Ayrburn Farm Developments Limited v Queenstown Lakes District Council
[2016] NZHC 693
•14 April 2016
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
CIV-2015-425-000090 [2016] NZHC 693
BETWEEN AYRBURN FARM DEVELOPMENTS
LIMITED Applicant
AND
QUEENSTOWN LAKES DISTRICT COUNCIL
Respondent
Hearing: 16 March 2016 Appearances:
J Hodder QC and M Baker-Galloway for Applicant
N Whittington and M Walker for RespondentsJudgment:
14 April 2016
JUDGMENT OF GENDALL J
AYRBURN FARM DEVELOPMENTS LTD v QUEENSTOWN LAKES DISTRICT COUNCIL [2016] NZHC
693 [14 April 2016]
TABLE OF CONTENTS
[Para]
Introduction [1] The Housing Accords and Special Housing Areas Act 2013 (the HASHAA) [3]
- Legislative history [3]
- The process [8]
- The key provisions [12] The Housing Accord and Expressions of Interest [17]
- The Housing Accord [17]
- QLDC policy and criteria for the Special Housing Areas (SHAs) [20]
- EOI – The Ayrburn proposal [24]
- The QLDC April policy [27]
- Ayrburn’s revised proposal [28] Evaluation of the proposals [29]
- Community feedback [29]
- 30 April Draft Report [31]
- 19 May Report [32] Submissions of Counsel and my decision [44]
- Were RMA or planning considerations relevant? [50]
- Was the appropriate weight given to affordability? [61]
- Did the decision rely on a flawed report? [70]
- Was a “separate” or “associated” error of law made over
proximity of the proposal to an “urban” area? [76]
- Infrastructure issues [79] Result [81] Costs [83]
Introduction
[1] This is an application for judicial review of a decision of the Respondent, the Queenstown Lakes District Council (QLDC) made on 3 June 2015. That decision was one not to recommend to the responsible Minister of the Crown (the Minister) a proposal submitted by the applicant, Ayrburn Farm Developments Ltd (Ayrburn) for a 45.7 hectare (150 dwelling) housing development near Arrowtown (the Ayrburn Farm Proposal) to be designated as a “Special Housing Area” (SHA) under the Housing Accords and Special Housing Area Act 2013 (HASHAA).
[2] The HASHAA was enacted for the general purpose of enhancing housing affordability and supply in certain regions identified as having significant housing supply and affordability issues. These regions are listed in Schedule 1 of the HASHAA and now include the Queenstown Lakes region where the Ayrburn Farm Proposal is situated.
The Housing Accords and Special Housing Areas Act 2013 (the HASHAA)
Legislative history
[3] The HASHAA was introduced in 2013, it seems in response to growing concerns over the cost of housing in certain parts of New Zealand. The means by which the HASHAA seeks to improve housing affordability is by increasing the supply of land for residential development in that region.
[4] The Explanatory Note to the Bill which became the HASHAA explained clearly that the Bill provided for some permissive resource consent powers.1 It said that whenever a resource consent application is made, the authorised agency must reach a decision consistent with, and which gives effect to, the purpose of the HASHAA.2 It also noted that the Bill provided for certain applications to be made that could not be made under the Resource Management Act (the RMA).
[5] The Regulatory Impact Statement for the HASHAA also emphasised the impact that the RMA has on land accessibility, which in turn affects housing
1 Housing Accords and Special Housing Area Bill 2013 (117-1) (explanatory note) at 3.
2 At 3.
affordability. The establishment of SHAs was considered to be the best approach to addressing land supply and housing affordability issues.
[6] The Select Committee Report echoed the purpose elucidated in the Explanatory Note.3 It recommended a clarification that the Minister must be satisfied of adequate infrastructure in order to approve a qualifying development because “to achieve the bill’s purpose, it is important that qualifying developments can be serviced by adequate infrastructure, such as sewerage system and electricity”.4
[7] The Act was given legislative assent on 13 September 2013 and came into force on 16 September 2013. Again, the stated purpose of the Act outlined in s 4 is specifically to:5
…enhance housing affordability by facilitating an increase in land and housing supply in certain regions or districts, listed in schedule 1, identified as having housing supply and affordability issues
The process
[8] As I have noted, the HASHAA applies to regions or districts that are listed in Schedule 1 of the Act. From 17 July 2014 Schedule 1 was amended by inserting QLDC as a district to which the Act applied.
[9] The HASHAA provided that, as an affected territorial authority, the QLDC could enter into an agreement with the Government to work together to address housing supply and affordability issues in its district.6 This is known as a “housing accord”. Any territorial authority that is party to a housing accord is known as an “accord territorial authority.”7 On 23 October 2014 the QLDC entered into a housing accord with the Government.
