Auckland Council v Auckland Council
[2025] NZHC 1214
•19 May 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-002825
[2025] NZHC 1214
UNDER The Judicial Review Procedure Act 2016 IN THE MATTER
of an application to review a decision under cl 9, Schedule 13A of the Local Government Act 2002
BETWEEN
AUCKLAND COUNCIL
Applicant
AND
AUCKLAND COUNCIL
First Respondent
FLETCHER RESIDENTIAL LIMITED
Second Respondent
Hearing: 29 April 2025 Appearances:
R Fowler KC and S F Quinn for Auckland Council
D Bigio KC and S T Macdonald for Second Respondent
Judgment:
19 May 2025
JUDGMENT OF VENNING J
This judgment was delivered by me on 19 May 2025 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: DLA Piper, Auckland
Berry Simons, Auckland
Counsel:R Fowler KC, Auckland D R Bigio KC, Auckland
AUCKLAND COUNCIL v AUCKLAND COUNCIL [2025] NZHC 1214 [19 May 2025]
Introduction
[1] In October 2022, Fletcher Residential Ltd (FRL) applied for a resource consent to subdivide land and construct 27 houses at 985–995 Mount Eden Road, Auckland (Three Kings). Auckland Council (the Council) granted the resource consent in March 2023. In October 2023, Council gave notice to FRL requiring development contributions for the resource consent.
[2] FRL exercised its right under s 199C of the Local Government Act 2002 (the Act) to object to the development contributions in relation to the reserve development and community infrastructure components.
[3] A Commissioner appointed by the Council upheld FRL’s grounds of objection (the Decision).
[4]The Council seeks to judicially review the Decision.
Background
[5] During 2012, FRL approached the Council with a proposal for an integrated development at Three Kings. At the time, the Council and FRL both held land at Three Kings. The Council held land as recreation reserve under the Reserves Act 1977 (reserve land) and FRL held freehold land (FRL’s land). To advance the development, FRL proposed part of the Council’s reserve land be exchanged for part of FRL’s land. Following approval by the Council’s Development Committee, the parties entered a Land Exchange Agreement (the LEA) on 30 June 2017. Under the LEA, FRL agreed to carry out Reserve Development works (the Reserve works). The LEA defined the Reserve works as those shown on the Master Plan in sch 4 to the LEA and as described in the public open space outline as “Sports Fields; Play Area; Plaza Stairs; Plaza & Shared Space; Grahame Breed Drive Park and Western Reserve”. The LEA was also conditional on the Minister of Conservation’s approval under the Reserves Act. The Minister’s approval was obtained, and the land exchange was carried out during 2018. FRL carried out the Reserve works.
[6] FRL then applied for specific resource consents for the 27 houses in 2022. The Council considered that development, which it consented to, would require it to incur capital expenditure for reserves, network and community infrastructure. Accordingly, it issued the notice in October 2023 requiring development contributions of $370,350.50 (the DC assessment) made up of:
· $69,030.70 for reserve acquisitions;
· $100,038.90 for reserve development;
· $50,938.80 for community infrastructure; and
· $150,342.10 for transport.
[7] As noted, FRL objected to the DC assessment, but only to the reserve development and community infrastructure components. FRL’s grounds for objection engaged each of the four separate grounds of objection provided by s 199D of the Act. FRL said that the Council had:
(a)failed to properly take into account features of FRL’s development that, on their own or cumulatively with those of other developments, would substantially reduce the impact of the development on requirements for community facilities in the territorial authority’s district or parts of that district;
(b)required a development contribution for community facilities not required by, or related to, FRL’s development, whether on its own or cumulatively with other developments;
(c)required a development contribution in breach of s 200; and
(d)incorrectly applied its Development Contributions Policy (the Policy) to FRL’s development.
[8]In particular, FRL alleged that:
(a)in supplying the Reserve works (including the creation of sports fields, playgrounds, public amenities and shared spaces) pursuant to the LEA, FRL had satisfied the demand generated from the project in relation to reserve development;
(b)the requirement for FRL to pay reserves development contributions pursuant to the DC assessment did not take into account the Reserve works and was contrary to the purpose and principles contained within the Act and the Policy; and
(c)the Policy had anticipated the growth of the Three Kings development, however, the growth in relation to reserve development has been provided for by the Reserve works carried out by FRL.
[9] A Commissioner was appointed under s 199F of the Act to consider FRL’s objection. In her decision delivered on 17 April 2024, the Commissioner upheld all four of FRL’s grounds of objection.
