they are unlikely to be realised, and told us thatit has received no petitions regarding the dolphins.[21] The Committee's conclusion was as follows:We understand the enthusiasm of many people in the Napier community for continuing the tradition of keeping dolphins at Marineland and appreciate the iconic significance of the dolphins for the area. We do not question thegenuine concern of Marineland's supporters for the dolphins and we supportthe maintenance of Marineland for the lifespan of the remaining dolphin, Kelly. However, scientific evidence about the detrimental impact of captivity on dolphins provided to us by the Department of Conservation and others leads us to conclude that it would not be appropriate to call on the department to change its policy to allow the keeping of new dolphins at Marineland, even if funding were available for remodelling Marineland to house new dolphins.[22] The Committee's report was received by the Council on 2 July 2008. The Council resolved, at an open meeting, as follows:...b) That Council confirm that when the remaining dolphin Kelly dies, Marineland will be closed to the public.c) That the strategy identified in 2001 be put in place at the same time....e) That redevelopment options continue to be investigated in consultation with the community.[23] The Chief Executive of the Council, Mr Neil Taylor, says that the decision to close Marineland to the public when there were no longer performing dolphins was a"practical operational decision". He says that it was made because the dolphin showand interaction with dolphins was the mainstay of the operation and that was no longer possible. He says that the Council was committed to considering redevelopment options in consultation with the community in accordance with theCouncil's obligations under the Local Government Act 2002.[24] Kelly died on 11 September 2008. Marineland was closed to the public onKelly's death. Marineland staff wished to have a grieving period and the closure enabled this to occur. However after that, Marineland remained closed except for the limited openings referred to below.[25] At a meeting on 1 October 2008 the Council resolved to consult on the future of Marineland. The resolution was as follows:That Council resolves, in terms of Section 82(3) of the Local Government Act 2002, that the principles set out in that section have been observed in such a manner that the Napier City Council considers, in its discretion, is appropriate to make decisions on the recommendation.[26] The Council further resolved that the consultation process would involve:(a) Executive summaries of review documents and seminars would beavailable: for collection from the Council's main reception; forreading at the public library; and on the Council's website. Publicitywould be wide ranging and would include a display board in the main foyer of the Council building and articles in newspapers;(b) Submissions would close on 5 November 2008;(c) Hearings would take place on 27 and 28 November 2008;(d) Submitters would have a week's notice of their hearing time.Individuals would be allocated 10 minutes each.[27] The Council devoted its October 2008 edition of its publication, "Proudly Napier", to the future of Marineland. The publication was delivered to every household, post office box and rural delivery address within Napier. The publication was a four page document:(a) It started with a letter from the Mayor saying that the issue was"where to from here for Marineland?" The letter said that the Councilwas making available a "free Information for Submissions" document.It said that this would contain executive summaries and other information obtained by the Council over the past few years. Theletter said that it was "seeking an option other than that of housing dolphins (the Government have told us that we cannot import or holdmore dolphins)". The letter said that the Council were looking for anattraction to provide a tourism impact similar to when Marineland first opened. Submissions were encouraged.(b) The second page of the document set out some of the history of Marineland. It provided dates of Council reviews of Marineland. Itstated that "[w]ith the Government decision not to allow importationor the holding of dolphins in captivity, dolphins at Marineland are nolonger an option". It set out an extract of the conclusion in the reportfrom the Local Government and Environment Committee that it would not be appropriate to call on the department to change its policy to allow the keeping of new dolphins at Marineland.(c) The third page set out the suggestions the Council had received so far. These included a modernised and upgraded marine zoo. Some general information about the impact of redevelopment on annual rates was provided.(d) The fourth page set out where the Information for Submissions document was available. It provided details about making a submission.