Kina Beach Vineyard Estate Limited v Environment Court HC Nelson CP3/01

[2001] NZHC 404

IN THE HIGH COURT OF NEW ZEALAND
NELSON REGISTRY CP3/01

IN THE MATTER of the Judicature Amendment Act 1972

AND IN THE MATTER of a decision under the Resource Management Act 1991

BETWEEN KINA BEACH VINEYARD ESTATE LIMITED AND OTHERS
Plaintiffs

AND THE ENVIRONMENT COURT
First Defendant

AND TASMAN DISTRICT COUNCIL
Second Defendant

AND WALTER HENRY GORDON SLOANE & NGAIO MARY SLOANE
Third Defendants

Hearing: 23 May 2001

Appearances: G W Allan with N M Wise for plaintiffs
No appearance for first defendant
J C Ironside with K Beckett for second defendant
C C M Owen for third defendants

Judgment: 24 May 2001

JUDGMENT OF DOOGUE J

Introduction

[1] The plaintiffs seek judicial review of four decisions:

(a) Part of an Environmental Court order dated 2 February 2001 relating to a property owned by the third defendants, Mr and Mrs Sloane;

(b) A decision of the Tasman District Council (“TDC”) to agree to the Environment Court order without advising the plaintiffs in their various capacities of a change of mind by the TDC over an earlier decision;

(c) A decision by the TDC not to notify a resource consent application by the Sloanes for a subdivision;

(d) The decision of the TDC to grant the resource consent sought by the Sloanes for a subdivision.

[2] The Environment Court abides the decision of this Court.

[3] The scheme of these reasons for judgment is as follows. First, the background is traversed; then certain preliminary matters are touched upon. Each of the plaintiffs’ primary submissions will then be traversed. After that factors relevant to the Court’s discretion will be traversed. Finally, I will state the decision reached.

Factual Background

[4] The Sloanes’ property, about which these proceedings revolve, is a 4.6 hectare property situated at Kina on Kina Beach Road between the Moutere Inlet and Tasman Bay in the Tasman District. The Sloanes purchased it in June 1999. Their predecessors in title were people by the name of Malcolm.

[5] At the time the Sloanes purchased their property the planning position in respect of it under the Resource Management Act 1991 (“the RMA”) was as follows. Under the Tasman District Transitional Plan (“the Transitional Plan”) the property was zoned Rural B, with a minimum lot size for a complying subdivision of 15 hectares. The proposed Tasman Resource Management Plan (“the Proposed Plan”) was notified on 25 May 1996. The Proposed Plan contained a provision for a 12 hectare triangle of land at Kina to be zoned Rural Residential and specified subdivision as a controlled activity for allotments with a minimum net area of 5,000 m2. The Sloanes’ property is located within that triangle.

[6] The rest of the Kina Peninsula was a mix of Rural 1 and Rural 2 zonings.

[7] Because of the huge number of submissions TDC received in respect of the Proposed Plan, it had a three year programme for hearing the submissions commencing in December 1997.

[8] In respect of land in the Rural Residential zone at Kina and surrounding lands there were in particular submissions requesting alterations in respect of the minimum lot size proposed for the Rural Residential zone and submissions requesting retention or changes in the zoning of land in the area. The TDC determined to hear the first category of submissions during 1998 and the second category of submissions at a later stage.

[9] There were a total of eight submissions in respect of the 5,000 m2 lot size for the Rural Residential zone at Kina. Certain of the plaintiffs and the Sloanes’ predecessors in title, the Malcolms, made submissions in respect of it. On 16 October 1998 the TDC notified its decision 224.1 (“the 1998 decision”) retaining the proposed 5,000 m2 lot size over the Rural Residential zone at Kina. None of the submitters took steps to refer that decision to the Environment Court.

[10] There were many more submitters, some 64 in all, in respect of the zoning of the lands at Kina and in the surrounding area. Some of the plaintiffs and the Malcolms were amongst that group. Amongst the plaintiffs, Mr and Mrs Lesser had made a submission not only in respect of zoning but also in respect of lot size and had sought a two hectare minimum lot size in respect of the Rural Residential zone.

[11] On 16 August 1999 the TDC notified its decision 225.8 (“the 1999 decision”) retaining the Rural Residential zone at Kina but extending it to cover additional areas of land in the vicinity of the Kina settlement. The TDC also passed two resolutions relating to the minimum lot size. One set the minimum net area requirement for subdivision in the Rural Residential zone not formerly so zoned at two hectares as a controlled activity. The second determined, despite the 1998 decision, that the existing minimum net area allotments in the Rural Residential zone at Kina be changed from 5,000 m2 to two hectares. It is that decision which has led directly to this litigation.

[12] A number of the plaintiffs were advised of that decision, as were the Malcolms and other interested parties.

