Ray Wallace Limited v Auckland Council (Formerly Papakura District Council) HC Auckland CIV 2011-404-3887 [2011] NZHC 1446 (20 October 2011)

Last Updated: 11 November 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV 2011-404-3887}

UNDER the Resource Management Act 1991

IN THE MATTER OF an appeal pursuant to s 299 of the Resource Management Act from a decision of the Environment Court

BETWEEN RAY WALLACE LIMITED Appellant

AND AUCKLAND COUNCIL (FORMERLY PAPAKURA DISTRICT COUNCIL) First Respondent

AND SOUTHGATE CENTRE LIMITED, RETAIL HOLDINGS LIMITED AND ADDISON DEVELOPMENTS LIMITED Second Respondents

Hearing: 19 October 2011

Appearances: R Brabant for Appellant

No appearances for First Respondent and Second Respondents

(counsel previously excused) Judgment: 20 October 2011 at 2:00 PM

_{JUDGMENT OF WHITE J}

This judgment was delivered by me on 20 October 2011 at 2.00 pm pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar

Date: ......................

Counsel: R Brabant, Auckland: [e-mail]

Solicitors: Atkins Holm Joseph Majurey, Auckland: [e-mail]

Chapman Tripp, Auckland: [e-mail] and [e-mail]

RAY WALLACE LTD V AUCKLAND COUNCIL HC AK CIV 2011-404-3887 20 October 2011

[1] This is an appeal against a decision of the Environment Court delivered on

3 June 2011 relating to one aspect of the determination of appeals from the Papakura District Council (now the Auckland Council) concerning planning for urban growth in the Takanini area of South Auckland. The aspect the subject of the appeal is a direction by the Environment Court that the terms of Plan Change 12 to the Papakura District Plan were those jointly proposed by the Council and the second respondents rather than those proposed by the appellant, Ray Wallace Limited (RWL).

[2] RWL challenges the decision of the Environment Court essentially on the ground that the Court failed to apply the correct legal test when it concluded that the “joint version” was preferable to the “RWL version” without assessing either version against the provisions of the Resource Management Act 1991 (the RMA) and relevant case law. RWL asks this Court to allow the appeal and to remit the matter to the Environment Court under r 20.19 of the High Court Rules with a direction that the Environment Court reconsider the proposed versions of Plan Change 12 and give a reasoned decision following its reconsideration.

[3] None of the respondents appeared to oppose the appeal:

(a) The Council, Southgate Centre Limited (Southgate Centre) and Retail Holdings Limited (Retail Holdings) filed memoranda abiding the decision of the Court; and

(b) Addison Developments Limited (Addison Developments) filed a memorandum indicating that it did not wish to participate in the appeal.

[4] In terms of ss 299(2) and 301 of the RMA and r 20.17 of the High Court Rules, the Environment Court may have been entitled to be represented and heard at the hearing of the appeal, but in accordance with normal practice no steps were taken on behalf of the Court for that purpose. In view of the relief sought by RWL, I did not consider it necessary to adjourn the hearing to provide the Court with an opportunity to be represented.

[5] After reading the relevant decisions and documents and the submissions for RWL and after hearing from Mr Brabant, counsel for RWL, I indicated at the end of the hearing that I would allow the appeal and remit the matter to the Environment Court under r 20.19 with the directions sought by RWL. These are my reasons for my decision.

[6] The approach to be adopted by a territorial authority in changing its district plan is prescribed by s 74 of the RMA. Under s 74(1) a territorial authority must change its plan in accordance with its functions under s 31, the provisions of Part 2, a direction given under s 25A(2), its duty under s 32, and any regulations. Under s 74(2) a territorial authority, when changing a plan, must have regard to any proposed regional policy statement, proposed regional plan, management plans and strategies prepared under other Acts, any relevant entry in the Historic Places Register and any relevant regulations.

[7] A territorial authority’s duty under s 32 includes the need to carry out an evaluation that examines the extent to which each objective is the most appropriate way to achieve the purpose of the RMA and whether, having regard to their efficiency and effectiveness, the policies, rules, or other methods are the most appropriate for achieving the objectives: s 32(3). For the purposes of the examinations, an evaluation must take into account the benefits and costs of policies, rules, or other methods, and the risk of acting or not acting if there is uncertain or insufficient information about the subject matter of the policies, rules, or other methods: s 32(4). The correct approach to the application of these provisions is

helpfully described in Orewa Land Ltd v Auckland Council.[1]

[8] The Environment Court on appeal from a territorial authority is required to adopt the same approach as the territorial authority: RMA, s 290.