[28] The Information for Submissions document provided a submission form, and the executive summaries of the following documents which had been obtained by the Council over the years:(a) The Napier Wildlife Experience (1994/1995)(b) Tourism Services Ltd (TSL) review of Marineland and consideration of options (December 1999)(c) Tourism Services (NCC) review of Marineland (August 2003)(d) 3D Creative Preliminary Concept (April 2005)(e) Economic Solutions Ltd Economic and Tourism Perspective Report (September 2005)(f) 3D Creative revised and more detailed concept Economic Solutions Ltd Economic Impact Report, Palairet Pearson Report, Cinta Research Report (January 2007 Seminar)(g) Council Seminar – penguin option (August 2008)[29] As well as the publicity by the Council about the consultation process, Friends of Marineland delivered a leaflet to all households which encouraged submissions so that Marineland would not "die". It sought support for "the retention of Marineland as a Marine Zoo". The public response to the Council's request forsubmissions was high. Over 350 submissions were received by the Council. While a large number were in favour of Marineland continuing, there were also submissions strongly opposed to that. Many of the submitters supported their submissions with oral presentations that took place on 27 and 28 November 2008 before a Council committee. The agenda for the committee meeting included Appendices which summarised all the submissions that had been received.[30] The committee reported back to the Council at a meeting on 17 December 2008. At that meeting the Council resolved:...b) That Council staff investigate a new attraction on the Marinelandsite, capitalising on the "Marineland" brand, to be based on marineanimals, coastal discovery, environmental education, and to include an underwater viewing area, multi-use performance platform, cafe, Maori history and stories of the region. The facility shouldmaximise views of the ocean and a natural layout with landscaping and pathways around the complex.c) That public/private partnerships be investigated.d) That the submissions of Emily Otto, Robin Stewart and 3D Creative be given further consideration.e) That a plan be drawn up and priced for the new attraction (including a staged development) and reported back to Council.f) That any future development be referred to public consultation.g) That the following ideas be investigated further for future development:i) Adventure park featuring trapeze/high wire/slidesii) Water parkiii) Transport (e.g. Hop on/Hop off bus/tram) connecting Marine Parade attractions, the Port and Ahuririiv) Improved transport hub/welcome centreh) That investigation into recommendations b), c) and d) be funded from the ring-fenced funding of Tourism Services Department. If these costs exceed $60,000 that they be referred back to Council.i) That investigation into recommendations b), c) and d) be carried out in an integrated manner which acknowledges that the suggestions inrecommendation g) are likely to be part of Napier's future....[31] At that same meeting, and arising out of the submissions received, the Council resolved to re-open Marineland to the public for a limited period (from 20 December 2008 until the end of the April 2009 school holidays). This was toprovide the public with a "low-key opportunity" for the public to view the remaininganimals. Marineland was accordingly re-opened on that basis and for that period. Since that time Marineland has had the occasional Open Day when the public have been able to visit. But otherwise it has remained closed.[32] After the meeting on 17 December 2008, the Council staff carried out further work on the options. 3D Creative was engaged to prepare a concept proposal for a redeveloped Marineland that was not dependent on performing mammals. This was provided in April 2009. The Council then engaged consultants to provide a likelycost of the physical work involved in such a redevelopment. The estimate provided was $8.2 million to $8.7 million plus GST. The Council then instructed accountantsto examine a business case for the proposed redevelopment. The accountants' reportwas provided in July 2009. It provided a revised cost estimate of $11.235 millionplus GST. It provided lower, middle and upper scenarios. The middle "most likely"scenario projected a net profit surplus of $560,000 in Year 1 reducing to a deficit of $168,000 by Year 5 (as revenues were projected to decline after the "honeymoon effect", that was expected to occur initially, was over). The information from this work was presented to the Council at a seminar on 30 July 2009.[33] Mr Taylor says that the accountants' report "brought the issues into sharpfocus, particularly in terms of Council's obligations of prudent financial management". The Council sought further advice from another accountant. Thisreport was provided in November 2009. The report concluded under the heading"Overall Financial Risk":The major concern to me is however that at $12 million the project is providing limited headroom even in the mid-range scenario projections by Howarth.The net cashflow's range from a high of $944,000 in the first year to$129,000 in year 5 on the basis of 33% debt fundings.The lower scenario provides limited cashflow benefit, only $563,000 in the first year and moving into deficit in the last 2 years of the 5 year range.There is no question that the site is a jewel in the crown so far as City assets are concerned however the lack of headroom means that the Council may have to consider financial risk mitigation. This could include considerationof the Council's equity in the whole project, i.e. is it necessary for theCouncil to continue to be the owner of the site and the operator of the business. There are philosophical issues involved here but there is also a strong need to balance the quite considerable financial risk. Despite the long history of Marineland this must be viewed as a start-up business notwithstanding the sound approach taken by the consultants, and it remains difficult to predict the long term financial outcome. In that respect it may well be that consideration should be given to the option of licensing or leasing a substantial part of the business so that risks can be mitigated andthe Council's overall investment reduced.