Made Group Limited v Kiwirail Holdings Limited
[2022] NZHC 3038
•21 November 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-002378
[2022] NZHC 3038
BETWEEN MADE GROUP LIMITED
First Applicant
KARAKA & DRURY LIMITED
Second ApplicantAURANGA RESIDENTS’ ASSOCIATION INCORPORATED
Third Applicant
AND
KIWIRAIL HOLDINGS LIMITED
First Respondent
AUCKLAND COUNCIL
Second Respondent/Continued over
Hearing: 9 November 2022 Appearances:
R J Hollyman KC and M D Pascariu for Applicants
P J Radich KC and M L Campbell for First Respondent W M C Randal for Second Respondent
M McCullough for Third Respondent J W E Parker for Fourth Respondent
Judgment:
21 November 2022
JUDGMENT OF WYLIE J
(Application for stay)
This judgment was delivered by Justice Wylie On 21 November 2022 at 3.00 pm
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
MADE GROUP LTD v KIWIRAIL HOLDINGS LTD [2022] NZHC 3038 [21 November 2022]
/Continued from over
AUCKLAND TRANSPORT
Third Respondent
WAKA KOTAHI NZ TRANSPORT AGENCY
Fourth Respondent
Solicitors/counsel:
Mihai Pascariu/B Hollyman KC, Auckland
Russell McVeagh, Auckland/P J Radich KC, Wellington DLA Piper, Auckland
Bell Gully, Wellington Buddle Findlay, Auckland
Introduction
[1] The parties to this proceeding disagree about where a proposed new railway station should be built in Drury West – Opāheke, near Auckland. There are a number of potential sites – each has its proponents and each has its critics. Consideration has been given to the options and there has been discussion over the issue. Indicative sites have been identified in various planning documents including in a structure plan prepared by the second respondent, Auckland Council. The number of sites has been gradually whittled down. There are now only two sites in issue.
[2] The first respondent, KiwiRail Holdings Ltd (KiwiRail), is a requiring authority pursuant to s 167 of the Resource Management Act 1991 (the RMA). It is responsible for developing the new railway station. It (and the other respondents) prefer a site south-west of a proposed extension to Jesmond Road. The site is known as site DW1.
[3] The applicants, MADE Group Ltd, Karaka & Drury Ltd and Auranga Residents’ Association Inc (jointly MADE), are all either involved with, or have an interest in, the development and subdivision of the Drury West area. They are seeking to develop what they describe as a “world-class, sustainable, urban community promoting wellbeing and meaningful connections between residents”. They prefer that the new railway station should be located on a site north-east of the proposed Jesmond Road extension. This site is known as site DW2.
[4]Site DW1 is about 450 metres from site DW2.
The judicial review proceedings
[5] On 10 December 2021, MADE filed an application for judicial review of a decision said to have been made on 21 August 2020 by the respondents, KiwiRail, Auckland Council, Auckland Transport and Waka Kotahi/NZ Transport Agency. MADE alleges that KiwiRail and the other respondents then determined that the railway station should be located at site DW1.
[6] The review application advances four grounds of review. Underlying all is an assertion that Auckland Council had confirmed site DW2 for the new station in the structure plan for the area released in August 2019.
(a)The first and fourth grounds of review allege that KiwiRail and some or all of the other respondents acted unreasonably and/or unlawfully in deciding to locate the new station at site DW1. It is alleged that they failed to consider or give proper weight to the detrimental effect a “change” of the station location would have on the interests and wellbeing of the existing and developing community in the area, that they failed to consider or give proper weight to the public health benefits a train station at site DW2 would deliver to the local and wider communities, that they gave “excess weight” to the possibility of a future community being developed on “unzoned” land near site DW1, that they failed to consider the increased road congestion resulting from additional vehicle use necessary to access site DW1 and that they failed to consider the impact increased emissions and other negative environmental effects flowing from a station on site DW1 would have on greenhouse gas commitments. They also assert that, in making the decision, KiwiRail and the other respondents failed to correctly understand and take into account that the development potential and accessibility of “green field” land proximate to site DW1 is lower than the development potential and accessibility of land proximate to site DW2. They allege that there are no significant operational or technical reasons preventing the location of the proposed station at site DW2 and they say that present and emerging communities will have “poor walkable and cyclable connectivity” to site DW1 and that this will lead to increased vehicle use. In the first cause of action it is alleged that the claimed decision is unlawful and in breach of the respondents’ climate change commitments and obligations, their statutory obligations and their respective statements of intent. In the fourth cause of action, it is claimed that the claimed decision is unreasonable.
