Mahora Residents Society Incorporated v Hastings District Council

[2024] NZHC 893

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2024-441-17

[2024] NZHC 893

UNDER

the Judicial Review Procedure Act 2016

IN THE MATTER

of an application for judicial review

BETWEEN

THE MAHORA RESIDENTS SOCIETY INCORPORATED

Applicant

AND

HASTINGS DISTRICT COUNCIL

First Respondent

NEW ZEALAND HOUSING GROUP HASTINGS LIMITED

Second Respondent

Hearing:

17 April 2024

Appearances:

M B Lawson for Applicant

No appearance for First Respondent M J Slyfield for Second Respondent

Judgment:

22 April 2024

JUDGMENT OF McQUEEN J

[1]    The Mahora Residents Society Inc (the Society) has issued judicial review proceedings against the Hastings District Council (the Council) and NZ Housing Group Hastings Ltd (NZ Housing Group) in relation to the Council’s decisions granting land use and subdivision consents on a non-notified basis to NZ Housing Group in respect of a residential development in Rimu Street, Mahora, a suburb of Hastings.

THE MAHORA RESIDENTS SOCIETY INCORPORATED v HASTINGS DISTRICT COUNCIL [2024] NZHC 893 [22 April 2024]

[2]    The matter presently before me is the Society’s application for interim relief against NZ Housing Group with the effect of stopping work on the development pending the determination of its substantive application. NZ Housing Group opposes the application.

[3]For the reasons set out below, I decline to make interim orders.

Factual background

[4]    In support of its application, the Society has filed an affidavit from Mr Thomas Ramirez, who is the president of the Society, as well as an affidavit from an expert planning consultant, Mr Philip Stickney. In support of its opposition to the application, NZ Housing Group has filed an affidavit from Mr Terence May, the Chief Executive Officer of TW Property, which is the project manager for NZ Housing Group, and an affidavit from Mr Roger Wiffin, an expert resource management planner. I draw on the affidavits of Mr Ramirez and Mr May to outline the factual background below.

[5]    The Society is an incorporated society that was recently registered under the Incorporated Societies Act 1908. The statement of claim states that the primary objects of the Society are to:

(a)advocate to central and local government on behalf of the community of Mahora, Hastings and its surrounds;

(b)represent and promote the interests of the Society; and

(c)do any act or thing incidental or conducive to the attainment of any of the above objects.

[6]    Mr Ramirez deposes that the Society represents the interests of the community living in Mahora. He says that the community includes “a broad range of people from a broad range of backgrounds and includes social housing, low-cost housing and some of the older more established homes of Hastings”. Although Mr Ramirez’s affidavit does not provide any detail about the members of the Society, Mr Lawson, counsel for the Society, informed the Court that the Society has over 50 members.

[7]    NZ Housing Group has a contract with Kāinga Ora to provide a residential development in Rimu Street, Mahora.1 In October 2022, NZ Housing Group applied to the Council for land use and subdivision consents (the resource consents) to develop 10 dwelling units at 906, 908 and 910 Rimu Street (each of these addresses previously had a 1940s–50s era residential house on it). Further information was sought by the Council and provided by NZ Housing Group. An independent urban design peer review was undertaken. In August 2023, a revised application was submitted  by   NZ Housing Group. Again, the Council sought further information from NZ Housing Group, and this was provided. The final  application  for  resource  consents  from NZ Housing Group is exhibited to Mr Wiffin’s affidavit.

[8]    In November 2023, an Independent Commissioner, under delegated authority from the Council, decided both that the application for resource consents could be dealt with on a non-notified basis (the notification decision) and that the application should be granted (the consent decision). The decisions relied on the report prepared by the Council officer who assessed the applications. The parties agree that in the circumstances the officer’s report can be understood as reflecting the reasoning for the Council’s decisions.

[9]    Mr Ramirez says that when the community found out about the decisions, there was considerable alarm. He says that the community is extremely concerned with the consents that have been granted and the failings that have occurred in the process by which those consents were granted. He says that the Society is concerned about homes being constructed on sites that are as small as 116m2 and that this is not in the interests of the community. Several community meetings were held. At those meetings, the prospect of challenging the decisions to grant the resource consents by way of judicial review was openly discussed. This led to the Society filing the proceedings naming the Council as respondent on 8 February 2024. Mr Ramirez says that NZ Housing Group was notified of the proceedings on 14 February 2024.