[10] Section 16(1) of the HASHAA then goes on to provide that the Governor- General may, upon recommendation of the relevant Minister, declare an area within
3 Housing Accords and Special Housing Areas Bill 2013 (117-2) (select committee report).
4 At 5.
5 Housing Accords and Special Housing Areas Act 2013, s 4.
6 Housing Accords and Special Housing Areas Act 2013, s 10(1).
7 Section 10(5).
a scheduled district to be a SHA for the purposes of the Act. Before making any such recommendation, the Minister responsible must have regard to factors such as existing geographic boundaries, and the district plan either existing or proposed.8
But, the Minister must not recommend an area unless the Minister is satisfied, amongst other things, that there is adequate infrastructure to service qualifying developments in the proposed SHA.9
[11] Importantly, it is the role of an accord territorial authority to recommend to the Minister that one or more areas within its district be established as SHAs.10 The HASHAA further provides that where there is a housing accord in place and a proposed SHA will fall within the district of the accord territorial authority, the Minister must not recommend the making of a SHA unless it is made on the recommendation of the accord territorial authority under s 17, or public notice of an intention to terminate the housing accord has been given.11 The recommendation of the accord territorial authority is therefore of considerable significance.
The key provisions
[12] For present purposes it is useful to set out certain key provisions of the
HASHAA in full which I now do:
16 Process for establishing special housing areas
(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, declare an area within a scheduled region or district to be a special housing area for the purposes of this Act.
(2) Before making a recommendation under this section, the Minister must have regard to existing geographic boundaries, the relevant district plan, and any relevant proposed district plan to ensure that the boundaries of the proposed special housing area are clearly defined in the Order in Council and easily identifiable in practice.
(3) The Minister must not recommend the making of an Order in
Council under this section unless the Minister is satisfied that—
(a) adequate infrastructure to service qualifying developments in the proposed special housing area either exists or is likely
8 Section 16(2).
9 Section 16(3)(a).
10 Section 17(1).
11 Section 16(4)(a)(i).
to exist, having regard to relevant local planning documents, strategies, and policies, and any other relevant information; and
(b) there is evidence of demand to create qualifying developments in specific areas of the scheduled region or district; and
(c) there will be demand for residential housing in the proposed special housing area.
(4) The Minister must not recommend the making of an Order in
Council under this section where—
(a) the proposed special housing area will fall within the district of an accord territorial authority, unless—
(i) the Minister’s recommendation is made on the recommendation of the accord territorial authority under section 17; or
(ii) public notice of the intention to terminate the housing accord has been given in accordance with section 13; or
(b) there is no housing accord between the Minister and the territorial authority for the district in which the proposed special housing area will fall, unless—
(i) the territorial authority and the Minister have been parties to a housing accord and the accord has been terminated; or
(ii) the Minister, after endeavouring to negotiate in good faith with the territorial authority in an attempt to conclude a housing accord, has been unable to reach an agreement with that territorial authority.
(5) The Minister has no obligation to recommend the making of an Order in Council under this section, even if the Minister is satisfied that all criteria for making a recommendation are met.
(6) The chief executive must, as soon as practicable after an Order in Council is made under this section, notify each Local Authority in whose district or region the special housing area falls of the making of the Order in Council.
[13] Section 17 is found in Part 1 of the HASHAA. It is a key provision which confers the relevant statutory discretion. It provides:
17Establishing special housing area in district covering by housing accord
(1) An accord territorial authority may, at any time, recommend to the Minister that 1 or more areas within the district of the accord territorial authority be established as special housing areas.
(2) An accord territorial authority, when recommending to the Minister that a special housing area be established, may recommend that the Order in Council declaring the special housing area prescribe 1 or more of the criteria referred to in section 15(1) and (3) for qualifying developments in the special housing area or a part of the special housing area (see section 15(7)).
(3) An accord territorial authority may also, at any time after a special housing area is declared, recommend to the Minister that an Order in Council be made prescribing 1 or more of the criteria referred to in section 15(1) and (3) for qualifying developments in the special housing area or part of the special housing area.
[14] In terms of s 16 of the HASHAA, the Minister may recommend the Governor General declare an area to be a SHA by Order in Council but must not do so unless satisfied of certain criteria. These criteria relate to the provision of adequate infrastructure to service any new SHA developments and to evidence of demand.
[15] In areas where the Minister has entered into a housing accord with the relevant local authority (such as is the case here), the Minister is restricted to recommending the making of an Order in Council in terms of s 16(4) of the HASHAA to situations where he has received a recommendation under s 17 from the applicable local authority.
[16] Once an applicant has been successful in having its land designated by Order in Council as an SHA under Part 1 of the HASHAA, then the provisions of Part 2 apply. This Part 2 has significant RMA implications. It sets up a permissive resource consenting regime which is designed to facilitate an increase in residential land and housing supply by making it easier for developers and owners of SHA land to obtain resource consents for certain qualifying housing developments.
The Housing Accord and Expressions of Interest
The Housing Accord
[17] As I have mentioned, the QLDC entered into a housing accord (the Housing
Accord) with the Government on 23 October 2014. Sections 10 and 11 of the
HASHAA deal with housing accords and it is useful here to set out their provisions in full which I now do:
10 Minister and territorial authority may enter housing accord
(1) The Minister and a territorial authority whose district is within a scheduled region or district may enter into an agreement to work together to address housing supply and affordability issues in the district of the territorial authority (a housing accord).
(2) A housing accord—
(a) must comply with the requirements in section 11(1);
and
(b) may, without limitation, cover the matters referred to in section 11(2).
(3) Either the Minister or a territorial authority whose district is within a scheduled region or district may initiate the negotiation of a housing accord.
(4) However, the Minister has no obligation to enter into a housing accord with a territorial authority whose district is within a scheduled region or district.
