Powell v Dunedin City Council [2004] NZCA 114; (2005) 11 ELRNZ 144; [2004] 3 NZLR 721; [2005] NZRMA 174 (1 July 2004)

Last Updated: 18 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA157/03

BETWEEN S C POWELL AND W M POWELL
First Appellants

AND D M COULTER AND E A D COULTER
Second Appellants

AND W B FINNIE AND J H FINNIE
Third Appellants

AND DUNEDIN CITY COUNCIL
First Respondent

AND OBSIDIAN ROCKS LIMITED
Second Respondent

Hearing: 18 March 2004

Coram: William Young J Chambers J O'Regan J

Appearances: L A Andersen and T J Shiels for Appellants
P J Page for First Respondent
A J P More and J N Rankilor for Second Respondent

Judgment: 1 July 2004

JUDGMENT OF THE COURT DELIVERED BY O’REGAN J

[1] This is an appeal against a decision of John Hansen J (HC DUN Civ 2003-412-81 22 July 2003). In that decision, John Hansen J dismissed the application for judicial review by the appellants of certain decisions made by the first respondent, the Dunedin City Council in relation to an application for resource consent by the second respondent, Obsidian Rocks Limited. The decisions of the Council which the appellants sought to review were a decision to process a resource consent application by Obsidian on a non-notified basis, and a decision to grant the resource consent sought by Obsidian.

Facts

[2] Obsidian owns a large site at 279 Highgate, Dunedin. This site is at the southern end of the Roslyn Village, which is a small shopping centre and the site of the Roslyn New World Supermarket owned by one of the appellants, Mr Powell. Obsidian’s site has frontages onto Highgate and also onto Ann Street which runs parallel to Highgate. The appellants are residents of Highgate. Their properties have frontages and accesses onto Highgate just south of, and opposite, the Highgate frontage of Obsidian’s site.
[3] Obsidian’s site was previously occupied by a bakery. It was divided into six titles but, because the bakery buildings straddled the lot boundaries, five of the six titles were subject to a certificate under s643(2) of the Local Government Act 1974, which prevented them from being dealt with separately. At the time of the resource consent application the site was in six separate titles, but it was clear that Obsidian intended to amalgamate the titles into one title.
[4] Obsidian wished to develop this site for a supermarket (we will call it the supermarket site). It was proposed that the supermarket would be built on the northern boundary of the supermarket site and that the rest of the site would be used for carparking and access. Obsidian was to undertake the development and then lease the supermarket and carpark to a major supermarket operator.
[5] Initially Obsidian sought a certificate of compliance from the Council under s139 of the Resource Management Act (RMA). Obsidian believed that the proposed activity was a permitted activity which could be lawfully carried out without a resource consent. One of the six lots was zoned “Residential A” under the plan and the remaining five certificates of title were located in the “Commercial C” zone. Under the proposed District Plan (the plan) all six lots were zoned “Local Activity”. A supermarket was a permitted use in that zone subject to issues of access and site coverage, which were governed by rules.
[6] The Council official dealing with the application for a certificate of compliance determined that there was a site coverage issue because the land was in separate titles. He determined that a certificate of compliance could not be issued until the amalgamation of the titles. Amalgamation of the titles would have delayed things so an application for resource consent was made. It appears that the Council official was wrong about the site coverage issue but nothing turns on that now, because it is common ground that there is no breach of the site coverage requirements. Accordingly the only issue before the High Court and before us is the issue of access. However, it is notable that, on the basis of the Council’s interpretation of the rules relating to access, a certificate of compliance would have been issued if the Council official had not been mistaken in his interpretation of the site coverage rules.
[7] The Council official determined that the site coverage issue could be dealt with by a condition that the resource consent would not come into effect until the six titles had been amalgamated into one, at which point the site coverage requirements would not be exceeded. He did not consider there to be any breach of the rules relating to access and therefore no need for any consent in that regard. Accordingly he determined that the application should be dealt with on a non-notified basis and that resource consent should be granted, subject to a condition that it would not come into force until the amalgamation of the sites was completed.
[8] The appellants found out about the proposed development. They took the view that the Council ought to have notified the resource consent application. They said they would be affected particularly by the proposed access for traffic entering and exiting the supermarket site onto Highgate, which would affect their properties.
[9] In particular, the appellants argued that Obsidian required a resource consent for the vehicular access from the supermarket site to Highgate because it breached Rule 20.5.6 of the plan in that it was located within 70 metres of the intersection of Highgate and City Road. (We will refer to Rule 20.5.6 as the access rule.) Whether the appellants are right about that depends on the interpretation of the access rule, which is at the heart of this case.
[10] It is common ground that if the respondents’ interpretation of the access rule is correct, then no resource consent would be required for the supermarket development at all, so that the issue of non-notification and granting of consent would be moot. On the other hand, if the appellants’ interpretation of the access rule is correct, then a resource consent is required. It would then be necessary to determine whether the failure of the Council official to take into account a breach of the access rule is such that the decisions not to notify the resource consent application and to grant the resource consent sought should be quashed.

