Public Decision Making Newsletter

SUMMER EDITION 2018

PUBLIC DECISION MAKING NEWSLETTER

This newsletter summarises recent developments in law relating to resource management and local government in CONTENTS New Zealand that may be of interest to local authorities and decision makers. MCMILLAN V QUEENSTOWN LAKES 02 DISTRICT COUNCIL In this edition, we discuss recent case law on what standards local authorities must meet when granting RECENT HIGH COURT GUIDANCE ON resource consent on a non-notified basis and the 03 THE APPLICATION OF NEW ZEALAND application of New Zealand King Salmon and Appealing KING SALMON IN A PLAN CHANGE Wanaka in a plan change context. We also discuss CONTEXT recent case law dealing with procedural issues relating to an award of costs in a discontinued judicial review and the way in which a division of the Environment AWARDING COSTS IN A 05 Court recently ordered a hearing to proceed. We also DISCONTINUED JUDICIAL REVIEW provide a quick update on the next round of policies to PROCEEDING be implemented under the National Policy Statement on Urban Development Capacity 2016. ENVIRONMENT COURT MAKES 06 DIRECTIONS AS TO ORDER HEARING WILL PROCEED IN

NATIONAL POLICY STATEMENT ON 06 URBAN DEVELOPMENT CAPACITY 2016 MCMILLAN V QUEENSTOWN LAKES DISTRICT COUNCIL

The Invercargill High Court delivered its judgment in Justice Mander found that overall the decision to process McMillian v Queenstown Lakes District Council [2017] NZHC CMPL’s application without notification, and to subsequently 3148 on 14 December 2017. The judgment considers what grant the resource consent was lawful. The Court found that: standards Councils must meet when granting resource ■■ In relation to the allegation of procedural impropriety – consent on a non-notified basis. the Court concluded that QLDC had received Mr Kingsley and Mrs Verna McMillan (The McMillans) adequate information on which to base its decision, applied for a judicial review of a decision by Queenstown despite deficiencies in the application, observing that Lakes District Council (QLDC) to grant, without “[Justice Wylie], in Tasti Products Ltd v Auckland City Council1, notification, resource consent to Coronet Managers noted there was no longer a statutory requirement that Proprietary Ltd (CMPL). The McMillans argued that they a Council must be satisfied it has received adequate were affected persons under section 95E of the Resource information”.2 Management Act 1991 (RMA), alleging that Council’s ■■ Under the second ground the Court, after considering decision was unlawful because it: section 95E(2)(a) of the RMA and the permitted baseline, (a) failed to follow proper process, found that QLDC had made its own independent assessment of whether adverse effects of the proposal (b) erred in the application of the permitted baseline, would be minor or more than minor. (c) failed to take into account relevant considerations, and ■■ QLDC’s failure to specifically refer to provisions in the (d) was unreasonable. ODP or the proposed district plan did not amount to a The resource consent was granted to CMPL for the failure to take into account a relevant consideration. construction of a dwelling at 685 Peninsula Road. The ■■ The argument raised by the McMillans that recent High McMillans own and occupy the neighbouring property at Court decisions suggest there has been a “loosening of the 681 Peninsula Road. In discussions with CMPL, the McMillans bounds of Wednesbury unreasonableness” are incorrect. expressed concern about the plan as it involved breaches of Wednesbury unreasonableness still applies, and any alleged the Operative District Plan (ODP) and had possible adverse error made by QLDC was not enough to render the effects on their property. decision unreasonable. CMPL submitted amended plans to QLDC as part of its Despite this outcome, Justice Mander confessed to “having consent application, omitting to mention their unresolved reason to pause in reaching that conclusion, resulting discussions with the McMillans. After learning of the as it does in preventing a neighbouring landowner from application, the McMillans had their representative write to formally participating in the consent decision-making QLDC outlining their adverse effects concerns. Despite this, process in relation to the construction of a new building QLDC processed the application on a non-notified basis and on an adjoining site in breach of the ODP”.3 However, approved consent, with conditions. as demonstrated by this case, where it is reasonably open to the consent authority to assess the adverse effects of the non-complying activity as being less than minor, the statute does not require notification.

1 [2016] NZHC 1673. 2 McMillan v Queenstown Lakes District Council [2017] NZHC 3148 at [32]. 3 McMillan v Queenstown Lakes District Council [2017] NZHC 3148 at [114].

