Queenstown Airport Corporation Ltd v NZ Rent a Car Queenstown Ltd
[2024] NZHC 3232
•1 November 2024
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2024-425-050
[2024] NZHC 3232
BETWEEN QUEENSTOWN AIRPORT CORPORATION LTD
Plaintiff
AND
NZ RENT A CAR QUEENSTOWN LTD
First Defendant
AND
AAMS GROUP LTD (T/A RENTAL CARS 247)
Second Defendant
AND
MTM MANAGEMENT LIMITED
Third Defendant
continued over
Hearing: 17 August 2024 Appearances:
M E Casey KC, B M Russell and A M McLuskie for Plaintiff
S Robertson KC for Second and Third Defendants in CIV-2024- 425-050
D J Neutz and R H Ashton for Second Respondent in CIV-2024- 425-054
Judgment:
1 November 2024
JUDGMENT OF EATON J
This judgment was delivered by me on …….. at ……… pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
QUEENSTOWN AIRPORT CORPORATION LTD v NZ RENT A CAR QUEENSTOWN LTD AND OTHERS [2024] NZHC 3232 [1 November 2024]
CIV-2024-425-054 UNDER
the Judicial Review Procedure Act 2016
IN THE MATTER
Of an application for judicial review of a decision regarding resource consent on a non-notified basis
BETWEEN
QUEENSTOWN AIRPORT CORPORATION LTD
Applicant
AND
QUEENSTOWN LAKES DISTRICT COUNCIL
First Respondent
AND
MTM MANAGEMENT LTD
Second Respondent
Introduction
[1] The plaintiff/applicant, Queenstown Airport Corporation Ltd (QAC), operates Queenstown Airport and owns the land on which it is situated. QAC seeks interim relief in two related proceedings in response to actions that QAC believes will weaken its development and expansion potential and airport transport operations.
[2] In the first, QAC seeks permanent injunctive relief and declaratory judgments against the defendants, AAMS Group Ltd (AAMS) and MTM Management Ltd (MTM) (the 050 proceeding) in relation to what QAC says is breaches and intended breaches of a restrictive covenant over land adjacent to the Airport (Land Covenant in Easement Instrument 7098676.32 (the Covenant)). QAC seeks an interim injunction restraining AAMS and MTM from commencing activities in breach of the Covenant. As against the first defendant, the proceeding has been discontinued.
[3] In the second, QAC seeks to quash decisions of the first respondent, Queenstown Lakes District Council (QLDC), to grant a resource consent to the second respondent, MTM, on a non-notified basis (the 054 proceeding). QAC contend that MTM’s consented operation will be in breach of the Covenant and is non-compliant
under, and in part prohibited by, the operative District Plan (the District Plan). QAC applies for interim relief under s 15 of the Judicial Review Procedure Act 2016 (JRPA) restraining MTM from commencing or continuing works in accordance with the resource consent granted on a non-notified basis. QLDC abide the decision of the court.
[4] By way of overview, QAC seeks to prevent AAMS from establishing a rental car business and a vehicle storage Park N Fly business at Purple Ash Avenue and MTM from developing a one-hectare site described as Lot 81 Purple Ash Avenue for the purpose of a campervan sales and rental business. QAC’s applications are supported by the affidavits of Rachel Tregidga, QAC’s General Manager and of Blair Devlin, an independent Resource Management Planner. In opposition AAMS and MTM rely on the evidence of Timothy Williams, a Queenstown-based planner formerly employed by Remarkables Park Ltd (RPL) as its planning manager; John Styls, an acoustic consultant; Mohammed Alim, a director of AAMS; Johnathan Chen, a director of MTM; and Alastair Porter, a director of Shotover Park Ltd and RPL.
