THE CANYON VINEYARD LTD v CENTRAL OTAGO DISTRICT COUNCIL [2023] NZCA 74

THE CANYON VINEYARD LTD v CENTRAL OTAGO DISTRICT COUNCIL [2023] NZCA 74 [23 March2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA583/2022[2023] NZCA 74BETWEEN THE CANYON VINEYARD LTDApplicantAND CENTRAL OTAGO DISTRICT COUNCILFirst RespondentBENDIGO STATION LTDSecond RespondentCourt: French and Mallon JJCounsel: L A Andersen KC and A V J Hamel for ApplicantD J Anderson for First RespondentP J Page and S R Peirce for Second RespondentJudgment:(On the papers)23 March 2023 at 3 pmJUDGMENT OF THE COURTA The application for leave to appeal is declined.B The applicant must pay the respondents' costs for a standard application ona band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Mallon J)Introduction[1] Bendigo Station Limited (Bendigo) owns a vast farming property in CentralOtago that takes in much of Bendigo Terrace and parts of the western foothills of theDunstan Mountain range. It sought resource consent to subdivide just over163 hectares of its property. The site of the proposed subdivision consists of a scrubfilled gully interspersed with open areas that are covered in scab weed and roughpasture. The site is currently used for low intensity dryland grazing.[2] The application for consent considered by the Central Otago District Council(the Council) involved the creation of 14 lots of which 12 would have consent forresidential building platforms.1 The remaining two lots, Lots 1 and 3, contain existingvineyards and were to be retained as such. The Council granted consent to the creationof 12 lots with consents for residential building platforms on eight of them (Lots 2, 4to 6, and 8 to 11). It declined the proposal for dwellings on Lots 7 and 12 because itconsidered dwellings on those two lots would have significant adverse effects.[3] The Canyon Vineyard Limited (Canyon) opposed Bendigo's application to theCouncil. It owns land to the west of Bendigo's land separated by a gully. It containsa restaurant, wine tasting facility, a function centre, and cinema building (collectivelyreferred to as the Function Centre). A vineyard is on adjacent land. From Canyon'sFunction Centre, there are expansive views to the north/north-west over BendigoTerrace, and the valley of the Clutha River/Mata-Au as it enters Lake Dunstan. Thereis a direct line of sight from parts of the Function Centre site toward that part of theBendigo land that is to contain proposed Lots 8 to 11.[4] Canyon appealed the Council's decision to the Environment Court. TheEnvironment Court upheld the Council's decision but in relation to a slightly amendedproposal (the Interim decision).2 A subsequent decision of the Environment Courtapproved the amended conditions (the Final decision).3 Canyon's appeal of both theInterim and Final decisions was dismissed by Doogue J in the High Court.4 Canyon1 The application considered by the Council was an amended application from that initially lodged.2 The Canyon Vineyard Ltd v Central Otago District Council [2021] NZEnvC 136 [Interimdecision] at [189].3 The Canyon Vineyard Ltd v Central Otago District Council [2021] NZEnvC 187 [Final decision]at [12].4 The Canyon Vineyard Ltd v Central Otago District Council [2022] NZHC 2458 [High Courtdecision].now seeks leave to appeal to this Court on three questions of law.5 Bendigo opposesthe leave application.Leave jurisdiction[5] An appeal from the Environment Court to the High Court is restricted to aquestion of law.6 A second appeal to this Court requires leave.7 This Court may onlygrant leave if the question of law involves a matter of general or public importance ora miscarriage of justice may have occurred or may occur unless the appeal is heard.8The question of law must be capable of bona fide and serious argument, so as tooutweigh the cost and delay of a further appeal.9AssessmentFirst question[6] The first proposed question of law, which Canyon submits is of general andpublic importance, is:Does kaitiakitanga for the purposes of s 7(a) [of the Resource ManagementAct] include an individual's relationship with particular land or is it limited tomore general evidence by rūnanga?