[13] The 1999 decision led to the Malcolms and people by the name of Brookes and Talley and White filing references in the Environment Court in or about September 1999. No issue arises in this proceeding about the Brookes or the Talley and White references. All that is at issue in this case relates to the Malcolms’ reference, taken over by the Sloanes (“the Sloanes’ reference”), and the decisions which led to it and which flowed from it.

[14] The Sloanes, when they had purchased their property, knew the land had a minimum lot size of 5,000 m2 by way of a controlled activity. They knew that the land was zoned Rural Residential, although the zoning was still to be finally determined. The TDC’s 1999 decision to change the minimum lot size in the face of the 1998 decision led to the Sloanes’ reference to the Environment Court.

[15] For whatever reason, the Sloanes’ reference was not notified to one of the plaintiffs in this proceeding, a Mrs Taylor.

[16] On 20 October 1999 TDC wrote to all the submitters in respect of the subject-matter of the 1998 decision, including Mrs Taylor and other of the plaintiffs, advising them of the Sloanes’ reference. The letter stated in part:

“Several appeals on the Council’s decisions have been lodged with the Environment Court. One particularly referring to the lot size in the original Kina Rural Residential Zone has been lodged by B & K Malcolm. This seeks to return this part of the now larger zone to its former 5,000 m2 controlled subdivision lot size.

As someone who made a submission to the proposed Plan on a similar matter, you may wish to become a party to this appeal and either support it, or support the Council’s decision to increase the lot size. You can do so by writing to the Registrar of the Environment Court, PO Box 5027, Wellington, saying that you wish to become a party to the reference lodged by B & K Malcolm on a decision of the Tasman District Council on the Proposed Tasman Resource Management Plan”

[17] Despite that advice, no steps were taken at any time by any of the submitters in respect of the 1998 decision to be entitled to be heard either as a party or otherwise under either s 271A or s 274 of the RMA.

[18] On 6 June 2000 the Sloanes applied for resource consent to subdivide their property into six Rural Residential allotments of between 5,800 m2 and 1.5 hectares in area and to build a residence on each of these lots (“the first subdivision application”). With the application was a legal opinion to the effect that the 1999 decision was invalid in regard to the lot size of properties the subject-matter of the 1998 decision that had retained the 5,000 m2 lot size for the Rural Residential zone at Kina.

[19] The first subdivision application was publicly notified on 5 August 2000. The closing date for submissions was 1 September 2000. Twenty-one submissions were received in respect of the application.

[20] The TDC sought legal advice. The hearing of the first subdivision application was deferred until after the question of its status had been resolved. A letter was sent to the Sloanes and all submitters in respect of the application to that effect. During the following period there were communications between persons interested in the application, including some of the plaintiffs and the TDC. The plaintiffs concerned were informed that they would be advised of the TDC’s position. They were told that they would be advised in due course what was to happen to the application.

[21] Unbeknown to the plaintiffs who made enquiries of the TDC, the TDC obtained legal advice in December 2000 as a result of which it decided to change its mind on the two hectare requirement for the Sloane property and agree to a consent order by the Environment Court enabling the Sloanes’ land to have a minimum allotment size of 500 m2. None of the plaintiffs who had made submissions in respect of the Proposed Plan or submissions in respect of the first subdivision application were advised of this.

[22] A memorandum of consent was placed before the Environment Court. It dealt with both the Sloanes’ and the Brookes’ property. It noted that there were no notices lodged under either s 271A or s 274 RMA in respect of either reference. It noted the background in relation to the 1998 decision and the 1999 decision. It noted that the latter decision was in conflict with the former in respect of the lands in the original proposed Rural Residential zone. It recorded the settlement that:

“Subdivision to a minimum net area lot size of 5000 m2 shall be confirmed in respect of the referrers’ lands. All other standards for the Rural Residential zone shall apply.”

Amendments were sought as set out in the schedule to the memorandum. The memorandum made clear that the consent order would result in two small “spot” zones.

[23] On 2 February 2001 the Environment Court made a consent order as requested of it, noting that there were no other parties to the references.

[24] As a result of the consent order, the Sloanes, on 7 February 2001, lodged a second subdivisional application (“the second subdivision application”) in similar terms to those of the first application. The solicitors for the plaintiffs wrote to the TDC requesting that the second subdivision application by the Sloanes be publicly notified. The application was assessed under the RMA by an officer of the TDC. She then made a decision under delegated authority that the second subdivision application should be processed on a non-notified basis. That decision was made on 7 March 2001. The reasons for the decision traversed, among other things, the Transitional Plan and the requirements of s 94 of the RMA. The decision-maker considered that the adverse effects of the proposal were minor and that no written approvals of other parties were required. The reasons for the decision also traversed some of the background already outlined.

[25] Before then, on 16 February 2001, certain of the plaintiffs endeavoured to lodge a notice under s 274 RMA with the Environment Court in respect of the Sloane reference, but of course they were too late as the Court had already made an order in respect of it.

