PALMERSTON NORTH CITY COUNCIL V DURY & ORS CA CA198/06

PALMERSTON NORTH CITY COUNCIL V DURY & ORS CA CA198/06 20 November 2007IN THE COURT OF APPEAL OF NEW ZEALAND CA198/06 [2007] NZCA 521BETWEEN PALMERSTON NORTH CITY COUNCIL Appellant AND GEOFFREY CHARLES DURY, ANTHONY HORNABROOK FISHER, MIRIEL ABERNETHY FISHER, HUGH BRYANT SHORT, NONA VAUGHAN SHORT, PAUL BASIL CHARLES ANNAN, JENNIFER ANNE ANNAN, IAN WILLIAM JOHN MARTIN EVANS, LUANNA HAZEL MEYER, RONALD DAVID HOSKIN, JOHN WILLIAM WARD, MARJORY ELIZABETH WARD, HUGH FRANCIS DRAKE, AND BARBARA JANET DRAKE RespondentsCA211/06BETWEEN M D COURTNEY ORTHODONTICS LIMITED First Appellant AND NORCOURT PROPERTIES LIMITED Second Appellant AND GEOFFREY CHARLES DURY, ANTHONY HORNABROOK FISHER, MIRIEL ABERNETHY FISHER, HUGH BRYANT SHORT, NONA VAUGHAN SHORT, PAUL BASIL CHARLES ANNAN, JENNIFER ANNE ANNAN, IAN WILLIAM JOHN MARTIN EVANS, LUANNA HAZEL MEYER, RONALD DAVID HOSKIN, JOHN WILLIAM WARD, MARJORY ELIZABETH WARD, HUGH FRANCIS DRAKE, ANDBARBARA JANET DRAKE Respondents Hearing: 31 October 2007 Court: William Young P, Chambers and Ronald Young JJ Counsel: J W Maassen and P J Reardon for Palmerston North City Council, the Appellant in CA198/06 G A Paine for M D Courtney Orthodontics Limited and Norcourt Properties Limited, the Appellants in CA211/06 H F Drake, one of the Respondents in both appeals, as representative of all the Respondents Judgment: 20 November 2007 at 3 pmJUDGMENTS OF THE COURT JUDGMENT IN CA198/06 A The appeal is allowed. B The order for costs in the High Court is quashed. The respondents must repay to the appellant (the Palmerston North City Council) the costs paid to them. The respondents' liability is joint and several. C The application to adduce further evidence in this court is dismissed. D No order for costs in this court. JUDGMENT IN CA211/06 E The appeal is allowed. F The decision of the High Court dated 11 September 2006 is held to have been erroneous.G The resource consent granted to the first appellant (M D Courtney Orthodontics Limited) on 14 October 2005 is declared to have been set aside wrongly and is restored. H The order for costs in the High Court is quashed. The respondents must repay to the appellants (M D Courtney Orthodontics Limited and Norcourt Properties Limited) the costs paid to them. The respondents' liability is joint and several. I The appellants are entitled to costs in the High Court, to be fixed, in the absence of agreement, by that court. J With respect to costs in this court, the respondents must pay to the appellants the sum of $3,000, plus usual disbursements. The respondents' liability is joint and several. REASONS OF THE COURT(Given by Chambers J)Table of ContentsPara NoNon-notification of an application for a resource consent for a restricted discretionary activity [1]Issues on the appeals [7]The legislative framework [15]Was the judge right when he held the council had not adequately inquired into noise effects? [20]Was the judge right when he held the council had not adequately inquired into the effects the proposed activity would have on traffic and parking requirements in Elmira Avenue? [29]Traffic effects [30]Parking effects [32]Was the judge right to take into account evidence filed on the residents' behalf as to what had happened, particularly with respect to traffic, since the orthodontic practice had commenced? [57]Other grounds on which the residents seek to uphold the High Court's decision [66]Should the resource consent be reinstated? [74]The council's application to adduce further evidence [89]Costs [92]Non-notification of an application for a resource consent for a restricted discretionary activity[1] In 2005, Michael Courtney, an orthodontist, decided he wished to operate his dental practice from a house at 9 Elmira Avenue, Palmerston North. The house had until then been used for residential purposes and required modification, principally internally, before it could be used as professional premises. Under the Palmerston North City Council's District Plan ("the plan"), health facilities are permitted activities in Elmira Avenue, provided they comply with ten performance conditions. What Dr Courtney proposed did not comply with all of them. The consequence was that he needed a resource consent. Under the plan, the proposed activity, because of its non-compliance with the ten performance conditions, was designated a restricted discretionary activity. [2] The council, having received Dr Courtney's application for a resource consent on 9 September 2005, proceeded to investigate. Under s 93 of the Resource Management Act 1991, the council was obliged to consider whether the application required notification. The counsel satisfied itself that the adverse effects of Dr Courtney's proposal on the environment would be minor. The council therefore decided public notification of the application was not required. It then resolved to approve Dr Courtney's plan to redevelop the house as an orthodontic surgery, subject to conditions. [3] When the residents of Elmira Avenue and a neighbouring street, Manapouri Crescent, became aware of the resource consent having been granted, some were incensed. They considered the application should have been notified so that they could explain why in their view the proposal should not be allowed to proceed. They petitioned the council. When that failed, they sought legal advice. Some of them, the present respondents, then brought an application for judicial review, seeking review of the council's decision not to notify the application. (Weshall refer to the respondents as "the residents".) They also challenged the decision to grant the resource consent. [4] Miller J found in the residents' favour: Dury v Palmerston North City Council HC PMN CIV 2005-454-869 11 September 2006. His Honour concluded the council made its decision not to notify the application without adequate information: at [62]. In particular, the judge considered the council had made inadequate inquiries as to whether the proposed activity would comply with the district plan's noise standard and as to the effect the activity would have on traffic and parking in Elmira Avenue. [5] The judge granted a declaration that the council had acted unlawfully by granting the resource consent on a non-notified basis. He set aside the consent: at [72]. He said that if Dr Courtney wished to continue practising from Elmira Avenue, he would need to seek a further resource consent. But the judge did not order Dr Courtney to stop practising orthodontics from No 9 in the meantime. He did, however, leave it open to the residents to seek an enforcement order from the Environment Court: at [71]. [6] The council was aggrieved with various aspects of the judge's decision and brought an appeal (CA196/06). The council's appeal was quickly followed by an appeal by Dr Courtney's interests (CA211/06). We should explain that M D Courtney Orthodontics Limited, the first appellant in CA211/06, is the company under which Dr Courtney practises his profession. That company leases 9 Elmira Avenue from Norcourt Properties Limited, the second appellant. Norcourt Properties is 50% owned by Dr Courtney and his wife and 50% owned by William Fearon and his wife, who are property investors. As it happens, the resource consent had been applied for by Dr Courtney himself. Nothing turns on this and we shall refer to these appellants loosely as either Dr Courtney or the Courtney interests.Issues on the appeals[7] The two appeals were heard together. Mr Maassen, for the council, and Mr Paine, for the Courtney interests, raised similar issues. [8] The first issue is whether the judge was right when he held the council had not adequately inquired into the noise effects of the compressors and air- conditioning units Dr Courtney was installing. [9] The second issue