1      The contract itself has not been provided in evidence although Mr May comments on some of its provisions.

[10]   Mr Ramirez says that, following this, nothing appeared to happen at the properties for a few weeks. Around 1 March 2024 there were some minor earthworks which Mr Ramirez says he was told was for the removal of some contamination on the site. However, Mr Ramirez says that works continued, including a substantial workforce working over a weekend. He says this is to further the laying of foundations and the implementation of the consents that are under challenge.

[11]   To address its concerns, the Society contacted its solicitor who then wrote to NZ Housing Group’s barrister on 11 March 2024, inviting NZ Housing Group to desist from  taking  steps  to  implement  the  resource   consents.   On   12 March 2024, NZ Housing Group’s barrister advised that NZ Housing Group was proceeding with work on the Rimu Street properties in accordance with its consents. On 13 March, the Society filed an application for interim relief and an order joining NZ Housing Group as a respondent in the proceeding.2

[12]   Mr May explains that before the grant of resource consents  in late 2023,    NZ Housing Group undertook a range of permitted works to prepare the site for potential development. He says that after the grant of resource consents, NZ Housing Group sought the requisite building consents and engineering approvals from the Council, which were granted on 7 or 8 February 2024. He says that on 12 February 2024, NZ Housing Group started work in reliance on the resource consents. To date, this work has broadly comprised stripping the topsoil, excavating and backfilling to precede the laying of foundations for around half of the 10 new dwellings, and excavating and backfilling to precede the creation of the joint accessway into the site. Mr May says that in the week beginning 18 March, the boxing is due to be installed for the pouring of  foundation  slabs  for  those  parts  of  the  site  that  are  ready.  Mr Slyfield, counsel for NZ Housing Group, informed the Court that framing work is now underway.

[13]   Mr May says that the estimated date for completion of construction is early November 2024 (although that does not allow for code completion processes or the processes to issue titles).

2      NZ Housing Group was joined by consent: see The Mahora Residents Society Inc v Hastings District Council HC Napier CIV-2024-441-17, 18 March 2024 (Minute) at [5].

[14]   Mr Ramirez says the Society believes there are serious flaws in the decisions and the decision-making processes which will see homes being constructed on sites that are as small as 116m2. The Society does not believe this is in the interests of the Mahora community or the wider Hawkes Bay community. Mr Ramirez says that is why there are District Plan provisions requiring sites to be substantially larger than that proposed in NZ Housing Group’s application. Mr Ramirez says the Society’s concern is that “[NZ Housing Group] are intent on railroading through this process and getting the homes constructed before the matter is able to be considered by the Court”.

[15]   Mr May addresses the consequences to NZ Housing Group if interim orders were  to  be  made  that   have  the  effect  of  stopping  work.  He  explains  that    NZ Housing Group has already incurred costs of over $2.1 million on the development, including land acquisition and all fees and expenses associated with progressing the development. Given the construction work being undertaken in March, he estimates that the likely cost to the end of March is about $2.3 million (excluding GST). Assuming an interest rate of 8.55 per cent, Mr May says that this equates to a monthly holding cost of $16,388, meaning that every month the project is delayed will cost NZ Housing Group this additional sum.

[16]   NZ Housing Group’s contract with Kāinga Ora requires the development to be completed by 20 February 2025. Mr May says that the development must, by that date, be constructed, code compliant, and with 10 individual freehold titles issued and ready to transfer. The contract value is $7,510,000 (including GST). Mr May explains that NZ Housing Group is liable under the contract to a weekly penalty of $1,000 for late completion, and that from 20 May 2025, Kāinga Ora has rights to cancel the contract.

[17]   Mr May estimates that a delay of one month in the construction programme puts the project at serious risk of being unable to satisfy the completion date and that a delay of two months would make it almost inevitable that this date could not be met. He says that a delay of more than that would put the project at risk of cancellation. Mr May also says that if construction was required to stop, there could be additional costs  if or  when  construction recommences,  such as the  costs  of remobilising  the

construction programme and remedying physical damage that results from an enforced stoppage.