(b)The second and third grounds of review are pleaded only against the second respondent, Auckland Council. The second ground of review alleges that Auckland Council has breached legitimate expectations enjoyed by MADE. It is asserted that these expectations came from consultation undertaken by Auckland Council with MADE and from the structure plan promulgated by Auckland Council. It is alleged in the third cause of action that Auckland Council failed to consult before making the claimed decision to “move” the station to site DW1.
[7] The respondents deny that a reviewable decision was made on 21 August 2020. They say that no decision was then made and that all that happened was that a workshop reported its view as to where the new station should go. They assert that the decision to opt for site DW1 was only made after further investigation and consultation (including with MADE) which occurred after 21 August 2021. They also oppose the application for judicial review on numerous other grounds and deny much of MADE’s pleadings. Each of the respondents denies that there has been any illegality or unreasonableness in the processes followed. For its part, Auckland Council denies that MADE can have had any legitimate expectation as alleged and that it (Auckland Council) failed to consult.
[8] All required interlocutory steps have been attended to and a fixture has been allocated for the judicial review proceedings commencing on 6 March 2023. Although MADE initially sought a priority fixture, this application is no longer pursued.
The notices of requirement/application for resource consents
[9] In July 2022, KiwiRail applied to Auckland Council for notices of requirement and resource consents for site DW1. There are two notices of requirement. One provides for railway infrastructure, the proposed station platforms and the proposed buildings. The other provides for interchange facilities and access ways. The resource consent applications are sought to authorise activities relating to the construction, operation and maintenance of the project. They relate to the management of contaminants, earthworks, the diversion of stormwater, new structures in the beds of streams, the discharge of water and/or contaminants and the reclamation of wetlands.
If the notices of requirement are confirmed, they will designate site DW1 in the Auckland Unitary Plan (Operative Version) and authorise works relating to the construction, operation and maintenance of the new station. They will authorise land use activities that would otherwise require resource consent under the plan, restrict the use of the DW1 site in the interim and prevent works that could hinder the development of a new station.
[10] The applications were publicly notified on 22 September 2022. MADE (along with many others) has lodged a comprehensive submission. All will be entitled to be heard at any hearing into the notices of requirement and resource consent applications.
[11] The focus of MADE’s submission is the notices of requirement. It acknowledges in its submissions that the site selection process undertaken by KiwiRail was comprehensive and that it satisfied the requirements of s 171(1)(b) of the RMA.
[12] KiwiRail has requested that its notices of requirement and resource consent application should be referred directly to the Environment Court under respectively ss 198B and 87D of the RMA. On 11 October 2022, Auckland Council granted this request. Following preparation of the required reports under ss 198D and 87F, KiwiRail will be able to commence a proceeding in the Environment Court pursuant to ss 198E(2) and 87G(2) by lodging in the Environment Court notices of motion applying for confirmation of the requirement and the grant of the resource consents. The notices of requirement and the resource consent application will then fall to be heard by the Environment Court. The Court will have to apply s 171 of the RMA to the notices of requirement and s 104 to the application for the resource consents.1
[13] It was common ground that any hearing before the Environment Court will not take place until late 2023.
The present application
[14]Against this background, KiwiRail seeks an order:
1 Resource Management Act 1991, ss 198E(6) and 87G(6).
(a)staying MADE’s judicial review application; and
(b)continuing the stay pending determination by the Environment Court of the notices of requirement and the resource consent application.
[15]MADE is opposed to the grant of a stay.