[7] Bendigo's consent was granted under the Resource Management Act 1991 (theRMA). The purpose of the RMA is to "promote the sustainable management of naturaland physical resources."10 In achieving this purpose, everyone exercising functionsand powers under the RMA (which includes the Environment Court) is required tohave "particular regard" to various specified matters including "kaitiakitanga".11 TheRMA defines "kaitiakitanga" as meaning "the exercise of guardianship by the tangatawhenua of an area in accordance with tikanga Māori in relation to natural and physical5 A further proposed question of law was abandoned.6 Resource Management Act 1991 [RMA], s 299(1).7 RMA, s 308(1), incorporating s 303 of the Criminal Procedure Act 2011 with necessarymodifications.8 Criminal Procedure Act, s 303(2).9 Te Whare O Te Kaitiaka Ngahere Inc Society v West Coast Regional Council [2015] NZCA 356 at[23], citing R v Slater [1991] 1 NZLR 211 (CA) at 214; and Downer Construction (NZ) Ltd vSilverfields Developments Ltd [2007] NZCA 355, [2008] 2 NZLR 591 at [33].10 RMA, s 5(1).11 RMA, s 7(a).resources ".12 In turn, it defines "tangata whenua" as "in relation to a particulararea, means the iwi, or hapū, that holds the mana whenua over that area".13[8] The Central Otago Operative District Plan (the Plan) identifies Ngāi Tahu asthe iwi exercising mana whenua in the area. The iwi authority is Te Rūnanga o NgāiTahu. Hayden Johnston, the director and shareholder of Canyon, affiliates to NgāiTahu. He gave evidence in the Environment Court about his whakapapa connectionto the land and adverse effects of the proposed subdivision from his perspective. Hisview was that the subdivision lacked kaitiakitanga. This was because it was driven bymaximising the number of houses and the views from them and ignored: the importance of an overall harmonious plan, where the parts integratewith each other, with my property, with the adjoining conservation landscapeand, most importantly, where the natural feel of this incredibly delicate naturallandscape is maintained.[9] In its Interim decision the Environment Court determined that the appeal waslimited to the visual impacts of the proposed Lots 4 (when viewed from the publicroad and historic schoolhouse premises) and 8 to 11 (when viewed from Canyon'sproperty) and the implications of the effects of the proposal within the Planframework.14 It said that Mr Johnston was "entitled to express his appreciation of therural amenities that he experiences and enjoys on his land, although those views willnecessarily be subjective."15 The Court went on to say that subjective values neededto be objectively tested and assessed in determining whether there was a reasonablebasis for that perspective.16 It then discussed the expert evidence of visual effects andconcluded that they were no more than minor.17[10] On appeal, the High Court said that "Mr Johnston's views as tangata whenuahold weight at first blush."18 However, on the facts, the Judge considered thatindependent evidence that kaitiakitanga required the land to remain unspoilt was12 RMA, s 2(1) definition of "kaitiakitanga".13 RMA, s 2(1), definition of "tangata whenua".14 Interim decision, above n 2, at [29] and [44]; and High Court decision, above n 4, at [165]–[170].15 Interim decision, above n 2, at [171].16 At [172].17 At [179].18 High Court decision, above n 4, at [174].required.19 This was because Mr Johnston's evidence conflicted with his earlieractions in agreeing with the vendors, when he purchased the Canyon land, that hewould not oppose development on the Bendigo land.20 The Judge went on to say ithad not been demonstrated in any event that, even if there had been an error in theEnvironment Court's approach to Mr Johnston's evidence, that it would have beenmaterial to the ultimate outcome.21[11] Canyon submits the Judge erred in taking into account the agreementMr Johnston reached with the vendors because it was not part of the evidence beforethe Environment Court and, although included in the bundle on the substantive appeal,was not discussed at that hearing. It says that the point is contested because Bendigowas not a party to that agreement, the non-objection condition in the agreement wasnot a registered covenant and that condition would not have applied because anydevelopment application had to be "in conformity with the RMA". These are technicalpoints. They do not go to the substance of the point the High Court made, and wasentitled to make, as to why in the circumstances independent evidence before theEnvironment Court that kaitiakatanga required an unspoilt view from Canyon's landor other relevant locations was necessary.[12] The first proposed question is a question of law. It would arguably be ofgeneral and public importance in a case where it may affect the outcome. This is notsuch a case. Neither the Interim decision nor the High Court rejected Mr Johnston'sevidence simply because it came from an individual rather than the rūnanga. Hisevidence was considered but rejected for the reasons they explained. Those reasonsdo not give rise to an error of law.Second question[13] The second proposed question, said by Canyon to be of general and publicimportance, concerns the meaning of "contrary to" in s 104D(1)(b) of the RMA and"maintain" in Objective 4.3.3 of the Plan. It asks:19 At [175].20 At [174]–[175].21 At [176].Did the High Court correctly assess effects by applying the correct test to thewords "maintain the rural environment" in Objective 4.3.3 of the CentralOtago District Council Plan:(a) By holding it did not require avoidance of effects that breached thespecified values; and(b) By holding that "contrary to" means "opposed in nature, different toor opposite ... repugnant and antagonistic".