Pascoe Properties Ltd v Nelson City Council HC Auckland CIV-2011-442-126 [2011] NZHC 332; [2012] NZRMA 232 (21 April 2011)

Last Updated: 1 June 2011

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

_{CIV-2011-442-126}

UNDER Judicature Amendment Act 1972

IN THE MATTER OF Applications for review of decisions of the Nelson City Council relating to Montgomery carpark

BETWEEN PASCOE PROPERTIES LIMITED First Plaintiff

AND JOHN MALCOLM FITCHETT Second Plaintiff

AND NELSON CITY COUNCIL Defendant

Hearing: 11 April 2011

(Heard at Wellington)

Counsel: J M Fitchett for Plaintiffs

CCM Owen for Defendant

Judgment: 21 April 2011 at 3:45 PM

_{I direct the Registrar to endorse this judgment with a delivery time of 3.45pm on the}

21st day of April 2011.

_{RESERVED JUDGMENT OF MACKENZIE J}

[1] This is an application for judicial review of decisions of the Nelson City Council (NCC or “the Council”) relating to the public carpark known as the Montgomery Carpark in the Nelson city central business district.

[2] The proceeding was commenced on 22 March 2011. An application for interim relief, particularly an interim order restraining the NCC from accepting any

PASCOE PROPERTIES LIMITED V NELSON CITY COUNCIL HC NEL CIV-2011-442-126 21 April 2011

tender for the construction of the reordering (or partial reordering) of the Montgomery Carpark until further order of the Court was sought. That application was made on notice. A considerable degree of urgency arises from the fact that tenders have been called, with the intention that work be completed before the Rugby World Cup later this year. I was informed from the bar that, to meet this deadline, work should commence no later than early May. By the time of an initial case management conference on 4 April 2011, the Registrar at Wellington had been able to allocate a one day hearing for 11 April 2011. With the cooperation of all parties, it was agreed that it would be feasible to argue the substantive application for judicial review, and not merely the application for interim relief, at that hearing. Accordingly, I have heard the substantive application for judicial review.

[3] The Montgomery Carpark is a public carpark operated by NCC. It is situated within a central city block bounded by Trafalgar, Hardy, Rutherford and Bridge Streets. It does not occupy the whole of that block, because there are buildings facing each of those four streets. The carpark is situated behind those buildings, and there are access lanes to the streets. The first plaintiff is the owner of a building (the BNZ building) fronting to Trafalgar Street and adjacent, at the rear, to the carpark. On the northern side of the building there is a service lane known as Bank Lane providing access from Trafalgar Street to the carpark. That is a legal road, although its present configuration is such that it provides non-vehicular access only. The second plaintiff is the lessee (from a family trust) of first floor premises in a building fronting Hardy Street and adjoining the Montgomery Carpark at the rear. (I interpolate to note that Mr Fitchett is both plaintiff and counsel. Mr Fitchett indicated from the bar that it had been his intention to brief other counsel, but that this was not practicable given the urgency with which the matter was heard.) The land on which the carpark is situated is owned by NCC, part in fee simple and part as lessee from Wakatu Incorporation. The carpark was developed by NCC in the 1970s and has been used as a carpark ever since. The acquisition of the land constituting the Montgomery Carpark was funded by an additional rating levy (generally in the nature of what is known as a targeted rate pursuant to the provisions of the Local Government (Rating) Act 2002) imposed on inner city rate payers, being the owners or occupiers of properties generally within the central city area bounded by Halifax, Collingwood and Rutherford Streets and Selwyn Place.

