NORTHLAKE INVESTMENTS LIMITED v QUEENSTOWN LAKES DISTRICT COUNCIL[2014] NZHC 2593

NORTHLAKE INVESTMENTS LIMITED v QUEENSTOWN LAKES DISTRICT COUNCIL [2014] NZHC 2593 [22 October 2014]IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYCIV-2014-425-000112[2014] NZHC 2593BETWEEN NORTHLAKE INVESTMENTSLIMITEDPlaintiffAND QUEENSTOWN LAKES DISTRICTCOUNCILFirst DefendantAND WILLOWRIDGE DEVELOPMENTSLIMITEDSecond DefendantHearing: 20 October 2014 (By way of telephone conference)Appearances: F B Barton and M A Baker-Galloway for PlaintiffA M Adams and NMH Whittington for First DefendantJudgment: 22 October 2014JUDGMENT OF DUNNINGHAM JIntroduction[1] The plaintiff, Northlake Investments Limited (Northlake) is in the process of developing land in Wanaka for residential use. A term of the plan change,1 whichrezones Northlake's land to allow its residential use, is that Northlake provide a20-25 metre community lap pool as part of the development.[2] Meanwhile, the Queenstown Lakes District Council (the Council) is, about to embark on a special consultative procedure under the Local Government Act 2002 (LGA) with Wanaka residents regarding a proposal to build a community swimming pool facility in Wanaka. As part of that process the Council has prepared a Statement of Proposal which set out three options for the location of a Council pool;1 Plan Change 45, which is still subject to appeal.being on the existing Plantation Road site, the Northlake site, and a site in anothersubdivision, known as the "Three Parks" site, where it would be co-located with a sports facility already proposed to be developed by the Council.[3] Northlake became aware in early October that the Council was to begin the statutory consultation process over provision of swimming pool facilities for Wanaka. It was not happy with how the Statement of Proposal represented the costs and benefits of the three options presented in the proposal. While the Council then made some modest changes to the documents it proposed to notify, it was notprepared to rewrite the document to address all of Northlake's concerns or criticisms.[4] Northlake now seeks judicial review of the Council, asserting non- compliance with the provisions of the LGA in the preparation of a Statement of Proposal, and seeks an interim order preventing the Council from publicly notifyingthe Statement of Proposal until Northlake's associated application for judicial review is determined. The Council wishes to proceed with notification so that consultation in accordance with the statutory timeframes can be completed by Christmas.[5] The simple issue I have to address is whether the interim relief sought by Northlake should be granted.[6] The application was received by the Court on Friday and referred to me late Friday afternoon. The matter was then scheduled for an urgent hearing by telephone on Monday afternoon. That allowed the Council to file material in response to theapplication. Because the Council's timeframe for completing notification, receivingsubmissions and hearing them before Christmas is extremely tight, I made orders at the end of the hearing:(a) declining the application for an interim order;(b) reserving the issue of costs.[7] I now provide my reasons for that decision.Background[8] The Council is proposing to build new public swimming facilities for Wanaka. The Council's existing public pool needs major structural repairs, andurgent repairs undertaken to date will only defer the decision for another two years. It is that issue which has brought forward the need to consider the options for a new pool.[9] At present the Council envisages there will be an eight lane lap pool and a learners' pool, but the cost of constructing and operating such a facility is notprovided for in the current Council Long Term Plan (LTP). It is proposed to be included in the 2015 - 2025 LTP.[10] Before settling on, and costing, a proposal to be incorporated in the draft LTP to issue in March 2015, the Council has decided to undertake a special consultative procedure, as provided for in the LGA, to inform it of the residents' views on matterssuch as the location, size and funding of the new public pool facility.[11] The Council has drafted a Statement of Proposal seeking guidance, in particular, on the following questions:(a) How soon are new pool facilities needed?(b) Where should the facilities be sited?(i) In Plantation Road on the existing pool site?;(ii) On the Three Parks site as part of the Wanaka sports facility?;(iii) At the Northlake site?;(c) Should the lap pool have six or eight lanes?(d) What rates increase is the community willing to pay for improved swimming pool facilities?[12] The Statement of Proposal provides estimated figures for the impact on rates for various presentations of the options presented in it.[13] The Council's preferred option is to develop a lap pool and learners' pool aspart of stage one of the Wanaka sports facility.[14] The Statement of Proposal was discussed at the Council's meeting on9 October 2014 and, with minor amendments to be made by officers, the Council approved the Statement of Proposal to go out for consultation and required officers to report back to the December 2014 Council meeting on the outcome of that consultation.