[14] Section 104D(1) of the RMA provides that a consent authority may grantconsent for a non-complying activity only if it is satisfied of one or other of (asrelevant) the following (emphasis added):(a) the adverse effects of the activity on the environment will be minor;or(b) the application is for an activity that will not be contrary to theobjectives and policies of–(i) the relevant plan [15] The proposed subdivision site is zoned Rural Resource Area (RU). Section 4of the Plan addresses landscape issues within the RU. Most relevantly for presentpurposes is the objective set out in section 4.3.3. It provides (emphasis added):4.3.3 Objective – Landscape and Amenity ValuesTo maintain and where practicable enhance rural amenity values created bythe open space, landscape, natural character and built environment values ofthe District's rural environment, and to maintain the open natural character ofthe hills and ranges.[16] Under the Plan, this objective is implemented through a number of policies.They include:4.4.2 Policy – Landscape and Amenity ValuesTo manage the effects of land use activities and subdivision to ensure thatadverse effects on the open space, landscape, natural character and amenityvalues of the rural environment are avoided, remedied or mitigated through:(b) Development which is compatible with the surrounding environmentincluding the amenity values of adjoining properties,(g) Encouraging the location and design of buildings to maintain the opennatural character of hills and ranges without compromising thelandscape and amenity values of prominent hillsides and terraces.[17] And:4.4.10 Policy – Rural Subdivision and DevelopmentTo ensure the subdivision and use of land in the Rural Resource Area avoids,remedies or mitigates adverse effects on:(a) The opens space, landscape and natural character amenity values ofthe rural environment in particular the hills and ranges,(c) The production and amenity values of neighbouring properties,[18] The Interim decision noted that the part of Objective 4.3.3 that was put in issuewas "[t]o maintain and where practicable enhance rural amenity value ".22Referring to Harris v Central Otago District Council, the Court considered the ruralsubdivision policy contemplated different degrees of adverse effects of subdivisionand that a decision on whether avoiding, remedying or mitigating those effectsdepended on the context.23 For the purposes of Policy 4.4.2, in deciding whetheradverse effects should be avoided, remedied or mitigated, the goal expressed inObjective 4.3.3 must inform that assessment so that the rural amenity values aremaintained.24[19] The Interim decision referred to Port Otago Ltd v Dunedin City Council insupport of the view that "to maintain" allowed a Council to "protect rather thanpreserve or enhance" and that "to protect" meant to "keep safe from harm or injury".2522 Interim decision, above n 2, at [140].23 At [141]-[142], referring to Harris v Central Otago District Council [2016] NZEnvC 52.24 At [145].25 At [147], citing Port Otago Ltd v Dunedin City Council EnvC Christchurch C004/02, 22 January2002.The Court also agreed with the observation in Harris that "[what] the policy does notsay is that adverse effects should simply be avoided."26[20] The Interim decision noted Objective 4.3.3 stated the rural amenity values ofthis rural environment are created by the "open space, landscape, natural character andbuilt environment values of the rural environment" involved.27 In assessing amenityvalue, the Court considered that it was relevant that the landscape category of the sitewas Other Rural Landscape (ORL), and not Outstanding Natural Landscape (ONL),Significant Amenity Landscape (SAL) or Significant Natural Area (SNA).28[21] The Court referred to the evidence from one expert witness that, while thefoothills to the Dunstan Mountains have scenic qualities, they do not have the samedegree of wildness and remoteness as the upper mountains that are within the ONL.29The Court referred to the Plan's description of the RU as enhanced by the "humanmade elements" which were stated as including the orchards and vineyards andhomesteads accompanied by stands of trees.30[22] The Court considered that Policy 4.4.2(b) applied both to public and privateamenity values. This meant that Canyon was entitled to expect that any developmenton the site would maintain, if not enhance, the rural amenity values experienced andenjoyed from the Function Centre site.31 The Court accepted that a visual change tothe area did not automatically equate to one that was incompatible with thesurrounding environment (including the visual amenity values experienced atCanyon).32[23] The Court rejected Canyon's