is whether the judge was right when he held the council had not adequately inquired into the effects the proposed activity would have on traffic and parking requirements in Elmira Avenue. [10] A third issue, raised specifically only by the council, was whether the judge had been right to take into account evidence filed on the residents' behalf as to what had happened, particularly with respect to traffic, since the orthodontic practice had commenced. Mr Maassen submitted in this regard that the judge's decision could potentially have a profound effect on other judicial review applications challenging non-notification decisions. [11] The residents back in October last year filed a memorandum to support the High Court judgment on grounds other than those upon which it was based, pursuant to r 33 of the Court of Appeal (Civil) Rules 2005. That memorandum listed no fewer than 16 additional grounds justifying, the residents said, the quashing of the resource consent. Not all these 16 additional grounds survived to be listed in the residents' issues sheets filed shortly before the hearing. We shall deal with the additional grounds which survived the winnowing process briefly and under one head, to be loosely termed the fourth issue. All these additional concerns the residents have expressed are of rather peripheral importance. If the judge was wrong on the issues of noise, traffic, and parking effects, then the additional concerns the residents raised, none of which found favour with the judge, could not possibly save the result the residents achieved in the High Court.[12] The fifth issue with which we shall deal is the question of remedy if the appellants succeed. [13] Mr Maassen applied to adduce further evidence on the appeal. The residents opposed that application. Because of the conclusions we have reached on earlier issues, we shall be able to deal with that application and the submissions surrounding it in short order. [14] Before discussing the issues we have identified, we set out the legislative framework under which the council was operating when it received Dr Courtney's application for a resource consent.The legislative framework[15] Section 93(1) of the Resource Management Act provides that a consent authority must notify an application for a resource consent unless the application is for a controlled activity or the consent authority is satisfied that the adverse effects of the activity on the environment will be minor. Section 94A, which was introduced in 2003, limits, in cases where it applies, the adverse effects the consent authority may consider when exercising its discretion under s 93. Of importance in this case is the restriction imposed by s 94A(a) and (b). That provision reads as follows:When forming an opinion, for the purpose of section 93, as to whether the adverse effects of an activity on the environment will be minor or more than minor, a consent authority – (a) may disregard an adverse effect of the activity on the environment if the plan permits an activity with that effect; and (b) for a restricted discretionary activity, must disregard an adverse effect of the activity on the environment that does not relate to a matter specified in the plan or proposed plan as a matter for which discretion is restricted for the activity. [16] Rule 10.8.3.2 of the plan sets out the "matters for which discretion is restricted" in terms of s 94A(b). These are: (a) design and appearance;(b) site layout; (c) effects on adjoining residential areas; (d) the safe and efficient operation of the roading network; (e) visual effects on the rural character an amenity of the Turitea Valley. [17] The council, when considering whether to notify an application for resource consent such as the one in this case, must disregard effects except in so far as they relate to one or more of those five matters. We mention in passing, as did an expert witness called by the council, that matter (c) seems very broadly worded. It is arguable that having such an open-ended "matter" rather defeats the purpose of restricted discretionary activities: see s 77B(3). [18] The changes to the notification provisions of the Resource Management Act (ss 93 - 95) in 2003 and again in 2005 have not affected the well-established principle of assessing the effects of the proposed activity against the permitted baseline, namely "what either is being lawfully done on the land or could be done there as of right": Bayley v Manukau City Council [1999] 1 NZLR 568 at 576 (CA) and Arrigato Investments Limited v Auckland Regional Council [2002] 1 NZLR 323 at [27] - [29] (CA). In this regard, it is appropriate to note the performance conditions which, if complied with, would have rendered this health facility a permitted activity, ie something that could be done as of right. The performance conditions for health facilities were set out in r 10.8.1.4 of the plan. Those relevant to this appeal are as follows:(a) Number of PractitionersThe health facility must not involve more than 3 health practitioners. A health practitioner includes a practice nurse.(c) Separation DistancesCompliance with Rule 10.7.1.1(c).(e) Parking and AccessCompliance with Rules: 20.3.7.2 Parking Provision of All Zones Except Inner Business Zone;(g) NoiseCompliance with Rule 10.9.1.[19] We should make clear that Dr Courtney's application for a resource consent was made after the Resource Management Amendment Act 1993 and the Resource Management Amendment Act 2005 had come into force.Was the judge right when he held the council had not adequately inquired into noise effects?[20] Dr Courtney planned to have his rooms air-conditioned. The plans submitted for resource consent did not disclose that. The air-cooled condensers for the air- conditioning system were to be installed in the side yard between the western side of the house at 9 Elmira Avenue and the boundary with No 7. The residents' principal concern was with respect to the noise these condensers might make. Similarly, the residents were concerned about potential noise effects from a compressor which was to be installed in an internal service cupboard. [21] The judge shared the residents' concern. He considered that, had the proposed location of these condensers been identified, it would have affected the council's analysis of fencing requirements, "since solid fences may be used to mitigate noise": at [47]. The judge said the council should have called for an acoustical engineer's report. It was not enough that Dr Courtney had said the activity would comply with the council's noise standard: at [48]. [22] The council's noise standard for residential areas was set out in r 10.9.1. The standard provided that noise emissions must not exceed 45 dBA between 7 am and 10 pm and 40 dBA between 10 pm and 7 am. Dr Courtney undertook to comply with those limits. [23] There was nothing to suggest the proposed activity could not comply with the noise standard. It was not legally possible for the council to impose a noise condition more stringent than that contained in its rules: 88 The Strand Limited vAuckland City Council [2002] NZRMA 475 at [15] (HC), a case apparently cited to Miller J but not referred to by him. [24] The plan permitted the activity of a health facility generating noise effects up to the maximum permitted by the noise standard. Even if noise up to that level could be considered "an adverse effect of the activity on the environment", it was an effect the council was entitled to disregard. [25] The potential noise effects of the condensers could not, of themselves, give rise to a requirement for "solid fences". There was nothing to suggest an acoustical engineer's report was required. The noise standard limits were the "permitted baseline", from which no adverse deviation was planned. Contrary to the judge's finding, it