02 | Public Decision Making Newsletter – Summer Edition 2018 RECENT HIGH COURT GUIDANCE ON THE APPLICATION OF NEW ZEALAND KING SALMON IN A PLAN CHANGE CONTEXT

The recent High Court decision of Royal Forest and Bird having regard to a particular activity and all factors which Protection Society of New Zealand v Bay of Plenty Regional go to its appropriateness, a proportionate response could Council [2017] NZHC 3080 saw Justice Wylie examine be adopted. and apply the Supreme Court decision of Environmental RFBPS then appealed the decision to the High Court on Defence Society of New Zealand v The New Zealand King the grounds that the Environment Court had applied Salmon Co Limited [2014] NZSC 38 (NZKS) in a combined several wrong legal tests, including in its interpretation and plan change context. application of NZKS. Bay of Plenty Regional Council prepared the proposed NZKS and Part 2 of the RMA Regional Coastal Environment Plan (RCEP), which covers the coastal marine environment in combination with the The majority in the Supreme Court’s decision in NZKS Regional Coastal Plan. found that the NZCPS gives substance to Part 2 of the RMA’s provisions in relation to the coastal environment, Royal Forest and Bird Protection Society Inc (RFBPS) had meaning in principle where planning documents are submitted on the notified RCEP and subsequently appealed established they are assumed to be in accordance with Part the wording of several RCEP policies that concerned the 2 subject to three exceptions where there are issues of location of regionally significant infrastructure in areas in the invalidity, incomplete coverage or uncertainty of meaning.4 coastal environment relating to indigenous biological diversity. As the Environment Court dealt with multiple national Environment Court’s decision policy statements, the RPS and the RCEP, it appeared The Environment Court examined which policy wording to consider NZKS of little assistance in helping resolve put forward by the parties in the appeal was the most perceived tensions between the various provisions, appropriate to give effect to the RCEP’s objectives. as NZKS only dealt with the NZCPS. The Court confined its consideration of higher order Justice Wylie acknowledged that while NZKS only dealt planning documents primarily to the lowest-order with one planning document, the Supreme Court’s document in the planning instrument hierarchy, being the approach still applies where there are perceived tensions unchallenged RCEP objectives, as well as briefly referring in multiple documents. to the Bay of Plenty Regional Policy Statement (RPS) and The Environment Court also perceived tensions in the some of the New Zealand Coastal Policy Statement 2010 RCEP objectives between the various elements in the (NZCPS) provisions. coastal environment. The High Court held that if there is With reference to NZKS’s discussion of the meaning of a perceived tension in a lower order document then the “appropriate” and “inappropriate”, the Court also adopted approach of the Supreme Court majority in King Salmon a “proportionate response”, meaning that in interpreting to try and resolve that tension should be applied. If it “appropriate”, the Supreme Court implicitly acknowledged cannot be, recourse should be made to the higher order its meaning varies by context. The Court concluded that documents.

4 Environmental Defence Society of New Zealand v The New Zealand King Salmon Co Limited [2014] NZSC 38, (2014) 17 ELRNZ 442 at [90].

www.dlapiper.com | 03 Justice Wylie also made comment on another Justice Wylie allowed the appeal in part and the matter Environment Court decision, Appealing Wanaka Inc v was remitted back to the Environment Court for Queenstown Lakes District Council [2015] NZEnvC 139, reconsideration. where that division of the Environment Court, in reliance Comment on NZKS, adopted a modified approach to assessing a district plan change. That Court considered that only This recent decision demonstrates the relevance NZKS the principles, objectives and policies of the district plan continues to have in plan change contexts, including needed to be considered, subject to the three exceptions where there are multiple planning instruments at issue. identified by the Supreme Court. Justice Wylie expressed It is important to ensure that in a plan change situation, his concern with this interpretation, stating “there is a the provisions of the plan at issue have given effect to the distinct risk that the intent and effect of higher order plans planning instruments higher up the planning hierarchy. can be diluted, or even lost, in the provisions of plans lower in the planning hierarchy.”5 Additionally, the High Court did not agree with the Environment Court’s “proportionate response” and found it to be inconsistent with NZKS, being effectively an overall judgment approach, which the Supreme Court had rejected.

5 Royal Forest and Bird Protection Society of New Zealand v Bay of Plenty Regional Council [2017] NZHC 3080 at [88].

04 | Public Decision Making Newsletter – Summer Edition 2018 AWARDING COSTS IN A DISCONTINUED JUDICIAL REVIEW PROCEEDING