submission that "to be compatible with" underPolicy 4.4.2(b) meant that the proposal must not detract from Canyon's current views.It considered that "to be compatible with" meant to "co-exist in harmony", "behomogenous with" or "not be discordant with" the amenity values enjoyed by26 At [148], quoting Harris, above n 23, at [32] (emphasis in original).27 At [151].28 At [152].29 At [154].30 At [155].31 At [161].32 At [162].Canyon.33 If this was achieved, then the rural amenity values of the rural environmentwould be maintained. In the Court's view, this was possible where new builtdevelopment was introduced. In its view, there was nothing in the Plan to supportCanyon's approach that visibility of any part of the development equated to an adverseeffect on Canyon.34[24] The Court accepted the evidence of two experts that the rural amenity valueson the Function Centre would be maintained and the development on Lots 8 to 11would be compatible with the surrounding environment. This meant that the proposalwould not be contrary to, in the sense of being repugnant to or antagonistic towards,the objectives and policies of the Plan and that therefore s 104D(1)(b) of the RMA wassatisfied.35[25] On appeal to the High Court, Canyon submitted that the Environment Court inits Interim decision had misinterpreted "maintain" under Objective 4.3.3 and had readdown the words "contrary to" in s 104D(1)(b). The Judge reviewed several authoritiesand found that "to maintain" meant "to protect rather than preserve or enhance" whichin turn meant "to keep safe from harm or injury".36 She accepted that to maintain didnot require a landscape to be frozen in time and anticipated land use change in a waythat maintained amenity.37 This meant that Canyon was not entitled to "an unspoiltlandscape" with no visible buildings from all parts of its property.38[26] The Judge also found that the Interim decision reference to "repugnant orantagonistic" to the rural amenity values was to be viewed in the context of Canyon'ssubmission that "to maintain" required the continuation of an unspoilt orundomesticated rural environment.39 She referred to New Zealand Rail Ltd vMarlborough District Council as authority that "contrary to" contemplated a proposalthat was not "opposed to in nature, different to or opposite repugnant and33 At [168].34 At [163]–[169].35 At [178]–[181].36 High Court decision, above n 4, at [124].37 At [125].38 At [124] and [135].39 At [127] and [128].antagonistic" to the relevant objective and policies.40 She considered that the Interimdecision had not found that Bendigo's proposal failed to maintain rural amenity.Rather, rural amenity in an ORL included the built environment and could enhance anORL's landscape qualities.41[27] The High Court therefore dismissed Canyon's appeal on these grounds. Now,Canyon proposes as a question of law whether the High Court correctly assessedeffects by holding that the words "maintain the rural environment" in Objective 4.3.3"did not require avoidance of effects that breached the specified values". Thatquestion misstates what the High Court decided. The High Court upheld theEnvironment Court's view that the "rural amenity values" in an ORL included the builtenvironment and the proposal was compatible with the surrounding environment,including the visual amenity value at Canyon's Functions Centre. There was nofinding that there were any effects that breached the specified values.[28] Canyon further proposes as a question of law that the High Court erred byholding that "contrary to" means "opposed in nature, different to or opposite repugnant and antagonistic". It submits that the normal meaning of "contrary to"means that a development will be contrary to the maintenance or enhancement of arural amenity if it decreases the amenity. It submits that Bendigo's proposeddomestication of an unspoilt rural area, which it also describes as a "degradation" ofthe environment, is contrary to the amenities of the existing rural amenity if "contraryto" is given its normal meaning.[29] That submission overlooks that s 104D(1)(b) provides that the consentingauthority must be satisfied that the development "will not be contrary to the objectivesand policies of the relevant plan". The rural amenity values of the relevant planinclude the built environment and contemplate development of the built environmentthat would protect or enhance the ORL environment. It was not premised on anunchanged environment.40 At [130], citing New Zealand Rail Ltd v Marlborough District Council [1994] NZRMA 70 (HC)at [11].41 At [134] and [135].