[5] It is convenient to consider the applications for interim relief in relation to both proceedings together. Central to the determination of those applications is whether QAC will suffer irreparable harm if the disputed activities of AAMS or MTM were to continue. QAC says there can be no doubt a breach of the Covenant is established and that the prohibited activities increase the risk of the Airport’s operations and development being constrained in the future. It is said that this will irreparably erode the protections afforded by the Covenant. AAMS and MTM dispute that their activities are in breach of the Covenant, but even if they were, contend that QAC is enforcing the Covenant with an anticompetitive purpose or effect and therefore is prohibited from doing so. In any event, they submit that QAC have fallen well short of establishing an identifiable injury as a consequence of the defendant’s/respondent’s activities.1
1 For convenience, I will refer to both parties as the respondents in relation to both sets of proceedings.
The parties
Queenstown Airport Ltd
[6] Queenstown Airport is New Zealand’s fourth largest airport. The airport is the product of a considerable investment by the community and substantial further investment in the airport is proposed. It is a key transport link for the South Island. It is also designated lifeline utility under the Civil Defence Emergency Management Act 2002, which means it must ensure it can function to the fullest extent possible during and after an emergency.2
AAMS
[7] AAMS is in the business of motor vehicle rental services, including hiring; cleaning; servicing of vehicles; customer service; and staff facilities. It performs airport drop-offs and pick-ups at Queenstown Airport via online bookings. It currently operates from 13 Red Oaks Drive. AAMS leases the premises at Red Oaks Drive. AAMS has been operating its rental car business within the Covenanted area for the past two years. It says it has not had any communication from QAC during that time.
[8] AAMS intends to establish two businesses at Purple Ash Avenue — a rental car business and a vehicle storage Park N Fly business. The primary activity of both businesses is said to be the parking of cars and it is intended that there be at least 120 carparks on the site to be used for both businesses. Mr Alim deposes that the rental car business that is proposed to be operated from Purple Ash Avenue is the same as the business that has operated from Red Oaks Drive. Purple Ash Avenue is adjacent to Queenstown Airport.
MTM
[9] MTM is a property development company. It was incorporated on 7 December 2023. MTM now has a resource consent to construct a ‘big box’ building on its one-hectare site at Lot 81 Purple Ash Avenue and rent the site and building. The
2 Civil Defence Emergency Management Act 2002, sch 1 part A. Most, if not all of New Zealand’s airports are entities identified as lifeline utilities.
resource consent is for a campervan sale and hire facility out of the big box building. MTM’s proposed building is 1,716 square metres and exceeds 9 metres in height.
Factual Background
[10] In 1997, QAC concluded an agreement with Remarkables Park Group entities to grant the Covenant over the land described as Lot 6, DP 304345, adjacent to and south of the airport’s main runway. The Covenant was executed on 3 August 2006 and formally registered on Lot 6 on 3 November 2006 and remains in full effect.
[11] The Covenant restricts land use activities on the burdened land to recreational and/or rural uses and utilities not of a noise sensitive nature, as those terms are described in the Covenant. For an activity to be permitted by the Covenant, it must be both:
(a)a recreational use, a rural use, or a utility; and
(b)not of a noise sensitive nature.
[12] QAC describe the Covenant as having been reaffirmed by a settlement agreement as recently as 2019. The 2019 agreement arose in the context of a proposal by Remarkables Park Ltd (RPL), the then owner of Lot 6, for subdivision consent. It was confirmed that the Covenant would be brought down on the subdivided titles. The land on which AAMS and MTM propose to operate are among these subdivided titles subject to the Covenant. The respondents dispute any reaffirmation. They say that cl 4 of that agreement merely recorded the factual position in relation to the Covenant upon subdivision of the land.
[13] On 5 July 2021, QAC wrote to a Mr Snelder of Mackersy Property, in his capacity as the then owner of 13 and 15 Red Oaks Drive, having reviewed the uses of land and being of the view that “some of the uses” are not permitted by the Covenant. QAC again wrote to Mackersy Property on 8 September 2021, providing a list of the activities of most concern including a rental car company. In August 2022, AAMS began operating its rental car company at 2/13 Red Oaks Drive. No action was then taken by QAC.