Commissioner’s Decision
[10] The Commissioner considered all the objection grounds were related in that they referred to the same factual basis. She took the view that, if the first objection ground was made out, then it was “highly likely” all the other objection grounds would be made out.
[11] The Commissioner noted the Council’s argument was that the Policy (and by implication the Act) did not allow an interpretation that would allow consideration of the Reserve works when considering the requirement for a development contribution. She disagreed. She considered that the correct interpretation of the Policy, applying the Act, was to consider the development and whether features of the development reduced the impact it had on requirements for infrastructure and community facilities in the Council district or parts of that district. She then found that, factually, there appeared to be no debate that the Reserve works (and the additional works)
substantially reduced demand such that there was no demand from the development.1 She therefore concluded the first ground of objection under s 199D(a) was made out.
[12] On the second ground of objection, the Commissioner was “not entirely persuaded” the evidence demonstrated that community facilities were not required by or related to FRL’s development. However, what was clear in her view was that the Reserve works substantially reduced demand such that it was difficult to argue that additional community facilities were required by the development. On that basis, to the extent it was necessary, she found the second ground of objection also made out.
[13] On the third ground, and after referring to Neil Construction Ltd v North Shore City Council, the Commissioner considered it difficult to see how the requirement to both pay for as well as provide sports fields and reserve surrounds was anything other than “double dipping”.2 She found the third ground was made out.
[14] As to the final ground, the Commissioner accepted FRL’s argument cl 94 of the Policy could not be used to argue that works a developer has undertaken which satisfy demand cannot be considered without, or in the absence of, a development agreement.3 The Commissioner accepted that if, as a matter of fact, demand was satisfied (as she found it was in this case) then the only conclusion was that the justification for a development contribution was negated.
1 The additional works related to playground equipment constructed at FRL’s initiative. The Council initially pleaded a sixth ground of review that the Commissioner was in error in referring to the additional works as they were beyond the scope of the objection, but Mr Fowler KC confirmed that ground of review was not pursued.
2 Neil Construction Ltd v North Shore City Council [2008] NZRMA 275 (HC). The Commissioner noted that the assets or projects funded by the Reserve works were not in the schedule of assets, but the evidence was that was not critical in determining that those assets were intended to be council assets. She noted that she expected therefore that the assets would be included, if not in the Policy, in the Council’s appropriate asset management plan in due course.
3 Fletcher Residential Ltd v Auckland Council DCC Auckland, 17 April 2024 at [62] (the reference to [32] is in error — the correct reference is [34]).
The review
[15] The Council seeks to review the Commissioner’s decision. It alleges she made the following errors:
(a)an error of law when she took into account irrelevant considerations, being the wider Three Kings precinct, rather than focusing on the resource consent;
(b)an error of law in her interpretation of cl 94 of the Policy;
(c)an error of law in conflating the grounds for objection;
(d)an error of law in her approach to the “double dipping” issue; and
(e)an error of fact in finding that the Reserve works satisfied the demand from the development.
[16] The Council says the first three and fifth grounds of review at (a)–(c) and (e) are errors that apply to and affect all of FRL’s grounds of objection. The fourth ground of review under (d) only applies to FRL’s objection under s 199D(c) that the development contribution was required in breach of s 200 of the Act.
[17]The Council seeks:
(a)a declaration binding upon the Council that the Reserve works (and additional works) are not a relevant consideration when determining development contributions payable for the resource consent/proposal; and
(b)an order setting aside and quashing the decision and referring the matter back to the Council (as decision maker) to decide the objection with reference to the Court’s determination in these proceedings.
Statutory framework
[18] Part 8, sub-part 5 of the Act provides authority for the Council to levy development contributions. For the purposes of the sub-part, s 197 defines development as:
(a)any subdivision, building (as defined in section 8 of the Building Act 2004), land use, or work that generates a demand for reserves, network infrastructure, or community infrastructure; but
(b)does not include the pipes or lines of a network utility operator
and development contribution as:
… a contribution—
(a)provided for in a development contribution policy of a territorial authority; and
(b)calculated in accordance with the methodology; and
(c)comprising—
(i)money; or
(ii)land, including a reserve or esplanade reserve (other than in relation to a subdivision consent), but excluding Māori land within the meaning of Te Ture Whenua Maori Act 1993, unless that Act provides otherwise; or
(iii)both.