(5) While a housing accord is in force, the territorial authority that is a party to that housing accord is an accord territorial authority.
11 Form and content of housing accord (1) A housing accord must— (a) be in writing; and
(b) set out the parties’ agreement about how they will work together to achieve the purpose of this Act in the district of the territorial authority; and
(c) set out agreed targets for residential development in the district of the territorial authority; and
(d) provide for either party to terminate the accord on giving 6 months’ notice (or such other period, of not less than 3 months, as may be agreed).
(2) A housing accord may—
(a) provide for the Minister and the territorial authority to work together across a range of housing issues, according to the matters that they may identify as relevant to improving housing supply and
affordability in the district of the territorial authority;
and
(b) provide for such other matters as the Minister and the territorial authority may consider necessary or desirable to address housing supply and affordability issues affecting the district of the territorial authority; and
(c) set out the grounds on which, and the mechanism by which, the housing accord may be terminated; and
(d) provide for a dispute resolution process that must be followed before the housing accord may be terminated; and
(e) provide for any matters that the parties agree, having regard to the matters covered by their agreement,—
(i) may be necessary to facilitate or ensure an orderly transition from the legislative regime that applies under this Act while the housing accord remains in force to the legislative regime that applies if the housing accord is terminated; and
(ii) are not covered by the transitional provisions set out in clauses 1 to 3 of Schedule 3.
[18] The specific Housing Accord reached here included commitments by the
QLDC:
(a) to prioritise achievement of the specified targets for the number of sections and dwellings to be consented in the next three years totalling
1300 consented sections and dwellings (the Targets);
(b)to utilise the HASHAA provisions to facilitate positive consideration of housing developments that might otherwise struggle to achieve approval under the District Plan and the RMA (the Facilitation Commitment); and
(c) to facilitate development aligned with the QLDC’s policy and regulatory framework including the District Plan, and with the QLDC’s intended plan for residential development to be more
affordable, medium high density, and closer to key centres and on good public transport routes.
It also acknowledged that improving housing affordability was a complex issue which required consideration of wider issues, not all of which could be addressed under the Housing Accord.
[19] The Housing Accord also set out specific targets for the QLDC to meet, being:
Housing Supply
Aspiration targets
Year One
Year Two
Year Three
Total number of sections and dwelling consented
350
450
500
The QLDC has met its year one target (for the period from October 2014 to October
2015), consenting 557 sections and dwellings in the Wakatipu Basin.
QLDC policy and criteria for the Special Housing Areas (SHAs)
[20] In October 2014 the QLDC adopted a Lead Policy (the October Policy) to guide the assessment of potential SHAs for recommendation to the Minister and to provide parameters around its approach to achieving its Housing Accord targets
[21] The October Policy included matters which reinforced the existing District
Plan and RMA considerations, including the desirability for potential SHAs to have: (a) location within or adjacent to existing urban areas; and
(b) assurance of adequate infrastructure; and
(c) community feedback
[22] The report also provided for a number of criteria on which each SHA proposal would be assessed and evaluated. The criteria were created in order to serve as a guide for the governing body of the QLDC, to provide a fair overall assessment of each Expression of Interest (EOI), and did not address all evaluative considerations such as RMA matters.
[23] On 7 November 2014, the QLDC invited EOIs from persons interested in developing areas of land within the district as SHAs.
EOI - The Ayrburn proposal
[24] In February 2015 Ayrburn prepared and submitted a detailed EOI. Its SHA
proposal was for a development of 150 new houses on a 45.7 hectare site at 341-343
Arrowtown-Lake Hayes Road it owned.
[25] The Ayrburn Farm proposal was for a medium density residential development which it said would be constructed at no cost to the QLDC. The proposed 150 lots ranged between 350m2 and 500m2. Level platforms on this particular site, it was said, would keep construction costs low and could enable housing to be delivered for around $450,000 in line with the Kiwisaver Homestart grant house price cap for Queenstown of $450,000.
[26] The Ayrburn Farm property is located approximately two kilometres from Arrowtown. It is adjacent to areas known as the Waterfall Park and Millbrook Special Resort Zones. Within these areas the Millbrook Resort at present contains approximately 200 dwellings, and is zoned for up to 450 dwellings, and Waterfall Park is zoned for up to a further 100 dwellings.
The QLDC April Policy
[27] On 30 April 2015, the Council adopted what was described as “an amended Lead Policy” (the April Policy). It was much the same as the October Policy but it also incorporated implementation guidelines relating to the HASHAA. Compared to the October Policy, the April Policy included new references to “Community Housing”, both generally and under the affordability criteria.
Ayrburn’s revised proposal
[28] On the basis of the amended April Policy and the addition of community housing to the criteria, Ayrburn revised its EOI, adding an offer to lease 15 three bedroom houses to the community housing provider for $1 per annum per house for a period of 25 years.
Evaluation of the proposals
Community feedback
[29] The QLDC initially had planned on considering the proposals in April 2015. However, the decision was made to defer the consideration until after a new Arrowtown Councillor had taken office at the end of May 2015. This was in order to allow an Arrowtown member to be involved in the decision making process. In the meantime, the QLDC made available the various proposals on their website so that the public could see them and provide feedback if they wished.