was enough that Dr Courtney said he would comply with the noise standard, unless there was something to indicate that compliance was unlikely. There were no such indications in this case. [26] The judge also noted that the condensers were included in the side yard close to the boundary with 7 Elmira Avenue. The existing house at 9 Elmira Avenue was 1.3 m from its western boundary (adjoining 7 Elmira Avenue). Rule 10.7.1.1(c) required a side yard of 1.5 m – so the western wall did not comply. The judge considered the placement of the condensers in that side yard "must have affected the council's assessment of the extent and impact of non-compliance with the performance standard relating to separation, whether or not the noise they created was within district plan limits": at [47]. We do not accept that. We have already dealt with the question of noise effects. The only other potential effects which could be considered were visual effects: see [16](c) above. But the condensers could have had no visual effects, as, because of fencing and planting, they could not be seen from neighbouring properties. [27] The "separation" point was barely mentioned before us. Indeed, it did not seem to feature very significantly in the High Court either. This may be because, by the time of the High Court hearing, the condensers had been moved to the back of the house at No 9 and were no longer in the western side yard in any event.[28] With respect to Miller J, we do not think he was right when he held the council had not adequately inquired into noise effects. The council was entitled to rely on the assurance that the noise standard would be complied with: see Barry v Auckland City Corporation [1975] 2 NZLR 646 at 651 (CA). If the standard was not complied with, residents and council alike had a number of remedial options available to them, including remedies achievable on an urgent basis.Was the judge right when he held the council had not adequately inquired into the effects the proposed activity would have on traffic and parking requirements in Elmira Avenue?[29] The judge was sharply critical of the council's lack of inquiry into parking and traffic matters. The essential difference between him and the council officers who considered the application stemmed from the different interpretations they placed on what was contemplated by the resource consent.Traffic effects[30] We deal first with traffic effects, as the judge's concerns in this regard can be quite shortly shown to have been unwarranted. It stands to reason that a health facility in a residential area will generate more traffic than a normal residential property, at least within working hours. Notwithstanding that, the plan, in permitting health facilities as permitted activities, imposes no direct controls on traffic generation. But there is an important indirect control. That was achieved by providing a performance condition that the health facility must not involve more than three health practitioners. The term "health practitioner" includes a practice nurse. Dr Courtney, in his application, agreed to comply with that condition. [31] Given Dr Courtney's compliance with that condition and given there was nothing to indicate this particular health facility would generate traffic in excess of the norm, no further inquiry into traffic itself was justified. Indeed, it was arguable this facility would generate less traffic than the norm as many orthodontic patients are school children, some of whom will either walk or cycle for treatment. It is entirely understandable the council concluded the effect on "the safe and efficientoperation of the roading network", leaving to one side for the moment the possibility of additional parking on the street, would be minor and entirely within the permitted baseline.Parking effects[32] Parking, however, raised more difficult issues. The district plan provided that, if a health facility was to be a permitted activity, there would need to have been three parking spaces "per consultant's room (including rooms suitable for consulting)": see r 20.3.7.2(a). That expression is problematic. What does "consultant" mean? What constitutes a "room"? We shall return to that question shortly. [33] Dr Courtney proposed to provide on-site five car parks. His architect accepted this did not comply: he accepted it was one car park short, based on two consultant's rooms. The council officers accepted that interpretation and assessed the application on an assumption it was a car park short. [34] The residents disputed that. They said car parking should be assessed on the basis that the facility would contain three consultants' rooms, perhaps even four. This meant there should have been nine car parks on-site, if not 12. Miller J agreed with the residents. [35] We set out first, in brief, why Miller J reached the conclusion he did. He concentrated exclusively on the proposed floor plan submitted with the application. That showed the existing kitchen and laundry and part of the existing bathroom being converted into one large space. (We purposely do not use the term "room" as that begs the question arising on the interpretation issue, to which we shall turn shortly.) This space had one large window providing light to the entire area. The plan showed one hand basin (in that part of the space labelled on the plan "surgery 1"). The space was effectively divided into two by a wall. The wall did not completely cut the space into two, however, as it stopped short of the large window, to which it ran at 90 degrees. Because the wall stopped short, it was easily possible to walk between the two halves of the space. Each half of the space was depicted ascontaining a dentist's chair. Beside one of these chairs was the label "surgery 1", beside the other "surgery 2". [36] The proposed floor plan showed no change to the existing lounge, the largest room in the house. But the room's function was to change. That space was now to have in its centre a sterilising bay. Then at one end of the lounge was an area labelled as "set-up". That area was shown as having two dentist's chairs, with what appeared to be a free-standing screen between them. [37] The judge concluded surgeries 1 and 2 (as labelled) both constituted "consultant's rooms" for the purposes of the plan. He also considered the open plan area labelled "set-up" to constitute a "consultant's room", if not two. By this means, he reached his conclusion that the facility would contain three "consultant's rooms", if not four. [38] The judge completely rejected the council's approach, which had been to treat the proposal as effectively a "two consultant" proposal, with the corollary that only six car parks were prima facie required. With respect to the judge, we consider he fell into error in this regard. [39] First, he reached his conclusion on the nature of the proposal solely from a consideration of the proposed floor plan. But the council, in assessing the proposal, were not limited to an interpretation of that plan. It had to be read in conjunction with the full application for resource consent. In addition, council officers gleaned information, which they were entitled to take into account, from site visits and discussions with Dr Courtney. Further, they had general experience of health facilities in their district. They were entitled to take into account all that information when assessing whether the application required notification: Discount Brands Limited v Westfield (New Zealand) Limited [2005] 2 NZLR 597 at [107] (SC). [40] From these sources, and in particular from the resource consent application itself, it would have been clear to the council that Dr Courtney intended to operate a sole practice, aided by two assistants. The chairs in the set-up area were to be used by the assistants to undertake