Issues

[11] The issues now before the Court are:

• (a) Does the siting of the access from the supermarket site to Highgate contravene the access rule and therefore make it necessary that Obsidian obtain a resource consent for the supermarket development?
• (b) If so, could the Council properly determine that the resource consent application be dealt with on a non-notified basis and grant resource consent, applying the “permitted baseline” test? and
• (c) If not, should this Court in the exercise of its discretion decline relief on the basis that, even if the resource consent application were notified, it is highly likely that a resource consent would have been granted in any event?

The High Court judgment

[12] In the High Court, John Hansen J concluded that the access from the supermarket site to Highgate did not breach the access rule and that, accordingly, no resource consent was required for the supermarket development. In doing so he undertook an extensive review of cases relating to the correct approach to the interpretation of planning documents and concluded that the appropriate approach was as follows:

• (a) The words of the document are to be given their ordinary meaning unless this is clearly contrary to the statutory purpose or social policy behind the plan in the rules or otherwise produces some injustice, absurdity, anomaly or contradiction;
• (b) The planning document should affect common law rights only where there is express provision to this end or it follows as a matter of necessary implication;
• (c) There is a need for certainty in the description of permitted activities and the operative parts of the plan. But the language used in the plan must be given its plain ordinary meaning, the test being “what would an ordinary reasonable member of the public examining the plan, have taken from” the planning document;
• (d) The interpretation should not prevent the plan from achieving its purpose;
• (e) If there is an element of doubt, the matter is to be looked at in context and it is appropriate to examine the composite planning document. [Paragraph [35] of the judgment]

[13] He then considered the access rule. Having considered the terms of the rule and the objectives, policies and methods set out in the plan, he concluded that the interpretation of the plan contended for by the Council and Obsidian was correct and that there was therefore no breach of the access rule. He drew support for that conclusion from the fact that this was in accord with a frontager’s common law right of access, as articulated in this Court in Fuller v MacLeod [1981] 1 NZLR 390.
[14] The conclusion reached by John Hansen J differed from the conclusion of Panckhurst J who considered a very similar rule in the Christchurch City Council Plan in O’Connell Construction Ltd v Christchurch City Council [2003] NZRMA 216. John Hansen J was satisfied that differences in the objectives of the Christchurch Plan, when compared to those in the Dunedin Plan, justified a different interpretation being reached in relation to the access rule in the Dunedin Plan. In particular, he was influenced by the inclusion in the Dunedin Plan of a “roading hierarchy”, to which we will refer in more detail later.
[15] Although his conclusion on the interpretation of the access rule meant that no resource consent was required, John Hansen J went onto consider whether, on the basis that the access rule were breached and that resource consent was therefore required, notification of the application for resource consent would have been required. This involved consideration of the permitted baseline for the purposes of the test articulated by this Court in Bayley v Manukau City Council [1999] 1 NZLR 568 and Smith Chilcott Ltd v Auckland City Council [2001] 3 NZLR 473. The Judge concluded that the permitted baseline included six separate developments, one on each of the six separate sites which existed prior to the amalgamation of the titles, two of which would have rights of access onto Highgate, with the other four having rights of access onto Ann Street. Thus he considered that the impact of the access from the proposed supermarket development to Highgate, when measured against the permitted baseline, would be minimal and that non-notification would have been appropriate.
[16] In view of those conclusions there was no discussion in the High Court judgment on the issue as to whether, in the event that the appellants had succeeded in establishing that the access rule was breached and that the resource consent application should have been notified, relief should be withheld in the exercise of the Court’s discretion.

The access rule

[17] The access rule provides as follows:

Rule 20.5.6 Vehicle Access Performance Standards

Note: This rule does not apply to farm paddock access tracks.

(i) Maximum number of vehicle accesses

The maximum number of vehicle accesses permitted on each road frontage of any site or comprehensive development shall be in accordance with Table 20.2.

Frontage Length (m)	Local Road	Collector Road	National, Regional or District Road
0 – 18	1	1	1
18 – 60	2	1	1
60 – 100	3	2	1
100 or greater	3	3	2

Table 20.2: Maximum number of vehicle accesses per road frontage

...

(iii) Distances of vehicle accesses from intersections

Any part of any vehicle accesses shall not be located closer to the intersection of any roads than the distances specified in Table 20.4.

