Jayashree Limited v Auckland Council
[2015] NZHC 2085
•31 August 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-000910 [2015] NZHC 2085
IN THE MATTER of an appeal under s 299 of the Resource
Management Act 1991
BETWEEN
JAYASHREE LIMITED, MADHAVA LIMITED AND MADHAVA CORPORATION LIMITED
AND
MADHAV HARA KARMARKAR Appellants
AND
AUCKLAND COUNCIL Respondent
Hearing: 19 August 2015 Appearances:
S Brownhill for the Appellants
C Brown for the RespondentJudgment:
31 August 2015
JUDGMENT OF EDWARDS J
This judgment was delivered by me on 31 August 2015 at 3:00pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar
Date:
JAYASHREE LIMITED & ORS v AUCKLAND COUNCIL [2015] NZHC 2085 [31 August 2015]
Introduction
[1] This appeal from a decision of the Environment Court concerns the way in which the Auckland Council determines the number of residential units permitted on a site.1 That turns on the meaning of “residential unit” contained in the Council’s operative District Plan,2 and in particular the words “designed to be used exclusively” contained in that definition.
[2] The appellants say that the Environment Court erred in law in its assessment of design use by taking into account whether, with very minor changes, a proposed building could be converted into additional household units so as to constitute multiple residential units. This approach is said to be inconsistent with the accepted legal test for determining designed use of the building, and infringes the principle that a person and their successors are entitled to a presumption that they will act lawfully.
Background
[3] The Environment Court’s decision concerns a number of properties located in the Mt Roskill and Mt Albert suburbs of Auckland.
[4] All of the properties are residential dwellings within the Residential 6a zone under the District Plan. Residential activities which comply with relevant development controls are permitted within this zone.3 Rule 7.7.2.1 of the District Plan prescribes a density limit of one residential unit per 375m2 per site area for the Residential 6a zone.
34 White Swan Rd
[5] The first named appellant, Jayashree Ltd, owns the land and dwelling at
34 White Swan Road. A building consent was granted by the Council to allow the single residential unit on the property to be developed into two residential units
which was a permitted activity within the density limits specified in the District Plan.
1 Jayashree Ltd v Auckland Council [2015] NZEnvC 59.
2 City of Auckland Operative District Plan 1999 (Isthmus Section) (District Plan).
3 District Plan, r 7.7.1.
[6] The building consent was issued subject to a notice under s 37 of the Building Act 2004 which prevents building work commencing where a territorial authority considers that resource consent is required. Resource consent was required because the Council took the view that the building was designed to be used as four residential units rather than the two permitted units.
[7] The evidence regarding the proposed units was summarised by the
Environment Court as follows:
[19] Mr Macpherson, for Jayashree, described the two units, including the facilities and services to be provided in each. Each unit would have two stoves, one kitchen sink and one laundry tub, two bathrooms, two power meters and two water meters, one living room (unit 1 would have an additional rumpus room), one letter box and multiple bedrooms. He explained two kitchens in each unit are needed in order to meet the cultural and religious requirements of members of the Indian community who are likely to occupy the same.
[20] Mr Thode, for Auckland Council, is of the opinion that the building is designed to be used as four separate residential units. This use would be achieved if certain internal doors are closed. If this is done, each of units would have an external door, a separate kitchen or combined laundry/kitchen, a separate bathroom, living or rumpus rooms and two-three bedrooms. While two units would not have a separate laundry, laundry facilities (washing machines/dryers) are not required to be shown on an application for a building consent and these can be located in a room with a water connection.
(footnotes omitted)
[8] Jayashree Ltd applied for a declaration that the shared use and occupation of the dwelling at 34 White Swan Road as two households was a permitted activity under r 7.7.1 of the District Plan subject to compliance in all respects with the relevant development controls under r 7.7.2.4 The Environment Court dismissed the application for a declaration, and this appeal is from that decision.
153 White Swan Road
[9] Madhava Ltd owns the property at 153 White Swan Road. This property was the subject of two abatement notices issued by the Council in 2012 which were
4 As recorded at [17] of the decision, it was common ground that even if the Court was to make the declaration sought by Jayashree Ltd, resource consent was still required as the proposed use of the building contravened a single development control. That continues to be the position on appeal.
subsequently withdrawn by agreement subject to the submission of a consent application to formalise the use of the existing single dwelling as three residential units on the property. Such an application was submitted, but was refused by the Environment Court on appeal in 2013.