In Neill v Auckland Council [2017] NZHC 2703 Auckland In terms of the highly adversarial approach by PPI, Council made a decision to cancel a resource consent the Court said that nothing in the papers before it condition which limited vehicle access to the property indicates such an approach. Further, the Court commented belonging to PPI Ltd (PPI) from a second frontage. that the applicants had commenced court proceedings, The applicants commenced proceedings to judicially the very nature of which is adversarial. Accordingly, a review that decision. Prior to the first case management “highly adversarial approach” in and of itself cannot mean conference, the applicants withdrew the proceedings. it is “just and equitable” to displace the presumption as to PPI sought costs from the applicants. costs. Given this, the Court determined that the applicants should pay the costs of PPI. A party who discontinues a proceeding must, unless the defendant otherwise agrees or the Court otherwise In terms of the amount of costs to be paid, PPI sought orders, pay a defendant’s costs “of and incidental to costs to cover four hours of legal work, and fees paid to a proceeding up to and including the discontinuance”, a planning consultant. However, some of that work was unless it would be “just and equitable” to not apply that incurred prior to proceedings being commenced. Any such presumption. The onus is on the applicants to persuade costs incurred prior to a proceeding being lodged would the Court that the presumption should be displaced, be on the basis that the costs were “incidental” to the and it is not displaced lightly. Given this, the expectation proceedings. The Court determined that costs incurred was that the applicants would pay PPI’s costs, unless the prior to a proceeding are not incidental to a proceeding. applicants could persuade the Court that it would be just Given this, those particular costs could not be recovered. and equitable to not apply the presumption. Ultimately, the Court determined that PPI was entitled to The applicants argued that costs should lie where they one third of the costs it would have been entitled to had a fall given its claim was not unmeritorious (and neither full statement of defence been prepared, being $1,478. party succeeded on the proceedings), and that the In conclusion, if a case is discontinued, even prior to any discontinuance occurred in the face of a highly adversarial substantive hearing, the other parties will be entitled to approach by PPI. costs unless it would be just and equitable for those costs The Court did not consider that this was case where the to lie where they fall. In addition, any costs incurred prior merits (or lack thereof) are “so obvious” that they should to commencement of proceedings will not be recoverable. influence costs following the discontinuance. In addition, the Court considered it is not appropriate to assess the merits of the claim or the stances of the parties, especially given the very early stage at which the proceedings were discontinued.

www.dlapiper.com | 05 ENVIRONMENT COURT MAKES DIRECTIONS AS TO ORDER HEARING WILL PROCEED IN

In Motiti Rohe Moana Trust v Bay of Plenty Regional Council The Regional Council sought to have the final right of [2017] NZEnvC 189 the Environment Court made reply, which it considered reasonable given the “significant directions as to the order that the hearing of an appeal novel issues raised in the proceedings” and the “substantial under section 120 of the RMA would proceed in, including changes sought to be included in the proposed plan.”6 which party would have the final right of reply. While Judge Smith agreed with that proposition, his Honour did not agree that the appellants should be deprived of The appeal concerned natural heritage and iwi their final right of reply if they had presented first. Judge management issues in the context of the proposed RCEP. Smith held that the fairer procedure would be to adopt a The matter had been set down for a hearing and evidence reverse order for any closing submissions after the entire had been filed. The Court had proceeded to read the evidence of all parties and their submissions had been evidence while the parties unsuccessfully attempted to heard. The Regional Council would therefore make its agree on an order for the hearing of the matter. closing submissions after having heard all of the parties’ Judge Smith found that the appropriate course was to closing submissions except for the appellants, then the follow the way in which evidence had been presented Court would hear the final submissions of the appellants. and read by the Court. It was anticipated that each party The Court made directions as to the order of opening would make its submissions in opening, and then follow submissions and evidence and reply submissions accordingly. that with any evidence in support of its position.

NATIONAL POLICY STATEMENT ON URBAN DEVELOPMENT CAPACITY 2016

The next timeframe for the implementation of the Following this, by 30 June 2018 local authorities with part National Policy Statement on Urban Development or all of an urban area in their district or region that is Capacity 2016 (NPSUDC) is approaching. newly classified as a high-growth urban area are required to have completed the housing and business development By 31 March 2018 local authorities with part or all of an capacity assessment under NPSUDC policy PB1. urban area in their district or region that is newly classified das a medium-growth urban area are required to have begun monitoring indicators under NPSUDC policy PB6 and using indicators of price efficiency under NPSUDC policy PB7.

6 Motit Rohe Moana Trust v Bay of Plenty Regional Council [2017] NZEnvC 189 at [8].

06 | Public Decision Making Newsletter – Summer Edition 2018 KEY CONTACTS

Kerry Anderson Emma Sweet Partner Senior Associate T +64 4 474 3255 T +64 4 918 3070 [email protected] [email protected]

Diana Hartley Kierra Krumdieck Partner Senior Solicitor T +64 9 300 3826 T +64 4 474 3228 [email protected] [email protected]

Stephen Quinn Kate Rogers Partner Senior Solicitor T +64 4 474 3217 T +64 4 918 3050 [email protected] [email protected]

Emma Crayton-Brown Anne Buchanan Solicitor Senior Associate T +64 4 918 3042 T +64 9 300 3807 emma.crayton-brown@ [email protected] dlapiper.com

Ashley Cornor Mollie Matich Senior Associate Solicitor T +64 4 474 3221 T +64 9 916 3722 [email protected] [email protected]

Emma Manohar Claire Wills Senior Associate Law Clerk T +64 4 918 3016 T +64 4 474 3229 [email protected] [email protected]

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