Roads where the speed limit is less than 100 km per hour
Frontage Road	Intersecting road type (distance in metres)
	National	Regional	District	Collector	Local
National	70	70	70	55	35
Regional	70	70	70	55	36
District	70	70	70	55	35
Collector	40	40	40	40	20
Local	25	25	25	25	20
Roads where the speed limit is 100 km per hour
Frontage Road	Intersecting road type (distance in metres)
	National	Regional	District	Collector	Local
National	275	275	180	180	180
Regional	180	180	180	180	90
District	180	180	180	90	90
Collector	90	90	90	60	60
Local	90	90	90	60	60

Table 20.4: Minimum distances of vehicle accesses from intersections

Clarification of, and exemptions to, Table 20.4

(a) Distances shall be measured along the boundary parallel to the centre line of the roadway of the frontage road from the kerb line, or formed hard surface edge of the intersecting road. Where the roadway is median divided, the edge of the median nearest to the vehicle access shall, for the purposes of this clause, be deemed the centre line.

(b) For proposals not involving application for subdivision consent, where the boundaries of a site do not allow the provision of any vehicle access whatsoever in conformity with the above distances, a single vehicle access may be constructed in the position furthest from the intersection.
(c) For proposals involving applications for subdivision consent, where the boundaries of a site do not allow the provision of any vehicle access whatsoever in conformity with the above distances, this shall be a matter that Council retains discretion over.
(d) National, regional, district and collector roads are identified on District Plan Maps 73 and 74. Local roads are all other roads.

...

(Paragraphs (ii), (iv) and (v) are not relevant for present purposes.)

[18] The attention of the present case is focused on paragraph (b) of the clarifications of, and exemptions to, Table 20.4 which appears in paragraph (iii) of the access rule. The supermarket site has frontages onto both Ann Street, which is a local road, and Highgate, which is a district road. The Ann Street access conforms with Table 20.4 but the access onto Highgate does not because the access is less than 70 metres from the intersection of Highgate and another district road, City Road.
[19] Because the Highgate access does not conform to Table 20.4, it is necessary to consider whether the proposed access onto Highgate is exempted by virtue of paragraph (b). The appellants say it is not because paragraph (b) comes into play only where a site is left with no vehicle access whatsoever. In this case the supermarket site has another access onto Ann Street and therefore does not come within the terms of the exemption in paragraph (b). On the other hand, the Council and Obsidian say that paragraph (b) is directed to accesses on each frontage, so it permits Obsidian to place an access from the supermarket site to Highgate in the position furthest from the intersection of Highgate and City Road. That is what Obsidian has proposed for the purposes of the supermarket development.
[20] If the appellants’ interpretation of the access rule is correct, and the proposed access from the supermarket site to Highgate is not saved by exemption (b), then the proposed supermarket development will not comply with the plan and a resource consent will be required. On the other hand, if the respondents’ interpretation is correct then the access from the supermarket site to Highgate will conform to the plan and no resource consent will be required. In that case it would not be necessary to determine the merits of the application for review of the decisions not to notify the resource consent application and to grant the resource consent because the supermarket development would comply with the plan and would not require a resource consent.

The context of the access rule

[21] Section 20 of the plan is headed “Transportation”. It is broken into subsections, which deal with transportation issues with increasing degrees of particularity.
[22] Section 20.1 deals with “Significant Resource Management Issues”. One of these is Issue 20.1.2, which states that traffic generating activities can cause adverse effects on, among other things, traffic safety, the function of roads, including their through-route function, and the efficient operation of intersections and roads.
[23] Section 20.2 then deals with the Objectives of section 20. One of these objectives (Objective 20.2.2) is to ensure that land use activities are undertaken in a manner which avoids, remedies or mitigates adverse effects on the transportation network. Objectives 20.2.3 and 20.2.4 are directed towards achieving integrated management of the roading network and maintaining a safe, efficient and effective transportation network.
[24] Section 20.3 then deals with the Policies of section 20 at a slightly more specific level. Of particular relevance are Policy 20.3.4, which is to “ensure traffic generating activities do not adversely affect the safe, efficient and effective operation of the roading network”, and Policy 20.3.5 which is to “ensure safe standards for vehicle access”.
[25] Section 20.4 deals with Methods of Implementation. This section begins as follows:

In addition to the rules found both in this section and in the relevant zone provisions, the methods to be used to achieve the objectives and policies identified in this section include the following:

[26] It is notable that, while the methods can be seen as having a higher ranking than the rules which appear in section 20.5, the methods are stated to apply “in addition to the rules”.
[27] In the High Court, particular emphasis was placed on Method 20.4.2, which sets out the road hierarchy identified in the plan. This hierarchy is as follows:

• (a) National roads (State Highways) including limited access roads.
• (b) Regional roads.
• (c) District roads.
• (d) Collector roads.
• (e) Local roads.