[30] Approximately 67 written responses were received, of which at least 12 directly referred to the Ayrburn Farm proposal, raised were in opposition to it and a range of issues. A copy of the community feedback was posted on the QLDC’s website for all members of the public to consider in advance of the Council’s meeting on the 3 June 2015. However, it seems Ayrburn may not have been aware of this document.
30 April Draft Report
[31] An original Planning and Development draft report from council officers dated 30 April 2015 was prepared and it recommended the QLDC accept seven of the proposed SHAs, including the Ayrburn proposal. That draft report, however, had predated the amended policy that introduced the new Community Housing provisions. Also, the report was simply a draft working document. It did not represent the final recommendation of QLDC’s officers to the Council. It was not presented to the governing body of the QLDC for consideration.
19 May Report
[32] The final Planning and Development report to the Council from its officers was dated 19 May 2015 (the May Report). The May Report recommended four proposals to be put to the Minister. The Ayrburn proposal, along with other SHA proposals for properties near to Arrowtown, was not one of them.
[33] The report writers, in considering the lack of guidance set out in the
HASHAA, expressly noted:
As stated previously, HASHA provides limited guidance as to the assessment of potential SHAs, beyond housing demand and infrastructure concerns. HASHA is silent on RMA / planning considerations, however our legal advice is that these are relevant considerations. The weight to be given to these matters is at the Council’s discretion, having regard to the overall purpose of HASHA. These matters have been considered extensively in this report, particularly with regard to the proposed Arrowtown SHAs.
[34] In relation to the Arrowtown proposals, the May Report stated:
There are some positive grounds to consider the SHAs proposed around Arrowtown. These include meaningful contributions to housing supply, well thought out design responses, and community housing contributions. However the Arrowtown SHAs largely fall outside the Urban Growth Boundary (UGB) and this matter needs to be carefully assessed and weighed against the benefits associated with an increase in housing supply.
[35] Attached to the May Report was an assessment matrix used to evaluate each EOI. This set out ten criteria which were taken into account for each proposal and their weightings. They were:
(a) Location – 15 per cent;
(b) Adequate infrastructure – 20 per cent;
(c) Demand for Qualifying Developments – 10 per cent; (d) Demand for residential housing – 10 per cent;
(e) Affordability – 20 per cent;
(g) Building height – 2 per cent;
(h) Minimum number of dwellings – 2 per cent;
(i) Residential development quality – 10 per cent; and
(j) Capability (developer and site) – 6 per cent.
[36] Each criterion for the proposals was scored by two assessors. The scores of the two assessors’ were then averaged and that average was converted into a score based upon the weight allocated to the particular criterion. For example, both assessors scored the affordability of Ayrburn’s proposal as five out of five. Therefore, Ayrburn was entitled to the full 20 per cent when it came to the affordability score. On the other hand, when it came to location, one assessor scored the Ayrburn proposal as a two and the other a three, the average being 2.5. On this criterion, Ayrburn was entitled to only half of the weighted percentage, in this case 8 out of 15.
[37] Ayrburn scored the maximum 5 on five of the criteria, 4.5 on two other criteria and a 4 on one. On the remaining two criteria, location and adequate infrastructure, it only averaged 2.5 on each. This amount to a total of 18 out of a possible 35. Ayrburn finished with a total of 80 per cent, 17 points of which were lost on those two criteria alone.
[38] The May Report also made clear that this assessment matrix was not the only decision making tool to be utilised by Council here. This is illustrated by the fact that of the top seven by score, the four that were recommended were the second, fourth, fifth and sixth highest scoring proposals. This demonstrated that the scoring mechanism was only a useful tool to assist in the exercise of the discretion, and did not result in the QLDC fettering its own discretion by slavish adherence to a guiding policy.
[39] An important consideration in the May Report was the location of the EOI proposals. So far as those nearby the Arrowtown area were concerned, these included consideration of their location in relation to the Arrowtown Urban Growth Boundary and associated issues. In particular, the May Report stated:
The Lead Policy’s preference for greenfield proposals to be located adjoining existing urban areas creates a specific issue for those EOIs adjacent to or adjoining the Urban Growth Boundary (UGB) in Arrowtown. Arrowtown is the only location in the District where an urban growth boundary is afforded statutory, District Plan status. Thus, EOIs for land located immediately adjoining the urban growth boundary in Arrowtown challenge the integrity of that boundary (despite scoring highly against the Lead Policy criteria).
The Arrowtown UGB is considered to be the most sensitive of the RMA /
planning issues that need to be balanced against the HASHA considerations.
[40] The May Report did identify that, as the HASHAA was primarily concerned with the affordability of housing, location was not in itself determinative, but rather it was a further factor that was required to be properly weighed.
[41] Specifically relating to the Ayrburn proposal, the May Report set out:
The Ayrburn Farm EOI, by being located some 2kms from the urban boundary, does not fit well with the locational criteria in the Lead Policy (although as noted above this does not preclude consideration). This can be viewed both positively and negatively in an RMA planning sense:
· It might be argued that being located well away from the UGB better
preserves the integrity of the UGB as an urban ‘fence’.
· Conversely, a significant aspect of UGBs is not only to protect the
‘town edge’ but also to discourage urban development in the countryside. The proposal essentially represents an “urban island” in the countryside, and may adversely impact landscape values.