[16] Auckland Council and Auckland Transport filed a joint notice in support of KiwiRail’s application for a stay. Waka Kotahi/NZ Transport Agency did not join in filing that notice but all three respondents appeared at the hearing through counsel and all adopted the submissions made by KiwiRail and supported its application.
Submissions
[17] Mr Radich KC, on behalf of KiwiRail, argued that an interim stay to allow the Environment Court proceeding to take its course best provides for the fair and efficient disposal of the disputes between the parties including in the judicial review proceeding. He submitted that:
(a)the Environment Court will consider and effectively determine most, if not all, of the factual and merits-based issues raised in the judicial review proceeding;
(b)the Environment Court is a specialist Court. It is best suited to address such issues;
(c)the judicial review proceeding cannot resolve the real dispute – the merits of the respective station sites. The High Court is not well equipped in the judicial review proceeding to rule on the “technical polycentric decisions” at the heart of the dispute between the parties;
(d)whatever the outcome of the judicial review proceeding, a hearing on the merits of the site preferred by KiwiRail (including whether adequate consideration was given to alternative sites) in the Environment Court is inevitable. Such hearing is likely to narrow the
issues in, and perhaps eliminate the need for, the judicial review proceeding. Conversely, the judicial review proceeding cannot refine the issues that will need to be resolved in the Environment Court;
(e)allowing the judicial review proceeding to go ahead of the Environment Court proceeding is at odds with s 296 of the RMA;
(f)both proceedings cannot go on at the same time. Inconsistent outcomes on common issues would make both unmanageable.
[18] Mr Hollyman KC, for MADE, argued that there is no basis for a stay. He submitted that:
(a)there are two proceedings and each concerns different matters and requires different decisions;
(b)the Environment Court proceeding has a limited focus. When considering the notices of requirement it will not determine which is the best or most suitable site for the station;
(c)the best or most suitable site for the station was determined by the respondents in August 2020. MADE says this decision was unlawful. If the Court agrees, it may set aside this determination and send the issue back to the respondents to reconsider;
(d)which site is best and most suitable should be lawfully determined by the respondents before the Environment Court is required to consider the notices of requirement;
(e)MADE has a right to engage this Court’s supervisory jurisdiction and challenge the lawfulness of the 21 August 2020 decision; and
(f)staying the proceeding would deny MADE’s right to judicial review and to seek the relief sought.
Analysis
[19] The Court has power to grant a stay under r 15.1 of the High Court Rules 2016 and in the exercise of its inherent jurisdiction. Relevantly, r 15.1 provides as follows:
15.1 Dismissing or staying all or part of proceeding
(1)The court may strike out all or part of a pleading if it—
(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b)is likely to cause prejudice or delay; or
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the court.
…
(3)Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
(4)This rule does not affect the court’s inherent jurisdiction.
[20] This Court has held that the discretionary power under r 15.1(3) to stay instead of striking out must be informed by the considerations in r 15.1(1),2 and it has been observed that the discretion conferred should be exercised only in “rare and compelling circumstances” and that “[t]here must be a real risk of unfairness or oppression … if the proceedings were allowed to continue.”3
[21] KiwiRail does not assert that MADE’s pleading discloses no reasonably arguable cause of action. Nor does it assert that the pleading is frivolous, vexatious or otherwise an abuse of the process of the Court. Indeed, it has not sought to strike out MADE’s statement of claim either in whole or in part. It is however implicit from KiwiRail’s submissions that it considers that allowing MADE’s judicial review application to proceed is likely to cause prejudice and/or delay.
2 Danone Asia Pacific Holdings Pte Ltd v Fonterra Co-operative Group Ltd [2014] NZHC 1681 [Danone HC] at [39]; upheld on appeal in Danone Asia Pacific Holdings Pte Ltd v Fonterra Co-operative Group Ltd [2014] NZCA 536.