[26] On 16 March 2001 the TDC, under a delegated authority, granted the second subdivision application of the Sloanes. On 17 March 2001 the first subdivision application was withdrawn.

[27] These proceedings were commenced on 23 March 2001.

Standing of the Plaintiffs

[28] The plaintiffs are residents in the Kina area. While it may undoubtedly be the case that some of them do not have standing, it is clear that a number of them do in one way or another. In particular, Mrs Taylor was entitled to be served with the Sloanes’ reference to the Environment Court but was not so served. The Lessers, who are also plaintiffs, had made a submission in respect of the minimum lot size in respect of the Rural Residential zone and were thus submitters in respect of the subject-matter of the 1999 decision. Certain others of the plaintiffs were submitters in respect of the subject-matter of the 1998 decision and the 1999 decision; others of the plaintiffs were submitters in respect of the Sloanes’ first application for subdivisional consent. The TDC raised no issue as to standing. The Sloanes raised an issue as to standing of some of the plaintiffs but did not deny that others of the plaintiffs had standing. This issue requires no further discussion.

The Decisions Sought to be Reviewed

[29] It is accepted that all the decisions sought to be reviewed are the exercise of statutory powers held by either the TDC or the Environment Court pursuant to the provisions of the RMA. It is further accepted that the decisions which it is sought to review were not merely procedural but substantive determinations.

First issue: the validity of the consent order of the Environment Court of 2 February 2001

[30] The Environment Court decision is attacked by the plaintiffs under three broad heads: first, jurisdictional error and illegality; secondly, failure to take into account relevant factors and unreasonableness; and, thirdly, breach of natural justice and of legitimate expectation. I deal with them under each of those heads.

Jurisdictional error and illegality

[31] Under this head the plaintiffs raise two issues, namely the service of the Sloane reference and the failure of the Environment Court to give any notice of hearing.

[32] The first of those issues revolves round the failure to formally advise Mrs Taylor, a submitter in respect of the subject-matter of the 1999 decision, of the lodging of the Sloanes’ reference. It is accepted that she was not served with a copy of the reference. It is accepted that she was entitled to be served with the reference.

[33] This breach gives rise to two associated considerations, namely, first, whether it was met by the TDC’s letter of 20 October 1999, which Mrs Taylor received, making it clear that the reference had been lodged but referring to a planning issue and not a legal issue as to the Sloanes’ rights. However, she was clearly put on notice by that letter of the existence of the reference and of her rights. Secondly, she subsequently received, with the first subdivision application by the Sloanes, a copy of the legal opinion challenging the legal validity of the TDC’s 1999 decision. She had previously had the 1998 decision and had taken no steps in respect of that decision. While, therefore, there was a breach, it is a matter that has to be considered under the subject heading of Exercise of Discretion hereafter.

[34] The second point taken on behalf of the plaintiffs under this head is that prior to the making of the consent order by the Environment Court no notice of hearing was given pursuant to s 272 RMA. It is said not only was there no compliance with that section but nor was there any compliance with regulation 34(d) of the Resource Management (Forms) Regulations 1991 (“RMR”).

[35] I do not intend to set out the provisions relied upon. The section and regulation relate to a hearing. I accept the submissions for the defendants that there was no hearing in the present case in terms of the provisions of the RMA. Rather there was a consent order determined by the Environment Court without a hearing in accordance with its own practice note. Put simply, there was never any issue which required a hearing once the only parties to the reference had agreed to a consent order. No doubt the Court could, if it wished, have required a hearing, and have required notice of that hearing to be given to some other person, but there was nothing before it which could possibly have led to that conclusion.

[36] In any event, even if s 272 RMA had applied, none of the plaintiffs would have been entitled to be served with any notice of hearing as none of them had taken any steps under either s 271 A or s 274 RMA.

[37] However it is approached, there is simply nothing in this point taken on behalf of the plaintiffs.

[38] The only point arising for further consideration in respect of the first head of attack by the plaintiffs upon the decision of the Environment Court is the failure to serve Mrs Taylor with the Sloanes’ reference to the Environment Court.

Failure to take relevant factors into account and unreasonableness

[39] The submissions under this head are an attack upon the memorandum put by the TDC and the Sloanes before the Environment Court, it being said that full relevant circumstances were not put before that Court.

[40] In particular, it is submitted for the plaintiffs the Environment Court was not advised:

(a) The Sloanes had already made the first subdivision application to the TDC, with such application being notified, there being 15 submissions in opposition, and that the proposed consent order would materially affect the position of those submitters.

(b) That certain of the plaintiffs had been advised by the TDC that they would be advised as to what would happen on the legal challenge to the validity of the two hectare requirement the subject-matter of the proposed Court order, and that such plaintiffs had not been advised.