[4] In about August 2009 NCC promulgated a strategy known as Heart of Nelson

Central City Strategy (HON) which was adopted by a resolution on

3 September 2009. Part of that strategy included the provision of high quality public spaces in the city centre specifically “develop pocket parks in Montgomery Square including the Bank Lane connection from Trafalgar Street”. The HON documentation concept sketch and plans showing certain developments for Montgomery Square. NCC provided funds in its 2010/2011 Annual Plan for the implementation for part of HON and publicised that the estimated total cost of the reordering of Montgomery Carpark would be $1.2m. The plan was adopted on

17 June 2010.

[5] The plaintiffs assert that in late August or September 2010 they became aware for the first time that NCC planned to redevelop Montgomery Carpark in a manner substantially different from that shown in HON. They assert that the Council’s plan proposed:

(i) to build a “pocket park” between the Toilet Block (near the middle of Montgomery Carpark) and the BNZ site: such pocket park to have substantial grassed areas, to be on sloping planes and to be substantially sited on the principal designed allotment;

(ii) to remove approximately 26 carparks from the principal designed land;

(iii) to change the operation of vehicles in Montgomery Carpark from two-way throughout, to a one-way clockwise lane around the inside of the perimeter;

(iv) to change the layout of the vehicular exit from Montgomery Carpark to Hardy Street from the existing two lanes (namely one lane turning right to the west and one lane turning left to the east) to a single lane;

(v) to change the traffic lanes for traffic travelling west on Hardy Street from the existing two lanes (with one lane for through traffic and one lane for traffic turning right from Hardy Street to Montgomery Carpark); to a single west bound lane whereby traffic turning right into Montgomery Carpark (but held up by east bound traffic) would impede west bound through-traffic on Hardy Street;

(vi) to block off approximately two-thirds of the access hitherto available from the adjacent land to the BNZ site;

(vii) to construct the clockwise lane around the extremity of Montgomery Carpark in a manner that it could not be used by semi-trailers, large trucks, some Fire Service vehicles, or coaches.

[6] Public reaction to the NCC proposals led to a public consultation meeting called by the Council on 8 September 2010. At that meeting, opposition to the proposal going ahead was expressed and the minutes note that a vote was taken and those present voted overwhelmingly against the proposal going ahead. On the following day, 9 September, the proposal was discussed at a Council meeting. Four councillors had moved a notice of motion to revoke any resolutions of the Council which authorised changes to the layout of the Montgomery Carpark and expenditure for such work. Following discussion of that resolution, and amendments moved to it, the motion that work around the Montgomery Square redevelopment be stopped and the whole matter re-debated by the incoming Council was lost. A subsequent motion that the consultants continue with the development of the plan taking into account feedback from consultation meetings and from councillors and report the revised design back to Council in two weeks time for information only was passed. A revised plan was presented to the Council on 23 September 2010. On

23 February 2011 NCC called tenders for the construction of the reordering of the

Montgomery Carpark generally in accordance with that revised plan.

[7] The plaintiffs plead a number of causes of action. I propose to deal first with the fifth cause of action, which alleges a failure to consult on the part of NCC as to the reordering of the Montgomery Carpark. Counsel for NCC rightly notes that the real issue at the heart of these proceedings is consultation, and that the real challenge the Council needs to address is the development, firstly, of the HON strategy, and, secondly the design of the Montgomery Square upgrade project to the point where it has been finalised and tenders called. That is the way in which I consider the plaintiffs’ claims should be addressed, particularly having regard to the urgency which attaches to this proceeding.

[8] The plaintiffs assert in essence that they and other owners and occupiers of properties fronting the carpark had a legitimate expectation that they would be consulted, generally in the manner set out in s 82 of the Local Government Act 2002, as to any reordering of the carpark before NCC called tenders. They assert that all rate payers of properties fronting the carpark, together with other inner city rate payers, or their predecessors, paid the full cost of developing the carpark, that their businesses depend on the provision of adequate carparking, that there has been no or

insufficient consultation on the proposals and that NCC’s Chief Executive’s responsibility to implement decisions of the Council did not extend to authorising works beyond that referred to in the Annual Plan unless there had first been appropriate consultation with affected or interested parties. They assert that there was no consultation between the publication of HON and the adoption of the Annual Plan by the Council on 17 June 2010. They further assert that no comment was sought on the plans prepared by the consultant in May and June 2010 and that there was no consultation until shortly before 9 September 2010, in particular that there was no general publicity or notice to affected parties in respect of the meeting held on 8 September 2010. They assert that a further meeting held on 29 September 2010 was not adequate consultation and that no changes of substance were made to the plan consequential on the views expressed at that meeting.