[14] There are a number of rental car businesses operating from QAC’s land, eight of which operate within the airport terminal: Hertz, Avis, Budget, Ezi, Europcar, Sixt, Enterprise and Go Rentals. There are at least six other car or campervan rental operations on private land immediately adjacent to the airport: THL, Apex, Ace, Juicy, Omega and Ezu. Some of the rental car companies that operate from the airport terminal also have operations on adjacent land.
[15] On 12 January 2024, MTM applied for a resource consent to establish commercial activity. Its application included plans for a large motor vehicle workshop with workshop bays for at least 14 campervans. MTM intends to operate at what is referred to as Lot 81. Its plans involve construction, including earthworks of a ‘big box’ building which can be used for campervan hire and sale.
[16] QAC wrote to QLDC on 23 February 2024 after becoming aware of MTM’s consent application, raising concerns with MTM’s proposal. QAC flagged its view that the proposal would breach the Covenant, was incompatible with the District Plan and could be defined as a prohibited activity.
[17] On 10 April 2024, QLDC resolved to process the MTM’s application on a non-notified basis and granted MTM’s application for resource consent. QAC’s independent planner, Mr Devlin, deposes that the 23 February letter was not read by the decision-maker before QLDC made its decision. It is QAC’s position that QLDC failed to take relevant factors into account and erred in law.
[18] On 12 April 2024, QLDC’s processing planner, Mr Neaves, confirmed that the issues raised within QAC’s letter would not have changed the way that QLDC assessed the MTM application, and that QLDC considered the Covenant to be a private matter between the landowner and the airport. In correspondence with Mr Devlin, Mr Neaves asked Mr Devlin to “spell out what your end considers the adverse effects of this application were on QAC”.
[19] Also on 12 April 2024, QAC wrote to AAMS recording that its operations at Red Oaks Drive were in breach of the Covenant. On 17 April 2024, AAMS acknowledged the importance of the Covenant and said it intended to relocate its
operations to Purple Ash Avenue. On 24 April, QAC’s lawyers advised that Purple Ash Avenue is also subject to the Covenant. On 26 April and 3 May 2024, AAMS advised QAC it had advice that its business is unlikely to breach the Covenant and that it could not cease its business.
[20] On 8 May 2024, QAC’s lawyers reiterated that AAMS’ operations breach the Covenant, and gave notice that it would seek an interim injunction, however accepting AAMS could continue to operate from its current location in the meantime. On 13 May 2024, QAC issued these proceedings against AAMS and MTM together with the application for an interim injunction, and on 22 May issued the judicial review proceedings and the application for interim relief against QLDC and MTM.
[21] QAC says that because matters concerning AAMS’s breaches of the Covenant were unable to be resolved and a resource consent had been granted without QAC’s input, it was compelled to bring both proceedings and seek interim relief to protect its position. To date the proceedings have not been formally consolidated but ultimately it was determined it was convenient that the applications for interim relief be heard together.3 Given the commonality of parties and issues, consolidation of the proceedings would seem appropriate.
Interim relief — the 050 proceeding
[22] I will deal first with the application for interim relief against AAMS and MTM. Similar (but statutory) principles apply in relation to relief under the JRPA.
Legal principles
[23] The essential purpose of interim relief is to protect a plaintiff from an injury for which damages will not provide adequate compensation.4 There was no disagreement between the parties as to the well-established principles that apply. There are effectively three stages to the consideration of an interim injunction:5
3 Queenstown Airport Corporation Ltd v Queenstown Lakes District Council and MTM Management Ltd CIV-2024-425-54, 6 June 2024.
4 American Cyanamid Co v Ethicon Ltd [1975] AC 396, [1975] 1 All ER 504 (HL).
5 Intellihub Ltd v Genesis Energy Ltd [2020] NZCA 344 at [23]–[24], affirming Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA) at 142.
(a)The applicant must establish there is a serious question to be tried.