[19] The effect of s 198(1)(a) is that the grant of a resource consent “triggers” the requirement for a development contribution, but s 198(2) confirms that the Council may only require a development contribution as provided for in a policy adopted under s 102(1) that is consistent with s 201. Section 201 sets out the requirements for the contents of the Policy.
[20]Section 199 sets out the basis for requiring a development contribution:
199Basis on which development contributions may be required
(1)Development contributions may be required in relation to developments if the effect of the developments is to require new or additional assets or assets of increased capacity and, as a consequence, the territorial authority incurs capital expenditure to provide appropriately for—
(a)reserves:
(b)network infrastructure:
(c)community infrastructure.
(2)This section does not prevent a territorial authority from requiring a development contribution that is to be used to pay, in full or in part, for capital expenditure already incurred by the territorial authority in anticipation of development.
(3)In subsection (1), effect includes the cumulative effects that a development may have in combination with other developments.
[21] Section 200 provides for limitations applying to the requirement for a development contribution:
200Limitations applying to requirement for development contribution
(1)A territorial authority must not require a development contribution for a reserve, network infrastructure, or community infrastructure if, and to the extent that—
(a)it has, under section 108(2)(a) of the Resource Management Act 1991, imposed a condition on a resource consent in relation to the same development for the same purpose; or
(b)the developer will fund or otherwise provide for the same reserve, network infrastructure, or community infrastructure; or
(ba) the territorial authority has already required a development contribution for the same purpose in respect of the same building work, whether on the granting of a building consent or a certificate of acceptance; or
(c)a third party has funded or provided, or undertaken to fund or provide, the same reserve, network infrastructure, or community infrastructure.
[22] Section 199C provides for the right of objection to the DC assessment and s 199D sets out the four grounds upon which an objection may be made:
199C Right to object to assessed amount of development contribution
(1)A person may, on any ground set out in section 199D, object to the assessed amount of the development contribution that a territorial authority has required from the person under section 198, advised in—
(a)a notice given to the person for that purpose by the territorial authority; or
(b)if notice has not been given, such other formal advice of the requirement that the territorial authority has given to the person.
(2)The right of objection conferred by subsection (1) applies irrespective of whether a reconsideration of the requirement for a development contribution under section 199A has been requested.
(3)The right of objection conferred by this section does not apply to challenges to the content of a development contributions policy prepared in accordance with section 102.
199D Scope of development contribution objections
An objection under section 199C may be made only on the ground that a territorial authority has—
(a)failed to properly take into account features of the objector’s development that, on their own or cumulatively with those of other developments, would substantially reduce the impact of the development on requirements for community facilities in the territorial authority’s district or parts of that district; or
(b)required a development contribution for community facilities not required by, or related to, the objector’s development, whether on its own or cumulatively with other developments; or
(c)required a development contribution in breach of section 200; or
(d)incorrectly applied its development contributions policy to the objector’s development.
[23]As noted, FRL relied on all four grounds of objection under s 199D.
The Council Policy
[24] The operative Policy applied to all applications lodged after 10 January 2022. Its purpose is stated to be to recover a fair, equitable and proportionate portion of the total cost of capital expenditure necessary to service growth over the long term. The Policy provides a number of steps for assessing units of demand and calculation of the consequent development contribution.
[25]The Council relies in particular on cl 94 of the Policy which states:
Under this policy there are no offsets of contributions for works provided by a developer. If a developer undertakes works on behalf of council it is expected
that the developer and council will enter into a works agreement or private developer agreement, but any development contributions must still be paid.
Approach to the review
[26] Mr Bigio KC noted the Act prescribed a detailed process for challenges to council requirements for a development contribution, including the appointment of duly qualified Commissioners as decision makers, to avoid the need for judicial review of such requirements.4 He submitted the Court should take a cautious approach to the review in the circumstances as an overly generous approach would risk undermining the statutory process.
[27] While I note Mr Bigio’s submission, given the nature of the matters at issue in this case, the review falls to be determined on the relatively confined basis of whether the Commissioner erred at law rather than any consideration of “reasonableness” which, in an appropriate case, might impact the intensity of review.