[9] A party to a proceeding before the Environment Court may appeal on a question of law to the High Court against any decision of the Environment Court in the proceeding: RMA, s 299(1). The correct approach to appeals from the

_{Environment Court to the High Court is set out in Estate Homes Ltd v Waitakere City}

Council.[2] The High Court is confined to the correction of legal error on the statutory appeal on points of law.

[10] In the present case Mr Brabant submitted and I accept that the task of the Court is to decide whether the decision of the Environment Court “was one that could be arrived at by rational process in accordance with a proper interpretation of the law and upon the evidence”: Stark v Auckland Regional Council and Contact Energy Ltd v Waikato Regional Council.[3]

[11] The issue arises in the present case because of the manner in which Plan Change 12 was approached and addressed by the parties and the Environment Court. The starting point is that RWL’s expert planning witness, Ms M Carr (subsequently Mrs M Baker), prepared the first draft of a complete text for the terms of Plan Change 12. This draft, which was Appendix J to her evidence, was considered by the Environment Court at its hearing in July 2010 and was the subject of the Court’s interim decision issued on 29 November 2010.

[12] In its interim decision of that date, the Environment Court, after taking into account the legal framework under the RMA for considering plan changes (decision at [15]-[16] and [36]-[55]), concluded at [60]:

Overall, in terms of the higher order objectives and policies of the District Plan, and other relevant planning documents, we find that a mixed use zone, generally as described in Appendix J to Mrs Baker’s evidence, on the RWL land is more consistent with the strategic directions than the Residential 8 zone. Having said that, we are more than a little concerned that the particular provisions attached to Mrs Baker’s evidence would introduce some 30 pages of text to the District Plan – for what is a rather small land area of 5.4 hectares. During the hearing the Court raised a number of related matters, including the similarity with the activities provided for in the Southgate Commercial 2 zoning and the extensive lists of assessment criteria applying to controlled and restricted discretionary activities, which in some cases number at least 34 matters. We think there must be better ways of providing for such a zone. In closing, counsel for the Council raised some concern about difficulties with administration because the Council had not been consulted. In determining that a mixed use zone is appropriate for the

RWL land we direct the Council to consult with the other parties with a view to agreeing on the provisions to be included in the Plan.

[13] Acting in accordance with the Court’s direction, the Council and the parties did consult, but were not able to reach agreement on the provisions to be included in the Plan. Instead two alternative versions of the terms, one from RWL and the other from the Council, Addison Developments and Southgate Centre, were submitted to the Environment Court for consideration and determination without the need for a further hearing.

[14] In its final decision of 3 June 2011 the Environment Court directed that the terms of Plan Change 12 were to be those “jointly proposed by Southgate Centre Limited, Retail Holdings Limited, Addison Developments Limited and the (now) Auckland Council”. The Court’s reasons for this direction were given in its final decision as follows:

[4] Having worked through the comparative versions of the terms ... we have to say that many of the differences seem to us to be matters of drafting preference rather than meaningful difference, and that either version would probably serve well enough.

[5] While the settling of Plan, or Plan Change, provisions is not necessarily a case of the majority prevailing, we have to say that where four out of five parties to the appeals agree on a formula of words, one does rather look at the minority view of the fifth with a sharp eye, to try to ascertain why it should be preferred.

[6] Here, in each case where there is a difference between the versions, we have to say that we see no good reason, in substantive result or simply choice of words, to prefer the Ray Wallace provisions.

[15] I accept the submissions for RWL that there are a number of significant difficulties with the reasoning of the Environment Court for making the direction which it did.

[16] First, an examination of the two alternative versions of the terms of Plan Change 12 shows that, contrary to the decision of the Environment Court, there are several significant differences between them. For instance:

(a) The use of the word “ensure” in the Council version rather than the word “enable” in the RWL version is a substantive difference, not a

matter simply of “drafting preference”. The word “enable” was inserted in the RWL version in recognition of the enabling provisions of the RMA and following questions put to Mrs Baker during the Environment Court hearings.