[15] The finalised Summary of Proposal was to have been circulated as part of theCouncil's monthly newsletter, placed on the Council website on 17 October 2014and notified to the public by advertising in local newspapers this week. Twenty three thousand, five hundred copies of the Council newsletter have also been printed forinclusion in the Mirror and the Wanaka Sun (Wanaka's weekly newspaper) on 22 and 23 October respectively. The Council needed to advise The Mirror by 10.00 am on Tuesday, 21 October whether the brochure should be included. The proposed deadline for submissions is 21 November 2014 (to allow for the statutory timeframe for submissions to be made). The Council then plans to hold hearings on 8 and 9 December 2014, and for reporting back to the Council to occur on 18 December 2014.[16] Following completion of the consultation process, the Council will decide onthe preferred option, taking into account the public's views on location, size offacility, costs and the like. It can then make provision for funding of the preferred option in the draft LTP, which itself will be the subject of a special consultative procedure starting in March 2015, with a view to adopting the final version of the LTP in June 2015. Construction of the pool could not start, therefore, until July 2015 at the earliest.[17] When Northlake became aware of the terms of the Statement of Proposal it was aggrieved. Northlake instructed its lawyer to write to the Council advising itsconcerns about the deficiencies of the proposal and lawyers for Northlake attendedthe Council meeting to present Northlake's concerns to the Council. Northlake alsorequested access to the information and detailed workings that lay behind the costings presented to the Council of the various options. Various communications then occurred between Northlake representatives and Council staff, and while it appears that some minor changes were made to the Statement of Proposal, Northlake remains extremely concerned about the way the proposal for development of community pool facilities at Northlake has been presented in comparison with the other two options.[18] In its Statement of Claim, Northlake asserts that a special consultative procedure based on the current Statement of Proposal would breach the requirements of the LGA because the Council has:(a) failed to comply with the principles in s 14 of the LGA to accurately and fairly summarise relevant information;(b) failed to comply with the requirements of ss 76 to 79 of the LGA 2002; and(c) failed to comply with the statutory obligations contained in ss 82, 83 and 83AA of the Local Government Act 2002.[19] The criticisms made about the content of the Statement of Proposal were summarised by counsel for Northlake as follows:2(a) it fails to explain the Northlake site proposal and the Three Parksproposal on a "like for like" basis;(b) it omits fundamental particulars of the cost and viability of the Northlake site proposal and the Three Parks proposal;2 At para [20] of the Memorandum of Counsel accompanying the application.(c) it is misguided in its presentation of the cost and viability of the Northlake site proposal;(d) it understates the cost of the Three Parks proposal;(e) it understates the benefits of the Northlake proposal.Interim relief[20] As explained, Northlake applies for interim relief under s 8 of the Judicature Amendment Act 1972. It seeks an order preventing the Council from continuing with a consultation process based on the existing documentation until its substantive claim for judicial review is decided.[21] Section 8 provides, relevantly:(1) Subject to subsection (2) of this section, at any time before the final determination of an application for review, and on the application of any party, the Court may, if in its opinion it is necessary to do so for the purpose of preserving the position of the applicant, make an interim order for all or any of the following purposes:(a) Prohibiting any respondent to the application for review from taking any further action that is or would be consequential on the exercise of the statutory power:Applicable legal principles[22] There was no real debate between the parties on the applicable legal principles to be followed in deciding whether such relief should be granted. The Courts generally follow the two stage enquiry first set out in Carlton and United Breweries Ltd v Minister of Customs,3 which has been subsequently approved by the Supreme Court in Easton v Wellington City Council.4[23] This approach begins with the statutory threshold of the necessity to preserve the position of the plaintiff. It then goes on to consider whether, having regard to a3 Carlton and United Breweries Ltd v Minister of Customs [1986] 1 NZLR 429 (CA) at 430.4 Easton v Wellington City Council [2010] NZSC 10.range of relevant considerations, it is appropriate to grant the relief sought. Those considerations include:(a) the strengths or weaknesses of the claim;(b) the statutory framework;(c) the public interest; and(d) the private and public repercussions of granting relief.Necessity to preserve applicant's position[24] Northlake, in arguing that it was necessary to preserve its position, submittedthat once the information was released to the public "It cannot be taken back and will continue to taint any further information that the public receives". Northlake's viewis that it would be an inevitable consequence of the public receiving the current Statement of Proposal that they will be led to believe that the Three Park site option is more cost effective than the Northlake site option. Northlake says that is not correct. It says the Council has failed to adequately account for the fact that Northlake would be required to provide a pool in any event on that site, and the Council has under-represented the cost contribution being offered by Northlake to a pool facility on that site.