The Canyon Vineyard Ltd v Central Otago District Council [2023] NZCA 74 (23 March 2023)

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA583/2022
[2023] NZCA 74

	BETWEEN	THE CANYON VINEYARD LTD Applicant
	AND	CENTRAL OTAGO DISTRICT COUNCIL First Respondent BENDIGO STATION LTD Second Respondent

Court:	French and Mallon JJ
Counsel:	L A Andersen KC and A V J Hamel for Applicant D J Anderson for First Respondent P J Page and S R Peirce for Second Respondent
Judgment: (On the papers)	23 March 2023 at 3 pm

[1] Bendigo Station Limited (Bendigo) owns a vast farming property in Central Otago that takes in much of Bendigo Terrace and parts of the western foothills of the Dunstan Mountain range. It sought resource consent to subdivide just over 163 hectares of its property. The site of the proposed subdivision consists of a scrub filled gully interspersed with open areas that are covered in scab weed and rough pasture. 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 for residential building platforms.^[1] The remaining two lots, Lots 1 and 3, contain existing vineyards and were to be retained as such. The Council granted consent to the creation of 12 lots with consents for residential building platforms on eight of them (Lots 2, 4 to 6, and 8 to 11). It declined the proposal for dwellings on Lots 7 and 12 because it considered dwellings on those two lots would have significant adverse effects.

[3] The Canyon Vineyard Limited (Canyon) opposed Bendigo’s application to the Council. It owns land to the west of Bendigo’s land separated by a gully. It contains a restaurant, wine tasting facility, a function centre, and cinema building (collectively referred to as the Function Centre). A vineyard is on adjacent land. From Canyon’s Function Centre, there are expansive views to the north/north-west over Bendigo Terrace, and the valley of the Clutha River/Mata-Au as it enters Lake Dunstan. There is a direct line of sight from parts of the Function Centre site toward that part of the Bendigo land that is to contain proposed Lots 8 to 11.

[4] Canyon appealed the Council’s decision to the Environment Court. The Environment Court upheld the Council’s decision but in relation to a slightly amended proposal (the Interim decision).^[2] A subsequent decision of the Environment Court approved the amended conditions (the Final decision).^[3] Canyon’s appeal of both the Interim and Final decisions was dismissed by Doogue J in the High Court.^[4] Canyon now seeks leave to appeal to this Court on three questions of law.^[5] Bendigo opposes the leave application.

[5] An appeal from the Environment Court to the High Court is restricted to a question of law.^[6] A second appeal to this Court requires leave.^[7] This Court may only grant leave if the question of law involves a matter of general or public importance or a miscarriage of justice may have occurred or may occur unless the appeal is heard.^[8] The question of law must be capable of bona fide and serious argument, so as to outweigh the cost and delay of a further appeal.^[9]

[6] The first proposed question of law, which Canyon submits is of general and public importance, is:

Does kaitiakitanga for the purposes of s 7(a) [of the Resource Management Act] include an individual’s relationship with particular land or is it limited to more general evidence by rūnanga?

[7] Bendigo’s consent was granted under the Resource Management Act 1991 (the RMA). The purpose of the RMA is to “promote the sustainable management of natural and physical resources.”^[10] In achieving this purpose, everyone exercising functions and powers under the RMA (which includes the Environment Court) is required to have “particular regard” to various specified matters including “kaitiakitanga”.^[11] The RMA defines “kaitiakitanga” as meaning “the exercise of guardianship by the tangata whenua of an area in accordance with tikanga Māori in relation to natural and physical resources ...”.^[12] In turn, it defines “tangata whenua” as “in relation to a particular area, 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 as the iwi exercising mana whenua in the area. The iwi authority is Te Rūnanga o Ngāi Tahu. Hayden Johnston, the director and shareholder of Canyon, affiliates to Ngāi Tahu. He gave evidence in the Environment Court about his whakapapa connection to the land and adverse effects of the proposed subdivision from his perspective. His view was that the subdivision lacked kaitiakitanga. This was because it was driven by maximising the number of houses and the views from them and ignored:

... the importance of an overall harmonious plan, where the parts integrate with each other, with my property, with the adjoining conservation landscape and, most importantly, where the natural feel of this incredibly delicate natural landscape is maintained.