preparation work. Dr Courtney would not himself usethose areas. The patient, once prepared, would then be taken in to see Dr Courtney, either in surgery 1 or in surgery 2. The reason for two surgeries was explained. While Dr Courtney was seeing a patient in one surgery, the other surgery would be being cleaned and prepared for the next patient. Dr Courtney would move from surgery to surgery, thereby minimising his "down time". Such an arrangement is quite common in modern dental practices. All that information was relevant when it came to assessing the parking requirements of the proposed activity. [41] This leads on to the second reason why we do not accept Miller J's approach. His Honour did not provide a definition of "consultant's room (including rooms suitable for consulting)", as used in r 20.3.7.2(a). He appears, however, to have considered the word "consultant" as synonymous with "health practitioner", as defined in r 10.8.1.4; that is to say, "consultant" would include practice nurses and their dental equivalent, dental assistants. Each dentist's chair, therefore, and the space it occupied became, if not a "consultant's room", at least "a room suitable for consulting". [42] There is no doubt the use of different expressions in rules 10.8.1.4 and 20.3.7.2 is problematic. The expression "consultant's room" in particular is inherently uncertain. It might be a typographical error for "consulting room". Alternatively, it may mean a "health practitioner's room", with "health practitioner" having the meaning set out in r 10.8.1.4. Possibly, it could even mean what it says! In a general medical practice centre, a practice nurse's treatment room, while in a sense a "health practitioner's room", would arguably not be a "consulting room" or a "consultant's room". While patients may occasionally visit only the practice nurse, often time will be spent with him or her only prior to, or after, seeing the medical practitioner. Most would regard the event as a single consultation. [43] We regard the interpretation issue which arises in this case as one best resolved functionally in terms of whether the "set-up" area would be associated with car-parking patients who were in addition to those seen by the orthodontist. Applying a functional and indeed common sense approach, we consider the space marked "surgery 1" and "surgery 2" constitutes a single "consultant's room" as only one consultant would be working, and only one patient would be seen, in that spaceat a time. Dr Courtney as part of his proposal said he would be the only person consulting in that space. And further, the layout of the space and the need for patient privacy would mean it was not actually feasible for surgeries 1 and 2 to be occupied simultaneously by different orthodontists. The "surgery" area would have required reconfiguration before a second orthodontist (working simultaneously with the first) could have been introduced. So the area in question will accommodate at any one time only one patient who might have come by car. [44] Similar considerations apply to the set-up area. We accept that Dr Courtney's assistants would be seeing patients in that area, even though Dr Courtney himself would not be. It is, of course, arguable that a dental assistant is not a "consultant" for the purposes of r 20.3.7.2(a). But again, we prefer a functional and common sense approach. There would be patients being seen in this area. They would be there when another patient was being seen by Dr Courtney in the "surgery" area. The patient or patients in the "set-up" area would, if they came by car, require a car park. So, in functional terms, it makes sense to treat this area as, at least, a "room suitable for consulting". [45] We appreciate the council did not approach the matter exactly as we have suggested. They regarded surgeries 1 and 2 as separate "consultant's rooms". They did not consider the set-up room as constituting " a consultant's room" as the area was to be used only by assistants undertaking preparation work. That is another approach, and we would not say it was wrong or unavailable to the council. The council was entitled to conclude, we consider, that most patients would be seen by Dr Courtney, even if they were also seen first by one of his assistants. A combined visit of that sort would generally be regarded as a single consultation, primarily with the consultant himself. Functionally, it makes little difference, one would have thought, whether in those circumstances Dr Courtney and the assistant were carrying out their respective roles in the same room or different rooms. [46] The decision on the on-site parking required was ultimately a matter of judgment on the council' part. The expression "consultant's room" had to be interpreted not literally but in light of the overall intent of the district plan. It is obvious the plan did not envisage that all parking must be on-site, because even the"permitted activity" level of three car parks per consultant's room would not guarantee that. [47] Whether the matter is looked at as we have suggested or as the council approached it, the result is the same. We consider the council was justified in treating the proposal as being just one car park short, not four and certainly not seven short. [48] Once the correct "baseline" is identified, there can be no doubt the council was justified in finding that the visual effects of the activity would be minor. Three of the car parks were to be positioned at the rear of the property, where they would not be visible from the road or from neighbouring properties. One car park, for use by staff, was to be provided in an existing garage on the property. The retention of that garage was intentional: it helped to preserve the overall "residential" feel of the facility. Only one car park was to be at the front of the property, and it to a large extent would be screened from view by fencing and existing planting, which was to be retained. [49] The traffic effects of the parking shortfall – relevant in terms of r 10.8.3.2, criterion (c) – were assessed by Daniel Tate, a traffic engineer employed by the council. (He was thus independent of the Courtney interests.) He visited the site on several occasions for the purpose of assessing parking and traffic effects. He considered that, despite the shortfall in on-site parking, the site would generally accommodate the facility's requirements. [50] He said he had also given consideration to the effect of any potential parking over-spill on the road network. He noted that, during his site visit and on subsequent drives through the area, only a small number of cars were actually parked on Elmira Avenue. It was his opinion that any parking over-spill could use the road frontage to the property without any adverse effect on the local residents. [51] Virginia Shaw, who holds the position of Principal Planner at the Palmerston North City Council, was the person who, under delegated authority, made the decision not to notify this application. So far as parking and traffic were concerned,she considered the views Mr Tate had expressed in a memorandum. She independently considered that issue and reached the same conclusion he had. Of course, she had a broader perspective as her brief was to consider effects beyond "the safe and efficient operation of the roading network". One of the features of the proposal which impressed her was the lengths to which the Courtney interests had gone to develop the health facility while maintaining the external residential facade of both the house and the property generally, so that the property continued to blend with its residential neighbours. She recognised how easy it would have been for the Courtney interests simply to remove the house and to erect a modern structure which could have met all the performance