First ground of review
The Council’s arguments
[28] The Council’s submission under the first ground of review is essentially that the Commissioner was in error by considering the wider Three Kings precinct, including the Reserve works provided for under the LEA, as a development rather than focussing on the resource consents in issue. In doing so, the Commissioner started in the wrong place. She exceeded her jurisdiction and misdirected herself. The Council’s argument is that the relevant development is the 27 terrace, duplex and standalone houses and associated subdivision to which the consents relate. They were the resource consents that triggered the development contribution assessment. The objection could only relate to the relevant development. The Council relies on the Court of Appeal decision of Beaumont Trading Company Ltd v Auckland Council.5
[29] Mr Fowler KC submitted that FRL was effectively claiming that the Reserve works offset the demand created as part of the development. However, for something
4 Local Government Act 2002, ss 199E–199N.
5 Beaumont Trading Company Ltd v Auckland Council [2016] NZCA 223, [2016] NZRMA 359.
to offset demand, it must have a positive effect on demand and cannot create demand itself. The Reserve works could not be considered a development under s 197 of the Act. The same definition of development must be applied consistently throughout. Applying an excessively broad ambit to the development at issue risked undermining the statutory regime.
[30] As well as referring to the case of Beaumont Trading Company Limited v Auckland Council, Mr Fowler also referred to the High Court’s observations in Neil Construction Limited v North Shore City Council:6
[109] Section 199 imports the definition of ‘development’. By s 197, to qualify as a “development” a subdivision or other development must generate a demand for infrastructure. Then under s 199, if the effect of the development either by itself or cumulatively with another development (s 199(3)), is to require new or additional assets or assets of increased capacity to provide appropriately for reserves or infrastructure, which involves the territorial authority in capital expenditure, development contributions may be required.
[110] While s 199 authorises councils to take account of the cumulative effects of developments in assessing whether capital expenditure will be incurred as a consequence of the requirement for further assets or assets of increased capacity, the assessment can only be made in relation to projects which qualify as a “development” in terms of s 197. That preliminary identification must therefore be made.
[111] The wording of s 199 itself requires this interpretation. The reference in subs (1) to “developments”, can only apply to projects each of which meets the definition of ‘development’ under s 197. It cannot be interpreted to include “all development, aggregated over the period of the development contributions policy”, as the Council's submissions suggest.
[31] Mr Fowler submitted that while other developments can be relevant for cumulative considerations under s 199D (a) and (b), that does not change the identity and ambit of the particular consented project in issue. Otherwise, any multiple land uses or works in a selected configuration could be deemed a development. In this case, the wider Three Kings precinct is a combination of discrete developments. The short point was that neither the wider Three Kings precinct nor the Reserve works can be “other developments” for the purposes of s 199D(a) or (b) in this case.
[32] Further, even if they could be regarded as “other developments”, the Commissioner failed to undertake the comparative assessment steps required
6 Neil Construction Limited v North Shore City Council, above n 2.
under s 199D(a) on the impact of the development on the requirement for community facilities or whether, under s 199D(b), such community facilities were not required.
[33] On FRL’s third ground of objection, as the Council had not required a development contribution on the wider Three Kings precinct, the Council could not be in breach of s 200. The Reserve works could be a singular and discrete land use or works but as they created no demand, they did not meet the second limb of the s 197 definition.
[34] Finally, Mr Fowler submitted the Commissioner had again misdirected herself in terms in her consideration of FRL’s objection under s 199D(d) by considering the relevant development was the wider Three Kings precinct development, so that particular error had affected all FRL’s grounds of objection.
Analysis
[35] This first review ground turns on whether the Commissioner was right to treat the broader development of the Three Kings precinct (under which the Reserve works were carried out) as a development for the purposes of ss 199 and 199D.
[36] At the outset, I do not consider the case of Beaumont to be of assistance on the point in issue.7 In Beaumont, the Court of Appeal confirmed that as the Council’s power to require a development contribution was triggered at the time the resource consent is granted for the development, the resource consent must generate the demand for the reserves or other amenities which support the development contribution assessment. That is not in issue in the present case. FRL accepts that the resource consents triggered consideration of the requirement for the development contribution assessments but says that the Council erred by not considering s 199D(a) applied to negate the requirement in relation to the reserve development and part of the community infrastructure components. The Court in Beaumont did not have to consider this point. It did not refer to s 199D(a).
7 Beaumont Trading Company Limited v Auckland Council, above n 5.
[37] Again, in the case of Neil Construction,8 the focus of the Court in the passages referred to above was on cumulative effects under s 199(3). That subsection is directed at the situation where there may be one or more relatively minor developments which, when taken together, have a cumulative effect which requires the Council to provide reserves and network infrastructure and/or community infrastructure. Even though the subject development may not, of itself, justify or lead to that requirement, the cumulative effect of that development being taken with other developments would, under s 199, support a development contribution levy. That is the inverse of the current situation, however.