[34] Mr Taylor says that the suggestion of licensing or leasing was consistent withthe Council's resolution on 17 December 2008 that public/private partnerships beinvestigated. The Council had discussions with a number of operators but no firm proposals emerged.[35] In the course of the public discussion, the possibility that dolphins bepurchased from other facilities overseas was raised. The Council's understanding was that the Department were opposed to the holding of marine mammals in captivity, not just their capture. By letter dated 18 October 2010 the Napier Mayor wrote to the Minister of Conversation. The letter referred to recent public comment in Napier about purchasing dolphins from overseas facilities for Marineland. The Mayor noted that the Council did not support the suggestion but wished to have clarification from the Government about its policy. The Minister of Conservation response confirmed that the Government remained opposed to the keeping of cetaceans in captivity.[36] At a meeting of the Council on 9 December 2010, from which the public were excluded, the Council resolved:a. That the Blue Penguins be moved to a new facility to be built for permanent display at the National Aquarium of New Zealand. Relocations to be completed by November 2011, funded from the existing Marine Parade CBD capital reserve account.b. That the current education programme provided from Marineland be moved to the National Aquarium of NZ from January 2011.c. That the animals at Marineland be relocated where possible.d. That Council work with the Department of Conservation for a solution on the remaining animals.e. That Council confirm their previous resolution of 2 July 2008 (i.e. that Marineland be closed to the public once the remaining dolphin dies).[37] Mr Taylor says that this decision was made in the absence of any viable sustainable proposal having emerged and the losses being incurred. By 2010 a loss of $510,000 had been sustained. The decision was announced by press release that day. On 20 December 2010 Friends of Marineland commenced this judicial review proceeding.[38] Although Marineland is closed to the public, there continue to be some animals at Marineland. The penguins have been, or are in the process of being, moved to the National Aquarium (a new facility in Napier) but, as at February this year, four sea lions, six fur seals and one sub-Antarctic fur seal remain at Marineland. Work is continuing on finding other institutions for the remaining animals. Release to the wild is not realistic, as the animals have lived in captivity for years and some are elderly and in poor health. If another institution cannot be found for the animals the options are continuing the facility until the last animal dies of natural causes, or euthanasia.[39] The affidavit evidence filed on behalf of Friends of Marineland is that some of the animals may live for another ten to twenty years. For so long as the animals remain at the facility, they need to be tended to and fed and there is cost involved in that. Although it is cheaper to operate Marineland when it is closed, much of theexpenditure is fixed and continues until the facility is closed. The Council's 10 yearplan has budgeted for net operating expenses of $412,000 in 2011/12, declining to about $190,000 per annum for the years 2012/13 to 2021/22.[40] The Council's view is that the present number of animals is insufficient forany form of viable show. Mr Taylor says that the cost in looking after the animals while they remain at the facility does not justify the capture of further marine mammals or the further capital expenditure on a facility for the remaining animals. Mr Taylor says that the Council continue to be open to proposals for the utilisation of the site for the benefit of the people of Napier. After the proceeding was commenced, the Council gave Friends of Marineland a further opportunity to put forward a proposal and set a date for that purpose. Friends of Marineland did not take up that opportunity, it seems at least partly out of concern about what they would be able to propose in the timeframe they were given.Decisions challenged[41] The statement of claim challenges two decisions:(a) the decision in July 2008 to close the facility; and(b) the decision in December 2008 to permanently close the facility.