3 Danone HC, above n 2, at [39] and [55].
[22] In any event, the Court clearly has an inherent jurisdiction to stay proceedings4 and it has been prepared to do so where the parties have previously agreed to alternative methods of resolving their dispute – for example, an agreement to refer a dispute to a panel of experts,5 an agreement to try to resolve differences informally6 or an agreement to mediate.7 Some statutes require the Court to stay proceedings – for example, the Arbitration Act 1996 requires the Court to stay a proceeding where the dispute is subject to an arbitration agreement entered into on or after 1 July 1997.8
[23] Mr Radich submitted that a stay can also be appropriate where the issue raised in a judicial review proceeding is also raised in a proceeding involving the same parties before a specialist tribunal. He argued that a stay will be appropriate where the specialist tribunal will be required to consider the same factual and merit-based allegations as are raised in the judicial review proceeding, particularly where the Court is unlikely to be able to provide a remedy in relation to the underlying issue.
[24] Mr Radich relied on the judgment of Cooke J in New Zealand Kiwifruit Growers Inc v Gisborne District Council.9 There, the Court granted an interim stay of a judicial review proceeding pending the hearing of an appeal to the Land Valuation Tribunal. The Court considered that granting the stay would allow the matters in issue to be addressed by the Tribunal and then on appeal to this Court if necessary. The Judge observed that whether there would then be any further utility in the judicial review proceeding could then be assessed. The Judge relied on two previous cases
4 KiwiRail’s application also relied on s 14 of the Judicial Review Procedure Act 2016. In New Zealand Kiwifruit Growers Inc v Gisborne District Council [2021] NZHC 2198 at [16], Cooke J suggested that s 14(2)(l) and (m) allow a Judge to fix the time for hearing a judicial review proceeding and to give consequential directions as necessary including staying the proceeding. I am not sure that I necessarily agree with this observation. Section 14(2) contains a prescriptive list of the orders and directions that can be made. They do not include the power to stay. Section 14(2)(m) allows the Court to give “any consequential directions that the Judge considers necessary”. Arguably the power to stay proceedings is not a direction that is consequential to the other matters identified in s 14(2). The point however was not fully argued before me and it was common ground that the Court does have jurisdiction to stay proceedings whether pursuant to r 15.1(3) or in its inherent jurisdiction. Therefore I take the issue no further.
5 Channel Tunnel Group Ltd v Belfour Beatty Construction Ltd [1993] AC 334 (HL).
6 Hooper Bailie Associated Ltd v Natcon Group Pty Ltd (1992) 28 NSWLR 194 (SC).
7 Braid Motors Ltd v Scott (2001) 15 PRNZ 508 (HC).
8 Arbitration Act 1996, Schedule 1, cl 8.
9 New Zealand Kiwifruit Growers Inc v Gisborne District Council, above n 4.
where judicial review proceedings had been brought in relation to matters that were also before the Tribunal and where stays were granted.10
[25] I am not persuaded that these various cases are in point. In New Zealand Kiwifruit, both the judicial review proceeding before the High Court and the proceedings before the Land Valuation Tribunal raised the same issue – the rateable value of land calculated by the respondent Council.11 There was a full right of appeal to the Land Valuation Tribunal and then a further right of appeal to the High Court. The Judge agreed with submissions made to him that the central question was “whether the statutory objection process [was] capable of effectively determining the issues raised in the judicial review proceedings”12 and he went on to consider whether the Land Valuation Tribunal would be required to assess the substantive issues raised in the judicial review proceeding. The judicial review proceeding involved two claims
– one alleging misinterpretation of relevant statutory provisions and the other alleging a breach of natural justice. The Judge considered that the Tribunal would be required to deal with the alleged misinterpretation issue.13 In relation to the alleged breach of natural justice, he considered that the High Court would be in a much better position to assess whether there had been any procedural impropriety once the process had been completed and noted that, in any event, the Court can decline to grant relief in judicial review proceedings which allege procedural impropriety, inter alia, where a subsequent appeal has cured the procedural deficiency.14
[26] Mr Radich also relied on a decision of the Court of Appeal – Reihana v Rakiura Tītī Committee.15 In that case the High Court had stayed a judicial review proceeding under r 15.1 on the basis that the Titi (Muttonbird) Islands Regulations 1978 provided an alternative and more appropriate method of resolving the factual issues underlying the dispute between the parties.16 The Court of Appeal held that the Judge was correct to do so, because the underlying dispute engaged factual issues unsuited to judicial
10 Telecom New Zealand Ltd v Christchurch City Council HC Christchurch CP68/02, 18 March 2003; and Blair v Upper Hutt City Council HC Wellington CIV-2005-485-1961, 21 June 2006.