[9] The first issue on this cause of action is whether there was a duty to consult affected owners before deciding to make the intended changes to the carpark. Such an obligation might arise either from a specific duty to consult, or from a legitimate expectation on the part of the affected property owners that they would be consulted.

[10] In determining whether an obligation to consult arose in one or other of those ways, the history of the carpark is relevant. As I have noted, the plaintiffs assert, and the Council does not deny, that the carpark was developed by NCC in the 1970s as a carpark and has since always been used for that purpose. It is also asserted, and not denied, that this was funded by a targeted rate imposed on inner city rate payers. There is dispute over whether the cost of operating the carpark in the period since the mid 1970s have been paid for by the inner city rate payers. It is also clear that at least some of the land was acquired for the specific purpose of a carpark. An area of

101 square metres adjacent to the BNZ building was acquired by NCC from the then owners of the BNZ building in 1974. Other small areas of land were, at the same time, acquired from adjoining landowners. That land was acquired for the purposes of a carpark. The certificate of title to the land acquired from BNZ contains the notation “purpose: parking space”. There is further evidence in the contemporary records, in that the minutes of the Council’s meeting of 21 February 1974 record advice from the city solicitor that the areas of land being acquired did not have street frontages. A resolution was passed to the effect that s 351BB(1) of the Municipal

Corporations Act 1954 should not apply to those parcels of land as they were to be “sites for a public utility to wit a parking place pursuant to s 177 of the [Municipal Corporations Act 1954]”. Section 177 of the Municipal Corporations Act 1954 provided that a Council may provide parking places, and gave certain incidental powers for that purpose.

[11] There is also evidence that another part of the Montgomery Square parking area, being the area held by NCC on lease from Wakatu Incorporation, is subject to a designation in the District Plan. The designation is carparking and the reason for designation is expressed in these terms:

DN11.2 Reason for designation

DN11.2.i The designation is needed to provide for authorisation to secure, maintain and operate the Montgomery Square public car park over land not in Nelson City Council ownership. The modification to the existing car park designation is a reduction in the area of the designation to the land listed. The land concerned is not owned, but leased, by Nelson City Council and is formed as public car park as part of Montgomery Square.

It seems from that description that it was not considered necessary that the land owned in fee simple by NCC that forms part of the carpark be the subject of the designation. The existence of the designation however makes it clear that the whole of the land is formed as a public carpark.

[12] I consider that the fact that the land included in the Montgomery Carpark is a public carpark, acquired and formed in the manner I have briefly described, is sufficient to give rise to an obligation on the part of the Council to undertake public consultation before effecting any change in the purpose for which land is held, or before undertaking any works inconsistent with the status of the land as a public carpark. The existence of an obligation to consult in those circumstances is consistent with the obligations of a local authority in relation to the making of decisions as set out in Part 6 of the Local Government Act 2002. Under s 78, a local authority must give consideration to the views and preferences of persons likely to be affected by, or to have an interest in, a matter which involves a decision making process. That section does not, on its own, require the local authority to undertake

any consultation process or procedure. Whether that is required must depend upon a consideration of the particular circumstances. In this case, the acquisition of the land for a carpark, and its use for over 30 years for that purpose, are on my assessment of the circumstances such as to engage the obligation in s 78 to seek the views of those likely to be affected before a change in the use of the land is undertaken. Further, I consider that the way in which the carpark was initially funded would give rise a legitimate expectation on the part of inner city rate payers that they would be consulted before any decision was made to use the land for some other purpose.