The application for judicial review

[18]   The Society’s statement of claim pleads nine causes of action against the Council. They are based on illegality/improper purpose, mistake of law, irrelevant considerations, unreasonableness, and legitimate expectation. The Society seeks orders quashing both the Council’s notification decision and the consent decision. There are complaints from the Council and the NZ Housing Group about the way the claim is pleaded, but I do not need to resolve them at this time.3

[19]   The heart of the Society’s claim is that the Council has not correctly applied the appropriate tests under the Resource Management Act 1991 (the Act) in determining whether NZ Housing Group’s application for resource consents should be subject to public notification and should be granted.4 Mr Lawson says this is important in that an application can be made to permit an activity that contravenes the District Plan but the correct approach to such an application must be taken to respect the integrity of the Plan.

[20]   NZ Housing Group contends that the Council has applied the correct approach to considering its application for resource consents.

The interim relief application and correct approach

[21]   Following discussion between counsel for each of the Society and the Council, it was confirmed that no interim relief is sought against the Council and accordingly, the appearance of counsel for the Council at the hearing of the Society’s application was excused.5

3      I record that Mr Lawson confirmed that the allegations of improper purpose/illegality rely on what the Society says is an incorrect interpretation of the Resource Management Act 1991. The Society does not suggest that beyond that, there are illegal acts or the pursuit of an improper purpose.

4      I accept that the statement of claim alleges errors in the way the Council made its notification decision under both s 95A (relating to public notification) and s 95B (relating to limited notification) but I consider that the Society’s evidence and submissions on its behalf make it clear that public notification is its real concern.

5      The Council is yet to decide whether it will seek leave to participate in any substantive hearing of this proceeding, in light of Fraser v Central Hawke’s Bay District Council [2021] NZHC 2981.

[22]   The hearing therefore proceeded on the basis that the Society seeks orders against NZ Housing Group prohibiting NZ Housing Group from taking any further action in the implementation or exercise of the land use consents and subdivision consents granted by the Council to NZ Housing Group.

[23]   The primary basis for granting interim relief in a judicial review proceeding is to be found in s 15 of the Judicial Review Procedure Act 2016. Section 15 relevantly provides:

15 Interim orders

(1)At any time before the final determination of an application, the court may, on the application of a party, make an interim order of the kind specified in subsection (2) if, in its opinion, it is necessary to do so to preserve the position of the applicant.

(2)The interim orders referred to in subsection (1) are interim orders—

(a)prohibiting a respondent from taking any further action that is, or would be, consequential on the exercise of the statutory power:

…

(4)An order under subsection (2) or (3) may—

(a)be made subject to such terms and condition as the court thinks fit; and

(b)be expressed to continue in force until the application is finally determined or until such date, or the happening of such other event, as the court may specify.

[24]   Mr Lawson submits that the test under s 15 is simple, in that an interim order may be made if the Court considers it necessary to preserve the position of the applicant. He emphasises that judicial review involves a judicial intervention to ensure that a decision by the executive or a public body was made according to law, even if the decision does not otherwise involve an actionable wrong. He says that the building of the 10 units by NZ Housing Group does not outweigh the public interest in the correct application of the law. Mr Lawson also contends that after consideration of whether the substantive claim gives rise to a serious question to be tried or otherwise has merit, consideration of the balance of convenience is not appropriate, in reliance on Fitzgerald v Commission of Enquiry into Marginal Lands Board.6

6      Fitzgerald v Commission of Enquiry into Marginal Lands Board [1980] 2 NZLR 368.

[25]   While I accept that the balance of convenience test is not, in such terms, an element of the test for interim relief under s 15, I consider that it is quite clear that the approach I must follow in considering the grant of interim relief under s 15 is more than just a question of preservation of an applicant’s position. It is also clear that while the strength of an applicant’s case is relevant, it too is not the only matter for the Court to consider.

[26]   Rather, I must apply the Court of Appeal’s approach outlined in Carlton & United Breweries Ltd v Minister of Customs, and adopted by the Supreme Court in Minister of Fisheries v Antons Trawling Company Ltd. The approach provides that:7

Before a Court can make an interim order under [s 15 of the Judicial Review Procedure Act 2016] it must be satisfied that the order sought is reasonably necessary to preserve the position of the applicant. If that condition is satisfied the Court has a wide discretion to consider all the circumstances of the case, including the apparent strengths or weaknesses of the applicant’s claim for review, and all the repercussions, public and private, of granting interim relief.

[27]   Wallace v Auckland Council is a recent decision of this Court in relation to an application for interim relief to stop the completion of a development. In his judgment,

Powell J acknowledged the test as outlined above and observed further that:8

[9]… Consideration must also be given to the purpose of interim relief power, being to:

(a)Relieve the applicant from the adverse effects of a challenged decision until the challenge is heard and determined; and

(b)Reserve the ability of the Court to grant effective relief if the challenge is successful.