The claim must not be frivolous or vexatious.6
(b)The balance of convenience must favour the granting of an injunction. This involves a consideration of the impact on the parties of the potential granting of, and the refusal to grant, an order.7
(c)The Court must then conduct an overall justice assessment reviewing the two prior stages and, where relevant, may take into account factors such as public interest, conduct of the parties and whether the granting or otherwise of injunctive relief would “determine the fate of the litigation”.8
Is there a serious question to be had?
[24] Mr Casey KC for QAC submits that the claim against AAMS and MTM raises a serious question. He submits there can be no dispute the Covenant is binding and enforceable. He submits the intended future operations of the respondents are blatantly in breach of the Covenant in that they are not a recreational use, a rural use, or a utility. Mr Casey submits the proposition advanced by AAMS and MTM that their operations fall within the permitted activities are “nonsensical”. He says that the strength of QAC’s case provides strong support for granting interim relief.
[25] Ms Robertson KC for both respondents in the 050 proceeding, submits a detailed analysis of the questions of fact and degree relevant to a merits inquiry is a matter for trial. She does not therefore contend that the applicants cannot establish there is a serious question to be tried as to whether the proposed activities comply with the Covenant. The respondents argue that there is a live and serious issue as to whether the current activities breach the Covenant and further that QAC’s enforcement of the Covenant is anticompetitive.
6 American Cyanamid Co v Ethicon Ltd, above n 4; and NZ Tax Refunds Ltd v Brooks Homes Ltd [2013] NZCA 90 at [12].
7 NZ Tax Refunds Ltd v Brooks Homes Ltd, above n 6, at [12].
8 McKay Electrical (Whangarei) Ltd v Hinton [1996] 1 ERNZ 501 (CA) at 507.
Analysis
[26] In assessing whether there is a serious question to be tried, the Court must consider whether there is a real prospect of the applicant succeeding in its claim for a permanent injunction at trial.9 This involves an assessment of the merits of the claims, in fact and in law, but is a “low threshold”.10
[27] I am satisfied there is a serious question to be determined at trial. It is common ground that the Covenant is binding and enforceable. However, the parties disagree as to whether the respondent’s current activities are prohibited by the terms of the Covenant.
[28] The observations of Duffy J observed in Bailey v Auckland Council are apposite:11
Where there are two opposing interpretations, it is possible that both interpretations are arguable. The question is whether the competing interpretation put forward by the second respondent means that the plaintiff’s interpretation is not seriously arguable.
[29] I agree with Mr Casey that it is clear that a land use is not compliant with the Covenant if it falls outside of the allowed uses, even if it is not of a noise sensitive nature. Campervan sales and hire, which MTM sought and acquired resource consent for, is not contemplated by the allowable activities under the Covenant.
[30] Vehicle parking is however specifically included in the meaning of utilities under cl 1(f) and the respondents submit that the primary activity of their operations is parking. Ms Robertson submits campervan rental and sales fall within the description of commercial recreation and is therefore permitted. I agree with Mr Casey that any element of recreation associated with vehicle hire of parking takes place well away from the vicinity of the airport and is not a use of the land itself. The argument that the activities are commercial recreation is not strong.
9 Hannon v Senior Trust Capital Ltd [2023] NZHC 16 at [40].
10 Nirvana Farms Ltd v Makakaho Land Co Ltd [2020] NZHC 3268 at [18].
11 Bailey v Auckland Council [2022] NZHC 2632 at [46].
[31] In my view, whether the disputed activities fall within the category of those permitted by the Covenant will require the Court to determine whether parking (and recreational) activities are the primary activity to be carried out by the respondents or merely ancillary to the primary activity. Determination of the categorisation of the activities is a question of fact and degree, and appropriately resolved at trial.12
[32] Ms Robertson highlights that the only activity MTM intends to undertake at this time is the development of the land. I agree, it is seriously arguable that it is only when an activity is conducted within or associated with the building that questions of compliance with the Covenant might arise.