[13] My conclusion that there is an obligation to consult before a decision is made to use the land for some other purpose raises the question of whether the Council’s proposals do involve a change in the purpose for which the land is to be used. Council for NCC submits that they do not. Ms Owen submits that they fall within the scope of the nature of the works in designation DN11 to which I have referred. Clause DN11.3 provides:

DN11.3 Nature of the works

DN112.3.1 Proposed works

a) maintenance and construction of vehicular parking and access and pedestrian access and facilities, and

b) erection and operation of service buildings within Montgomery Square subject to the rules contained in this Plan (Inner City Zone) relating to “Buildings in Montgomery Square”

DN11.3.ii Operational works

a) access by vehicles and pedestrians to and from Montgomery Square, loading and unloading of good to and from adjoining properties and service lanes, and

b) flea market and from time to time festivals, displays, bazaars, fairs, galas, exhibitions, ceremonies and outdoor performances.

[14] The presentation to the public meeting held on 8 September 2010 by the consultants engaged by NCC describes the proposals and the reasons for them. That plan describes one of the objectives from the HON strategy as being “develop pocket parks in Montgomery Square, including the Bank Lane connection from Trafalgar

Street. The eastern edge of Montgomery Square and Bank Lane is to be converted into a user friendly multi-purpose inner city pocket park.” In accordance with that objective the concept plans and sketches included in the HON documents in August 2009 had shown what was described as “a user-friendly multi-purpose inner- city pocket park” along the eastern edge of Montgomery Square and Bank Lane. In further describing the HON strategy the consultants in the September 2010 presentation described the issue as being “a lack of high amenity outdoor setting for passive recreation, socialising and play within the CBD.” They note that one of the options to address that issue is “development of a pocket park and associated design interventions including suitable storm water management and opportunities for people to rest at Montgomery Square”. As to a preference the presentation notes “the most appropriate location to provide an open space asset is considered to be in Montgomery Square. This inner city park has been designed specifically as a place for rest and relaxation and aimed to provide an intimate experience in close proximity to existing central city amenities. ...” The plan shows a pocket park, restricted to pedestrian access, over an area extending between the BNZ building and an existing toilet block in the middle of Montgomery Square. As shown in the September 2010 presentation, the park would have eliminated 26 existing carparks.

[15] I do not consider that the work described in the September 2010 presentation falls within DN11.3, or is ancillary to the use of Montgomery Square as a public carpark. The pocket park is an area from which vehicles would be entirely excluded. Its purpose is to provide an amenity for passive recreation, socialising and play. That is not a use which falls within the present use as a carpark. Designation DN11.3 refers to pedestrian access. That is, in the context of that designation, clearly intended to refer to pedestrian access ancillary to the use of the land as a carpark. It does not extend to a park or pedestrian area designed specifically as a place for rest and relaxation. The pedestrian access which the pocket park would provide is not ancillary to the use of the land as a carpark, providing access to the carpark. On this aspect of the proposal at least, the proposed reordering involves a departure from the present use of the land as a public carpark. I consider that that change gives rise to an obligation to undertake a public consultation process which meets the requirements of the Local Government Act 2002 Part 6.

[16] The next question is whether the consultation which was in fact undertaken was sufficient to meet that obligation. Ms Owen submits that extensive consultation was undertaken at all stages of the process and that the HON strategy was one of the most extensively consulted strategies ever undertaken by Council. The concept of pocket parks in Montgomery Square was first introduced in the HON strategy. It is not necessary for me to consider whether the level of public consultation undertaken in 2009 on the HON strategy would have been sufficient to allow the “pocket park” proposal shown in the HON documents. At that stage the pocket park proposed was substantially different from that ultimately decided upon following the consultant’s report. Ms Owen submits that the HON documents show only a concept, not a developed proposal. That is so, but it does not mean that consultation on that concept is sufficient to meet the obligation in respect of the proposal. In considering the adequacy of consultation, regard must be had to the concept which was disclosed. It is not permissible to rely upon consultation on one concept as sufficient consultation on a materially different concept. I consider that the real issue is the adequacy of consultation in respect of the present proposals.