[42] In oral submissions Friends of Marineland also sought to challenge the decision in 2001. The challenge was put on the basis that the decision was made in breach of a common law duty to consult.9 It is not necessary to consider this submission further. That is because the Council did not implement the decision at that time. After that decision was made, further consideration was given to the future of Marineland. This lead to the Council's decision in July 2008, which led tothe facility closing when Kelly (the last remaining dolphin) died. By then the Council was subject to the Local Government Act 2002. That decision, and the later decision in December 2010, needed to comply with the requirements of subpart 1 of Part 6 of the Act.Statutory provisions[43] The Local Government Act 2002 changed the manner in which local authorities were empowered to exercise its functions. Unlike its predecessor, decision-making was subject to the provisions of Part 6 Subpart 1 of the Act. Those provisions, so far as they are relevant for present purposes, set out the responsibilities on Council to identify and assess options and to obtain community views. They also set out principles of consultation.[44] The starting point under these provisions is s 76(1). That requires that everydecision be made "in accordance with such of the provisions of sections 77, 78, 80, 81, and 82 as are applicable." For present purposes sections 77 (assessing options), 78 (obtaining community views) and s 82 (principles of consultation) are the relevant provisions. As to how the Council is to determine when ss 77, 78 and 82"are applicable", s 77(3) provides that the Council must ensure that its decision-making processes "promote compliance" with s 76(1)10 and that, in respect of a"significant decision," the Council must ensure, before it makes its decision, that it9 Reference was made to Friends of Turitea Reserve Society Inc v Palmerston North City Council[2008] 2 NZLR 661 (HC) where the High Court considered that there was a common law dutyon the Council to consult in respect of a decision to add "renewable electricity generation" as apurpose in respect of a local purpose reserve so that a windfarm could be established on thereserve.10 Section 76(3)(i) of the Local Government Act 2002.has "appropriately observed" s 76(1).11 Section 79 provides that how the Council achieves compliance with ss 77 and 78 is a judgment for the Council to be made"largely in proportion to the significance of the matters affected by the decision".That section also sets out factors the Council is to take into account in making that judgement.[45] A "significant decision" is defined as meaning a decision which "has a high degree of significance".12 In turn, "significance" is defined as meaning:... the degree of importance of the ... decision ... as assessed by the local authority, in terms of its likely impact on, and likely consequences for, -(a) the current and future social, economic, environmental, or cultural well-being of the district or region:(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision, or matter:(c) the capacity of the local authority to perform its role, and the financial and other costs of doing so.[46] The section 77 requirement is that local authority must, in the course of its decision-making process, "seek to identify all reasonably practicable options for theachievement of the objective of a decision". It also requires the Council to assessthose options by considering various matters which are set out.[47] Section 78 provides:78 Community views in relation to decisions(1) A local authority must, in the course of its decision-making process in relation to a matter, give consideration to the views and preferences of persons likely to be affected by, or to have an interest in, the matter....(3) A local authority is not required by this section alone to undertake any consultation process or procedure....11 Section 76(3)(b) of the Local Government Act 2002.12 Section 5 of the Local Government Act 2002.[48] Section 78 therefore envisages that community views may be obtained in ways other than consultation. However, under the judgment the Council is required to make under s 79, the more significant the decision the more the local authority will need to do to discharge the obligation to consider community views. Consultation may be the only proper way to obtain community views for some decisions.13 When consultation is required (at common law,14 by a provision in the Local Government Act15 or under another enactment, or because the Council considers that consultation is the proper way to discharge its s 78 obligation), s 82 sets out principles for that consultation as follows:82 Principles of consultation(1) Consultation that a local authority undertakes in relation to any decision or other matter must be undertaken, subject to subsections (3) to (5), in accordance with the following principles:(a) that persons who will or may be affected by, or have an interest in, the decision or matter should be provided by the local authority with reasonable access to relevant information in a manner and format that is appropriate to the preferences and needs of those persons:(b) that persons who will or may be affected by, or have an interest in, the decision or matter should be encouraged by the local authority to present their views to the local authority:(c) that persons who are invited or encouraged to present their views to the local authority should