[33] If a breach is established, the respondents submit that enforcement of the Covenant would be anticompetitive, in breach of s 28 of the Commerce Act 1986. Section 28 provides:
28 Covenants substantially lessening competition prohibited
(1)No person, either on his own or on behalf of an associated person, shall—
(a)require the giving of a covenant; or
(b)give a covenant—
that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.
(2)No person, either on his own or on behalf of an associated person, shall carry out or enforce the terms of a covenant that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.
(3)Subsection (2) applies to a covenant whether given before or after the commencement of this Act.
(4)No covenant, whether given before or after the commencement of this Act, that has the purpose, or has or is likely to have the effect of substantially lessening competition in a market is enforceable.
[34] Ms Robertson submits that a live issue at trial will be whether s 28 of the Commerce Act prevents QAC from enforcing the Covenant. She highlights that QAC
12 Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council [2022] NZCA 598, [2023] NZRMA 280 at [147].
have a number of car rental companies operating on the land it owns, and that it owns land that could be sold or leased for such activities. She questions QAC’s motive for enforcing the Covenant given there are, what were described, as identical operations in closer proximity to the airport than those of the respondent. The respondents say QAC is seeking to rely on the Covenant to exclude MTM from leasing land for the supply of campervans and to exclude AAMS operating a rental car business, in close proximity to the airport. Ms Robertson asks how it is that the respondent’s operations might pose such a threat to the airport’s operation when QAC is content to allow other operators to engage in the same activities on its own land.
[35] Ms Robertson submits it is open to a Court to infer an anticompetitive purpose from QAC’s actions and the circumstances. She contends that eliminating the challenged activities will also have, or is likely to have, an anticompetitive effect in the markets for the development and sale or lease of land for commercial uses and the retail markets for the uses attaching to this land.
[36] QAC says it is taking enforcement action because it needs the protection of the Covenant from the activities to be conducted by the respondents. Mr Casey submits that there are substantial legal obstacles to the s 28 defence, including that the evidence advanced by the respondents falls well short of the complex and detailed analysis that would be required to establish that QAC was acting in a manner that was anti-competitive. QAC says that there is an abundant supply of available land zoned for commercial activities (including car rental) and there is no shortage of rental operators in the vicinity of the airport.
[37] I agree that QAC’s position in relation to the respondents’ activities, at least at first blush, could be considered inconsistent with the same activities being conducted on land owned by QAC (in the case of rental car businesses) and being conducted immediately adjacent to the airport, in even closer proximity than the proposed development, without any evidence of harm (in the case of campervan hire). However, Mr Casey is quite right to highlight that a s 28 defence will require considerable further investigation and analysis to be successfully advanced.
[38] At this stage I have reservations as to whether there is an arguable case that QAC has breached s 28. I consider the s 28 defence to be very much in its infancy. Currently, it is not possible to form a view as to whether there is an arguable case that QAC are acting in breach of s 28. Focussed evidence will be required to entertain such a claim. That is a matter to be explored at trial.
[39]I am satisfied QAC have raised serious questions to be determined at trial.
The balance of convenience
[40] Mr Casey submits the balance of convenience must favour restraining the activities of AAMS and MTM because the presence of such non-compliant activities on the burdened land will “irreparably erode the protections afforded by the Covenant”. The purpose of the Covenant is said to be to protect and future proof the airport’s operations and protect the airport from opposition to expansion associated with aircraft noise and reverse sensitivity complaints. The Covenant guarantees that the airport is free from the risk of adverse impacts and is able to develop and expand to meet the current and future needs of the region and beyond.
[41] QAC maintain that it will be difficult or impossible to undo the consented activities once construction of buildings commences. At the hearing, Mr Casey questioned why QAC must justify why it is exercising its legal right afforded by the Covenant when MTM could comply with the interim order with, what QAC says is, relative ease.