[17] The evidence is that the first time that those proposals were publicly consulted on was at the meeting on 8 September 2010. Opposition to the proposal was expressed, and an overwhelming vote against the proposal was recorded. On the following day, a motion to stop the proposal was lost at a meeting of NCC and the consultants were instructed to continue, taking into account feedback from the consultation and from the Council meeting. They were to report the revised design back to the Council “for information only”. The revised design was “received” at the next meeting on 23 September 2010.

[18] I do not consider that that consultation was adequate to fulfil the Council’s legal obligations in that regard. There must, in accordance with the principles described in Wellington International Airport Ltd v Air New Zealand,[1] be a process which enables those consulted to express their views in a fully informed way, and the decision maker must enter the consultation with an open mind, taking due notice of what is said before making a decision. Here, the sequence of events indicates that

_{the decision maker, NCC, left the consideration of any changes to the plans to}

Council officers and consultants, and their only action following the direction to the consultants on 9 September was to receive, not to consider or adopt, the final proposals. In particular, the Council did not itself consider the submissions made in the consultation.

[19] For these reasons, I conclude that the Council has failed to properly consult with the public, and in particular with the owners or occupiers of properties adjoining Montgomery Square, in relation to the works which it now seeks to undertake.

[20] Ordinarily, the appropriate remedy, having reached that conclusion, would be an order that the Council reconsider its decision, undertaking the appropriate consultation in the course of doing so. The next question is whether relief should be refused in the exercise of the Court’s discretion. Ms Owen submits that relief should be refused on account of the delay in issuing proceedings, and on the grounds that the relief sought would not be in the public interest because the works are, and were always, intended to be completed by the time of the Rugby World Cup and that delaying these works does not promote the best interests of the city of Nelson.

[21] On the question of delay Ms Owen refers to the entire period from the promulgation of HON in August 2009. In the light of the history as I have discussed it, I consider that the relevant period is from the receipt by NCC of the final proposals on 23 September 2010. The evidence is that the plaintiffs had, from September 2010, been requesting advice from NCC as to when tenders would be let. I do not consider that there has been such delay on the part of the plaintiffs that relief ought to be refused on that account. I do not think that the urgency which is contended for in relation to the completion of the works before the Rugby World Cup is a sufficient basis for declining the grant relief. The works which are proposed will have a long term effect. The public interest will not be best served if works are undertaken without the degree of consultation which I have held is required. For these reasons I do not consider that the case is one where relief should be declined in the exercise of the Court’s discretion.

[22] There will be an order prohibiting the Council from accepting tenders to carry out the work proposed in Montgomery Square. There will be a further order directing the City Council to undertake consultation, in accordance Part 6 of the Local Government Act 2002, on the proposed work.

[23] I have not, in this judgment, dealt with the other causes of action which were pleaded and argued before me. The need to deliver a decision promptly makes that unrealistic. Further, the reconsideration which I have ordered may have implications for some of those causes of action, in that any change which might be made to the present proposals, as a result of consultation, may impact on those causes of action. For these reasons, I do not propose to address those other causes of action in this judgment. Under r 11.2 of the High Court Rules, a judgment may be interim or final and may deal with any question or issue. This judgment is an interim judgment, dealing only with the questions which I have identified. All other causes of action are reserved for further consideration. Any party may apply for directions as to how any of those other causes of action shall be further progressed.

_{[24] Costs are reserved. The parties may submit memoranda.}

Solicitors: Rout Milner Fitchett, Nelson for Plaintiffs

Duncan Cotterill, Nelson, for Defendant

“A D MacKenzie J”

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[1] Wellington International Airport Ltd v Air New Zealand [1993] 1 NZLR 671.