[10]Although the strengths and weaknesses of the claim are relevant to the Court’s discretion, a detailed discussion of the merits of the application, beyond the limited purposes for which the merits are relevant to interim relief, is not required.

7      Minister of Fisheries v Antons Trawling Company Ltd (2007) 18 PRNZ 754 (SC) at [3], citing

Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 (CA) at 430.

8      Wallace v Auckland Council [2022] NZHC 1299 at [9]–[10] (footnotes omitted).

[28]Accordingly, I turn to consider each aspect of the test in the present case.

Does the Society have a position to preserve and is an order reasonably necessary to preserve the position?

[29]   It appears that the Society has been formed recently, including for the purpose of bringing this proceeding. While Mr Lawson submitted that the interim orders are necessary to preserve the position of the Society and the community of Mahora, the application for interim relief refers only to the need to preserve the position of the Society.

[30]   Mr Ramirez’s supporting affidavit is brief. He deposes that the Society represents the Mahora community but provides no detail to support that. There is no identification of any individual members or suggestion that any individual is affected by the grant of the resource consents. Mr Lawson informed the Court that the Society has more than 50 members and that more than that number attended the public meetings held, and that there does not appear to be opposition in the community to the Society’s concerns about the development. Mr Lawson emphasises the public way in which the concerns have been raised and says that, overall, I can regard the Society as providing very good representation.

[31]   Despite these submissions, the fact is that I have very limited information about the Society, its members or indeed the community of Mahora.

[32]   While I can conclude that the Society represents the interests of its members, I do not consider that there is a basis for me to conclude that it represents the wider community of Mahora, nor indeed Hastings or the Hawke’s Bay area. I proceed on the basis that it is the Society’s position, on behalf of its members, that is relevant for this application.

[33]   No challenge was made to the Society’s standing to bring judicial review proceedings per se. Rather NZ Housing Group’s position is that, in the circumstances, the Society has no position to preserve in relation to the notification and substantive decisions.

[34]   Mr Slyfield submits that in the absence of information about the membership of the Society and its mandate to represent the community, the Court cannot assess whether the errors alleged in the statement of claim are matters giving rise to an interest that warrants preservation. He says that, at best, the Society may represent some of the community, but that community does not necessarily have any greater interest than the public at large in the outcomes for the site. Mr Slyfield also argues that the Society faces a high hurdle in challenging the Council’s non-notification decision, referring to the amendments in 2009 to the Act, and says that the right to make a submission if the application was publicly notified is a very limited position.9

[35]   The question then becomes whether the possibility that the Society may gain a right to make a submission on NZ Housing Group’s resource consent application means that the Society has a position sufficient to justify interim relief with the effect of stopping the development.

[36]   Mr Slyfield compares the Society’s position to that of the unsuccessful applicant for interim relief in Aro Valley Community Council Inc.10 He says that in that case, expert heritage assessments had been undertaken by both the Council and the consent applicant and the Council relied on those assessment in deciding not to notify the applications. He then says that similarly, in the present case, NZ Housing Group and the Council engaged independent assessments relating to neighbourhood character and amenity. Mr Slyfield argues that the Society has not put forward any evidence that challenges these assessments and there is therefore no reason to expect that the Council would make a different decision to the one already made.

[37]   While Mr Lawson accepts that the 2009 amendments to the Act were intended to provide greater certainty through providing specific tests that removed discretion from the consent authority, he emphasised his fundamental point that the position to preserve is one where the statutory tests are applied correctly.

9      Aro Valley Community Council Inc v Wellington City Council [2015] NZHC 532, (2015) 18 ELRNZ 555 at [8], [22]–[23] and [29]. See also Coro Mainstreet (Inc) v Thames-Coromandel District Council [2013] NZCA 665, [2013] NZRMA 73 at [39]–[40].

10 Aro Valley Community Council Inc v Wellington City Council, above n 9, at [11]–[13], [24] and [31].

[38]   He also contends that the Society’s potential success in its application for judicial review is rendered nugatory without the interim relief sought. I do not accept that is the case. The parties have been co-operative in considering a timetable to an early substantive hearing. If the Society is successful in its substantive application, the likely remedy is that the notification decision and consent decision would be quashed. NZ Housing Group would then need to pursue the Council’s further consideration of its applications, and work on the development would necessarily have to stop pending that process.11

[39]   My assessment of the Society’s position to preserve is that in circumstances where I have so little information about the Society and its membership, its position to preserve is limited and is properly cast as being no more than the public at large.