[42] Mr Casey says that the interim injunction is necessary to protect QAC’s interest in other proceedings including:
(a)a claim in the Land Valuation Tribunal to determine compensation for land acquired by QAC from RPL under the Public Works Act 1981;
(b)proceedings to modify the Covenant;
(c)the judicial review application; and
(d)other applications for resource consent within the burdened land to operate businesses that are not permitted by the Covenant.
[43] QAC is particularly concerned that if the alleged non-compliant activities are not injuncted, RPL will seek to take advantage of that position in the Covenant modification proceeding it has issued against QAC.
[44] Ms Robertson submits that QAC’s assertion of injury is unsupported — QAC does not particularise any development or expansion that is planned or anticipated for which the respondents’ activities might pose a problem. Nor does it particularise how the respondents might pose a problem to the airport’s existing operations pending determination of the substantive proceedings. Ms Robertson submits it is difficult to see how it could do so given a large number of the same businesses operate in the same proximity to the airport.
[45] Counsel submits that QAC have, in effect, acquiesced in having failed to take steps to enforce alleged breaches of the Covenant notwithstanding QAC having knowledge of what it now asserts to be blatant breaches. Ms Robertson submits that highlights there is no imminent risk of harm to QAC.
[46] Ms Robertson submits that the respondents will suffer harm if interim relief is granted. AAMS will be burdened with two sites from which it cannot operate. MTM, having incurred over $450,000 on the plans to develop the land, would be at grave risk of losing the opportunity to pursue the development.
Analysis
[47] The balance of convenience has been described as “the balance of risks of doing an injustice”.13 It involves a decision as to whether granting or refusing an injunction is the course which, after the action itself has been tried and the issues between the parties determined, would fairly allow the adjustment of the rights of the parties in a way that accords with fairness and justice.14
13 McLaughlin v McLaughlin [2019] NZHC 2597 at [37], citing Cayne v Global Natural Resources Plc [1984] 1 All ER 225 (CA) at 237.
14 Congolenm Corp Ltd v Poly-Flor Products (NZ) Ltd [1979] 2 NZLR 560 (CA) at 571.
[48] A key consideration in the assessment of the balance of convenience is whether the consequences of the alleged breach will give rise to some form of irreparable harm such that unquantifiable loss will result if the applicant is unsuccessful in seeking interim relief, but successful at the substantive hearing. The purpose of an injunction is to provide for injury from the respondents’ conduct that cannot be compensated in damages. If there is no actual injury, there is no basis for an injunction.
[49] If the extent of the uncompensatable disadvantage to each party does not appear to differ widely, it may be permissible to take into account, in tipping the balance, the relative strength of each party’s case as revealed by the affidavit evidence.15
[50] I have concluded that the “irreparable erosion” of the protections afforded by the Covenant that is said to trigger from MTM and AAMS carrying out their activities does not withstand scrutiny. My reasons follow.
Encouragement of others
[51] The primary harm QAC says it will suffer if interim relief is not granted is that the operations of AAMS and MTM would provide visible encouragement to other purchasers from RPL and prospective developers to embark on non-compliant activities, resulting in any number of breaches of the Covenant. QAC is concerned that third parties will seek to justify commercial development based on the respondents’ activities and this will erode the Covenant’s protections. QAC say “other parties are in the wings waiting” and this case may set a dangerous precedent and catalyse, or be seen as greenlighting, more developments.
[52] Mr Casey went so far as to submit that third parties may choose to disregard the Covenant “and will be bolstered by an unwillingness by the Court to enforce it”. In my view, that submission captures the shortcoming in QAC’s case. In refusing interim relief, the Court is not expressing an unwillingness to enforce the Covenant.
15 Jessica Gorman (ed) and others McGechan on Procedure (online ed, Thomson Reuters) at [HR7.53.06(1)].
Any third party who thinks otherwise would be foolish and wrong. The enforceability of the Covenant can only be determined at a substantive hearing.