[38] I agree with Mr Fowler that the word and concept of “development” should not have different meanings in different contexts within the same sub-pt, particularly when there is a statutory definition. But the issue is whether, in the context of FRL’s objection, the wider Three Kings precinct can be considered a development for the purpose of determining that objection, and whether the Reserve works were a feature of that development.
[39] In my judgment, the submissions on behalf of the Council on this point overlook the reference in s 199D to “features” of the objector’s developments and, implicitly, “features” of other developments. The section contemplates consideration of other developments that have features which could impact on the need for the infrastructure which otherwise justifies the development contribution.
[40] The Three Kings precinct meets the definition of a development under s 197. It is undoubtedly a land use or work that generated a demand for reserves, network infrastructure or community infrastructure. Further, it is a feature of that Three Kings precinct development that FRL provided the Reserve works. The LEA was essential to the Three Kings precinct development. The LEA provided for the Reserve works.
[41] The intent of pt 8, sub-pt 5 of the Act is to ensure that the Council can recover development contributions from a developer where the particular development under consideration has led to the need for further community facilities. Section 199 is the starting point. However, having regard to s 199D, it is implicit in the statutory scheme
8 Neil Construction Limited v North Shore City Council, above n 2.
that when considering the requirement for community facilities (which as defined include reserves, network infrastructure or community infrastructure) generated by the particular consented development under s 199, the Council will also have regard to features of other development(s) which have the effect of reducing the impact of the development under consideration on that need for community facilities.
[42] It follows that I consider the Commissioner was correct to take into account the Reserve works carried out as part of the broader Three Kings precinct development as a “feature” of the Three Kings precinct development, when considering the effect of the current development of the 27 dwellings (and associated subdivision), under the resource consents. The Reserve works provided as part of the Three Kings precinct development have the effect of substantially reducing the impact of the current, consented development on the requirement for community facilities.
[43] The submission that the Commissioner failed to undertake the comparative assessments required under s 199D(a) and (b) is met by the evidence adduced on behalf of FRL by Fraser Colegrave (an economic consultant), John Duthie (a planner) and Steven Evans (Chief Executive, Residential and Development of FRL). The Commissioner was entitled to rely on that evidence.
[44] I consider the Commissioner was correct to find the Three Kings precinct was a development for the purposes of FRL’s objection, and that the Reserve works were a feature of that development which substantially reduced the impact of the consented development of the 27 dwellings on the requirements for community facilities. It follows that the first ground of review, which challenged the Commissioner’s finding in relation to all four grounds of objection on that basis, must fail.
Second ground of review
The Council‘s arguments
[45] The second ground of review involves the interpretation of cl 94 of the Policy, in the context of the Policy and application of sub-pt 5 of the Act. For convenience, I set out cl 94 again:
Under this policy there are no offsets of contributions for works provided by a developer. If a developer undertakes works on behalf of council it is expected that the developer and council will enter into a works agreement or private developer agreement, but any development contributions must still be paid.
[46] The Commissioner concluded that cl 94 cannot be used to argue that works that a developer has undertaken that satisfy demand cannot be considered in the absence of a development agreement. Mr Fowler acknowledged the Council agreed with the Commissioner if she intended that it apply only to whether there could be a requirement at all (which would cut across and override s 200(1)(b)), but if the Commissioner was intending to say that it applied “intra” the Policy, then she erred.
[47] Mr Fowler referred to the purpose of the Policy and the requirements of a development contribution assessment policy generally as referred to in s 106(2) of the Act. He noted that, before adopting a development contribution policy, the Council was required to consult and there was a need for regular reviews.9 Mr Fowler then referred to the purpose of the Policy as set out in the Policy itself, which was to:
provide predictability and certainty to stakeholders in how infrastructure for growth, including major transformational infrastructure, is to be funded and to provide transparency of what is to be funded and what has been delivered.
[48] Mr Fowler noted that the Council’s capital planning anticipates a mixture of both public and private infrastructure development. The Council’s capital planning was provided for in the Long Term Plan (the LTP) adopted under the Act. The Council has planned to provide the assets to service growth as set out in sch 8 of the Policy. Further, sequencing was important. He submitted the LTP represented the voice of Auckland in respect of Council expenditure, and that if FRL’s interpretation of cl 94 in this case was adopted, the planning the Council had undertaken would be undermined leading to community facilities being provided in an incoherent manner.