[28] As already indicated, Highgate is a district road and Ann Street is a local road. Method 20.4.2 says that district roads provide connections between regional roads and connect major rural, suburban, commercial and industrial areas, whereas the primary function of local roads is “to provide access to properties, rather than to act as through-routes.”

Approach to interpretation of the plan

[29] We have set out the relevant parts of the significant resource management issues, objectives, plans and methods, in addition to rule 20.5.6, because the respondents argued that reference to the objectives, policies and methods, in particular, was necessary in order to determine the meaning of the access rule. On the other hand, the appellants argued that the meaning of the access rule and, in particular, exemption (b) of paragraph (iii), was plain and unambiguous. This gave rise to considerable debate both in this Court and in the High Court as to the approach to be taken to the interpretation of plans.
[30] The starting point for a discussion as to the approach to be taken to the interpretation of plans is the decision of this Court in J Rattray & Son Ltd v Christchurch City Council [1984] NZCA 9; (1984) 10 NZTPA 59 at 61. In that case, the Court was considering the interpretation of predominant uses in a plan subject to the Town and Country Planning Act 1977. The Court said:

We would accept that language used to describe predominant uses within a particular zone will have an immediate significance and must be given its intended effect when that is unmistakable and can be clearly ascertained within the same close environment. But words take flavour and colour from their general context and can carry so many shades of meaning that it is frequently impossible to be dogmatic about any single normal or everyday meaning. So that where there is any uncertainty, or doubts arise, it would put at risk or even stultify the process of construction if an answer were to be given that itself was uncertain, or if doubt had to be left unresolved simply because it was thought necessary to cut away the language of the ordinance from the other parts of the same instrument. ... For those general reasons we are satisfied, ... that assistance not only may but ought to be sought from the composite planning document taken as a whole whenever obscurities or ambiguities might seem to arise.

[31] That approach was adopted by the High Court in relation to the interpretation of a plan under the RMA in Beach Road Preservation Society Inc v Whangarei District Council [2001] NZRMA 176. That case concerned an application to the District Council for resource consent to build a house and boatshed on property which fell within the Marina zone under the local district plan. The application was considered on the basis that the house and boatshed came within the term “residential accommodation” and was therefore a controlled activity.
[32] Chambers J determined that the term “residential accommodation” was ambiguous but said that, quite apart from that ambiguity, it would make no sense to interpret the term “residential accommodation” divorced from its immediate context, particularly the objectives and policies of the Marina zone. He rejected a submission from the applicant for resource consent that, on the basis of the Rattray decision to which we have referred earlier, the term “residential accommodation” had to be interpreted in isolation. After considering Rattray and other authorities such as Foodtown Supermarkets Ltd v Auckland City Council (1984) 10 NZTPA 262 and K B Furniture Ltd v Tauranga District Council [1993] 3 NZLR 197, he concluded at para [33]:

In light of those authorities, with all of which I respectfully concur, it seems to me obvious that at the very least regard must be had to the zone statement, objective and policies and the rest of Part 14.4 when interpreting the words “Residential Accommodation”. These cases provide authority for looking far beyond Part 14.4. In this particular case, one does not need to go further.