(c) The TDC had represented to submitters in its letter of 20 October 1999 that it was supporting the two hectare subdivisional standard but had changed its mind without advising those affected.

[41] A further point was made in reliance upon reg 34(d) of the RMR, but such point in my view has no substance whatever and I put it to one side.

[42] It is submitted that because of the matters already traversed the Environment Court was not aware of the full picture and, if it had been so aware, it may well have considered requiring a hearing and notice of hearing to those of the plaintiffs with an established interest.

[43] There is no question that a council such as the TDC can change its position on a reference before the Environment Court from that taken previously, subject to the principles of the Act and the capacity of the Environment Court to regulate its own procedure, guided by principles of fairness and efficiency.

[44] So far as the challenge to the Environment Court decision is concerned, it is the matters already relied upon which are further relied upon under the next subheading to be addressed which have the most substance and merit.

[45] However, for the defendants it is said that none of the plaintiffs took the steps open to them under either s 271A or s 274 RMA and the Environment Court had been properly advised that there were no persons with an interest under those sections. In addition, it is submitted the planning process and the subdivisional consent process were separate processes and the Environment Court would hardly have regarded the subdivisional consent process as relevant to the planning process. Further it is submitted that the memorandum of the parties to the reference addressed everything required of them under the Environment Court’s practice note and that the onus was on the plaintiffs who claimed an interest to take steps.

[46] While acknowledging the substance of the plaintiffs’ submissions under this head, they do not fall easily into an attack upon the decision of the Environment Court for failing to take into account relevant matters or of unreasonableness. These matters are more relevant under the next head to be addressed.

[47] The plaintiffs further submitted that the consent order of the Environment Court did not have regard to issues of sustainable management, as was required by s 5 RMA, and was a decision wholly related to an issue of whether or not the TDC had jurisdiction to impose a lot size requirement when considering zoning issues. It is therefore submitted that the consent order resulted in spot zoning, was an undesirable planning outcome and contrary to the intention of sustained management. Nor, it is submitted, did the Environment Court consider whether severance of the lot size requirements would affect the integrity of the underlying decision of the TDC on zoning. It is submitted the decisions of the TDC on lot size and zoning were intrinsically linked and a relevant consideration was whether the Rural Residential zoning should remain if the lot size requirement was reduced in the way that appeared.

[48] I can see no substance in these submissions at all. There is nothing before this Court which would justify it concluding that the Environment Court was not cognisant of the relevant sections of the RMA which it deals with every day. The consent order sought made it clear on its face that it was creating two spot zones and the circumstances behind that.

[49] On any basis it cannot be said that the Environment Court failed to take into account relevant matters or acted unreasonably. On the materials before it, which were all it would expect to have before it in the light of its own practice note, it is clear the Court took into account all relevant matters and acted reasonably.

Breach of natural justice and of legitimate expectation

[50] The plaintiffs’ case is that the Environment Court order is tainted with the breach of natural justice which it is alleged occurred and the failure of the Council to fulfil a legitimate expectation the plaintiffs had that they would be advised of the Council’s position after it had considered the legal opinion proffered by the Sloanes in support of their first subdivisional application.

[51] The plaintiffs rely on two lines of authority. First, in respect of natural justice, they rely upon what was adopted and stated by Gendall J in Matthews v Marlborough District Council [2000] NZRMA 451, 458:

“[18] In areas of natural justice and substantive fairness it is not always helpful to assign labels or categories to various concepts. As was said in the well known passage from the judgment of the Privy Council in Furnellv Whangarei High Schools Board [1973] 2 NZLR 705 at 718:

It has often been pointed out that the conceptions which are indicated when natural justice is invoked or referred to are not comprised within and are not to be confined within certain hard and fast rules . . . Natural justice is but fairness writ large and juridically. It has been described as “fair play in action”. Nor is it a leaven to be associated only with judicial or quasi-judicial occasions. But as was pointed out by Tucker LJ in Russell v Duke of Norfolk [1949] 1 All ER 109, 118, the requirements of natural justice must depend on the circumstances of each particular case and the subject matter under consideration.

[19] I do not think it is necessary to delve too deeply into the question of “substantive unfairness” because it really means no more than fair play in action and the remedy exists when something has gone wrong to the extent that it offends the Court’s view of fair and just dealing of such a nature as to require the Court to intervene. Of course it does not follow that anything described as “unfair” will suffice and in each case the particular facts require examination, including the nature of unfairness, so as to determine whether they are such as to justify the intervention of the Court. See for example Thames Valley Electric Power Board v NZFP Pulp and Paper Ltd [1994] 2 NZLR 641 (CA) per Cooke P at 52-53.”