[49] For those reasons, Mr Fowler submitted that the Policy, and particularly cl 94, must be read in the context of the development contribution framework it sits in. He again noted that a project can only qualify as a development for the purposes of s 199 where it generates demand for infrastructure and s 200 limits the ability to require
9 Local Government Act, ss 102(4) and 106(6).
development contributions where, among other things, those contributions will fund works already funded by a developer. He submitted that the statutory framework did not allow the Council to consider projects that offset demand as they cannot be said to generate demand and cannot be developments. The plain and ordinary meaning of cl 94 — that it does not allow offsets of contributions for works provided by a developer — was entirely consistent with the statutory framework. When a developer undertakes works specifically on behalf of a council then, as cl 94 anticipates, the parties will enter a works agreement or private developer agreement, but development contributions must still be paid.
[50] Finally, on the point, Mr Fowler referred to s 199J which required the Commissioner to consider the Policy when considering all grounds of FRL’s objection. He submitted the Commissioner had failed to do so which effectively tainted her consideration of all of FRL’s objection grounds.
Analysis
[51] I favour an interpretation of cl 94 consistent with the Commissioner’s finding: namely, that cl 94 is intended to prevent developers from obtaining offsets for work they may carry out in the course of their development, simply by reason of the fact that they provided the works in implementing the resource consent itself.
[52] Clause 94 has two parts to it. The first is the general policy that no offsets will be provided for works provided by a developer. The second is, in a way, an advisory statement which clarifies that if a developer carries out works “on behalf of council” the parties should enter a separate agreement to address payment and consequences. However, it also confirms that development contributions must still be paid (which the developer would no doubt take account of when settling the terms of any such separate agreement). The wording used in this second aspect of the clause is relevant. The works in issue in this case (the Reserve works) were carried out in the context of the Three Kings precinct development and as provided for in the LEA.
[53] Importantly, however, the Policy and cl 94 cannot trump or override the provisions of the Act. Section 200(1)(b), for example, expressly confirms that the Council cannot require a development contribution if the developer will fund or
otherwise provide for the community facilities. The Council’s argument as to the interpretation and application of cl 94 does not sit comfortably with s 200(1)(b). On one reading, it seeks to engraft on to that statutory provision a further requirement that a development contribution may still be required in those circumstances unless a development agreement is in place.
[54] A more practical interpretation of cl 94 of the Policy would have it apply in circumstances where, in implementing the works under the resource consent, the developer carries out or provides such incidental works. Clause 94 makes it clear that in those circumstances there can be no credit or offset for those works and a development contribution assessment may still be applied. In the present case, FRL has, on the evidence, provided regional assets quite outside the terms of the resource consents in issue. They were provided as part of the Three Kings precinct development generally and in accordance with the LEA.
[55] Finally, the Commissioner was well aware of s 199J. She expressly referred to it in the context of the statutory framework and correctly noted that no one part of the section took precedence. It is implicit in her reasoning that she was aware of the need for coherence in application of the Policy.
[56] For those reasons, I do not consider the Commissioner was in error in her interpretation of cl 94 in this case. The second ground of review fails.
Third ground of review
The Council’s arguments
[57] The Council says the Commissioner erred by conflating the four grounds of objection under s 199D. The various grounds are disjunctive and required separate consideration. Mr Fowler referred to the Commissioner’s observation that if she found the objection ground (a) under s 199D was made out, it was “highly likely” all the objection grounds would be made out. He argued that she effectively predetermined the outcome for objection grounds (b)–(d). Each ground needed separate consideration.
[58] Mr Fowler submitted that, again, the Commissioner had fallen into error by focusing on the demand from the wider Three Kings precinct and treating it as part of the development. As a result, she failed to give proper consideration to the elements of each individual ground of objection.
Analysis
[59] It is apparent the Commissioner was aware the grounds of objection were disjunctive. As she noted at [41] of her decision:
The Objection cites all four grounds and Counsel for FRL submitted that all grounds under clause 199D are not mutually exclusive and that its case demonstrated that all of the grounds have been made out. I agree that if I consider that a particular ground is not made out, that does not limit my ability to find that a separate ground has been established. However, in a case such as this the grounds are interlinked so finding that one ground is established it is more than likely that I will find all grounds are established.
[60] I also reject the submission that the Commissioner’s observation it was “more than likely” if one ground (particularly the first) was made out then the other grounds of objection would be found to be established amounted to predetermination. Rather, it reflected the inevitable overlap of considerations between the objection grounds given the factual background in this case.