[10] The Council issued a fresh abatement notice in respect of this property on 19
September 2014. It requires the owner of the property to return the building to a single residential unit by taking various steps such as removing kitchen features, removing any excess power, water and gas meters and removing any locks or obstructions on the property which prevent access through internal doors on the property.
[11] The Environment Court dismissed Madhava Ltd’s appeal from this abatement
notice, and this appeal is from that decision.
325, 325A, 325B Mt Albert Rd
[12] Madhava Corporation Ltd and Madhava Hari Karmarkar own the properties at 325, 325A and 325B Mt Albert Road, Mt Roskill. In 2012 these appellants were prosecuted for dividing the three residential units on this property into six residential units. An abatement notice was issued on 19 September 2014 requiring the appellants to take steps to restore the property back to its consented use. The Environment Court dismissed the appeal from this abatement notice and that decision forms part of the appeal also.
District Plan Rules
[13] The application for a declaration and the abatement notice appeals were consolidated into a single proceeding before the Environment Court because they all turn on the meaning of “Residential Unit” under Part 13 of the District Plan.
[14] “Residential Unit” is defined as:
Residential Unit
means a building, a room or group of rooms used or designed to be used exclusively by one or more persons as a separate household unit.
[15] “Household Unit” is defined as:
Household Unit
means a separate housekeeping unit, consisting of either:
(a) one person: and up to four people unassociated with the household;
or
(b) two or more persons related by blood, marriage or adoption or by legal guardianship: and up to four people unassociated with the household: or
(c) a group of not more than eight persons unrelated by blood, marriage, adoption or legal guardianship.
and includes any of the normal domestic household activities which may occur on the premises.
[16] District Plan rules have the force and effect of regulations.5 They must therefore be interpreted in accordance with s 5(1) of the Interpretation Act 1999 which requires the meaning of an enactment to be ascertained from its text and in light of its purpose. The Court must also have regard to the immediate and general legislative context, and the social, commercial or other objectives of the enactment, if relevant.6
[17] The purpose of these rules is to be derived from the relevant objectives and policies of the District Plan.7 Those policies include the need to provide for flexibility in the range of residential development, while offering reasonable protection to the amenities of neighbouring properties and the local environment.8
The Environment Court Decision
[18] The Environment Court reviewed the relevant District Plan provisions that applied to all of the properties, including the general objectives and policies relating
to the residential activity to be undertaken in the Residential 6a zone. It also
5 Resource Management Act 1991, s 76(2).
6 Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR
767 at [22].
7 Official Bay Heritage Protection Society Inc v Auckland City Council [2007] NZCA 511, [2008] NZRMA 245 at [34]; Powell v Dunedin City Council [2004] 3 NZLR 721(CA) at [35]; Beach Road Preservation Society Inc v Whangarei District Council [2001] NZRMA 176 (HC) at [34].
8 District Plan, objective 7.3.3.
reviewed the competing evidence on the description and use of each of the properties.
[19] The Court considered the case law on the relevant legal test to apply at some length. This included a detailed analysis of the Environment Court’s decision in B & C Shaw Ltd v Auckland City Council9 and whether that decision was consistent with the objective use test laid down by the Court of Appeal in Landeman v Cavanagh.10
The Court summarised the applicable test at [63] of the decision as follows:
[63] The issue before this court turns on the use for which the building was designed as opposed to the manner which the owner may wish to use it or the actual use of the building. While each case needs to be considered in light of its facts, I respectively adopt the meaning of ‘designed to be used’ and ‘exclusively’ in Shaw, B & C Ltd v Auckland City Council and I find it consistent with the earlier decisions of Holm v Auckland City Council and Landeman v Cavanagh. And so the issue before this court is whether, objectively assessed, each flat within the four residential dwellings is designed to be used exclusively by one or more persons as a separate household unit.
[20] The Court went on to apply this legal test to the four buildings. In relation to
34 White Swan Rd, the Court said:
[67] I am unable to agree with Mr Macpherson that 34 White Swan Rd is designed to be used exclusively as two residential units.