[52] In respect of legitimate expectation the plaintiffs rely upon two decisions in particular, where, however, the decisions were based upon undertakings that were then breached. The first case is Attorney-General of Hong Kong v Shiu and R v Liverpool Corporation, Ex parte Taxi Fleet Operators’ Association. In Attorney-General of Hong Kong v Shiu the Privy Council was concerned with the breach of an undertaking by an immigration official that illegal immigrants would be granted an interview before a decision as to deportation was taken. The Privy Council observed at 636:

“Accordingly “legitimate expectations” in this context are capable of including expectations which go beyond enforceable legal rights, provided they have some reasonable basis: see Reg v Criminal Injuries Compensation Board, Ex parte Lain [1967] 2 AB 864.”

[53] The Privy Council then referred to the second of the cases relied upon by the plaintiffs and adopted at 638 what was said in that case, that the principle:

“that if a person or public body is entrusted by the legislature with certain powers and duties expressly or impliedly for public purposes, those persons or bodies cannot divest themselves of those powers and duties. . . . But that principle does not mean that a corporation can give an undertaking and break it as they please. So long as the performance of the undertaking is compatible with their public duty, they must honour it.”

[54] The Privy Council could see no reason why the same principles should not be applicable when the person who would be affected by the decision was an alien. The Privy Council’s advice stated at 638:

“The justification for it is primarily that, when a public authority has promised to follow a certain procedure, it is in the interest of good administration that it should act fairly and should implement its promise, so long as implementation does not interfere with its statutory duty. The principle is also justified by the further consideration that, when the promise was made, the authority must have considered that it would be assisted in discharging its duty fairly by any representations from interested parties and as a general rule that is correct.”

[55] The plaintiffs argue that in this case the TDC first represented in its letter of 20 October 1999 to submitters in respect of the minimum lot size in the Kina Rural Residential zone that it would be supporting its two hectare minimum lot size decision. Subsequently, on the receipt of the Sloanes’ first subdivisional application and the legal advice of the Sloanes that the two hectare minimum subdivisional lot decision was invalid the TDC held out to the submitters in respect of that application that they would be advised by the TDC of the position once it had legal advice. One of the TDC’s officers deposes that he advised enquirers that they would “be advised in due course what was to happen with the application”.

[56] The plaintiffs therefore argue that the combination of representations that the TDC intended to support its two hectare subdivisional standard and that submitters would be advised of the TDC’s position in respect of that standard as it applied to the Sloanes’ land created a situation where in fairness and as a result of legitimate expectation the TDC was obligated to inform the submitters of its position before consenting to the order excepting the Sloanes’ land from the two hectare subdivisional standard. It is submitted that the submitters were entitled to know the TDC’s position in order to make a reasoned decision about whether to give notice to the Environment Court in respect of the Sloanes’ reference under either s 271A or s 274 RMA.

[57] Thus the plaintiffs say that the TDC should not have been a party to the consent order without the submitters being advised of the true position, or, at the very least, the TDC should have ensured that the Environment Court was fully advised as to the true position.

[58] On this crucial issue the TDC submits that the letter of 20 October 1999 (see para [16] above) fairly advised submitters of the then position. In particular, it advised them of the Sloanes’ reference to the Environment Court, of which they might otherwise have been unaware, and made it clear to them how they could take steps to protect themselves in respect of that reference. The letter contained no undertaking of any description that the TDC would not reassess its stance and change its position without reference to the submitters. The TDC submits that the communications relating to the first subdivision application were entirely separate and distinct proceedings and could not give rise to any expectations in respect of the planning reference to the Environment Court. All that submitters in respect of the subdivision application could expect was to be advised in due course of the Council’s view in respect of the first subdivision application. For the TDC it is submitted that the plaintiffs who were submitters in respect of the 5,000 m2 subdivisional standard could not have any legitimate expectation to be advised of the TDC’s position unless they had exercised their statutory rights under either s 271A or s 274 of the RMA, in which event they would have had a statutory right to be heard or consulted. The TDC notes that in Pring v Wanganui District Council [1999] NZRMA 449 Goddard J remarked:

“So long as the matter was accorded due process in accordance with the requirements of the Act then any legitimate expectation any person might have is fulfilled.”

On that basis she concluded there could be no substance in an allegation of legitimate expectation.

[59] The submissions for the Sloanes echo those for the TDC. It is noted for the Sloanes that the submitters had had some 18 months in which to lodge notices under either s 271 A or s 274 RMA and had not done so even with the prompting of the TDC’s letter of 20 October 1999. It is submitted that the processes in respect of the Sloanes’ reference to the Environment Court and the Sloanes’ subdivisional application to the TDC were entirely separate and distinct. It is further submitted that in this case there is no possible basis of legitimate expectation as there was never a commitment or an undertaking by the TDC sufficient to bring into play the principle of legitimate expectation expounded in Attorney-General of Hong Kong v Shiu and the R v Liverpool Corporation, Ex parte Taxi Fleet Operators’ Association cases.