[61] Further, there is an issue of materiality here. The short point is that, if FRL succeeded on its first ground of objection under s 199D(1)(a), that was sufficient for FRL to have the development contribution assessment set aside. The Commissioner was not strictly required to go on and consider whether the other grounds as set out in s 199D(1)(b)–(d) were made out.
[62] Having done so, I agree with the submission for FRL that when the Commissioner’s decision is read in its entirety, the reasoning, albeit brief, in relation to grounds (1)(b), (c) and (d) addresses the relevant considerations raised by those subsections. The third ground of review is not made out.
Fourth ground of review
The Council’s arguments
[63] The fourth ground of review only relates to FRL’s third ground of objection under s 199D(1)(c). Even if the Council succeeded on this ground of review, it would not be sufficient for it to succeed overall as I have confirmed the Commissioner’s decision on the first objection under s 199D(1)(a). Nevertheless, I deal with it briefly as follows.
[64] The Council says the Commissioner erred by determining FRL’s third ground of objection (which was based on s 200) only by the reference in Neil Construction Limited v North Shore City Council to “double dipping”, rather than by reference to s 200 of the Act itself.
[65] Mr Fowler submitted that for the “double dipping” principle to apply in the present case, the development contributions would have had to be used to fund the Reserve works. He submitted that the obligation to provide the Reserve works arose under the LEA and was a quite separate legal obligation.
[66] Before the Commissioner, FRL had relied on the judgment of Neil Construction Limited v North Shore City Council and the comments of Potter J in that case to the effect that:10
[61] Section 200 provides a safeguard against “double dipping”. A development contribution may not be required if the capital expenditure is otherwise funded by a financial contribution under the Resource Management Act, or if the developer will otherwise fund or provide for the same reserve or infrastructure, or funding will be derived by the territorial authority from a third party.
[67] FRL made the point before the Commissioner that the evidence was that FRL has contributed over $10.4 million towards Auckland wide local parks and sports field developments, in line with the LTP, which formed the basis of the Policy.
10 Neil Construction Limited v North Shore City Council, above n 2.
Analysis
[68]The relevant provision is s 200(1)(b) of the Act:
(1)A territorial Authority must not require a development contribution for a reserve, network infrastructure, or community infrastructure if, and to the extent that–
…
(b) the developer will fund or otherwise provide for the same reserve, network infrastructure, or community infrastructure; …
[69] The issue is whether the Reserve works provided by FRL are the “same’ community facilities on which the Council has based the development contribution assessment. The concept of ‘sameness’ runs through s 200(1), although in (1)(a) and (1)(ba) it refers to “the same purpose”, and in (1)(ba) in respect of “the same building work”, whereas (1)(b) and (c) refer to “the same community facilities”.
[70] The Council’s argument is that it was legally entitled to the Reserve works under the terms of the LEA, as these were consideration in return for its provision of the reserve land. As such, and on a strict application of s 200(1)(b), it is not “double dipping” in the present case to require the development contributions.
[71]The LEA provides in the preamble:
D. As part of the consideration payable by FRL and as a condition to agreeing to the acquisition and disposal of the Existing Reserve Land, Reserve to be Exchanged and the Reserve to be Transferred, the Council is requiring FRL to carry out the Reserve Development Works. (Reserve works).
[72]The preamble also refers to:
F. FRL has agreed to undertake the Reserve Development Works for the Council in accordance with the terms and conditions in this agreement at no cost to the Council.
[73] The operative part of the LEA does not refer to the issue of consideration. Clauses 7.1 and 7.2 of the LEA simply record FRL agreed to undertake the Reserve works and complete their construction at its own cost. Under cl 7.4, FRL also agreed
to complete, at its own cost, the construction of the sports fields, playspace area and immediate vicinity.
[74] Mr Bigio noted the Reserve works did not form part of the clause providing for the “Equality of Exchange” under the LEA. He submitted that suggested the Reserve works were not part of the consideration under the LEA, despite recital D. He argued that FRL agreed to carry out the Reserve works as part of its development as that was the most cost effective and logical option, as confirmed by John Duthie in his evidence.
[75] Mr Bigio also noted that sch 1 of the Policy contained activity descriptions for reserves, network infrastructure and community infrastructure: under the “Reserves – Acquisition” clause, it noted land acquisition for public open space of all types from small local parks to large regional parks; and “Reserves – Development” included development and improvement of local parks, local sports parks and other local open space areas. However, as the Commissioner herself noted, these works are not in sch 4 and are not currently specified in sch 8 of the Policy, which both set out the capital expenditure projects that were to be funded by development contributions.