[68] There is a weak spatial relationship between the different rooms in each of the two proposed flats. Instead, a strong spatial relationship exists between different groups of rooms within each flat. This is due in large part to the presence of two kitchens (or combined kitchen/laundries) at opposite ends of each flat and the location of the kitchens within or adjacent to a living room or rumpus room. This spatial relationship is reinforced by the presence of an external door providing access and egress to one of the four living/rumpus rooms and finally by the number of electricity and water meters proposed to be installed in the building. I find each flat is not designed to be used exclusively as a separate household unit. The design enables each flat to be used as one or two residential units and this would be achieved simply by locking an internal door.
[21] The Court expressed a preference for the evidence of the Council witnesses in respect of all the properties, finding that they had approached their assessment of
the flats in a “thorough and systematic manner” having considered:11
9 B & C Shaw Ltd v Auckland City Council EnvC Auckland C56/2003, 9 May 2003.
10 Landeman v Cavanagh [1998] NZRMA 137 (CA).
11 At [72].
…the arrangement of rooms relative to each other; whether the rooms are isolated from or integrated with each other; the features and facilities in each of the rooms and the use made of the rooms by the occupants.
[22] The Court found that the design of each putative flat at 153 White Swan Rd and the Mt Albert Rd properties was the same or similar to 34 White Swan Rd. That conclusion was reinforced by the existence of lockable doors restricting access within individual flats.12 The appeals from the abatement notices were accordingly dismissed.
Questions of Law
[23] The appeal is brought under s 299 of the Resource Management Act 1991 which allows appeals to this Court on a question of law.
[24] The principles to be applied to an appeal pursuant to s 299 are well settled. They were summarised in Ayrburn Farm Estates Ltd v Queenstown Lakes District Council as follows: 13
[33] An appeal to this Court under s 299 is an appeal limited to questions of law.
[34] Appellate intervention is therefore only justified if the Environment
Court can be shown to have:
i) applied a wrong legal test; or
ii) come to a conclusion without evidence or one to which on the evidence it could not reasonably have come; or
iii) taken into account matters which it should not have taken into account; or
iv) failed to take into account matters which it should have taken into account.
[35] The question of the weight to be given relevant considerations is for the Environment Court alone and is not for reconsideration by the High Court as a point of law.
12 At [73].
13 Ayrburn Farm Estates Ltd v Queenstown Lakes District Council [2012] NZHC 735, [2013] NZRMA 126 at [33]-[36].
[36] Further, not only must there have been an error of law, the error must have been a ‘material’ error, in the sense that it materially affected the result of the Environment Court’s decision.
(footnotes omitted)
[25] The appellants identify two questions of law as set out below.
Question 1
[26] The appellants put the first question of law as follows:
Was the Environment Court in error to adopt the meaning of “designed to be
used” and “exclusively” in Shaw, B&C Ltd v Auckland City Council,
Environment Court, 9 May 2003, Decision No. C056/03, in deciding that with minor changes the proposed building could be converted into additional
separate household units?
[27]
That question requires an assessment of:
(a) the applicable legal test to apply in determining designed use;
(b) the decision in Shaw and whether it is inconsistent with
that
applicable legal test; and
(c) whether the Environment Court in this case erred by adopting the
Shaw approach in any respect.
The applicable legal test
[28] It was common ground that the Court of Appeal’s decision in Landeman v Cavanagh sets out the relevant test in determining whether a building, a room, or group of rooms is “used or designed to be used exclusively by one or more persons as a separate household unit”.14
[29] Landeman was an appeal from a High Court decision on review declaring a resource consent issued by the Auckland City Council for a “sleep-out” invalid.
Validity of the consent turned on the definition of “accessory building” which
14 Landeman v Cavanagh, above n 10.
required an assessment of the designed use of the building at the resource consent stage.
[30] The Court of Appeal held:15
Determining the designed use of the building at the time resource consent is sought and granted involves an objective assessment of the plan of the building, its nature, size, layout and its relationship to the other building or buildings on the property.
[31] On the particular facts of that case, the application of the objective test lead to the conclusion that the sleep-out was designed to meet the primary living requirements of the occupant and was not incidental to the use of the main house. The features which lead the Court to reach that conclusion included the following:16
It has its own substantial separate living area and deck. It has a separate bedroom. It has its own bathroom and has allowed for easy provision of laundry facilities. Its distance from the house adds to its privacy and to its separateness from the house. It lacks conventional built-in kitchen facilities and the kitchen and dining areas of the house are intended to be available for food preparation and dining. And with technological advances, such as microwave ovens, some conventional kitchen facilities can easily be provided in the building as it stands.