[9] In its Interim decision the Environment Court determined that the appeal was limited to the visual impacts of the proposed Lots 4 (when viewed from the public road and historic schoolhouse premises) and 8 to 11 (when viewed from Canyon’s property) and the implications of the effects of the proposal within the Plan framework.^[14] It said that Mr Johnston was “entitled to express his appreciation of the rural amenities that he experiences and enjoys on his land, although those views will necessarily be subjective.”^[15] The Court went on to say that subjective values needed to be objectively tested and assessed in determining whether there was a reasonable basis for that perspective.^[16] It then discussed the expert evidence of visual effects and concluded that they were no more than minor.^[17]

[10] On appeal, the High Court said that “Mr Johnston’s views as tangata whenua hold weight at first blush.”^[18] However, on the facts, the Judge considered that independent evidence that kaitiakitanga required the land to remain unspoilt was required.^[19] This was because Mr Johnston’s evidence conflicted with his earlier actions in agreeing with the vendors, when he purchased the Canyon land, that he would not oppose development on the Bendigo land.^[20] The Judge went on to say it had not been demonstrated in any event that, even if there had been an error in the Environment Court’s approach to Mr Johnston’s evidence, that it would have been material to the ultimate outcome.^[21]

[11] Canyon submits the Judge erred in taking into account the agreement Mr Johnston reached with the vendors because it was not part of the evidence before the 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 Bendigo was not a party to that agreement, the non-objection condition in the agreement was not a registered covenant and that condition would not have applied because any development application had to be “in conformity with the RMA”. These are technical points. They do not go to the substance of the point the High Court made, and was entitled to make, as to why in the circumstances independent evidence before the Environment Court that kaitiakatanga required an unspoilt view from Canyon’s land or other relevant locations was necessary.

[12] The first proposed question is a question of law. It would arguably be of general and public importance in a case where it may affect the outcome. This is not such a case. Neither the Interim decision nor the High Court rejected Mr Johnston’s evidence simply because it came from an individual rather than the rūnanga. His evidence was considered but rejected for the reasons they explained. Those reasons do not give rise to an error of law.

[13] The second proposed question, said by Canyon to be of general and public importance, 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:

Did the High Court correctly assess effects by applying the correct test to the words “maintain the rural environment” in Objective 4.3.3 of the Central Otago District Council Plan:

[14] Section 104D(1) of the RMA provides that a consent authority may grant consent for a non-complying activity only if it is satisfied of one or other of (as relevant) the following (emphasis added):

[15] The proposed subdivision site is zoned Rural Resource Area (RU). Section 4 of the Plan addresses landscape issues within the RU. Most relevantly for present purposes is the objective set out in section 4.3.3. It provides (emphasis added):

To maintain and where practicable enhance rural amenity values created by the open space, landscape, natural character and built environment values of the District’s rural environment, and to maintain the open natural character of the hills and ranges.

[16] Under the Plan, this objective is implemented through a number of policies. They include:

To manage the effects of land use activities and subdivision to ensure that adverse effects on the open space, landscape, natural character and amenity values of the rural environment are avoided, remedied or mitigated through:

To ensure the subdivision and use of land in the Rural Resource Area avoids, remedies or mitigates adverse effects on:

[18] The Interim decision noted that the part of Objective 4.3.3 that was put in issue was “[t]o maintain and where practicable enhance rural amenity value ...”.^[22] Referring to Harris v Central Otago District Council, the Court considered the rural subdivision policy contemplated different degrees of adverse effects of subdivision and that a decision on whether avoiding, remedying or mitigating those effects depended on the context.^[23] For the purposes of Policy 4.4.2, in deciding whether adverse effects should be avoided, remedied or mitigated, the goal expressed in Objective 4.3.3 must inform that assessment so that the rural amenity values are maintained.^[24]