Ayrburn Farm’s location is more remote from services and facilities, and would be largely reliant on private vehicle transport. However, the masterplan submitted is considered to be of a high quality. In addition, the Ayrburn Farm proponent has proposed a significant Community Housing contribution, and together with the proposed allotments sizes and design proposal makes a meaningful contribution to housing supply and affordability issue in the District.
[42] The Council of the QLDC considered the May Report at its meeting on
3 June 2015. It decided to proceed with only four EOIs as candidates for recommendation as SHAs, excluding the Ayrburn Farm Proposal.
Submissions
[44] The essential ground of judicial review pleaded by Ayrburn is that the QLDC made an error of law when it made its decision not to recommend the Ayrburn Farm Proposal. In particular, it is argued that the QLDC misinterpreted and undermined HASHAA in that it:
(a) misconstrued or disregarded the purpose of the HASHAA and took into account irrelevant RMA considerations; and
(b) relied on flawed reports;
(c) was required by the HASHAA to place “primary” weight on housing
affordability but it failed to do so; and
(d)made a “separate” or “associated” error of law by determining that the Ayrburn proposal was not adjacent to an existing urban area when neighbouring land, it was said, was zoned “urban”.
[45] In opposition, the QLDC does not accept that any of these alleged errors occurred.
[46] It is trite law that a public body must exercise its statutory powers in accordance with the statutes that confer them. If the body makes a decision that is outside the limits of its power, that power is abused. The two most common examples of abuse of power are first, for the decision-maker to take into consideration matters that they ought not to take into consideration, or secondly, for the decision-maker to not take into consideration factors that they ought to have.12
[47] Often the constraints on a decision-maker’s power are set out in the
provisions of the governing statute. But sometimes a statute, on its face, is more or less silent as to the criteria or factors that the decision-maker must consider. In this
12 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230. .
case, other than the matters I note at [14] above, the HASHAA is largely silent when it comes to considerations that should be taken into account when deciding what EOIs should be recommended to the Minister to be established as SHAs. This does not mean that there are no restrictions on the decision-making power. It is a basic principle of administrative law that a statutory power is subject to limits even if it is conferred in unqualified terms. This was confirmed by the Supreme Court in Unison
Networks Ltd v Commerce Commission:13
[53] A statutory power is subject to limits even if it is conferred in unqualified terms. Parliament must have intended that a broadly framed discretion should always be exercised to promote the policy and objects of the Act. These are ascertained from reading the Act as a whole. The exercise of the power will be invalid if the decision-maker “so uses his discretion as to thwart or run counter to the policy and objects of the Act”. A power granted for a particular purpose must be used for that purpose but the pursuit of other purposes does not necessarily invalidate the exercise of public power. There will not be invalidity if the statutory purpose is being pursued and the statutory policy is not compromised by the other purpose.
[54] Ascertaining the purpose for which a power is given is an exercise in statutory interpretation which is not always straightforward. This is partly because legislative regimes differ in the specificity with which they grant powers. In this area the courts are concerned with identifying the legal limits of the power rather than assessing the merits of its exercise in any case. They must be careful to avoid crossing the line between those concepts.
[55] Often, as in this case, a public body, with expertise in the subject matter, is given a broadly expressed power that is designed to achieve economic objectives which are themselves expansively expressed. In such instances Parliament generally contemplates that wide policy considerations will be taken into account in the exercise of the expert body’s powers. The courts in those circumstances are unlikely to intervene unless the body exercising the power has acted in bad faith, has materially misapplied the law, or has exercised the power in a way which cannot rationally be regarded as coming within the statutory purpose.
[48] In its submissions before me, Ayrburn contends that, when the HASHAA and the Housing Accord are considered in tandem, QLDC, in deciding whether an area should be recommended to the Minister as a potential SHA, was required by the
HASHAA’s purposes:
13 Unison Networks Ltd v Commerce Commission [2007] NZSC 74, [2008] 1 NZLR 42 citing
Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997 (HL) at 1030.
(a) to give primary weighting to the improvement of housing affordability, including the provision of community housing; and
(b) to direct itself that RMA matters would be addressed only under
Part 2 of the HASHAA after the SHA had been established.
[49] Ayrburn submits that the scheme and purpose of the HASHAA and the terms of the Housing Accord established what relevant and irrelevant criteria were. Its essential point was that the QLDC erred in law by adopting a decision-making process and criteria that did neither of these things, and that this error was manifested in the ultimate decision to reject the Ayrburn Farm proposal.
Were RMA or “planning” considerations relevant?
[50] As already set out above, the purpose of the HASHAA is provided by s 4. The purpose can be broken down into “what” and “how”. In relation to the what, the purpose is to “enhance housing affordability”. How this is to be achieved is “by facilitating an increase in land and housing supply.”
[51] To assist in achieving this purpose, as I have noted, the HASHAA provides for the entering into of a housing accord between the relevant territorial authority and the Government. As with any accord, this would suggest a certain level of agreement and collaboration. This is what the specific Housing Accord reached here provided for:
The Council and the Government agree that joint action is needed to improve housing supply and affordability in Queenstown-Lakes district. Both parties seek to work collaboratively to focus on the distinct housing issues facing the district. To provide a basis for this collaboration the Government and Council have entered into this Accord.