11 New Zealand Kiwifruit Growers Inc v Gisborne District Council, above n 4.
12 At [17].
13 At [21].
14 At [28]–[29].
15 Reihana v Rakiura Tītī Committee [2018] NZCA 325, [2018] NZAR 1652.
16 Reihana v Rakiura Titi Committee [2016] NZHC 2048, [2016] NZAR 1491.
review and issues involving tikanga. The regulations provided a framework for the determination of such disputes and any decision was appealable to an independent decision maker.17
[27]Again, I am not persuaded that this decision assists in the present case.
[28] MADE’s judicial review proceeding concerns the decision said to have been made on 21 August 2020; it puts in issue whether that (alleged) decision was made in accordance with the law. It is essentially asserted that, on 21 August 2020, the respondents decided that site DW1 was the best and most suitable site for the proposed station, that in making this decision they failed to take into account relevant considerations and took into account irrelevant considerations and that, as a result, their decision to locate the proposed new railway station on site DW1 was unlawful and/or manifestly unreasonable. It is also alleged that Auckland Council breached MADE’s legitimate expectations and that Auckland Council failed to consult with MADE.
[29] These are accepted and traditional grounds on which judicial review is often sought. If MADE is right in its assertions and the respondents did decide on 21 August 2020 that site DW1 was the best and most suitable site and that they should locate the station at site DW1, then that decision will be unlawful. The Court could so declare, set aside the decision and require the respondents to reconsider which site is best according to law. Any reconsideration might result in site DW1 being confirmed as the best site. If so, the notices of requirement can proceed to hearing before the Environment Court. It might however result in another site, perhaps site DW2, being identified as the best and most suitable site, in which case fresh notices of requirement will have to be filed.
[30] The lawfulness of the decision allegedly made on 21 August 2020 will not fall to be determined by the Environment Court and it has no jurisdiction to rule on that issue. Rather, its concern – in relation to the notices of requirement – will be with s 171 of the RMA. Relevantly, s 171 provides as follows:
17 Reihana v Rakiura Tītī Committee, above n 15, at [4] and [17]–[19].
Recommendation by territorial authority
…
(1)When considering a requirement and any submissions received, a territorial authority must, subject to Part 2, consider the effects on the environment of allowing the requirement, having particular regard to—
(a)any relevant provisions of—
a national policy statement:
(ii)a New Zealand coastal policy statement:
(iii)a regional policy statement or proposed regional policy statement:
(iv)a plan or proposed plan; and
(b)whether adequate consideration has been given to alternative sites, routes, or methods of undertaking the work if—
(i)the requiring authority does not have an interest in the land sufficient for undertaking the work; or
(ii)it is likely that the work will have a significant adverse effect on the environment; and
(c)whether the work and designation are reasonably necessary for achieving the objectives of the requiring authority for which the designation is sought; and
(d)any other matter the territorial authority considers reasonably necessary in order to make a recommendation on the requirement.
(1B) The effects to be considered under subsection (1) may include any positive effects on the environment to offset or compensate for any adverse effects on the environment that will or may result from the activity enabled by the designation, as long as those effects result from measures proposed or agreed to by the requiring authority.