[19] The Interim decision referred to Port Otago Ltd v Dunedin City Council in support of the view that “to maintain” allowed a Council to “protect rather than preserve or enhance” and that “to protect” meant to “keep safe from harm or injury”.^[25] The Court also agreed with the observation in Harris that “[what] the policy does not say is that adverse effects should simply be avoided.”^[26]

[20] The Interim decision noted Objective 4.3.3 stated the rural amenity values of this rural environment are created by the “open space, landscape, natural character and built environment values of the rural environment” involved.^[27] In assessing amenity value, the Court considered that it was relevant that the landscape category of the site was 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 the foothills to the Dunstan Mountains have scenic qualities, they do not have the same degree of wildness and remoteness as the upper mountains that are within the ONL.^[29] The Court referred to the Plan’s description of the RU as enhanced by the “human made elements” which were stated as including the orchards and vineyards and homesteads accompanied by stands of trees.^[30]

[22] The Court considered that Policy 4.4.2(b) applied both to public and private amenity values. This meant that Canyon was entitled to expect that any development on the site would maintain, if not enhance, the rural amenity values experienced and enjoyed from the Function Centre site.^[31] The Court accepted that a visual change to the area did not automatically equate to one that was incompatible with the surrounding environment (including the visual amenity values experienced at Canyon).^[32]

[23] The Court rejected Canyon’s submission that “to be compatible with” under Policy 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”, “be homogenous with” or “not be discordant with” the amenity values enjoyed by Canyon.^[33] If this was achieved, then the rural amenity values of the rural environment would be maintained. In the Court’s view, this was possible where new built development was introduced. In its view, there was nothing in the Plan to support Canyon’s approach that visibility of any part of the development equated to an adverse effect on Canyon.^[34]

[24] The Court accepted the evidence of two experts that the rural amenity values on the Function Centre would be maintained and the development on Lots 8 to 11 would be compatible with the surrounding environment. This meant that the proposal would 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 was satisfied.^[35]

[25] On appeal to the High Court, Canyon submitted that the Environment Court in its Interim decision had misinterpreted “maintain” under Objective 4.3.3 and had read down the words “contrary to” in s 104D(1)(b). The Judge reviewed several authorities and found that “to maintain” meant “to protect rather than preserve or enhance” which in turn meant “to keep safe from harm or injury”.^[36] She accepted that to maintain did not require a landscape to be frozen in time and anticipated land use change in a way that maintained amenity.^[37] This meant that Canyon was not entitled to “an unspoilt landscape” with no visible buildings from all parts of its property.^[38]

[26] The Judge also found that the Interim decision reference to “repugnant or antagonistic” to the rural amenity values was to be viewed in the context of Canyon’s submission that “to maintain” required the continuation of an unspoilt or undomesticated rural environment.^[39] She referred to New Zealand Rail Ltd v Marlborough District Council as authority that “contrary to” contemplated a proposal that was not “opposed to in nature, different to or opposite ... repugnant and antagonistic” to the relevant objective and policies.^[40] She considered that the Interim decision 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 an ORL’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 assessed effects 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”. That question misstates what the High Court decided. The High Court upheld the Environment Court’s view that the “rural amenity values” in an ORL included the built environment and the proposal was compatible with the surrounding environment, including the visual amenity value at Canyon’s Functions Centre. There was no finding that there were any effects that breached the specified values.

[28] Canyon further proposes as a question of law that the High Court erred by holding 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 a rural amenity if it decreases the amenity. It submits that Bendigo’s proposed domestication of an unspoilt rural area, which it also describes as a “degradation” of the environment, is contrary to the amenities of the existing rural amenity if “contrary to” is given its normal meaning.

[29] That submission overlooks that s 104D(1)(b) provides that the consenting authority must be satisfied that the development “will not be contrary to the objectives and policies of ... the relevant plan”. The rural amenity values of the relevant plan include the built environment and contemplate development of the built environment that would protect or enhance the ORL environment. It was not premised on an unchanged environment.