[52] The role of recommending which areas should be declared SHAs lies with the responsible Minister. Section 16 provides for considerations that the Minister must have regard to such as geographic boundaries, relevant district plans, infrastructure and demand.
[53] However, an accord territorial authority can recommend areas for the Minister to consider. Although the HASHAA does not set out considerations that the accord territorial authority must take into account, this does not mean its scope is unlimited. There are factors, however, as I see it, that serve to limit the relevant considerations.
[54] As is made clear in Unison Networks Limited, one of these is the policy objectives of the Act. In the present case, these are clearly identified by the purpose
– to enhance housing affordability. The Act achieves this ultimately by softening elements of the RMA for appropriate areas of land. To that end, Ayrburn has attempted to argue that initially RMA considerations should not be taken into account. As I see it, there are three problems with this argument, however.
[55] The first is that the Housing Accord sets out, and the HASHAA anticipates, a collaborative process between the Government and the QLDC as the territorial authority. Under this collaborative process and as set out in the Housing Accord (as I have noted at [15] above), QLDC specifically committed to facilitate new housing developments aligned with its policy and regulatory framework and, in particular, to take into account District Plan issues. Proposed residential developments were specifically to be “more affordable, medium high density, and closer to key centres and on good public transport routes”. All of these matters were clearly to be part of the collaborative process. To completely disregard matters of location, as I see it, would be contrary to collaboration.
[56] Secondly, although the purpose of HASHAA is to enhance housing affordability by increasing land supply, the Act simply does not roll out a blank canvas for development. Despite the general thrust of submissions advanced before me on behalf of Ayrburn, the HASHAA does not set up a regime in which every area of land that meets the listed criteria (i.e. infrastructure availability and evidence of demand) must be declared an SHA. Some land in any region simply would not be suitable or appropriate for establishment as an SHA. This would include, for example, land that might be contaminated or land close to an airport or otherwise noise or industry-affected land. Clearly these matters are controlled in terms of ss 16 and 17 of the HASHAA through discretions held by the Minister and the local
authority, in this case QLDC. It simply cannot be correct to say that, in passing the HASHAA, it was Parliament’s intention that every piece of land in a region on which a housing development could conceivably be put was required to be recommended to the Minister as a potential SHA. As I see it, the HASHAA gave both the Minister and a local authority a discretion and, clearly, the actual location of areas of land to be recommended (and to that extent what could be described as planning or RMA matters) were always appropriate considerations in any such recommendation.
[57] And thirdly, I turn to Ayrburn’s argument here that, because the consenting regime under Part 2 of the HASHAA limits the involvement of the public and provides for RMA matters to be considered, albeit carrying reduced weight, such matters are not relevant to the exercise of discretion under Part 1 of the HASHAA. In my view, this argument runs directly counter to the express requirements of the Local Government Act 2002 (the LGA) which generally require all decision makers to have regard to a local council’s policies and its District Plans. That the provisions of the HASHAA may, to an extent, override the LGA could well be the case. But, nevertheless, if location or planning matters are to be excluded at this first stage of the process then potentially dangerously contaminated land or land close to an airport, for example, could constitute recommended SHAs. Allowing land with these issues to be subject to the permissive RMA regime under Part 2, in my view, would simply set up recommendations for failure. Worse still, it might:
(a) undermine the HASHAA because, instead of the later Part 2 RMA consenting process being streamlined, that process would simply be a waste of resources and time; or
(b)risk housing development being approved and undertaken that was entirely undesirable in that it posed a risk to health and safety and thereby did not in fact satisfy demand.
All of this simply is not in line with achieving the purpose of the HASHAA and would undermine s 17 which operates as a gateway for the HASHAA process.
[58] And finally, as I see the position, it is clear from Parliament’s drafting process for the HASHAA that location and planning considerations were to be available to territorial authorities. Supplementary Order Paper 343 sought to amend cl 16,14 the reasoning for this being:15
This Supplementary Order Paper amends the Housing Accords and Special Housing Areas Bill to remove the override provisions in the Bill that allow the Government to impose special housing areas on a local community without a housing accord being reached. Such provisions undermine local democracy and are likely to lead to poor decisions being made around the building of housing because local councils are the bodies best placed to know what housing needs they have and whether housing developments will fit with the council’s long term plans for an area.
[59] This acknowledges that territorial authorities are in the best position to deal with planning issues. It also implicitly acknowledges that planning considerations should, or at least could, be taken into account by a territorial authority when making a s 17 recommendation. And, it is useful too, in turning to the precise wording of Part 1 of the HASHAA, to note that, as I see it, there are strong textual clues in this Part 1 that planning matters are relevant in both the recommendations to be made by the local authority and the Minister. This is made clear in s 15(8) of the HASHAA where the relevant criteria may (without limitation) be prescribed by reference to the provisions of a relevant plan or proposed plan. Section 16(3) of the HASHAA also notes the mandatory requirement that a Minister, in recommending an Order in Council be made as to an SHA, is required to be satisfied that adequate infrastructure to service qualifying developments in the proposed SHA either exists or is likely to exist. It need hardly be said that the Minister can only get this information from the local authority, in this case QLDC itself.