[30] We conclude that the proposed question of law misstates the High Court'sapproach. It is not arguable that the incorrect test was applied to determine whetherthe proposal maintained the rural amenity value as required by Objective 4.3.3, nor towhether the proposal was "contrary to" Objective 4.3.3 and the relevant policies.Rather, Canyon's view that the rural amenity values were negatively impacted by anyvisible building on the site reflected a misunderstanding under the "objectives andpolicies of the relevant plan".42Third question[31] The third proposed question of law, said by Canyon to give rise to a miscarriageof justice, is:Does the Environment Court have jurisdiction to amend the plan that formspart of its final decision after the Canyon appeal is dismissed?[32] This question concerns the omission of a mound on Lot 8 in the plans submittedwith the proposed consent conditions considered by the Environment Court in its Finaldecision. This mound was no longer required for one of its originally intendedpurposes but its secondary purpose was to screen views of the driveway to Lot 8. Thesurveyor preparing the plans considered by the Environment Court in its Interimdecision omitted the mound on the erroneous assumption that it was no longerrequired.[33] The Interim decision discussed this when considering the appeal from theCouncil's decision as follows:43[60] The amended plans did not depict the secondary mound originallyshown on Lot 8, although we understand that removal was inadvertent.Bendigo intends that this be reinstated, and Mr Smith undertook his visualassessment on that basis.[34] The Interim decision did not finalise the conditions of the consent because ofother anomalies raised by Canyon and also to allow further consideration to be givento the definition of "simple gable roof".44 Contrary to what was envisaged at the time42 RMA, s 104D(1)(b)(i).43 Interim decision, above n 2.44 At [190]–[193].of the Interim decision, the submitted plans were not updated to include the mound onLot 8 when the conditions were considered in the Final decision.45 In approving theconditions proposed by Bendigo, the Environment Court rejected Canyon's proposedchanges and additions in the Final decision because they went beyond the ambit thatthe Environment Court had called for in the Interim decision and were unsupported bythe evidence given at the hearing.46[35] On appeal to the High Court, Bendigo accepted that the mound ought to havebeen shown on Lot 8. It submitted that this should be addressed by the EnvironmentCourt pursuant to its power to correct an accidental slip or omission in a judgment ororder.47[36] The High Court said:48[199] Owing to the clerical error of Bendigo's expert witnesses, the revisedplans did not reflect [the] intention of the EC in its Interim Decision toreinstate the second mound. Accordingly, these revised plans should beamended to reflect the proper meanings and intentions of the Interim Decision.[200] To rectify this error, Bendigo offered to produce an updated plan thatincludes the second mound, and to file a joint memorandum to the EC alertingit [to] this issue and requesting that it rectify this error. That course should beadopted, and the jurisdiction of the Court need not be engaged.[37] Canyon submits that a miscarriage will occur if leave to appeal is not grantedbecause the Environment Court's approval of the plans without the mound in the Finaldecision was not a clerical error and that Court is now functus officio. It says that thisis because it pointed out the omission of the mound in its submissions to theEnvironment Court for the Final decision and that Bendigo, supported by the Council,rejected this and the Final decision rejected all the amendments it had proposed.[38] We do not agree that this point is arguable. The Final decision approving theconditions and plans does not specifically refer to the omission of Lot 8. Whatevermay have been said in the submissions to it, it is not apparent that the EnvironmentCourt turned its mind to the omission in the Final decision. It is clear that its Interim45 Final decision, above n 3, at [11].46 At [10].47 RMA, s 278; District Court Rules, r 11.10; and High Court decision, above n 4, at [197].48 High Court decision, above n 4.decision was founded on the basis that the mound was intended by Bendigo to bereinstated and that it had considered Canyon's proposal on the basis of expert evidencethat similarly proceeded on that basis. In approving conditions and plans that did notinclude the mound, the Final decision did not reflect the Court's Interim decision.Absent any other plausible inference, this has to have been an accidental error. It istherefore capable of correction by the Environment Court in order to give effect to itsInterim decision pursuant to which the consent to the proposal was given.Result[39] The application for leave to appeal is declined.[40] The applicant must pay the respondents' costs for a standard application on aband A basis and usual disbursements.Solicitors:Antony Hamel, Dunedin for ApplicantMactodd Lawyers, Queenstown for First RespondentGallaway Cook Allan Lawyers, Dunedin for Second Respondent