[33] Chambers J then referred to s76 of the RMA, and in particular s76(2) which says that rules appearing in district plans have the effect of regulations. He noted that this meant the Interpretation Act 1999 applied to the interpretation of such rules. Section 5(1) of that Act requires that the meaning of an enactment (in this case, rule) must be ascertained from its text and in the light of its purpose. He noted that “purpose” in the context of a district plan would be the purpose prescribed by s76(1)(b) of the RMA, namely the objectives and policies of the relevant plan. Accordingly he said it was mandatory to consider the objectives and policies of the Marina zone as set out in the relevant part of the Whangarei district plan.
[34] Chambers J also noted that the purposive approach to interpretation was consistent with the approach taken in relation to interpreting contracts as set out by this Court in Boat Park Ltd v Hutchinson [1999] 2 NZLR 74.
[35] In this case, the appellants argued that the Court should look to the plain meaning of the access rule and, having found that there is no ambiguity, interpret that rule without looking beyond the rule to the objectives, plans and methods referred to in the earlier parts of section 20 of the plan. While we accept it is appropriate to seek the plain meaning of a rule from the words themselves, it is not appropriate to undertake that exercise in a vacuum. As this Court made clear in Rattray, regard must be had to the immediate context (which in this case would include the objectives and policies and methods set out in section 20) and, where any obscurity or ambiguity arises, it may be necessary to refer to the other sections of the plan and the objectives and policies of the plan itself. Interpreting a rule by a rigid adherence to the wording of the particular rule itself would not, in our view, be consistent with a judgment of this Court in Rattray or with the requirements of the Interpretation Act.
[36] The respondents placed great emphasis on the Beach Road decision, because they said that this approach supported the interpretation adopted by the High Court Judge in this case. In that regard they placed particular emphasis on the roading hierarchy (section 20.4.2 of the plan) in the light of the finding by the High Court Judge that, if the rule required that traffic from the supermarket be directed onto a local road such as Ann Street, this would be inconsistent with the roading hierarchy.
[37] While we accept the submission made on behalf of both respondents that the approach to interpretation outlined in Beach Road is the appropriate approach in this case, we do not accept that it yields the result contended for by the respondents. In our view the meaning of exemption (b) to rule 20.5.6(iii) is clear whether one looks only at the words themselves, or to the whole of rule 20.5.6, or to the broader objectives, policies and methods outlined in section 20 of the plan.
[38] If one starts with the words of paragraph (b) itself, there appears to us to be no escape from the conclusion that, when the provision refers to “any vehicle access whatsoever”, it means exactly what it says. The respondents argued that “any vehicle access whatsoever” means “any vehicle access whatsoever on the relevant frontage”, and that paragraph (b) should be seen as directed to each particular frontage of a section, rather than to the section itself. We can see no justification for including additional words which do not appear in the provision itself.
[39] On behalf of Obsidian, Mr More said that when regard is had to paragraph (i) of rule 20.5.6, it is clear that individual road frontages are being addressed. We accept that that provision deals with the maximum number of vehicle accesses on each road frontage, but that is because the term “on each road frontage” is specifically used in that rule. It is conspicuous by its absence from paragraph (iii), and paragraph (iii) can be sensibly interpreted as applying a rule which is of the general application rather than one which applies to each individual frontage.
[40] The respondents also suggested that paragraph (i) created an entitlement to an access on the Highgate frontage, because under the terms of that rule one frontage on the particular road is specified in table 20.2. In our view that overstates the significance of paragraph (i), which sets out a maximum number, rather than guaranteeing a minimum number, of accesses on a particular frontage.
[41] The respondents then referred to the method set out in section 20.4.2 and said that it would be anomalous if the supermarket had only one access and that access was onto a local road when traffic heading towards or away from the supermarket should be using a district road in preference to a local road. We are unable to accept that the roading hierarchy assists interpretation of paragraph (iii) in the manner contended for by the respondents.
[42] In essence, the respondents’ argument is that, because the application of the access rule to the situation facing Obsidian in this case would mean that the only permitted access (ie permitted without obtaining a resource consent) would be to Ann Street, this would offend against the roading hierarchy. In our view that confuses the result of the application of the access rule to a particular situation with the interpretation of the access rule itself. The argument is predicated on the basis that it would be an absurd outcome for all traffic to the proposed supermarket to be required to use a local road such as Ann Street. But the rule does not require that outcome: rather, it requires that a resource consent be obtained for an access way which contravenes the access rule. In any event, the roading hierarchy refers to the primary function of local roads as being to provide access to properties, as Ann Street would provide for the supermarket site in this case if the rule were applied as the appellant contends it should be. So the roading hierarchy provides support for both interpretations.
[43] Consideration of the broader objectives and principles of section 20 does not assist with the interpretation of the access rule in this case. This case differs from the Beach Road case, where the meaning of the term “residential accommodation” in the particular context became clear only after consideration of the objectives and policies of the Marina Zone in the district plan. In this case, both the meanings contended for by the parties are able to be reconciled with the general issues, objectives, policies and methods set out in section 20 of the plan, and the immediate context (the access rule itself) does not drive the reader to an interpretation which cannot be gleaned from paragraph (b) itself.
[44] The respondents argued that an interpretation of the rule in a way which limited the exemption in paragraph (b) to situations where a site has no access whatsoever could yield an anomalous result in some situations. Mr More gave as an example a situation where streets are laid out in a grid fashion and a site has frontages to two roads, neither of which meet the 70 metre requirement set out in table 20.4. He said that in this situation there would be no access at all if the rule were interpreted as the appellant contends it should be. We accept that, in that situation, the words “the intersection” at the end of paragraph (b) would need to be interpreted as “an intersection” in order to yield a sensible result. That situation illustrates that the drafting of rule could be improved, but it does not lead us to determine that a strained interpretation of the rule is justified. In our view the interpretation contended for by the respondents requires the reader to ignore the term “whatsoever” and to add additional wording referring to each frontage. We see no justification for doing that.
[45] Mr Page, for the Council, submitted that paragraph (b) should be read so as to minimise the restriction on a frontager’s right of access to a street from any part of the boundary. Mr Page referred to Fuller v MacLeod. We do not accept that that case does have any bearing on the proper interpretation of section 20 of the plan and, in particular, the interpretation of the access rule. There is no challenge by any party to the validity of section 20 or to the validity of the access rule. There can be no doubt that the access rule is a substantial restriction on what would have been a frontager’s rights at common law. The common law rules were developed at a time when modern traffic conditions were unheard of. The focus in Fuller was quite different from the focus in the present case. Fuller was primarily a dispute between two neighbours in a situation where the activities of one in attempting to improve access to his property gravely affected the other’s access to his. Further, the Court stressed in that case that common law rights must yield to statutory limitations (see, for instance, at 395). The access rule, having the effect of a regulation, is a statutory limitation. The fact that the access rule, like the RMA generally, affects a land owner’s common law rights does not call for any special rules of interpretation.
[46] John Hansen J accepted that the interpretation which found favour with him was at odds with the interpretation of a very similar rule in the Christchurch City district plan by Panckhurst J in O’Connell Construction Ltd v Christchurch City Council. In O’Connell, the provision under consideration was essentially the same as exemption (b) in paragraph (iii). Panckhurst J rejected the argument that the rule should be interpreted as applying to individual frontages and saw the provision as creating an exemption for a site where otherwise there would not be any vehicle crossing whatsoever to the boundaries of the site. He believed that was clear and unambiguous, and also rejected the argument that it was contrary to the policy underpinning the rule. John Hansen J attributed the different interpretation in this case on the basis that the O’Connell situation was different and that the objectives considered by Panckhurst J in O’Connell differed from those in the Dunedin Plan. In particular, he noted that the interpretation adopted by Panckhurst J in O’Connell did not conflict with the planning document, whereas the interpretation in this case would conflict with the roading hierarchy. As we have already said, we do not accept that contention because the interpretations put forward by both the appellants and the respondents could be seen to be consistent with the roading hierarchy.
[47] In our view there was no basis for distinguishing this case from O’Connell. We find ourselves in agreement with the approach adopted by Panckhurst J and the result it yielded and we believe that the same interpretation should be adopted in this case.
[48] We acknowledge that the Christchurch provision under consideration by Panckhurst J dealt more effectively with the anomaly raised by Mr More (see para [44] above). In the situation where no access whatsoever could be obtained to a site in conformity with the relevant rule, the Christchurch provision provided that a single access was permitted “in the position which most nearly complies with the provisions of [the relevant table]” (in contrast to the Dunedin provision which refers to “the position furthest from the intersection”). We accept that there is the potential for an anomalous outcome in relation to the Dunedin provision which would not be present in the Christchurch provision. But the fact that the access rule does not deal adequately with one potential fact scenario does not, in our view, justify adopting a strained interpretation to avoid the possibility that the anomaly may arise in the future.