be given clear information by the local authority concerning the purpose of the consultation and the scope of the decisions to be taken following the consideration of views presented:(d) that persons who wish to have their views on the decision or matter considered by the local authority should be provided13 In Whakatane District Council v Bay of Plenty Regional Council [2010] 3 NZLR 826 (CA) at [11] the Court of Appeal says "Self evidently the decision to shift the head office and manypersonnel from Whakatane to Tauranga is significant. So in terms of s 76(3)(b), ss 77, 78 and 82must be complied with." However at [76] the Court of Appeal says "We appreciate the reasons for Duffy J's adoption of a broad approach. In terms of s 78(1) the decision-maker is the local authority and it is no function of the courts to engage in intense scrutiny of its decision-making processes. The s 78(1) requirement ... is distinctly less than that of consultation under s 82 which s 78(3) expressly excludes...". The line between consideration of community views and consultation is not clearly demarcated for significant decisions. There is a discussion of this issue in Dean Knight "Local Democracy and Consideration of Community Views: Obligation and Observance" in Dean Knight and Claire Charters (eds) We, the People(s): Participation in Government (VUP and NZCPL, Wellington, 2011) 284.14 For example, Pascoe Properties Ltd v Nelson City Council HC Nelson CIV-2011-442-126, 21April 2011 at [12].15 For example, s 138 of the Local Government Act 2002.by the local authority with a reasonable opportunity to present those views to the local authority in a manner and format that is appropriate to the preferences and needs of those persons:(e) that the views presented to the local authority should be received by the local authority with an open mind and should be given by the local authority, in making a decision, due consideration:(f) that persons who present views to the local authority should be provided by the local authority with information concerning both the relevant decisions and the reasons for those decisions....(3) The principles set out in subsection (1) are, subject to subsections (4) and (5), to be observed by a local authority in such manner as the local authority considers, in its discretion, to be appropriate in any particular instance.(4) A local authority must, in exercising its discretion under subsection (3), have regard to—(a) the requirements of section 78; and(b) the extent to which the current views and preferences of persons who will or may be affected by, or have an interest in, the decision or matter are known to the local authority; and(c) the nature and significance of the decision or matter, including its likely impact from the perspective of the persons who will or may be affected by, or have an interest in, the decision or matter; and(d) the provisions of Part 1 of the Local Government Official Information and Meetings Act 1987 (which Part, among other things, sets out the circumstances in which there is good reason for withholding local authority information); and(e) the costs and benefits of any consultation process or procedure.(5) Where a local authority is authorised or required by this Act or any other enactment to undertake consultation in relation to any decision or matter and the procedure in respect of that consultation is prescribed by this Act or any other enactment, such of the provisions of the principles set out in subsection (1) as are inconsistent with specific requirements of the procedure so prescribed are not to be observed by the local authority in respect of that consultation.[49] There is a separate provision which sets out the requirements on a local authority when it is required by statute to use or adopt "the special consultative procedure".16 That is a more prescriptive kind of consultation that that which may be undertaken in accordance with the principles in s 82. That procedure applies to certain types of decision (not relevant here) or when the local authority chooses to use the special consultative procedure.17Predetermination[50] Friends of Marineland contend that the Council "pre-determined" its decisionto close Marineland. As I understand it, this is a claim that the Council did not comply with its obligations under s 77, s 78, and s 82 when it made its decision in July 2008 at all; and that it did not comply properly with ss 77, 78 and 82 in December 2010 because, by then, it had already decided to close Marineland by way of its earlier resolutions in 2001 and 2008. It is because the decisions to close Marineland were said to have been already made without considering other options and without proper consultation as required by those sections, that the Council is said to have pre-determined its decision.[51] Friends of Marineland's starting premise is that the decision to close Marineland was a "significant decision" and that therefore compliance with ss 77, 78and 82 was mandatory. In making that submission reliance is placed on the number of visitors Marineland has attracted over the years, the petition that attracted 13,500 signatures, the number of submissions the Council received in response to the request for submissions in October 2008 and the economic impact of Marineland on the local community as referred to in the September 2005 Economic and Tourist Perspective report (said to have a total value-added or local GDP (economic activity) impact of $3.22 million).