[40]   This places the Society in a position where it is not reasonably necessary to make an order for interim relief to preserve its position. In case I am wrong in this assessment, I consider the discretionary element of the test.

Apparent strengths and weaknesses of the Society’s case

[41]   The Society submits that the Council has not correctly applied the appropriate tests under the Act in determining whether NZ Housing Group’s application for resource consents should be subject to public notification and whether they should be granted. Mr Lawson says the errors are plain, and he relies heavily on the strength of this argument as justifying the grant of interim relief.

[42]   Mr Lawson characterises the issue as “whether the [Council] has stayed within the confines of the limited jurisdiction that has been conferred by the statute”.12 He advances three lines of argument as to why the Council has not complied with the correct approach under the Act. He refers to the expert evidence from Mr Stickney in support of his submissions. I briefly outline the arguments.

11 And, as counsel for the Council has noted, NZ Housing Group would be unable to apply for approval of a survey plan (under s 223 of the Act) or certification of compliance with consent conditions (under s 224 of the Act).

12 Coro Mainstreet Inc v Thames-Coromandel District Council, above n 9.

[43]   The first relates to the idea of a “permitted baseline” and it is helpful at this point to outline the relevant provisions of the Act.

[44]   A consent authority must decide in accordance with ss 95A–95E of the Act whether to give public or limited notification of an application for resource consent. A step by step process is set out. In the present case, the focus of the Society’s challenge is on the requirement in s 95A(8)(b) that the Council must decide that the activity that is the subject of the application “will have or is likely to have adverse effects on the environment that are more than minor”. That decision must be made in accordance with s 95D. Section 95D relevantly provides that:

A consent authority that is deciding, for the purpose of section 95A(8)(b), whether an activity will or is likely to have adverse effects on the environment that are more than minor-

…

(b)may disregard an adverse effect of the activity if a rule or national environmental standard permits an activity with that effect; …

[45]   Mr Lawson explains that this reflects that if the District Plan permits an activity that gives rise to certain adverse effects, that has been anticipated in the promulgation of the Plan, such that a level of effects is deemed acceptable. This approach is known as the “permitted baseline” and involves a comparison of the effects of an activity for which consent is being sought with the effects of an activity that could be undertaken as of right as a permitted activity. While once a creature of caselaw, it is now recognised in the statute.13

[46]   A similar “permitted baseline” approach is included in s 95E when a consent authority is deciding if a person is an “affected person” (also relevant to the provision for limited notification in s 95B), and in s 104(2), in the context of what a consent authority must have regard to when considering an application for a resource consent.

[47]   Mr Lawson contends that on a proper interpretation of these provisions, the “permitted baseline” approach is not available to the Council in relation to the Society’s application. As I understand the argument, it is that as the District Plan has

13     See for example Arrigato Investments Ltd v Auckland Regional Council [2002] 1 NZLR 323 at [2].

no permitted activity with the same effects as the construction of 10 dwellings on the properties, and so therefore no “permitted baseline” arises. Mr Lawson says the Council recognised this when it said that there is no permitted baseline for subdivision, as subdivision requires at least controlled activity consent. He says that the Council then wrongly applied a “permitted baseline” approach premised on a hypothetical “five residential units plus one supplementary unit” over the properties as a single title (the “unbundled” approach). He argues that the effect of the approach taken by the Council is that it has disregarded the effects of that proposal and considered only the effects of the development beyond the five dwellings and one supplementary unit. He says then that this results in effectively applying the permitted baseline twice, as the additional effects are considered on the basis that the activity of subdivision at that level is permitted (which is not the case), and also ignores that effects include cumulative effects.14 This submission is supported by Mr Stickney’s opinion that:

The plan makes provision for development at much lower densities than that proposed. I consider that it is an incorrect application of the permitted baseline to effectively split the consideration of the proposed activity into two parts, namely one part being akin to a permitted development which is disregarded and then only considering the incremental effects.

[48]   Here, Mr Lawson says that the density of the development is in breach of the District Plan, which provides for development at the rate of one residential building per 350m2 of the net site area (whereas the development includes some lot sizes of 116m2). He notes the Society’s concern about the absence of backyards, as the District Plan contemplates, and for which a waiver has been granted in the resource consents, and refers to the discussion of traffic generation in the report as demonstrating the illogicality of the Council’s approach.