[30] We conclude that the proposed question of law misstates the High Court’s approach. It is not arguable that the incorrect test was applied to determine whether the proposal maintained the rural amenity value as required by Objective 4.3.3, nor to whether 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 any visible building on the site reflected a misunderstanding under the “objectives and policies of ... the relevant plan”.^[42]

[31] The third proposed question of law, said by Canyon to give rise to a miscarriage of justice, is:

Does the Environment Court have jurisdiction to amend the plan that forms part 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 submitted with the proposed consent conditions considered by the Environment Court in its Final decision. This mound was no longer required for one of its originally intended purposes but its secondary purpose was to screen views of the driveway to Lot 8. The surveyor preparing the plans considered by the Environment Court in its Interim decision omitted the mound on the erroneous assumption that it was no longer required.

[33] The Interim decision discussed this when considering the appeal from the Council’s decision as follows:^[43]

[60] The amended plans did not depict the secondary mound originally shown on Lot 8, although we understand that removal was inadvertent. Bendigo intends that this be reinstated, and Mr Smith undertook his visual assessment on that basis.

[34] The Interim decision did not finalise the conditions of the consent because of other anomalies raised by Canyon and also to allow further consideration to be given to the definition of “simple gable roof”.^[44] Contrary to what was envisaged at the time of the Interim decision, the submitted plans were not updated to include the mound on Lot 8 when the conditions were considered in the Final decision.^[45] In approving the conditions proposed by Bendigo, the Environment Court rejected Canyon’s proposed changes and additions in the Final decision because they went beyond the ambit that the Environment Court had called for in the Interim decision and were unsupported by the evidence given at the hearing.^[46]

[35] On appeal to the High Court, Bendigo accepted that the mound ought to have been shown on Lot 8. It submitted that this should be addressed by the Environment Court pursuant to its power to correct an accidental slip or omission in a judgment or order.^[47]

[199] Owing to the clerical error of Bendigo’s expert witnesses, the revised plans did not reflect [the] intention of the EC in its Interim Decision to reinstate the second mound. Accordingly, these revised plans should be amended to reflect the proper meanings and intentions of the Interim Decision.

[200] To rectify this error, Bendigo offered to produce an updated plan that includes the second mound, and to file a joint memorandum to the EC alerting it [to] this issue and requesting that it rectify this error. That course should be adopted, and the jurisdiction of the Court need not be engaged.

[37] Canyon submits that a miscarriage will occur if leave to appeal is not granted because the Environment Court’s approval of the plans without the mound in the Final decision was not a clerical error and that Court is now functus officio. It says that this is because it pointed out the omission of the mound in its submissions to the Environment 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 the conditions and plans does not specifically refer to the omission of Lot 8. Whatever may have been said in the submissions to it, it is not apparent that the Environment Court turned its mind to the omission in the Final decision. It is clear that its Interim decision was founded on the basis that the mound was intended by Bendigo to be reinstated and that it had considered Canyon’s proposal on the basis of expert evidence that similarly proceeded on that basis. In approving conditions and plans that did not include 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 is therefore capable of correction by the Environment Court in order to give effect to its Interim decision pursuant to which the consent to the proposal was given.

[40] The applicant must pay the respondents’ costs for a standard application on a band A basis and usual disbursements.

Solicitors:
Antony Hamel, Dunedin for Applicant
Mactodd Lawyers, Queenstown for First Respondent
Gallaway Cook Allan Lawyers, Dunedin for Second Respondent

^[1] 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 [Interim decision] 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 Court decision].

^[7] RMA, s 308(1), incorporating s 303 of the Criminal Procedure Act 2011 with necessary modifications.

^[14] Interim decision, above n 2, at [29] and [44]; and High Court decision, above n 4, at [165]–[170].

^[23] At [141]-[142], referring to Harris v Central Otago District Council [2016] NZEnvC 52.

^[25] At [147], citing Port Otago Ltd v Dunedin City Council EnvC Christchurch C004/02, 22 January 2002.

^[47] RMA, s 278; District Court Rules, r 11.10; and High Court decision, above n 4, at [197].

Court of Appeal of New Zealand

The Canyon Vineyard Ltd v Central Otago District Council [2023] NZCA 74 (23 March 2023)