conditions and thus proceeded as a permitted activity, but which would have been much less acceptable from an aesthetics point of view. She considered that retaining the existing building was an excellent means of preserving existing residential character, notwithstanding the fact that the use of the building was changing from residential to non-residential. [52] Further, she also noted that, had the council insisted on a further car park being provided, the Courtney interests could easily have provided one in the front yard. But that would have come at the expense of at least one existing specimen tree, which would have significantly affected the streetscape. The Courtney interests would have been entitled to remove that tree as of right. [53] In Discount Brands, Blanchard J, whose views commanded majority support, said this concerning the court's role on a judicial review application of a consent authority's non-notification decision:[116] Because the consequence of a decision not to notify an application is to shut out from participation in the process those who might have sought to oppose it, the Court will upon a judicial review application carefully scrutinise the material on which the consent authority's non-notification decision was based in order to determine whether the authority could reasonably have been satisfied that in the circumstances the information was adequate in the various respects discussed above.[54] Even though the notification sections of the Resource Management Act are different now from the sections considered in Discount Brands, we still consider, with respect, His Honour's test to be applicable. We have carefully scrutinised the material on which Ms Shaw relied in reaching her decision and we have no doubt theinformation was adequate, reliable, and independent. The council could reasonably have been satisfied that the adverse effects of the proposed activity would be minor. [55] It follows that we respectfully differ from Miller J's assessment that "the application was plainly deficient in its treatment of traffic volumes and parking requirements": at [49]. He did not actually specify what additional steps the council should have taken; rather, he seems simply to have disagreed with Mr Tate's assessment. The disagreement to a significant extent emanated from the different baseline he adopted from that adopted (correctly, in our view) by Mr Tate. His Honour proceeded from an assumption that the plan required nine (or possibly even 12) car parks, whereas we accept the council's view that the plan required only six. [56] Further, his Honour did not consider the commercially viable alternative which weighed heavily with Ms Shaw, namely the near identical facility which could have been built as of right (albeit in modern idiom) and which would have met all performance criteria. That, in our view, was a very significant factor rightly given considerable weight by the council when considering whether the adverse effects of Dr Courtney's proposal would be minor.Was the judge right to take into account evidence filed on the residents' behalf as to what had happened, particularly with respect to traffic, since the orthodontic practice had commenced?[57] We have already found the judge was, with respect, wrong in his conclusion that the council had proceeded without adequate information when assessing the effects of noise, parking and traffic arising from the proposed activity. Before we turn to the relief (if any) to which the council and the Courtney interests are now entitled, we turn to consider an evidential matter Mr Maassen raised. This court is always reluctant to answer questions which are not necessary for its decision – and this question is in that category. At the same time, we accept that the issue Mr Maassen raises is an important one and that Miller J's decision on the issue could have undesirable precedential effect unless corrected. So we deal with it, if only briefly.[58] The issue is an evidential one. After the Courtney interests obtained their resource consent and Dr Courtney started practice from his new premises, the residents conducted a traffic survey. The results of that survey then formed part of an affidavit sworn by Ronald Hoskin, one of the concerned residents and one of the respondents to these appeals. The data, which allegedly had been collected by a number of named residents, was said to show that "the number of vehicles coming and leaving 9 Elmira Avenue and the on-site and spill-over roadside parking of those vehicles" far exceeded the council's traffic and parking projections. [59] Mr Maassen said he had objected to the admissibility of this evidence at the High Court hearing. The council had not responded to the evidence, because it said the evidence was inadmissible. Miller J does not appear to have given a ruling on the council's objection, although inferentially he must have dismissed it. We say that because there is a section in his judgment – from [35] to [39] – where he deals with "environment effects experienced since commencement of practice". In that section, he referred to Mr Hoskin's traffic survey. He also referred to the affidavit of another resident, Hugh Drake, the respondents' spokesperson in this court. Mr Drake had given evidence of the number of vehicles he had seen parked on the road. He had referred to what the judge described as "a dangerous concentration of vehicles and people" forming from time to time in the immediate vicinity of 9 Elmira Avenue. [60] So far as the traffic survey evidence was concerned, Mr Maassen submitted it was inadmissible on two grounds. First, it was hearsay. Mr Hoskin purported to convey to the court matters in respect of which he had no personal knowledge. In our view, this submission is probably correct. The evidence probably was inadmissible in terms of Myers v Director of Public Prosecutions [1965] AC 1001 (HL) and R v Morris CA405/05 3 October 2006 at [40] - [43]. It did not come within the statutory exception to the hearsay rule: see Evidence Amendment Act (No 2) 1980, ss 3 and 7. But we do not need to come to a concluded view on that, as we have reached a decision in the council's favour on the second ground advanced. [61] The second submission was that the evidence was inadmissible because it was not relevant. It did not relate to the matter in issue, namely the reasonablenessof the council's decision not to notify based on information available to it at that time. Rather, it was evidence of what had allegedly occurred after the impugned decision was made. It was the precedential implications of Miller J's allowing such evidence which was, Mr Maassen submitted, of particular concern to his client council and other local authorities throughout New Zealand. [62] We are satisfied this ground of objection is sound. The leading authority is perhaps Roussel Uclaf Australia Pty Limited v Pharmaceutical Management Agency Limited [1997] 1 NZLR 650, a decision of the Full Court of this court. In that case, Roussel was complaining, by way of judicial review, about a decision by Pharmaceutical Management Agency Limited (Pharmac) to reduce the subsidy paid by regional health authorities to Roussel in respect of pharmacy sales of Roussel's antibiotic product, "Rulide". Gallen J in an interlocutory ruling had struck out sections of three affidavits filed by Roussel, containing new material which had not been before Pharmac when it made its decision. Roussel appealed against that ruling, but was unsuccessful. Richardson P, writing for the court, respectfully endorsed Gallen J's reasons for excluding that new material. The President said at 658:What is under review is a challenge to the integrity of the earlier decision-making process, on which the new material does not impinge in any significant way. New opinion evidence, not presented to the decision maker, can seldom help to demonstrate the decision on what is essentially an evaluation exercise was unreasonable when made. It is not appropriate to allow in this material which was not before the decision maker, and was largely brought into existence after the impugned decision was made, and to do so essentially for the purpose of casting doubt on the substantive reasonableness of the decision.