[49]   Mr Lawson’s second and third arguments are linked. These relate to the alternative development scenario and give rise to the question of whether a supplementary residential building has the same effects as a residential home.

[50]   The District Plan contemplates the building of a supplementary residential building where there is a primary dwelling. Mr Lawson says that the alternative development scenario discussed in the officer’s report on NZ Housing Group’s

14     Section 3(d) of the Act defines “effect” to include cumulative effects.

application is that if the development could have five primary dwellings, the ability for each lot to have a supplementary residential building has the same effect as a 10 dwelling development. He says alarm bells should have immediately been ringing for the Council, as it makes no sense that a 10 lot development is not allowed under the District Plan, but that it can be permitted through characterising the development as five primary dwellings and five supplementary residences.

[51]   Mr Lawson says that supplementary residences are understood as sleep out or granny flat type buildings, where they support the primary dwelling. This is not what is contemplated in the present development where the supplementary residences will themselves be principal residences with independent traffic movements, parking requirements etc. He accepts generally that the use of the supplementary buildings can evolve over time to be more independent, but says it would be wrong to start out by treating them as a second principal dwelling. Mr Lawson argues that the Council then seeks to rely on the supplementary nature of the second building and it being exempt from requirements faced by a primary dwelling (such as accessways and outdoor spaces) but also to contend that the second buildings are primary dwellings with the same effects. He says that this is not a consistent approach.

[52]   Mr Lawson contends that the Council then made a “de facto” use of the permitted baseline approach by making a comparison between the proposed development and the alternative development scenario. He says that comparison of an activity with another activity that requires consent is not a relevant consideration. Rather, the Act requires consideration of the effects of the proposed activity on the environment.

[53]   The Council and NZ Housing Group disagree with Mr Lawson’s submissions.15 They contend that this is not a situation where there is a clear error on the face of the record. While they say that the deficiencies of the statement of claim prevent the merits of the claim from being determined even to the limited level relevant to interim relief, I consider that, with the benefit of Mr Lawson’s submissions, I have been able to ascertain sufficiently the Society’s arguments, irrespective of the

15     Counsel for the Council expressed their views in a memorandum dated 14 March 2024.

asserted deficiencies with the statement of claim. I therefore consider that I can adequately assess the strength of the parties’ positions, for the purposes of the present application.

[54]   The Council and NZ Housing Group contend that the Council has taken a completely orthodox approach to the requirements of the Act, and in particular to the application for the “permitted baseline” approach. They say that it is not whether the intended activity is permitted (as it is not, if consent is required, as is the case here) but how its effects compare with those activities that are permitted. As Mr Lawson did, Mr Slyfield took me to various aspects of the officer’s report in support of his position that the report takes a correct approach to the statutory test. Mr Slyfield does not accept Mr Lawson’s  characterisation  of  the  approach  taken  in  the  report.  NZ Housing Group also relies on the affidavit from Mr Wiffin, who disagrees with Mr Stickney’s views on the approach taken by the Council. Mr Wiffin says that the Council’s approach to the “permitted baseline” and analysis of the alternative development scenario and supplementary residential buildings is sound.

[55]   In the context of interim relief, I cannot resolve these differences between the parties. The situation I am faced with is that both counsel and the two expert urban planners fundamentally disagree on the correct approach to the statutory test. I acknowledge that all counsel involved with this matter are experienced practitioners in relation to planning law.

[56]   I am satisfied that the Society has raised genuine arguments about the correct application of the relevant provisions of the Act in the context of the notification decision and consent decision. I do not consider that the arguments are so strong that they outweigh other relevant considerations in assessing whether interim relief should be granted. Full consideration of the legal arguments will take place at the hearing of the substantive application.

The public and private repercussions of granting interim relief

[57]   Mr Lawson says that I should not take account of the public interest in the development of social housing by Kāinga Ora as it is not outweighed by the need to ensure that statutory tests are followed. Mr Slyfield did not rely on public

repercussions as favouring the refusal of interim relief. Nor is there any evidence before me relating to any value that should be placed on social housing, or as to Kāinga Ora’s views. In those circumstances, I do not attempt to assess or place weight on any public repercussions of granting relief.