[25] The Council, on the other hand, says an order is not necessary to preserve the position of Northlake. First the information that Northlake objects to is already inthe public domain as it was published on QLDC's website as part of the agenda ofthe 9 October 2014 Council meeting.[26] Second, Northlake is perfectly entitled to engage with the community as part of the consultation process and makes its case to the public, however it wishes to do so. It also is obviously able to make submissions to the Council about what it considers are the true benefits or disadvantages of the various options, in the consultation process.[27] Finally, it says that if Northlake remains of the view that there are material errors in the consultation material, it has open to it the well established remedy of judicial review of the substantive decision reached by the Council after it has had regard to the views of the community.[28] In support of its submission that Northlake does not need an interim order made to protect its position, the Council refers to the decision in Easton, initially heard in the High Court and eventually coming before the Supreme Court on an application for leave to appeal.[29] In Easton, an application for an interim order under s 8 of the Judicature Amendment Act 1972 to stop public consultation on revoking the pedestrian mall status of Manners Mall in Wellington, was declined. The Supreme Court confirmedthe High Court's view that as the plaintiff retained both the right of appeal and the ability to undertake review proceedings once the appeal right was exhausted, he was not disadvantaged or deprived of a remedy.[30] While the Easton case is of some assistance, I do observe that, in that case, the basis of the challenge was an allegation of pre-determination. It was not that the documents underpinning the consultation process were themselves flawed or in error. I therefore do not rule out the possibility that a Statement of Proposal could be so flawed that interim relief restraining commencement of the consultation process could be justified.[31] However, I am not satisfied that is the case here. I accept the Council'ssubmission that the disputes are primarily over matters of judgment about the assumptions to be used in assessing the relative costs of one option over another. While the costs comparisons of the three options are presented in very precise figures, there are not huge differences between them. More importantly, they areaccompanied by the statement that "these figures are estimates, based on the following assumptions". The assumptions are then put out in bullet point form so the reader can see the basis on which QLDC has arrived at its conclusions.[32] I also do not accept Northlake's submission that once this material is out in the public domain, it will "taint" people's views and there is no remedy for that.That approach overlooks the fact that it is the Council itself which is the decision-maker, not the members of the public. Northlake is in a position, as with all members of the public, to make its own submissions and to challenge the financial assumptions and the merits of the various options. To suggest that the Council cannot listen with an open mind to those submissions is to effectively assert that the consultation process will not be undertaken properly, or with an open mind.[33] I therefore accept that an order is not needed to maintain Northlake'sposition. It remains free to raise all its concerns with the Council in the submission process. If it considers that either the process, or the decision reached, is in error, or procedurally flawed in some way, it retains its right to seek judicial review of theCouncil's decision.Discretionary considerations[34] In the above discussion, I have held that the threshold for interim relief has not been met in this application. However, for completeness, I will make brief comment on the discretionary considerations as described in ENZA Ltd v Apple and Pear Export Permits Committee,5 as these were addressed by the parties in their submissions.Strengths or weaknesses of the claim[35] Northlake asserts it has a strong claim against the Council, saying the proposal is fundamentally misguided and inaccurate, for the reasons set out in [19] above. However, these are very generally worded criticisms. When one drills into the criticisms, it appears they are primarily challenges to the assumptions used by the Council.[36] For example, Northlake challenges the assumption that profit revenues will be 30 per cent above the existing Wanaka community pool for the Northlake option5 ENZA Ltd v Appple and Pear Export Permits Committee HC Wellington CP266/00, 18 December 2000.but will be 50 per cent more for Three Parks option, on the basis that Three Parks would have lower operating costs because of its co-location with the Wanaka sports facility. However, that assumption is clearly identified in the Statement of Proposal, it is one which is based on advice received, and if there are reasons to challenge that assumption, they can be brought to the Council's attention in the submission process.