[63] To similar effect was this court's observation in Discount Brands that it is wrong in principle to impugn a council's decision by later-generated material which was not before the council at the time the non-notification decision was made: [2004] 3 NZLR 619 at [46]. Although this court's decision was reversed by the Supreme Court, the judges of that court do not appear to have questioned the correctness of this particular proposition.[64] This second ground of objection would also render Mr Drake's affidavit inadmissible in so far as it detailed his observations on parking and traffic after Dr Courtney started to practise in Elmira Avenue. [65] In summary, therefore, Miller J was, with respect, wrong to take into account evidence as to traffic in fact generated after the resource consent was granted and the activity commenced. This post-hearing effects evidence should not have informed the evaluation of the reasonableness of the council's decision not to notify.Other grounds on which the residents seek to uphold the High Court's decision[66] We turn to the fourth issue. As we have said, the residents, in their r 33 notice, listed a large number of additional grounds on which they said the High Court's judgment could have been based. Only some of those were, however, repeated in the residents' issues sheets filed before the hearing. We intend referring only to them. [67] The residents submitted the council's non-notification decision should have been overturned because the council had failed to request from Dr Courtney sufficient "clinical staff and patient information" so that a proper assessment could be made of "patient throughput" and how that would affect "car parking demand". The judge made a passing reference to this topic at [57] of his judgment, where he noted that "it appears that no inquiries were made about numbers of patients and frequency and duration of visits". The judge made clear, however, in the next paragraph that the reason he thought these inquiries should have been made was because of the judge's "permitted baseline" of nine to 12 car parks, whereas the council officers were working "from the premise that the plan required six car parks and the proposal was only one short": at [58]. For the reasons already given, we, unlike the judge, accept the council's premise. In those circumstances, we do not accept the suggestion that further information did need to be obtained about numbers of patients and frequency and duration of visits. [68] The residents' next point was that "the adverse effect of a non-complying non-residential activity to the special character of Elmira Avenue subject to CouncilElmira Avenue and Manapouri Crescent Design Guidelines should have been taken into account". This is, of course, the real concern of the residents or most of them: they are opposed to what they see as the commercialisation of their street. What this submission fails to recognise is that the council has provided for "non-residential activity" as a permitted activity in Elmira Avenue. Further, the design guidelines are voluntary: they do not form part of the district plan. In addition, as Ms Shaw stressed, what Dr Courtney proposed was much more sympathetic to these design guidelines than a new structure which he could have built as of right would have been. The design guidelines were taken into account, as the judge found. The judge rejected the residents' complaint as to "the effect of the design on the amenity of the street" and considered its "overall effectto be appropriate to the amenity of the street": at [61]. We accept the judge's conclusion on that point. [69] The residents' next ground for upholding the quashing of the resource consent was that "the decision-maker [Ms Shaw] failed to make an independent decision but merely rubberstamped the incomplete and defective report of a junior reporting officer". This is a reference to the fact that Ms Shaw had delegated the task of reporting on the application to Sabrina Young, one of the council's planning officers. [70] The judge made no finding to this effect. On the contrary, he recorded that Ms Shaw had "explained in her affidavit that she [had given] independent consideration of the proposal" after receiving Ms Young's report: at [32]. He does not doubt that assertion; nor could he, because that is exactly what Ms Shaw said in her affidavit, and the residents did not seek to have her cross-examined. It is also clear from her affidavit that she did give the matter independent consideration. She made several site visits. In addition, she herself sought certain changes to the proposal, to which Dr Courtney through his advisors agreed. Like the judge, we do not consider this complaint to be established. [71] Finally, the residents complain that the council "failed to consider if any adversely affected persons [were] entitled to limited notification". The reference to "limited notification" is a reference to ss 94(1) and 94B of the Resource Management Act. This submission cannot be sustained on the facts. Ms Young, inher report, expressly turned her mind to the issue of those who might be adversely affected by the proposed activity in terms of s 94. She concluded that no one had been identified as potentially adversely affected. Ms Shaw also considered this matter. She reached a different view on one aspect. She had noticed on a site visit that the boundary fence between 7 and 9 Elmira Avenue was only approximately one metre high and that the applicant did not propose to increase the height of that fence. We take up the story from her affidavit:Having regard to the change to the entrance of the dwelling and the fact that it would now be the main entrance to the health facility, I considered the failure to provide a 1.8 metre closely boarded fence as required by performance condition 10.8.1.4(f) could create potential effects that were more than negligible on the owners of 7 Elmira Avenue. As a result I signalled my preliminary view that they were affected parties unless modifications were made to the fence. I informed the applicant's representative in a letter dated 13 October 2005.[72] Ms Shaw then went on to explain that the Courtney interests then revised their proposal to incorporate a 1.8 metre fence, as Ms Shaw had requested. Only then was she satisfied that there were no adverse effects justifying either public notification or limited notification. In our view, that conclusion was reasonably open to her. [73] In summary, therefore, we do not consider these additional matters assist the residents' case. The judge was right when he found that the crucial matters for evaluation were noise, traffic, and parking. He was right to decide that the other matters about which the residents complained were of a character such that the council could reasonably conclude, having regard to ss 93A and 93B, that their "effects were of a minor nature": at [61].Should the resource consent be reinstated?[74] For the reasons we have given, we are satisfied that the High Court's decision was erroneous. The judge, with respect, was wrong to have set aside the resource consent granted to the Courtney interests. It follows that both appeals must be allowed.