[52] The Council disagrees. The Council submits that closure was not a"significant decision" under its "policy of significance". It says that under its policy,Marineland is considered to be a significant asset and so the decision to demolish the16 Section 83 of the Local Government Act 2002.17 Sections 84-87 of the Local Government Act 2002.building or to sell it would be a significant decision. It contrasts this with a decision of whether or not to operate Marineland, and says that this not a significant decision as referred to in s 76 of the 2002 Act. The Council did not submit a copy of its policy of significance. It did not do so even though the statement of claim pleadedthat "the future of Marineland is a significant one affecting the respondent's ratepayers and the wider public of New Zealand". It says that this allegation is notthe same as an allegation that the decision to close Marineland is a "significant decision" as defined by the Local Government Act.[53] There is evidence about how the Council viewed its obligations under the Local Government Act from Mr Taylor. He says that the decision to close Marineland (as distinct from redevelopment) was a practical operational decision. He says that the Council was committed to redevelopment options in consultation with the community in accordance with the Local Government Act 2002. Thatevidence is supported by the Council's resolution at its July 2008 meeting.[54] I accept that a decision to close the doors on the death of the last dolphin is a practical operational decision. However, if it is a decision to permanently close thedoors of Marineland then it moves into the territory of a "significant decision".Although Mr Taylor does not say whether the Council turned its mind to whether redevelopment options were viewed a "significant decision", its actions suggest thatit did. The matters relied on by Friends of Marineland are relevant when consideringwhether a decision to close Marineland was a "significant decision". In terms of thes 5 factors, a decision on its future would have some impact on the community's "social, economic, environmental well-being". Therefore if the decision in July2008 was to close the doors of Marineland (with or without dolphins) permanently then, before that decision was made, the Council was required, before making thedecision in July 2008, to "appropriately observe" such of the provisions of ss 77,78,and 82 as are applicable.[55] Friends of Marineland submit, in effect, that this was the decision. It refers to the 2001 decision being made in a closed meeting, without public consultation, and without any public communication of the decision once it was made. It says that, consistent with having made this decision, Mr MacDonald was directed that therewas to be no more breeding at Marineland and requests for funding to upgrade the facility were declined. When it made the same decision to close Marineland in July 2008 it did so without considering alternatives and without consultation.[56] However, the decision in July 2008 was to close Marineland in the form that it had been operating. That is, it was a decision to close the facility in which a dolphin show (and the more recent "swim with the dolphins" programme) was thestar attraction. It does not seem that any specific consideration was given to theoption of applying again for permits. It seems that the Council saw the Minister'sdecision in 2000 as ruling this option out. If there was any doubt about this, from theCouncil's perspective there could be no further doubt when the Minister of Conservation approved the Department's policy in 2005 and the petition toParliament was unsuccessful in achieving a change to that policy. This had all occurred by the time of the July 2008 decision.[57] The requirement in s 77 is to seek to identify "all reasonably practicable options" for the achievement of the objective of a decision and to assess "those options". The evidence shows that applying for further permits was not a"reasonably practicable alternative". The Council was therefore not in breach of s 77in this respect. That appears to be acknowledged by Friends of Marineland in that the pleading does not refer to this aspect of the decision and counsel for Friends of Marineland acknowledged that there were at least some obstacles in the way of that option.[58] As to options other than permanent closure, the evidence shows that the Council did assess them. Options were reviewed and analysed beginning at least as early as 2003. The review obtained at that time presented three options, which were redeveloping the site, relocating to the National Aquarium and permanent closure. The option of redevelopment (which is the option I understand Friends of Marineland to still favour) is that Marineland would be upgraded to a modern marine zoo. This option was the subject of further analysis and reports. This option had not been ruled out by the time of the July 2008 decision as is apparent by the resolutionthat "redevelopment options continue to be investigated in consultation with the community".