[60] It is undoubtedly true that the processes in respect of the minimum subdivisional size and the Sloanes’ subdivisional application were entirely separate and distinct as a matter of law. However, as the very history of this matter shows, they were inevitably associated in this particular case. If the TDC had not agreed to the consent order enabling a minimum lot size for the Sloanes’ land of 5,000 m2 , the Sloanes would not have been able to subdivide as they did. The two matters were inextricably interlinked.

[61] However, that is but a starting point. It is quite clear that the only persons who can complain about any failure by the TDC to advise them of their change of position in respect of the minimum lot size for the Sloanes’ land were those of the plaintiffs who were submitters in respect of both the minimum lot size for the Rural Residential zone at Kina and the first subdivision application. Those of the plaintiffs who were solely submitters in respect of the first subdivision application could have no expectations whatever in respect of the Sloanes’ reference to the Environment Court in respect of the minimum subdivisional standard as they had taken no relevant steps in respect of the Proposed Plan.

[62] There can be little doubt that the TDC knew that it had represented to the submitters in respect of the minimum subdivisional standard that it was supporting a two hectare standard in accordance with the 1999 decision, which was, after all, later in time than the 1998 decision. The TDC also knew that submitters in respect of the minimum subdivisional standard were also submitters in respect of the first subdivision application. The TDC further knew that the decision on the first subdivision application turned on the outcome of the Sloanes’ reference to the Environment Court. The TDC also knew that those of its ratepayers who had been submitters in respect of both matters had received assurances that they would be informed of the TDC’s position. The simple fact is that the submitters with an interest in both matters were not informed of the TDC’s position until a fait accompli had been achieved in the form of the Environment Court consent order.

[63] It is true that the TDC never gave any undertaking or assurance to the submitters in respect of the minimum subdivisional lot standard in the Proposed Plan that it would not change its position without advice to the submitters. It is equally true that the TDC made plain to those submitters their rights under either s 271A or s 274 of the RMA and that none of the submitters took that prudent step. It is also true that the TDC did in due course make plain to all the submitters in respect of the Sloanes’ subdivisional planning application what its position was, but by then the consent order of the Environment Court had been made.

[64] The circumstances of the case may not satisfy the test for a breach of legitimate expectation, in that there was no such undertaking or commitment by the TDC such that any submitter was entitled to come along later and say that the TDC undertook, had undertaken or committed itself to a particular course of action. On the other hand, the circumstances of the case indicate a breach of natural justice in that the TDC changed its stance and did not advise the submitters to both the Proposed Plan and the subdivisional application of that change of stance before agreeing to the consent order. Nor did the TDC advise the Environment Court that there were persons interested in the subject-matter of the consent order who had not been advised by it of its position, notwithstanding that it had given assurances to those submitters that they would be advised of the position. In terms of the principles adverted to by Gendall J in Matthews v Marlborough District Council, I consider that this did give rise to a breach of natural justice, although it does not automatically follow that the decision of the Environment Court is to be quashed. I deal further with that issue under the heading of Exercise of Discretion.

Second issue: Council Decision No. 1: to agree to the Environment Court consent order without notice to plaintiffs who were submitters in respect of the minimum lot size standard

[65] The challenge to this decision of the Council relies very much on what has just been discussed. The overlap is such that it is unnecessary to refer further to the submissions based upon breach of natural justice and fairness. I have already expressed the view that the Council, in reaching the decision to agree to the consent order without advising the submitters to the Proposed Plan minimum subdivisional lot size for the Rural Residential zone at Kina did act in breach of natural justice.

[66] Because of that conclusion, it is really unnecessary to say anything more about the plaintiffs’ submissions under this head. I would, however, make plain again that the only persons who could have been entitled to advice from the TDC were those of the plaintiffs who were submitters in respect both of the Proposed Plan minimum subdivisional standard for the Kina Rural Residential zone and the first subdivision application.

[67] I should, however, record that, apart from relying upon breach of natural justice and fairness, the plaintiffs have also relied upon unreasonableness. I can see no basis for the claim of unreasonableness in the TDC’s decision to agree to the consent order other than that traversed in respect of breach of natural justice. Other arguments were raised by the plaintiffs under this head but I would not have regarded them as sustainable.

Third issue: Council Decision No. 2: not to publicly notify the Sloanes’ second subdivisional application

[68] The plaintiffs make a number of points in respect of the non-notification of the second subdivision application. First they note that the activity was a non-complying activity under the Transitional Plan. They submit that the adverse effects of the activity on the environment were not minor and written approval had not been obtained from persons who would be adversely affected by the granting of the second subdivision application. However, the decision-maker reached the opposite conclusion in a reasoned way, and what I am really being asked to interfere with is the merits of the decision. I cannot say that the decision taken by the decision-maker was not open to her, and there is no substance in this point.