[75] Normally, in a situation like this, the reviewing court would reinstate the resource consent which had been wrongly set aside. But in this case there is a complication. After Miller J's decision, the Courtney interests decided to apply for a fresh resource consent. The council delegated all decision-making with respect to that application to an independent commissioner. He resolved to notify the application. He then held a hearing, at which many of the current respondents were heard in opposition. Later he issued a decision, granting the resource consent, subject to conditions. Those conditions are not identical to the conditions imposed by the council on the first resource consent. The precise details do not matter: suffice to say the new consent is somewhat more constricted than the first from the consent holder's point of view. The Courtney interests have complied with the conditions of the new consent and do not plan to appeal against it. Mr Drake, who addressed us on behalf of all the respondents, advised that his group did not intend to appeal against the commissioner's decision. [76] In these circumstances, what should we do? Mr Maassen submitted that, in view of the changed circumstances, we should not now reinstate the first resource consent. The second should prevail. Mr Drake obviously supported the second resource consent, which had been made after the residents had been heard and from which decision they did not intend to appeal. Mr Paine, however, argued that the Courtney interests were entitled to their first consent. We raised with him the prospect that, if we were now to reinstate the first consent, there would be two consents relating to the same facility and activity, but consents in different terms. We suggested this would lead to much confusion: which would prevail? Mr Paine acknowledged that and said that, if necessary, the Courtney interests would "surrender" the second resource consent. At the time, no one could tell us exactly how a resource consent could be "surrendered". Since then, we have looked at the Act, and our preliminary conclusion is that it does not appear to make provision for such a course. It does provide for lapsing and cancellation of consents, but the circumstances for those actions are not satisfied: see ss 125 and 126. [77] After much deliberation, however, we have decided Mr Paine's submission is sound and that the first resource consent should be restored. We gave consideration as to whether we have a discretion not to restore the resource consent wrongly setaside. In the end, we conclude we have no discretion. A court finding for the plaintiff on an application for judicial review always has a discretion as to whether to grant relief, but there is no equivalent discretion when a defendant succeeds. The defendant always keeps the benefit of the decision unsuccessfully challenged. The fact is the judicial review application should have failed and the first resource consent should never have been set aside. The Courtney interests are entitled to be put in the same position they would have been in had the High Court decided the case correctly. We acknowledge immediately that restoring the first resource consent may now cause difficulties, given that the two consents have different conditions. How that is to be worked out in practice will be a matter for the council and the Courtney interests. It may be the council and the Courtney interests will be able to agree a variation of the two resource consents, whereby they are effectively amalgamated. We can take this no further, as we did not receive detailed submissions on this point. [78] There is one aspect of the first resource consent which has given us some concern. The council approached Dr Courtney's application on the basis that his would be a sole practice involving one orthodontist aided by two assistants. That was fundamental to Ms Shaw's assessment of, in particular, the parking baseline and her assessment of the proposal being just one car park short. We have held she was justified in approaching the application on that premise and that she was justified in her decision not to notify. [79] It is arguable, however, that that fundamental premise has not been completely captured in the wording of the conditions to which the resource consent itself was made subject. In particular, the residents drew attention to condition 8, which reads as follows:The consent holder must ensure that there are to be no more than three health practitioners practising on-site at any one time.[80] This would permit, the residents said, two orthodontists to practise from 9 Elmira Avenue, with an assistant. That meant, they argued, the proposal had been incorrectly assessed as a sole practice, plus two assistants.[81] Mr Maassen disputed that and pointed to condition 1, which reads as follows:That the alterations and additions to the building are constructed and the car parking area set out in accordance with the plan submitted with the application (drawn by Courtney Architects Designers Limited, Drawing Numbers 1-8) and supporting information submitted as part of the application. These plans are held on Council records under File Ref: E10/9/PLN.[82] The supporting information, Mr Maassen submitted, made clear that the council had approved only use as a sole orthodontic practice, with up to two dental assistants. [83] While we think there is merit in Mr Maassen's argument, we think it desirable the potential conflict between conditions 1 and 8 be clarified. As it turns out, Dr Courtney had consented to such clarification in an affidavit he swore prior to the High Court hearing. In that affidavit, he said it had "always been [his] intention to use the premises as an orthodontist facility involving only one orthodontist." He continued:The application makes it plain that a single orthodontist will operate from the facility. I do not accept that there is any confusion about that and the applicant was granted consent on that basis. For the avoidance of doubt, if the court considers it desirable, I am prepared to consent to an amendment to the consent so that condition 8 is amended to read: "The consent holder must ensure that there are to be no more than three health practitioners as defined, together with associated staff practising on site at any one time including not more than one orthodontist."[84] While, as we have said, "the court considers it desirable" to remove the ambiguity, we are uncertain of our jurisdiction to do that in circumstances where we have upheld the council's decisions not to notify the application and to grant the resource consent. Dr Courtney has properly made the offer to have condition 8 varied. In our view, the council should take him up on that offer. The appropriate procedure would appear to be an application under s 127 of the Resource Management Act. We would have thought this variation could be swiftly and cheaply made and determined, as the effect of it is simply to remove any mismatch between conditions 1 and 8. But whether this course is followed is a matter for theparties; it is not a requirement of this judgment that the Courtney interests mustapply for such a variation or that the council must grant it. [85] We add just one comment, should the parties decide to venture down this track. As it happens, we do not consider Dr Courtney's redraft of condition 8 is completely free from ambiguity either. A possible redraft of condition 8, which we consider consistent with the council's original intent and Dr Courtney's offer, might be along the following lines: 8(a) The right to use the property as a health facility is limited as follows: (i) the health facility may be used only for the practice of the professions of dentistry and/or orthodontics; (ii) only one dentist or orthodontist may practise from the facility; (iii) not more than two practice nurses may operate from the facility at the same time. (b) For the purpose of condition 8(a)(iii), "practice nurse" includes a dental assistant but does not include a receptionist. [86] We have used the term "practice nurse" in draft condition 8(a)(iii) as that is the expression used in the definition of "health practitioner" in performance condition (a) to r 10.8.1.4. We have made clear that dental assistants (or auxiliaries) come within the definition of "practice nurse", but receptionists do not. We have also made clear that the limitation is on the number of practice nurses operating from the facility at the same time. It may well be in the future that Dr Courtney wants to employ dental assistant A on Mondays and Tuesdays, dental assistant B on Wednesdays, Thursdays, and Fridays, while dental assistant C is full-time. That ought to be permitted, as only two practice nurses will be operation from the facility at the same time. The traffic effects of that arrangement would be identical to the traffic effects caused by the employment of two full-time dental assistants.