Conclusion: interpretation

[49] We conclude that the access rule requires that, in the present case, no access be located closer than 70 metres from the intersection of Highgate and City Road. As it is not possible to meet that requirement, exemption (b) comes into play. However, that exemption does not apply in the present case because the supermarket site is not a site which has no vehicle access whatsoever conforming with the access rule – it does have such an access, albeit in a local road, Ann Street. Thus it is not possible to provide an access way from the supermarket site to Highgate in conformity with the rule. For that reason it would be necessary to obtain a resource consent for a development proposal which requires such an access.

Non-notification : the permitted baseline

[50] As we have found that a resource consent is required for the supermarket development, it is now necessary to determine whether, in view of our interpretation of the access rule, the resource consent application ought to have been notified. In the High Court, John Hansen J considered this issue (although his conclusion in relation to the access rule did not make it strictly necessary to do so), and concluded that non-notification was appropriate. The appellants argued that his finding on that issue was wrong.
[51] The starting point is the relevant statutory provision, s94(2) of the RMA. Section 94 has recently been amended, but at the relevant time s94(2) provided:

2. An application for a resource consent need not be notified in accordance with section 93, if the application relates to a discretionary activity or a non-complying activity and¾

(a) The consent authority is satisfied that the adverse effect on the environment of the activity for which consent is sought will be minor; and

(b) Written approval has been obtained from every person whom the consent authority is satisfied may be adversely affected by the granting of the resource consent unless the authority considers it is unreasonable in the circumstances to require the obtaining of every such approval.
[52] There was no real dispute about the test to be applied in relation to decisions under s94. In Bayley (at 576) this Court said:

Before s 94 authorises the processing of an application for a resource consent on a non-notified basis the consent authority must satisfy itself, first, that the activity for which consent is sought will not have any adverse effect on the environment which is more than a minor effect. The appropriate comparison of the activity for which the consent is sought is with what either is being lawfully done on the land or could be done there as of right. In the present case the starting point is that business activities are permitted. Then, at the second stage of its consideration, the authority must consider whether there is any adverse effect, including any minor effect, which may affect any person. It can disregard only such adverse effects as will certainly be de minimis, of which the minimal intrusion of the closets into the yard space may be an example, and those whose occurrence is merely a remote possibility. With no more than that very limited tolerance, the consent authority must require the applicant to produce a written consent from every person who may be adversely affected. It should not be overlooked also that “effect” in s 3 includes a temporary effect, which requires the authority to consider adverse effects which may be created by the carrying out of construction work.

[53] The test set out in Bayley was further explained by this Court in Smith Chilcott. In particular, the Court explained the approach which should be taken to determining what could be done “as of right” (to use the words of Bayley) on a particular site. The Court said at paras 25-26:

[25] In the part of its decision concerned with the s105(2A) threshold the Environment Court used a number of expressions which the High Court thought had stated the wrong test in terms of Bayley (para [7] above). We agree that it is not enough for the developer to point to a very remote possibility and to treat it as something that could be done as of right: a one-unit building of the permitted maximum height and width on the present site, but with only one very narrow room per floor, for instance. But we also agree with the High Court that comparative tests – for instance, which development is the more likely? – or tests which rely on assessments of financial viability stray from what is called for.

[26] We begin with what is allowed under the relevant plan. In accordance with the purpose of the legislation anything that is permitted but fanciful does not provide a realistic indication of what is permitted and a proper point of comparison. There must be a practical fact specific assessment. The test is perhaps best captured in a single expression as the discussion at the hearing indicated. Of the various phrases used in Barrett and elsewhere, “not fanciful” appears to us to set the standard appropriately. It follows that any permissible use qualifies under the permitted baseline test unless in all the circumstances it is a fanciful use.

[54] The components of the permitted baseline test as set out in Bayley and Smith Chilcott were drawn together by this Court in Arrigato Investments Limited v Auckland Regional Council & Ors [2002] 1 NZLR 323 at para [29], as follows:

[29] Thus the permitted baseline in terms of Bayley, as supplemented by Smith Chilcott Ltd, is the existing environment overlaid with such relevant activity (not being a fanciful activity) as is permitted by the plan. Thus, if the activity permitted by the plan will create some adverse effect on the environment, that adverse effect does not count in the ss 104 and 105 assessments. It is part of the permitted baseline in the sense that it is deemed to be already affecting the environment or, if you like, it is not a relevant adverse effect. The consequence is that only other or further adverse effects emanating from the proposal under consideration are brought to account.