[59] At this point, therefore, the Council had not made a decision that Marineland would be permanently closed. It was open to options for the facility and intended to consult with the community about that. Friends of Marineland say that the consultation that then took place (in October 2008) was mere window dressing because the Council had no intention of genuinely considering any option other than closure. Friends of Marineland support the claim with an affidavit from a Councillor at the relevant time (who had promoted the petition), that the public submission process was to appease growing public concern about the closure of Marineland. His view was that the majority of the Council had no intention of reopening Marineland.[60] In my view, the evidence does not bear this claim out. The Council decided that it would consult. It decided on a process for that which it considered to be, in terms of s 82(3), appropriate to the matter. By this time at least, the evidence shows that the Council was turning its mind to its obligations under the Local Government in its decision making processes. The process adopted provided to the public a helpful summary, by way of the Proudly Napier publication, of what it was seeking submissions on and the process involved. Background information was available via the Information for Submissions document. Hearings were held and all submissions were summarised for the Council's consideration. It is quite a stretch to say that thisdetailed process was being embarked upon with no genuine intention on the part of the Council to consider the submissions that were received.[61] Moreover, it is clear that the Council did act upon the submissions. Some members of the public wished to be able to visit Marineland in its current state. This suggestion was acted upon. Marineland opened from December 2008 until April 2009 to enable the public to visit, and there have been Open Days since. Friends of Marineland say that in closing Marineland in August 2008 the Council had failed to consider this option. However, if this was a failure in terms of s 77, it was rectified.[62] More significantly, the Council acted upon the submissions that were in favour of a redeveloped Marineland. It set out how this idea was to be further advanced (including that any future development would be referred for public consultation) and it also recommended further investigations into other futuredevelopments. The Council then proceeded to obtain reports from consultants on a redeveloped Marineland. Those reports provided cost estimates and highlighted the risks. It was only after these reports were obtained that the decision in December 2010 was made.[63] I therefore dismiss the claim that the Council predetermined its decision (the first cause of action in the statement of claim).Inadequate consultation[64] Friends of Marineland submit that the consultation that took place in October 2008 was flawed because the information provided about closure was limited and misleading. As developed in submissions, this claim was focussed on whether the Council provided information to the public that there would be on-going significant costs, even if Marineland remained closed, because the remaining animals needed to be tended to and fed unless and until an alternative home was found for them, or they were euthanised. At the hearing Friends of Marineland applied, orally, to amend the statement of claim so as to raise this issue. The amendment was opposed. I have decided to consider this issue because I am satisfied that I can do so without there being material prejudice to the Council as a result of the late amendment application.[65] Relevant to this claim is the requirement in s 82(1)(a) that persons who may be affected by a decision or who have an interest in the decision should be providedwith "reasonable access to relevant information in a manner and format that isappropriate to the preferences and needs of those persons". The question is whetherthe on-going costs of looking after the animals was relevant information and, if so, whether there was reasonable access made to that information.[66] The Council's evidence did not address this topic because the statement of claim did not alert the Council that this was being raised as an issue. Nevertheless at the hearing the Council handed up extracts from its Annual Plans and its 10-year Plan. These show that the Council has considered and budgeted for on-going costs for Marineland and that the budgeted net operating expenses decrease significantly after closure of Marineland to a figure of around $190,000 per year. This issue wasalso set out in at least one of the reports for the Council ([12] above) and the instructions given to a consultant ([13]). This material shows that the Council must have been aware that there was the potential for on-going costs. That said, the Council is working on finding homes for the remaining animals and if it is successful in these efforts it will not continue to sustain these costs in the long-term.18[67] The Council's consultation was focussed on what to do with the facility. Oneof the options mentioned in the Proudly Napier publication (which advised the public of the consultation) was a modernised and upgraded marine zoo. But the publication also made it clear that the Council was open to suggestions for any attraction that would provide a tourism impact similar to when Marineland first opened. It was readily apparent that the Council was not limiting its consideration to an attraction that involved the remaining animals. Consistent with this, there were submissions suggesting establishing a casino and restaurant, a recreational beach area, a water park and a picnic area.