[60] For all these reasons, I find that the QLDC here was entitled to take into account RMA and planning considerations when exercising its discretion in deciding
what proposals to recommend to the Minister.
14 Supplementary Order Paper 2013 (343) Housing Accords and Special Housing Areas Bill 2013 (117-2).
15 Supplementary Order Paper 2013 (343) Housing Accords and Special Housing Areas Bill 2013 (117-2) (explanatory note) at 2.
Was the appropriate weight given to affordability?
[61] Weight is usually a matter for the decision-maker.16 However, “In some circumstances a Court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or which has given excessive weight to a relevant factor of no great importance”.17
[62] In the present case, Ayrburn has submitted that “housing affordability” must be given “primary” weight by QLDC in the exercise of its discretion under Part 1 of the HASHAA.
[63] Ayrburn went on to submit, with reference to Ye v Minister of Immigration,
that where legislation prescribes a certain weight to be given to a factor, “weight is
… not a matter left to the decision-maker’s discretion”.18 In that case, the legislative instrument set out that a particular factor was a “primary consideration”. Glazebrook J, at the time sitting in the Court of Appeal, held that this meant that “[a]s a matter of law, the statute must be interpreted consistently with the substantive requirement to take the best interests of the child into account as a primary consideration”.19
[64] The weighting in question here is the 20 per cent weighting given to the factor of affordability. Ayrburn submits that it is expressly stated under Part 2 of the HASHAA that the purpose of the Act is the most important consideration. As such, the factor of housing affordability should not be “de-weighted” at the s 17 stage as this would defeat the primacy of this factor at Part 2.
[65] I do not accept this argument. Ayrburn’s submission that “housing affordability” must be given “primary” weight in the exercise of QLDC’s discretion under Part 1, in my judgment, is simply not supported by the HASHAA. The submission that it should be given “primary” weight is effectively that it should
receive more weight than even the permissive consenting regime in Part 2 of the
16 Chief Executive Land Information New Zealand v Te Whanau O Rangiwhakaahu Hapu
Charitable Trust [2013] NZCA 33, [2013] NZAR 539 at [108].
17 Thames Valley Electric Power Board v NZFP Pulp & Paper Ltd [1994] 2 NZLR 641 (CA) at
652.
18 Ye v Minister of Immigration [2009] 2 NZLR 596 (CA) at [88].
19 At [88].
HASHAA requires, by which time in theory the land in question has been determined suitable for housing. The argument, in my view, is entirely circular.
[66] In addition, involving local authorities like the QLDC by way of Housing Accords and the exercise of their discretion under s 17 is a clear acknowledgement of the expertise and experience of local authorities in the particular issues of their district. Local authorities are a repository of resource planning knowledge for their region and clearly Parliament intended that should be brought to bear in determining the most suitable locations for SHAs. The social benefit, in my view, is obvious. In achieving the purpose of the HASHAA of enhancing housing affordability, by increasing land and housing supply, of course an applicant might put forward a proposal involving a contaminated or undesirable piece of land. This proposal might involve extremely affordable housing ultimately, but it would have no way of achieving the purpose of the HASHAA if it was simply, and inevitably, to be rejected once recommended to the Minister. This is not to suggest that Ayrburn’s land here was undesirable in this respect, but rather to show that factors such as affordability cannot be considered in a vacuum.
[67] I also do not consider that, in this instance, affordability was “de-weighted”. Alongside infrastructure, affordability was the highest weighted factor considered under the assessment matrix, making up one fifth of the assessment criteria.
[68] Submissions addressed on behalf of Ayrburn on this point also, in my view, do not paint the correct picture of the decision to which I was referred, Ye v Minister of Immigration. On appeal, the Supreme Court held that “primary consideration” does not necessary denote weight or rank. It held:20
[25] It is appropriate, in the light of New Zealand’s obligations under art
3(1), to interpret the relevant provisions of the Immigration Act so that the interests of New Zealand citizen children are always regarded as an important consideration in the decision-making processes. The words “a primary consideration” in art 3(1) do not denote how this consideration ranks against any other relevant consideration such as the public interest. The child’s interest are always important; but what ultimate effect should be given to them is a matter of assessment against all the relevant circumstances of the particular cases and the specifics of any applicable statutory test.
20 Ye v Minister of Immigration [2009] NZSC 76, [2010] 1 NZLR 104 at [24].
(my emphasis)
[69] The HASHAA is generally silent when it comes to all the considerations a territorial authority should take into account when exercising its discretion under s 17. I consider that the QLDC correctly exercised its discretion to weight affordability as it did.
Did the decision rely on a flawed report?
[70] As is already clear from my discussion above, I do not consider that the report to the QLDC from Council Officers in question here was flawed. To the contrary, I am satisfied it was comprehensive and carefully considered, and completed after the precaution of obtaining legal advice was undertaken first.
[71] As I have noted, the HASHAA does not set out in detail the considerations that should be taken into account. As a territorial authority, QLDC was required to exercise its discretion in order to formulate assessment criteria which were fair and objective. I consider that it did just that, and the results in the May report and the ultimate decision were achieved in a fair and proper manner.
[72] The May report, as I see it, strikes a balance between capturing the affordability purpose of the HASHAA against the collaborative process required by the Housing Accord. It is irrational in my judgment to rigidly quarantine the considerations that a territorial authority is to take into account from those that the Minister is to consider.