[55] The essence of the dispute between the parties in this case was how the supermarket site should be classified for the purposes of establishing the permitted baseline. The appellants argued, both in this Court and in the High Court, that the Court had to focus on the supermarket site as one lot, and determine what was permissible as of right on that site as a single lot. On the other hand both respondents argued that the supermarket site should be considered as six separate sites, each of which was available for development and two of which had frontages onto Highgate.
[56] For the appellants, Mr Andersen argued that, since amalgamation of the six lots comprising the site was necessary to make the supermarket development a permitted use on the site, any assessment of the baseline should be confined to determining what could be done as a right on the site as a single lot. He said that comparing the supermarket development (which requires the site to be amalgamated) with the permitted use of the site as six separate lots is like comparing apples with oranges.
[57] We are unable to accept Mr Andersen’s submission on this point. The Court has to consider what could be done on the supermarket site as of right i.e. without the need to obtain a resource consent. Obsidian could have demolished the bakery and used the six separate sites for any number of permitted activities, without the need for resource consents. The sites were being amalgamated solely for the purpose of the supermarket development. The possibility of retaining the land as separate sites could certainly not be dismissed as fanciful.
[58] We therefore conclude that John Hansen J was correct to take into consideration the potential uses of the supermarket site if it were subdivided into six (or a smaller number) lots. The significance of that finding is that developments could occur on the supermarket site with one or possibly two frontages onto Highgate as of right. That is a major difference from the position which would apply if the permitted baseline were determined by reference to the supermarket site as one lot only, in which case the only road frontage available as of right would be onto Ann Street.
[59] Having determined that the permitted uses of the site as six lots could be considered, John Hansen J determined that the effects of the supermarket proposal, when measured against the permitted baseline, would be minimal. As the Council did not need to notify the proposal if its adverse effects would be minor, he found non-notification would have been appropriate. We agree with the Judge’s conclusion and reasoning on this issue. There was little that the appellants could argue against it, which is why the argument in this Court on the notification issue was focussed on whether the baseline was one amalgamated lot or six separate lots.
[60] The Judge had before him evidence from a planner engaged by Obsidian, Mr Constantine, who put forward three hypothetical proposals for development of the supermarket site, all of which would comply with the requirements for commercial activity as permitted in a local activity zone.
[61] The first of these scenarios involved six separate permitted activities on the six separate sites. It was postulated that these could include a gymnasium, a takeaway outlet, a video store, a dairy or a bar and café. Additionally, community support facilities could also be located within the local activity zone, and these could include a day care facility for children, the elderly or the disabled, a place of worship, a hall or a language school. If such a development occurred there would be two separate frontages onto Highgate, both of which would be permitted without resource consent.
[62] The expert traffic engineer called by Obsidian, Mr Gamble, calculated the likely traffic movements if there were two developments fronting Highgate, one of which was a video store with five parking spaces, and the other which had similar traffic demands. He calculated that these two developments would generate 420 traffic movements during week day peaks compared with 256 movements onto Highgate from the proposed development (i.e. 64% higher). He said the other permitted activities would generate significant traffic numbers on Ann Street – he calculated there would be a 550% increase in traffic on Ann and Hereford Streets, both of which would then be faced with traffic movements which were more than twice their capacity.
[63] The second scenario put forward by Mr Constantine involved a larger scale development such as a McDonalds or KFC fast food outlet occupying both of the Highgate frontage sites. Mr Constantine said such a facility could include a drive-through facility. The traffic impact of this type of development was not assessed by Mr Gamble.
[64] A further scenario put forward by Mr Constantine was the establishment of an activity of a greater floor area on three or more of the lots of the supermarket site. He postulated the possibility of a small supermarket, a bar/restaurant or a place of worship which would leave sufficient space for parking. Mr Gamble assessed that the traffic impact of this type of development would be similar to Mr Constantine’s first scenario.
[65] Mr Andersen criticised these scenarios as being unrealistic, and said that they should have been dismissed as fanciful. In particular he noted that the scenarios postulated by Mr Constantine involved substantial developments fronting onto Ann Street, which would mean that both Ann Street and Hereford Street would have twice as much traffic as they were capable of carrying. He said that this should be considered fanciful because no developer would undertake a development if it had that impact on the surrounding streets. We do not accept that submission. In our view the scenarios postulated by Mr Constantine were realistic possibilities, and certainly not fanciful.
[66] In the alternative Mr Andersen said that, since the Council had considered the non-notification decision on a flawed basis (because of its incorrect interpretation of the access rule), the matter should be remitted to the Council so that it can determine the issue afresh, and make its own assessment of the extent to which the proposed alternative uses of the supermarket site are fanciful.
[67] We accept that, in an ideal world, the matter should be determined by the consent authority rather than by the Court, since normal notification decisions are decisions which are left in the hands of consent authorities by the legislation, and come before the Courts only in circumstances of judicial review applications. Mr Page and Mr More strongly urged us against that course.
[68] Mr More pointed out that the supermarket development had to be stopped in March 2003, when funding was withdrawn, and said that it would lead to further costly delays for Obsidian if the Court did not determine the matter itself. He pointed out that the Court had before it significant evidence on the impact of the supermarket development and the impact of the alternatives which would be within the permitted baseline, and indeed had before it far greater information than a consent authority would typically have when making a non-notification decision.
[69] We accept Mr More’s submission that, in the unusual circumstances of this case, it is appropriate for the Court to determine the non-notification issue. In particular, we note that the only matter which needs to be assessed in this case is traffic/access, because in all other respects the supermarket development proposal complies with the plan. We agree with the approach taken by John Hansen J. For reasons similar to those adopted in the High Court, we conclude that, in the present case, the only available conclusion from an application of the permitted baseline test is that the effects of the supermarket development proposal would be not more than minor, and that the test in s94(2)(a) is therefore satisfied. That meant that the Council did not need to notify the proposal, and there is therefore no justification for the Court to interfere with the Council’s decision not to notify the proposal. For similar reasons we are satisfied that the Council’s decision to grant resource consent for the proposal should stand.

Discretion

[70] Our conclusions on the non-notification issue mean that it is unnecessary for us to consider the discretion argument.

Result

[71] We dismiss the appeal. Each respondent is entitled to costs of $6,000 together with reasonable disbursements (including the travelling and accommodation costs of counsel where appropriate) to be agreed by counsel or failing agreement to be fixed by the Registrar. The appellants are jointly and severally liable for those costs and disbursements.

Solicitors:
Wilkinson Adams, Dunedin for Appellants
Gallaway Cook Allan, Dunedin for First Respondent
Woodhouse Partner, Dunedin for Second Respondent