…
[31] The Environment Court has observed that the duty cast by subs 171(1)(b) is limited to having particular regard to whether adequate consideration has been given
to alternatives. It is not a duty to decide the preferable site, route or method.18 This Court has reached a similar conclusion.19 In Queenstown Airport Corporation Ltd v Queenstown Lakes District Council, Whata J cited observations of the Environment Court as follows:20
[18] The Court observed that the central issue under s 171(1)(b), dealing with the assessment of alternatives, is whether QAC gave adequate consideration to alternative sites, routes or methods. The Court then adopted the principles stated in the final report and decision of the Board of Inquiry into the Upper North Island Grid Upgrade Project as follows:
“a) the focus is on the process, not the outcome: whether the requiring authority has made sufficient investigations of alternatives to satisfy itself of the alternative proposed, rather than acting arbitrarily, or giving only cursory consideration to alternatives. Adequate consideration does not mean exhaustive or meticulous consideration.
b)the question is not whether the best route, site or method has been chosen, nor whether there are more appropriate routes, sites or methods.
c)that there may be routes, sites or methods which may be considered by some (including submitters) to be more suitable is irrelevant.
d)the Act does not entrust to the decision-maker the policy function of deciding the most suitable site; the executive responsibility for selecting the site remains with the requiring authority.
e)the Act does not require every alternative, however speculative, to have been fully considered; the requiring authority is not required to eliminate speculative alternatives or suppositious options.”
The Judge did not take issue with these observations or with the Environment Court’s adoption of them.
[32] I agree with Mr Hollyman’s submission that the enquiry the Environment Court will be required to make into KiwiRail’s notices of requirement is limited and that the Environment Court and the High Court will not be considering the same issue.
18 Omokoroa Ratepayers Association Inc v Western Bay of Plenty District Council EnvC Tauranga A102/2004 at [51]; Bungalo Holdings Ltd v North Shore City Council EnvC Auckland A052/01, 7 June 2001 at [65]; Minhinnick v Minister of Corrections EnvC Manukau A043/2004, 6 April 2004 at [234]; and Tainui Hapu v Waikato Regional Council EnvC Hamilton A063/2004, 10 May 2004 at [148].
19 Kett v Minister for Land Information HC Auckland AP404/151, 28 June 2001 at [29].
20 Queenstown Airport Corporation Ltd v Queenstown Lakes District Council [2013] NZHC 2347 (citation omitted).
(a)The Environment Court will not be considering which is the best or most suitable site for the new station. It will be considering whether KiwiRail and the other respondents undertook sufficient investigation of alternatives to satisfy themselves that site DW1 was the preferred site for the new station. Responsibility for selecting the best and most suitable site lay with the respondents, in particular, with KiwiRail.
(b)Nor will the High Court in the judicial review proceeding be considering which is the best or most suitable site; rather it will be considering whether or not the process adopted by the respondents to identify the best or most suitable site, if it resulted in a decision in August 2020, was lawful. The Environment Court’s specialist expertise will be irrelevant to the issue the High Court will be required to address.
[33] For the same reason, I do not consider that s 296 of the RMA is engaged. It provides as follows:
296No review of decisions unless right of appeal or reference to inquiry exercised
If there is a right to refer any matter for inquiry to the Environment Court or to appeal to the court against a decision of a local authority, consent authority or any person under this Act or under any other Act or regulation—
(a)no application for review under the Judicial Review Procedure Act 2016 may be made; and
(b)no proceedings seeking a writ of, or in the nature of, mandamus, prohibition, or certiorari, or a declaration or injunction in relation to that decision, may be heard by the High Court—
unless the right has been exercised by the applicant in the proceedings and the court has made a decision.
The matters referred to the Environment Court by KiwiRail are not the same matters that MADE wishes to take to the High Court. There is no right to refer the decision said to have been made on 21 August 2020 to the Environment Court for inquiry.
Result
[34] For the reasons I have set out, I am not prepared to stay MADE’s judicial review proceeding. KiwiRail’s application is declined.
Costs
[35] Counsel were agreed that costs should be fixed on a 2B basis. I agree that this is appropriate and so order. Counsel anticipated that they would be able to reach agreement on quantum between themselves. If there is any disagreement, I direct as follows:
(a)any memorandum seeking costs is to be filed and served within five working days of the date of this decision;
(b)any memorandum opposing an award of costs is to be filed and served within a further five working days;
(c)memoranda are not to exceed three pages.
I will then deal with the issue of costs (and disbursements) on the papers unless I require the assistance of counsel.
Wylie J
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