[32] The test in Landeman was later adopted and applied specifically to the definition of “residential unit”17 by the Environment Court in Holm v Auckland City Council.18 That case concerned a proposed addition to a house to accommodate the owner’s extended family. The issue was whether or not the proposal was an addition or alteration to the existing house, or a “residential unit” as it was defined in the
District Plan at the time.
[33] The Environment Court in Holm adopted and applied the same approach in
Landeman to the definition of “residential unit” and concluded that the proposal was for an addition to the existing dwelling on the site and not for a “residential unit”.19
15 At 142.
16 At 142.
17 The definition of “residential unit” considered in both Landeman and Holm differed slightly to the current definition but both parties agree that nothing turns on this difference.
18 Holm v Auckland City Council [1998] NZRMA 193 (EnvC).
19 At 196.
B & C Shaw Ltd v Auckland City Council20
[34] The Shaw case involved the addition of a structure to one of two identical flats on a site in a residential zone. The Court had to decide whether or not the proposed building was “designed to be used exclusively” by one or more persons as a separate household unit within the meaning of “residential unit” as it was then defined.
[35] Although the decision was unanimous, separate judgments were given by Judge Jackson and Commissioner Manning. Following his review of the text, policies and objectives of the District Plan, and the relevant authorities, Judge Jackson drew the following conclusions on the meaning of the word “exclusively”:21
After considering all the above factors I conclude that the word “exclusively” plays a vital part in the definition of “residential activity” for the purposes of rule 7.7.2.1. Consequently the exclusivity test for whether a proposed addition is designed as a separate residential unit is whether the plans show, objectively, that by its nature, size, layout and relationship to other buildings on the property the addition can only be used exclusively as part of a greater household unit, or whether they show that with very minor changes the addition could be converted into a second separate residential unit. This is, of course, a question of fact and degree in each case (emphasis added).
[36] His Honour’s conclusions on the facts were that:22
… by installation of a few chattels in Unit 1 to make a kitchen, and locking the doors at both ends of the passageway between Unit 1 and Flat 2 so that it hosts ghosts solely, Unit 1 could, with a few minutes work, become a separate residential unit on its own, as it would appear to be at all times from outside (same shape, same materials) in any event. Given those facts I hold that the structure plan for Unit 1 and Flat 2 is not for a “residential unit” because it is not designed to be used exclusively as a single household unit, but is designed to be used as one or two such units. (emphasis added)
[37] It is these passages, and the italicised portions in particular, which the appellants say evidence a departure from the objective test in Landeman, and an infringement of the principle that an applicant is entitled to have it assumed that
they will act lawfully.23
20 B & C Shaw Ltd v Auckland City Council, above n 9.
21 At [30].
22 At [35].
23 At [68].
[38] Viewed in isolation, there is some force to the appellants’ concerns arising out of these passages. I do not agree with Judge Jackson’s conclusion that “exclusively” refers to the capability of a building to be used in different ways. Rather, the word “exclusively” as it appears in the definition of “residential unit” refers to use by a single household unit. I agree and adopt the meaning of “exclusively” given in Commissioner Manning’s judgment as follows:
In other words “exclusively” is to be taken with “to be used” not “designed”. The question then is ‘is the proposed building designed to be used exclusively by a household unit?’ I do not consider that the definition in these terms indicates that the building must be incapable of all other uses but rather that its design purpose is for exclusive use by a single household unit.
[39] However, an error in the articulation of part of the legal test does not mean that the Shaw decision represents a departure from the accepted legal approach. Judge Jackson’s observations need to be read and understood in the context of the decision as a whole.
[40] The “minor changes” referred to by the Judge were the inclusion of kitchen chattels and locking of internal doors. Whether the building could house one or two residential units depended on the closing and locking of those internal doors. These were not possible or potential changes in design or use which were not discernible from the proposed plans. Rather, they were features arising out of the plans for the proposed building that, viewed objectively with all the other features shown on those plans, suggested that the building had been designed as separate residential units.
[41] That approach is consistent with the objective test in Landeman, and does not infringe the principle that parties are entitled to have it assumed that they will act lawfully. Whilst the formulation of the test in one of the judgments may not have been correct, it was not a material error affecting the overall approach and ultimate decision in Shaw.