[68] For its part, Friends of Marineland contemplated that the Council mightdecide to let Marineland "die" and because of that it had its publicity campaign forsubmissions to save Marineland. A number of submitters wanted the Council toopen Marineland "as is". Given their interest in Marineland, Friends of Marineland can be taken to be aware that there were still animals at Marineland and that, if it was to be closed, something would need to be done with the animals. Indeed Mr MacDonald, who is a member of Friends of Marineland, was the author of the August 2003 review that specifically addresses this issue.[69] Friends of Marineland refer to a submission from a member of the public who submitted that Marineland should be pulled down and the land left empty so that it will not cost the citizens of Napier via rates. Friends of Marineland say that this submitter seems therefore to have been misled about the ongoing costs. Friends of Marineland also refer to the information provided to 3D Creative in February18 The Council says that this proceeding has caused some uncertainty and therefore delay. Friendsof Marineland say that there has been no injunction preventing the Council from proceedingwith finding homes for the animals. Either way, the key point is that closing the doors does notmean zero costs and that the on-going costs may continue for some time.2005 (refer [13] above). It is said that this was relevant information which was not provided to the public.[70] However, members of the public interested in the matter were readily able to obtain the Information for Submissions document. Included in that material was the executive summary of the August 2003 review discussed above (at [12] and [13]).The executive summary referred to the option of "Permanent Closure" and said that there was the "issue of caring for remaining animals". Anyone concerned about thecost implications of closure was therefore alerted to the issue. Had they wished to pursue this issue, there is no reason to think they could not have sought the full copyof this report from the Council or raised this as an issue for the Council'sconsideration. They could also obtain the Council's Annual Plan and 10-year planfrom the Council's website.[71] In my view, therefore, the public had reasonable access to information about on-going costs and there was no breach of the Council's obligations in this respect. The information provided and available was appropriate to the occasion. I therefore dismiss the claim that the consultation undertaken was misleading and incomplete (the second cause of action).Third cause of action[72] For completeness I note that the statement of claim contained a third cause of action. This pleaded that the Council had failed to take into account various relevant considerations. These allegations were largely abandoned and, to the extent that they were not, they were not developed in the written or oral submissions. In the end, all that was advanced under this heading, that has not already been dealt with under the first and second causes of action, was a general submission that the Council had not taken into account the value of the Marineland facility in terms of its marine mammal and bird life protection function. This submission is not made out on the facts. The Council was interested in pursuing the revamped marine zoo concept and only decided against it on the basis of financial advice. This cause of action is therefore dismissed.Result[73] The decision to close Marineland in July 2008, which was first implemented in September 2008, was revisited through the consultation process that began in October 2008. The evidence shows that the Council considered the reasonably practicable options for Marineland and assessed them, and that it consulted on the potential options. The nature of the consultation was adequate to the decision being made and was a genuine consultation exercise rather than mere window dressing. It was after that process that the Council decided in December 2010 not to pursue the marine zoo redevelopment and to confirm its earlier decision to close Marineland to the public. Friends of Marineland have therefore failed to establish that theCouncil's decision-making process did not comply with the requirements of the Local Government Act. The application for judicial review is dismissed.[74] The issue of costs is reserved. If the parties are unable to reach an agreement on costs, they have leave to file brief (no more than three pages) memoranda on thematters in dispute within one month of today's date.Mallon JSolicitors/Counsel:P Ross, Station Street Chambers, PO Box 7472, Taradale, Napier.M Lawson, Lawson Robinson, PO Box 45, Napier 4140, email mlawson@lawsonrobinson.co.nz