[87] But this is merely a suggestion. It is, in fact, not easy to draft a condition to capture the nuances of what the council and Dr Courtney were trying to achieve. For that reason, we are not critical of the drafter of the original (and current) condition 8. [88] We are also conscious that, if some form of amalgamation of the two resource consents is to take place, the equivalent condition to condition 8 in the second resource consent may require consideration. How the conflict between the two resource consents is to be resolved is beyond the scope of these proceedings, for the reasons previously given.The council's application to adduce further evidence[89] Before we turn to the issue of costs, the last matter we must consider, we need to deal with the council's application to adduce further evidence in this court. The residents opposed this application. The proposed further evidence covered two broad areas. The first was a reply to the residents' post-decision effects evidence. The council had not attempted to answer that in the High Court on the basis that such evidence was inadmissible. If we held, contrary to the council's submission, that Miller J had been correct to entertain that evidence, then the council sought leave to adduce evidence in reply. Since we have held the post-decision effects evidence inadmissible, as Mr Maassen submitted, the need for rebuttal evidence disappears. [90] The second area covered by the new evidence related to aspects of the way in which Miller J allegedly conducted the judicial review hearing. We find it unnecessary to consider that part of the application or the proposed evidence. Even if the evidence were permitted and were accepted (which we do not decide), it would not assist the council's case. The council has in any event been successful on all points argued before us. [91] Accordingly, the application to adduce further evidence in this court can be formally dismissed.Costs[92] In the High Court, the residents obtained costs orders against the council and the Courtney interests. Costs have been paid to them. [93] In the event of success, the council did not seek costs, either in this court or in the High Court. But it did seek to have the costs order in the High Court against it quashed. That clearly must follow. So too, in terms of r 54 of the Court of Appeal (Civil) Rules 2005, the respondents must now repay to the council the costs which the council paid to them, without interest. [94] It may seem odd that the council pursued this appeal when its only direct interest was its share of the High Court costs order against it and the Courtney interests. Mr Maassen explained, however, that the council's principal concern was the implications of Miller J's decision on the council's handling of resource consents in the future. Mr Maassen submitted that Miller J's decision suggested councils should be adopting a much more rigorous analysis of effects than had occurred in this case. That would, he submitted, have far-reaching consequences with respect to the cost of processing applications for resource consents, costs which would ultimately be borne by the applicants. We accept that was a legitimate concern on the council's part. [95] The Courtney interests also sought the quashing of the order for costs in the High Court. In their case, however, they did seek costs, both in the High Court and in this court, if they were successful, as they have been. [96] We are satisfied they are entitled to the relief they seek. The order for costs against them in the High Court must be quashed and the respondents must now repay to the Courtney interests the costs paid to them, without interest. [97] In this court, the respondents must pay to the Courtney interests costs in the sum of $3,000, plus usual disbursements. That sum is rather lower than is normal on a civil appeal. It reflects the fact the oral hearing was able to be completed in under half a day and also the fact that Mr Paine did not have the full burden of preparingand advancing the argument against the High Court judgment. To a considerable extent, Mr Paine was able to glide in Mr Maassen's slipstream. [98] Notwithstanding that, the residents should appreciate they have been treated lightly. They filed detailed submissions in this case on no fewer than four occasions, the submissions totalling 106 pages. That is well in excess of the 30 page limit prescribed by r 41(1) of the Court of Appeal (Civil) Rules. No leave was sought or granted for additional pages. Submissions of this length would have required detailed analysis by Messrs Maassen and Paine and would generally have given rise to an increased costs order. [99] The Courtney interests are also entitled to costs in the High Court. We hope they and the residents will be able to agree them. If they cannot, then the High Court will fix them. Obviously, this is a category 2 proceeding. There would not seem to be any case for reduced or increased costs, but we have insufficient information about all the steps taken in the High Court and the appropriate band for each step. It is better the High Court undertake that exercise. [100] It may also seem odd, at first blush, that the Courtney interests have pursued this appeal. After all, the commissioner awarded them a second resource consent, with the terms of which they are satisfied (even though they prefer the generally laxer conditions of the first consent). The explanation is simple, however. The Courtney interests filed their appeal back in September last year. The commissioner did not grant the second consent until 20 September this year. There was then an appeal period, which ran until shortly before the hearing before us. In those circumstances, it was entirely appropriate that the Courtney interests commenced and continued with their appeal. [101] There is one other matter concerning costs which we mention, solely because the residents are unrepresented. Where we have made orders that the residents must pay or repay costs, we have provided that "the respondents' liability is joint and several". This means that the council or the Courtney interests, as the case may be, can look to any one or more of the respondents to meet the entire obligation. If one of the respondents pays the lot or more than his or her share, that person may recoverfrom the other respondents their shares of the total. Unless the respondents have agreed something different among themselves, each is liable to contribute equally to the total. Provided each respondent meets his or her share, none of them should have to contribute more than one-fourteenth of the total.Solicitors: Cooper Rapley, Palmerston North, for Palmerston North City Council, the Appellant in CA198/06 Bruce Andrews, Palmerston North, for M D Courtney Orthodontics Limited and Norcourt Properties Limited, the Appellants in CA211/06