(b) The differences between the provisions set out in the two versions relating to the Desired Outcomes to be achieved by the zone involves substantive not simply drafting preferences.

(c) There is a significant difference between the parties over the wording of Policy 1.

(d) In the Activity Table, there are six substantive differences, not simply drafting preferences.

(e) In relation to 16.4.3.2 – Matters for Discretion – restricted discretionary activities, there are matters of substantive difference, as there are also in the assessment criteria (16.4.4).

(f) In relation to performance standards, the Council version has a height in relation to boundary control on two road frontages which does not appear in the RWL version.

(g) The Council version has a new performance standard requiring a “Minimum Residential Component” which is a change of significance beyond a simple drafting preference. The rule would limit maximum gross floor area to 20,000 m2 and would introduce a 5,000 m2 gross floor area “trigger”. The threshold figures are arbitrary and unexplained in the Council version.

[17] Second, it was not appropriate for the Court to adopt a “majority rules” approach. The Environment Court was obliged to assess the two versions of Plan Change 12 against the relevant provisions of the RMA and relevant case law. There is no indication from the Court’s final decision that it did so. It should also be noted

that Retail Holdings was not a party to the version of the terms proposed by the

Council, Addison Developments and Southgate Centre.

[18] Third, the Environment Court gave no adequate reasons for rejecting RWL’s proposal, notwithstanding –

(a) its acceptance in its interim decision that Appendix J to Mrs Baker’s evidence was “more consistent with the strategic directions than the Residential 8 zone”;

(b) RWL’s proposal was prepared on the basis that it met the points raised by the Environment Court in its interim decision at [60]; and

(c) RWL’s proposal was in fact significantly shorter than the version proposed by the Council, Addison Developments and Southgate Centre.

[19] For these reasons I therefore also accept the submission for RWL that the Environment Court’s final decision was not arrived at by a rational process. The Court’s decision was in error because it failed to apply the correct legal test in assessing the two versions against the relevant provisions of the RMA and relevant case law.

[20] In these circumstances the appropriate remedy is to remit the case to the Environment Court, as the specialist tribunal, to reconsider the two versions of the terms for Plan Change 12: Waitakere City Council v Estate Homes Ltd and Te Rūnanga-Ā-Iwi O Ngāti Kahu v Far North District Council.[4]

Result

[21] Accordingly, RWL’s appeal is allowed and acting under r 20.19 of the High

_{Court Rules I remit the case to the Environment Court with a direction that it}

reconsider the question of the appropriate terms for Plan Change 12 in accordance with the provisions of s 74 of the RMA.

[22] I understand from Mr Brabant that RWL will be able to ask the Environment Court to arrange a further hearing and that no formal direction is required for that purpose.

[23] As RWL has succeeded in its appeal and notwithstanding the suggestion by the Council in its memorandum of 31 August 2011 that costs should lie where they fall, there does not appear to me to be any reason why RWL should not be entitled to its costs against the Council on a category 2 basis in accordance with [2](b) of the minute of Asher J dated 18 July 2011, with disbursements to be fixed by the Registrar. If, however, the parties are unable to agree on costs, then RWL may file and serve a memorandum on the issue within 14 days of the date of this judgment

_{and the Council may respond with its memorandum within a further 14 days.}

D J White J

---

[1] Orewa Land Ltd v Auckland Council HC Auckland CIV-2010-404-6912, 21 April 2011 at [30].

[2] Estate Homes Ltd v Waitakere City Council [2006] 2 NZLR 619 (CA) at [198]-[199]; and Te Rūnanga-Ā-Iwi O Ngāti Kahu v Far North District Council HC Whangarei CIV-2010-488-766, _{29 September 2011, at [53]-[55].}
[3] Stark v Auckland Regional Council [1994] 3 NZLR 614 at 617; and Contact Energy Ltd v Waikato Regional Council [2006] NZHC 1523; [2007] 14 ELRNZ 128 (HC) at [56]-[57].

[4] Waitakere City Council v Estate Homes Ltd [2006] NZSC 112, [2007] 2 NZLR 149 at [70]; and Te

Rūnanga-Ā-Iwi O Ngāti Kahu v Far North District Council HC Whangarei CIV-2010-488-766,

29 September 2011, at [153]-[154].