[73] I am satisfied also that the scoring mechanism here was only a useful “tool” to assist in the exercise of the discretion, and was not solely determinative of how the QLDC made its recommendations. Of the top seven scoring submissions, the four that were recommended came second, fourth, fifth and sixth. Therefore, even if an applicant had the highest scoring result, this did not guarantee that their proposal would be recommended to the Minister.
[74] For all these reasons, I find that the May report was not flawed.
Was a “separate” or “associated” error of law made over proximity of the proposal
to an “urban” area?
[75] A final submission advanced before me by Ayrburn, as outlined at [44](d) above, is that the QLDC committed a separate or an associated error of law by treating Ayrburn’s proposal as one which was not adjacent to an existing urban area. As to this, Ayrburn suggested that its proposal was adjacent to land zoned “urban” under the QLDC District Plan, being the Millbrook Resort Special Zone. I leave on one side the obvious comment that this submission cannot sit easily with Ayrburn’s suggestion that the QLDC’s District Plan is not relevant here to any assessment of a potential SHA under the HASHAA. Implicit in this particular submission must be the fact that in assessing the location of a potential SHA area, the QLDC ought to have considered how all the land in the immediate area was zoned under its District Plan.
[76] In any event, on this argument, the QLDC’s April Policy, its “Lead Policy” noted at para [27] above, is clear that the location criterion relates to “existing urban areas and services”. It is not directed at areas that are zoned for some future urban development but contain no present urban features (such as the Waterfall Park Special Zone) or to those areas that contain little urban development situated near the proposed SHA’s site (Millbrook). In its assessment of the location criterion for the Ayrburn proposal, QLDC correctly recorded that:
The land is zoned Rural General, and is bounded to the north by Millbrook Resort, the undeveloped Waterfall Park Zone, and rural residential zoning to the south along Speargrass Flat Road.
[77] Even on Ayrburn’s own provided reports here, the Ayrburn farmland and surrounds are noted as rural in nature. Ayrburn acknowledges too that the Millbrook Resort Special Zone (the vast majority of which is open golf course and associated land) is separated from the Ayrburn land by a prominent steep slope visible in the layout plan for the proposal.
[78] I reject this alleged separate error submission by Ayrburn. It is a further attempt to dispute an evaluative assessment that was well within the ambit of the QLDC’s discretion here.
Infrastructure issues
[79] And, linked in a way to this “separate error” argument, is a further factor. Under the HASHAA, infrastructure issues are to be a mandatory consideration when recommending a SHA. Attached to the reports from QLDC staff was a report from the Ministry of Education. This stipulated that Arrowtown School lacked any existing capacity to absorb a significant number of new students who would necessarily arrive in the district if proposed SHAs around Arrowtown proceeded, and, therefore, the EOI proposals in the Arrowtown School catchment area would bring with them significant issues. It seems, as I can recall, that there was little mention of this fact in submissions advanced to me on behalf of Ayrburn and yet, as an infrastructure issue, it was a matter that assumed some importance for the QLDC.
[80] Also, as to other infrastructure issues, the physical separation of the Ayrburn Farm proposal land from Arrowtown had some implications for the report writers and QLDC councillors. Indeed, the councillors had visited the Ayrburn site and clearly discussed and took into account those infrastructure concerns, a factor that further supports the conclusion that the Ayrburn proposal decision by the QLDC here was properly made and should not be interfered with. In considering ss 4 and 17 of the HASHAA, it is proper, in my view, to read into requirements for SHA land that overall it be “suitable”. This concept of “suitability”, as I see it, requires the local authority, here the QLDC, to be the assessor of “suitability” for good reason. This is in part because of the local authority’s expert knowledge of its region and land but, also of additional relevance here, its constant role to evaluate what infrastructure is required to budget and fund it and to build and maintain it.
Result
[81] For the reasons I have outlined above, I find that issues concerning location of a proposed SHA (which may also be described as planning or RMA matters) are relevant, permissible considerations for a local authority and the QLDC here when exercising its discretion under s 17. I am satisfied that the QLDC did not here improperly disregard the true purpose of the HASHAA nor take into account considerations which it was not entitled to do. I find too that no error of law occurred here in relying on any flawed or inaccurate report of Council officers and
that the QLDC, as the decision maker, was properly informed of material facts in making its decision. I conclude also that the UGB, although taken into account as an important consideration here, did not receive disproportionate weight or focus bearing in mind proper location issues. As such, and for the other reasons mentioned, I conclude that the decision under review not to recommend Ayrburn’s proposal was a lawfully available exercise of the discretion by QLDC and this Court should not interfere with it.
[82] The present application for judicial review therefore fails.
Costs
[83] As to costs, counsel for the QLDC has indicated that it intends to seek costs and to be heard on quantum.
[84] As the successful party here, the QLDC is entitled to an award of costs. If counsel is unable to resolve that question of costs between them, then they may file memoranda (not to exceed 10 pages) sequentially and, in the absence of either party indicating they wish to be heard on the issue of costs, I will decide that question based upon the memoranda and the material then before the Court.
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Gendall J
Solicitors:
Anderson Lloyd for the Applicants
Meredith Connell for the Respondents
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