[37] Similarly, there is a criticism of failing to explain the Northlake and ThreeParks proposals on a "like for like" basis. However, Northlake's own submissions say that "the Three Parks site option is so inherently different to its own proposal forthe development that the options cannot be accurately presented on a like for like basis without careful explanation as to the obvious difference and assumptions thatthe QLDC have made". Again, it is not clear that what the Council has done is inerror. It has simply made a judgment on how much information should be presented about the various options for the purpose of a public consultation process.[38] In short, nothing in Northlake's evidence points to a fundamental error in the Statement of Proposal or persuades me that Northlake has a claim of sufficient strength against the Council such that the statutory consultation process should be halted for a minimum of six months, while the judicial review process proceeds.The statutory framework[39] Both Northlake and the Council submit that the statutory framework of the LGA supports their position.[40] There is no disagreement that the LGA supports open and transparent decision-making as stated in s 14 of the LGA, and that the carefully prescribed decision-making process and consultative procedures in the LGA are intended to ensure that the decision-making process is transparent and that the Council will have regard to the best interests of the district.[41] While the Council acknowledges the purposes and principles of the LGA, it also submits that the decision-making consultation obligation in the LGA are designed to be flexible and to allow local authorities to make judgments about the nature and extent of the consultation required. It says that the broad statutorydiscretions granted to the Council should be recognised in determining the intensity of scrutiny that Courts should exercise over local authorities' consultation procedures.[42] I agree that the LGA gives a broad discretion to Councils as to how theLGA's purpose and principles are to be achieved. In this case there is nothing whichhas been identified to me which is so obviously in error, or which so obviously contradicts the LGA purposes and principles, that it would weigh in favour of intervening at this early stage of the public consultation process. That could only be determined after a full hearing on the merits.The public interest[43] Northlake understandably submits that it is in the public interest that the public be provided with relevant and accurate information concerning the options to develop the pool.[44] The Council, however, sees that it is in the public interest to allow public consultation to proceed, particularly when that will likely impact on the Council being able to provide for the pool proposal within its draft LTP to be adopted in June 2015. A delay would impose additional costs on ratepayers and will generally increase the cost to the local authority of undertaking consultation. Logically it would in turn delay when construction could proceed.[45] I therefore accept that considerations of public interest do not weigh in favour of granting the relief sought.The public and private repercussions of granting relief[46] Similar issues arise under this consideration as arose under the considerations of the public interest. The plaintiff submits that the public will suffer no prejudice if the proposal is not publicly notified in its current form, and there is delay while the Statement of Proposal is amended to address the concerns of Northlake. That it says,would not "infringe upon any right or function of the QLDC" and would avoid thepublic being critically misinformed of the advantages and disadvantages of each proposal.[47] In addition to its concerns about not meeting the timetable for including a pool option in the 2015 - 2025 LTP, the Council raises the concern of setting an adverse precedent if any party affected by local authority consultation could delay it on the grounds they are unhappy with how the information is presented. Instead itsubmits that Northlake's concerns are best considered judicially in the context of theentire consultation process and the views of the community, once received. As the Council notes, it is possible that the Wanaka community will prefer the Northlake site and the Council proceed on that basis.[48] Again, nothing in these considerations favours the granting of interim relief, over allowing consultation to continue.[49] Accordingly, even if interim relief had been necessary to preserveNorthlake's position, the various discretionary factors discussed above do not weighin favour of the application and I am not satisfied the case for interim relief has been made out. Northlake's application for interim relief is accordingly dismissed.Costs[50] At the end of the hearing I reserved costs. My current view is that the Council is entitled to costs on a 2B basis.[51] If costs cannot be agreed, then any memorandum seeking costs on behalf of the Council is to be filed by 7 November 2014 and any memoranda in reply by 24 November 2014.Solicitors:Anderson Lloyd, DunedinMeredith Connell, Auckland