[69] Secondly it is said for the plaintiffs that, as the Council had reserved control over certain matters relating, for instance, to amenity protection, it was desirable that there was public input, and thus the second application should have been notified. It was a matter for the TDC as to whether public input would be of assistance to it and desirable. Once again the decision-maker addressed the relevant considerations, both statutory and otherwise, and there is no possible basis for the Court interfering.

[70] The fact of the matter is that, once the consent order had been made by the Environment Court permitting the minimum subdivisional size of 5,000 m2 in respect of the Sloanes’ land, it was inevitable that the second subdivision application would be treated as a non-notified application as there was no basis upon which it could have been required to be publicly notified. The concerns of the plaintiffs had already been advised to the TDC by way of their submissions in respect of the first subdivision application. Nothing has been put before the Court to show that there was any material matter not before the TDC which public notification could have advanced. The TDC was well aware of the positions of the plaintiffs. There was nothing about the subdivision which took it out of the ordinary. It simply was not one where the Court has any justification for intervening and saying the TDC’s processes were wrong.

[71] It is said for the plaintiffs that under s 94(5) RMA the TDC should have considered special circumstances existed and failed to take into account certain factors. None of those factors are relevant to the subdivision proposed as such but to the history of the matter, which has already been traversed. Once again the plaintiffs say that there were breaches of principles of natural justice and that the decision of the Council was unreasonable, but none of the matters referred to in support of the submissions have any particular reference to the matters that the TDC had to consider in determining whether the application was to be notified or not, which could only relate to appropriate conditions to be attached to the subdivisional plan. Even now there is no suggestion that the TDC did not impose appropriate and considered conditions or that it was possible that additional conditions might have been attached if the second subdivision application had been publicly notified and the submitters to the first subdivision application heard.

[72] Thus, even if there had been any substance of any sort in respect of the plaintiffs’ submissions in respect of this decision of the Council, it could not possibly have led to any remedy as any remedy would have been futile.

Fourth issue: TDC Decision 3: decision to grant Sloanes’ second subdivisional application

[73] It is submitted for the plaintiffs that the TDC had an obligation to consider s 406(1)(a) RMA when considering the second subdivision application. That section provides in part that a territorial authority shall not grant a subdivision consent if it considers that the proposed subdivision would not be in the public interest. It is submitted for the plaintiffs that the TDC did not have regard to that section. It is submitted that there were significant public interest factors in respect of the application which the TDC should have considered, including:

(a) the lot size, contrary to the 1999 decision;

(b) the Sloanes have benefited from the consent order and the non-notified application;

(c) alleged adverse implications for the consistent administration of the District Plan, depredation of amenity standards, and a severe erosion of public confidence in the integrity of the planning process.

[74] There is nothing to substantiate any of these criticisms. It is plain from the TDC’s decision in respect of the application that it was properly considered in terms of the RMA. The Proposed Plan represented the public interest. Section 406 RMA is a transitional provision preserving the right to refuse to grant a subdivision consent on the grounds that it is not in the public interest. The provision is only required to be considered while transitional plans prepared under former legislation are in force.

That was not the position here where the dominant planning instrument is the Proposed Plan, the relevant provisions of which were beyond challenge. There was simply no requirement for the TDC to consider s 406 RMA in the way suggested, given the position in respect of the Proposed Plan.

Exercise of Discretion

[75] I have found that Mrs Taylor should have been served with the Sloanes’ reference and that the decision of the TDC to consent to the Sloanes’ reference and the consequential consent order of the Environment Court were tainted by a breach of natural justice. The breach of natural justice was the failure of the TDC to notify either the submitters to the Proposed Plan and the first subdivision application of its position before agreeing to the consent order, or the TDC’s failure to advise the Environment Court of the position of those submitters at the time of applying for the consent order. The issue is whether those breaches should give rise to any remedy for the plaintiffs.

[76] I am clear that the plaintiffs should not be granted any remedy in respect of the matters where their complaints have some substance. In refusing them a remedy no injustice will be done. In granting them a remedy a considerable injustice would be done to the Sloanes.

[77] The difference in positions of the two sides in the way in which they have conducted themselves is dramatic. The Sloanes have at all times followed due process, both in pursuing their predecessors’ reference to the Environment Court and in respect of their subdivisional application. No faults of any kind have been pointed to in respect of their actions. What the plaintiffs are asking would see the Sloanes penalised for their compliance with due process.

[78] On the other hand, the plaintiffs are endeavouring to achieve by a side wind what they did not seek in the first instance, and indeed, for the most part, at the second instance. Those of them who were submitters in respect of the minimum subdivisional standard in the Kina Rural Residential zone took no steps to bring a reference to the Environment Court in respect of the 1998 decision retaining the 5,000 m2 lot size within the zone. That was the time at which the submitters should have acted if they had wished to protect the position which they now prefer. They did not do so. What they now seek to do is to achieve the result that they did not endeavour to achieve at that time by an attack on subsequent decisions.