[58]   Mr Slyfield does, however, emphasise the private repercussions of granting relief. I have earlier outlined the evidence from Mr May about the consequences of interim relief for NZ Housing Group and its completion of the development. I consider that  I  can  fairly  conclude  that  the   consequences  would  be   significant  for    NZ Housing Group.

Consideration of all the circumstances and the overall justice of the case

[59]   I now stand back to consider all the circumstances and the overall justice of the case.

[60]   As will already be apparent, Mr Lawson’s critical submission is that the public interest in the correct interpretation of the statutory tests must prevail against all other considerations. He relies on the merit of his legal arguments to justify interim relief.

[61]   Mr Lawson has also confirmed that the Society is willing to give an undertaking as to damages but, very fairly, has been quite open about the fact that the Society is of limited means and that it would struggle to meet any substantial award of damages against it. He describes its funding as essentially based on a “give a little” model.

[62]   While there is no need for an undertaking as to damages to accompany an application for interim orders under the Judicial Review Procedure Act 2016, this Court has considered that the fact that an applicant is unwilling to offer an undertaking as to damages may be relevant to whether the wider circumstances of the case favour the making of interim orders.16

16     Wallace v Auckland Council, above n 8, at [11]–[12].

[63]   I accept the importance of not imposing fiscal barriers to possibly meritorious claims to review administrative decisions, particularly where there is high public interest. Nonetheless, here, there is no suggestion that NZ Housing Group has proceeded in anything other than an entirely proper way in pursuing its application for resource consents. It engaged with the Council for over a year before the notification decision and consent decision were made. It is apparent (leaving aside the allegation that the Council wrongly applied the statutory tests) that the Council officer considered the application in detail, sought further information on more than one occasion, and obtained an independent assessment of amenity considerations.

[64]   I also consider that NZ Housing Group has in good faith carried out work and incurred costs on the basis that it was authorised to proceed, having relied on the Council decision to grant resource consents. Given its views, it was entitled to carry on with that work pending the Society pursuing this proceeding and application for interim relief, and the determination of the application. I record, however, that it is also apparent that the Society took legal action promptly on discovering that the development was proceeding.

[65]   As  for  the  position  now,  it  is   clear   from   Mr May’s   evidence   that  NZ Housing Group has spent considerable sums to date on the development. If interim relief was to be granted, NZ Housing Group will face holding costs and the risk of penalties and/or cancellation for failure to complete the project on time. If the Society is then unsuccessful in its substantive application, NZ Housing Group will also face additional costs on recommencing work on the development. While Mr Lawson submits  that  it  is  not  for  the  Court  to  say  the  commercial  choice  made  by  NZ Housing Group to continue working on the development overrides the correct application of the Act, in my view this is nonetheless a consideration that the test under s 15 contemplates.

[66]   The practical reality is that the Society would bear no exposure to such losses if it was unsuccessful in its substantive application. It has no funds of significance to make available through an undertaking. Thus, its willingness to offer an undertaking provides no protection for NZ Housing Group.

[67]   To my mind this is a relevant factor in my overall consideration of the circumstances. The parties agree that the substantive application for judicial review should proceed as quickly as possible to hearing. Mr Lawson indicated that an amended statement of claim would be filed in response to the concerns raised by the Council and NZ Housing Group, and that the Society was unlikely to file any further evidence. With a cooperative approach between counsel, an early hearing should be possible.

[68]   I have formed the view also that while the development is of some public interest, there is no evidence before me that allows me to be satisfied that it is of high public interest such that interim relief is justified. This is not to say that the legal questions to be determined at the substantive hearing are not important. Given the seemingly regular application of the “permitted baseline” test, and the apparent situation that the matters at issue in this case have not previously been addressed by the courts, those questions would appear to require determination.

[69]   Having considered all the discretionary aspects of the application, I conclude that the overall justice of the case requires that I decline to order interim relief.

Result

[70]The application for interim orders is declined.

Next steps

[71]   I invite counsel to liaise in relation to all matters necessary for the substantive application to be ready for hearing as early as possible.

[72]   I direct that the proceeding be placed in the next convenient Judges’ Chambers List, to be advised by the Registrar.

Costs

[73]   Costs were not addressed at the hearing. I reserve costs pending the determination of the substantive application or other order of the Court.

McQueen J

Solicitors:

Lawson Robinson, Napier for Applicant

Sainsbury Logan & Williams, Napier for Second Respondent