Analysis
[76] While “double dipping” is a pejorative term, the principle underlying s 200 is clear. Where the capital expenditure on community facilities (particularly, in the present case, reserves) required by the consented development project is met by the developer providing for the same reserve, then the Council cannot require a development contribution. On the evidence, FRL has arguably provided the ‘same’ reserve required by the development.
[77] While there was the reference in recital D of the preamble to the Reserve works being part of the consideration, I consider it important that the LEA did not prohibit FRL from claiming a credit in respect of the Reserve works. The evidence of David Kelleher (the lawyer advising the Council) and Nicole Moynagh (FRL’s inhouse counsel) confirms that the issue of a credit for the Reserve works was discussed but not agreed. The point was left open.
[78] Further, the “exchange” under the LEA and as referred to in the Equality of Exchange provision was the exchange of the two lots of land. Under the exchange arrangement, Council’s consideration in relation to its land was FRL’s land. The Reserve works were additional, and operatively not part of the consideration, despite the reference in the preamble. FRL’s carrying out of the Reserve works was the practical course as Mr Duthie’s evidence confirmed.
[79] It follows I accept that it was open for the Commissioner to find that to require a development contribution for reserves was, in this case, a breach of s 200(1)(b). However, even if I am wrong in that, it makes no difference to the end result on this review as it only applies to one aspect of FRL’s challenge to the development contribution assessment and I have upheld the Commissioner’s findings on the other challenges.
Fifth ground of review
The Council’s arguments
[80] Under the fifth ground of review, the Council submits the Commissioner erred in concluding that factually there appeared to be no debate the Reserve works (and the additional works) substantially reduced demand such there was no demand from the development.
[81] Mr Quinn argued that was a reviewable error of fact. While it did not call evidence, the Council had still contested the capability of the demand being satisfied in that way in submission. Mr Quinn submitted that factual error materially influenced the Commissioner’s approach to her reasoning in accepting FRL’s objections.
[82] In Woods v Legal Complaints Review Officer, the Court discussed the concept of review on the basis of error of fact:11
[39] Error of fact is a problematic concept in the spectrum of judicial review grounds. Factual challenge is more normally the subject of appellate rather than review jurisdiction. Where review is concerned, the courts take a circumspect view of factual error. But the courts will intervene where factual
11 Woods v Legal Complaints Review Officer [2013] NZHC 674, [2015] NZAR 577 (footnote omitted).
error undermines jurisdiction, where the factual inquiry was clearly inadequate or otherwise the product of an unfair process or where a finding of fact is utterly unsupportable on the evidence.
[83] Mr Quinn submitted the Commissioner was wrong to conclude there was no debate between the parties that the Reserve works provided under the LEA substantially reduced demand. The Council had effectively reserved its position in submissions. Mr Quinn submitted the error was material. The Commissioner was preoccupied with whether the demand had been satisfied and her mistake of fact on this issue flowed through to her consideration of FRL’s objection grounds generally.
[84] However, as Mr Bigio noted, the evidence from Fraser Colegrave and John Duthie provided a basis for the Commissioner to find that the Reserve works (and additional works) provided by FRL had accommodated the demand generated by the development, including the development approved by the resource consents. While the Council did not concede the Reserve works had an impact on the demand, as the Commissioner observed, it elected not to provide any evidence to the contrary despite being given the opportunity to do so.
[85] Instead, the Council relied on cl 94 of the Policy and its argument that the clause prevented consideration of the Reserve works as there was no infrastructure funding agreement.
Analysis
[86] I agree that it is now too late for the Council to challenge the findings the Commissioner made in the absence of such or any contradictory evidence from the Council.
[87] In the circumstances, and looking at the matter overall, the Commissioner was not wrong to have found that the Reserve works substantially reduced demand such that there was no relevant demand for development contribution assessment purposes arising from the consented project. On the evidence before her, the Commissioner was entitled to make the findings that she did.
Conclusion
[88] For the above reasons, the Council’s challenge to the Commissioner’s findings which upheld FRL’s objection to the development contribution assessment in relation to the reserves and community infrastructure components must be dismissed.
Costs
[89] FRL is entitled to costs. Costs are to be the subject of an exchange of memoranda if they cannot be agreed between the parties. If it is of any assistance to the parties, I consider costs on a 2B basis together with allowance for second counsel to be appropriate.
Venning J
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