[79] Only one or two of the plaintiffs were submitters in respect of the Rural Residential zone at Kina and supporters of a two hectare subdivisional standard as upheld by the 1999 decision. Neither those submitters nor any of the submitters in respect of the minimum subdivisional lot size in the Kina Residential zone took any steps to protect their position under either s 271A or s 274 RMA, notwithstanding the TDC had put the issue squarely before them in the TDC’s letter of 20 October 1999.

[80] Thus it is the plaintiffs’ failure to follow due process that has resulted in the position that they are now in. The TDC and the Sloanes were fully entitled to proceed upon the basis that those submitters who took exception to the TDC’s decision in 1998 relating to the 5,000 m2 lot, or those submitters who took exception to the Sloanes’ reference, would have taken steps to protect their position. The simple fact of the matter is that they chose not to do so. I appreciate that to some extent the matter was bedevilled by later events and that it was reasonable for at least some of the plaintiffs to operate upon the basis that they did not need to make a final decision until the TDC had advised them of its position. However, common prudence dictated that, if they took exception to the 1998 decision in relation to the 5,000 m2 lot size, they should have lodged a reference with the Environment Court and that, if they took exception to the Sloanes’ reference, they should have lodged a notice under either s 271A or s 274 of the RMA to protect their position. They chose not to do so. There would be no justice if the Sloanes were to suffer because of the neglect of the plaintiffs in the overall circumstances of this case. As is submitted for the TDC and the Sloanes, what the plaintiffs are really trying to do is to turn the clock back and to put themselves in the position that they would have been in if they had taken steps at an earlier time. In the circumstances of this case it could not be right to permit that.

[81] There is a further problem for the plaintiffs and that is that, leaving aside the overall justice of the case in respect of whether relief should be granted, which lies firmly in favour of the Sloanes, the Court is being asked to lend itself to what almost inevitably would be an exercise in futility. The simple facts are that the TDC made the 1998 decision in respect of the lot size in the Rural Residential zone at Kina and fixed it at 5,000 m2. It made no reservation in respect of that decision that it could be reviewed in any subsequent decision. It at no time applied to vary its proposed plan to change that decision. When it reached its 1999 decision in respect of the Rural Residential zone at Kina, it was certainly entirely open to it to find that the additional parts of the Rural Residential zone at Kina added at that time were subject to a two hectare minimum lot size. It could not, however, find contrary to its 1998 decision in respect of the original Rural Residential zone at Kina in the way that it endeavoured to do. The Environment Court could be in no better position than the TDC when it came to deal with the Sloanes’ reference. It could not uphold the 1999 decision which was in direct conflict with the 1998 decision. The 1999 decision was beyond the TDC’s powers. It has been suggested that the proper attack by the Sloanes was to seek a declaration rather than by reference. However, in the circumstances of the case that is a spurious argument as it was not simply a legal issue but one of law and merits.

[82] Thus it is difficult, if not impossible, to see what possible result the Environment Court could have reached other than that the original minimum lot size had to be retained as determined in 1998 for the properties of the Sloanes and of anyone else within the original Rural Residential zone at Kina who sought to maintain that standard. There was no basis under the RMA for any other conclusion to be reached.

[83] I have not addressed each and every of the plaintiffs’ arguments in respect of the discretion. It is enough to say that I reject them. None of them, singly or collectively, would have persuaded me to grant relief in the circumstances of this case to the disadvantage of the Sloanes. There would be no possible justification for the Court intervening to benefit the plaintiffs to the detriment of the Sloanes when the plaintiffs rested on their rights throughout while the Sloanes were pursuing their rights. As was said by the Court of Appeal in Ronaki Ltd v Number One Town and Country Planning Appeal Board and Others, a case dealing with a predecessor to the RMA, at 183

“. . . we think the legislation leaves owners and occupiers to take reasonable care to take the available steps to safeguard their own interests.”

[84] The Sloanes did that. The plaintiffs chose not to do so. The Sloanes should not be disadvantaged by the plaintiffs’ failures.

Decision

[85] The application for judicial review is dismissed.

Costs

[86] The Sloanes are entitled to costs against the plaintiffs, which are fixed in accordance with Category 2 in the Third Schedule to the High Court Rules and Column B of the Fourth Schedule to the High Court Rules. They are, in addition, entitled to their reasonable disbursements. In the event of there being any dispute as to their costs and disbursements, they are to be fixed by the Registrar.

[87] Having regard to the finding already reached in respect of the TDC’s omissions which have led to this litigation, there will be no order for costs in favour of the TDC. Nor, however, will there be any order for the TDC to pay the costs of the plaintiffs or of the Sloanes. The time for the plaintiffs to challenge the subdivisional allotment size at Kina in the Rural Residential zone was after the 1998 decision, and none of them chose to do so. Nor did any of them choose to join the Sloane reference. They should not have any remedy in costs at this time.