[42] Finally, I note that the appellants argued that the Shaw decision was also wrong because it had little, if any, regard to the objectives, policies and statements in the District Plan regarding the provision for a broad and flexible range of residential development to meet a variety of different housing needs. I do not need to express a
view on this argument as the appellants accept that the Environment Court in this case did not misdirect itself in this way. My finding that the Shaw test did not depart from the accepted legal approach means that it is unnecessary to express a view on this argument in any respect.
Test applied by the Environment Court
[43] Even if I am wrong on my conclusion that Shaw is consistent with the accepted legal approach, I am not persuaded that the mere adoption of the Shaw test by the Environment Court in this case was an error which affected the decision of the Environment Court in a material way.
[44] The Environment Court reached its decision on an objective assessment of the plans, the spatial relationship between the different rooms, the presence of kitchens and laundries, and the location of those kitchens within or adjacent to a living room or rumpus room, the external doors providing access and egress to the four living room/rumpus rooms, and finally the number of electricity and water
meters proposed to be installed in the building.24 The fact that the separate
residential units could be completed by the closing and locking of an internal door was a further feature of the design that the Environment Court was entitled to have regard to in determining design purpose.
[45] This was a proper application of the Landeman test and the Environment
Court did not err in law in this respect.
Findings on first question of law
[46] I find that the decision in Shaw is consistent with the objective test in Landeman. But even if it is not so consistent, then I do not find the adoption of it by the Environment Court to be a material error of law warranting the grant of relief.
The answer to the first question of law posed by the appellants is “no”.
24 Jayashree Ltd v Auckland Council, above n 1 at [68].
Question 2
[47] The second question of law posed by the appellants is as follows:
Does the “exclusivity test” adopted by the Environment Court wrongly extend the objective use test in Landeman v Auckland City Council [1998] NZRMA 137, 142, to enquire whether with “very minor changes” a residential unit could be converted into a separate household unit, and thus run counter to the principle in Barry v Auckland City Council (1975)
5 NZTPA 311, 318, that a person is entitled to a presumption that they and their successors will act legally.
[48] The second question of law builds on the first in that it is alleged that the Environment Court’s consideration of “very minor changes” runs counter to the principle in Barry v Auckland City Council.25
[49] The Barry case concerned the refusal of the Council to grant permission to erect a seven story block of 30 motel units. Use of the motel units as permanent accommodation would have constituted an offence under the relevant legislation in force at the time. The Court of Appeal held that neither the Council, nor the Appeal Board, were entitled to rely on the possibility that the appellant might convert the motel into permanent accommodation and thus commit an illegal act as a ground for refusing permission. The appellant was entitled to have it assumed that he and his successors would act legally.
[50] The relationship between the test in Landeman and Barry was considered by the Environment Court in Holm. The Environment Court in Holm accepted counsel’s submission that there was no discrepancy between the two decisions describing the relationship between them as follows:26
Application of the objective test set out in Cavanagh [Landeman] determines whether an accessory building is an accessory building, and once that determination is made, the rule in Barry, allows one to assume that the consent holder intends to act legally. In this case, the definition of residential unit determines whether the proposed addition forms part of the same residential unit, and the rule in Barry then applies to consideration of possible future changes in use.
[51] I accept and respectfully adopt that distinction between the two legal tests.
25 Barry v Auckland City Council [1975] 2 NZLR 646 (CA).
26 Holm v Auckland City Council, above n 18 at 197.
[52] It follows from my findings on question 1 that the “minor changes” referred to by the Court in Shaw, and by the lower Court in this case, were not changes of the sought envisaged in Barry. They are not possible or potential changes in design or use. Rather, they are features of the proposed building which the Council and Court were entitled to have regard to in determining the designed use of the building.
[53] I find that the reference to these features by the Environment Court was not an infringement of the principle in Barry and the answer to the appellants’ second question of law is therefore “no”.
Result
[54] The appeal is dismissed.
[55] The respondent is successful and is therefore entitled to costs. If there are matters relating to costs which need to be drawn to the Court’s attention then the parties are directed to file memoranda dealing with those matters within 10 working days of receipt of this judgment. If no memoranda are received then the respondent
will be awarded costs on a 2B basis.
Edwards J
Solicitors:
S Brownhill, Auckland
C Brown, Auckland
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