[53] Mr Casey told the Court that there are two applicants for resource consent to develop the Covenanted land. I accept other parties will be interested in the current proceedings, and in the RPL proceeding. But the risk of harm is not sufficient to invoke the sanction of an interim injunction. Likewise, the general fear expressed by QAC that the disputed activities will “constrain” the airport lacks particularisation.
[54] Relevant to the submission that to decline interim relief will encourage other developers, counsel made available to the Court a copy of the statement of claim in proceedings brought by RPL against QAC seeking to modify the Covenant under ss 316 and 317 of the Property Law Act 2007.16 The RPL proceedings seek to have the Covenant modified to expressly permit recreational uses and/or rural uses and/or utilities; commercial activity and/or service activity; and visitor accommodation uses (on condition). That proceeding is to be heard in this Court on 16 February 2025 with an estimate of eight days. Modification of the Covenant could significantly impact these proceedings.
[55] The RPL application is strongly opposed by QAC, and the respondents are not party to the application under the Property Law Act. But the fact proceedings addressing an issue that is so closely connected to the current proceeding provides some context to QAC’s submissions as to the encouragement of developers.
[56] It would be commercially foolish for any other developer to embark on developments that may not be permitted under the Covenant simply because interim relief was denied in this particular case, knowing that a hearing more closely consider the merits of the competing cases is shortly to be heard. That the RPL proceeding is to be heard in under four months’ time, and it is highly unlikely that any significant progress could be made by the respondents in furthering their contested operations in the meantime, further tips the balance of convenience in favour of the respondents.
16 Remarkables Park Ltd v Queenstown Airport Corporation Ltd CIV 2023-425-000012.
[57] Given my view that QAC have raised serious issues that should be determined at trial, I do not accept that refusing interim relief might be interpreted as a rejection of QAC’s interpretation of the Covenant.
[58] Had I been satisfied that other parties would forthwith embark on non-compliant activities on the burdened land as a consequence of this Court’s refusal to grant QAC interim relief, I would have considered the balance of convenience and overall interests of justice to favour granting relief. However, on the evidence available I am not satisfied that risk is real. In my view, the concerns expressed by QAC are both speculative and overstated.
Other proceedings
[59] I do not accept that QAC’s unparticularised interests in other proceedings with other parties are of any significance to the determination of the application for interim relief. The purpose of an interim injunction is to protect the claimant from injury occasioned by the respondent’s conduct in this proceeding. I reinforce that a refusal to grant interim relief, could not reasonably be interpreted as a finding by this Court that the Covenant is not enforceable or that the disputed activities are permitted. Those involved in other proceedings will know that it is the substantive proceeding that will determine the issues in dispute. I do not accept that my refusal to grant interim relief will prejudice the legal position of QAC in relation to other proceedings.
Repurposing
[60] The respondents submit that they will be able to be repurpose the big box building if the Court ultimately finds that the operation of a campervan rental and sales business is not permitted by the Covenant. QAC submit that even if retrospective consent could be obtained to allow repurposing, that is not equivalent to repurposing in fact. QAC highlight that the resource consent application described a purpose-built and designed building. Mr Casey says there is no evidence of any likelihood that the building could be used for commercial recreation or that this would be attractive or economic. He points to evidence that the demand for buildings of that scale is limited and an oversupply of commercial recreation land, suggesting the claim that the building could be repurposed is hollow.
[61] I accept that QAC have little faith in the respondents to repurpose in a manner compliant with the Covenant, but commercial realities would surely incentivise MTM to repurpose the building to ensure compliance with the Covenant. I am satisfied that repurposing is an option in the event MTM are ultimately unsuccessful in either of the substantive proceedings. That factor points to the balance of convenience favouring the respondents.
Acquiescence
[62] As regards Ms Roberton’s submission that QAC have in effect acquiesced with what is now said to be blatant breaches of the Covenant, I agree that QAC must have known of AAMS’ operations for around two years prior to issuing proceedings. Whether or not that is properly described as acquiescence, it does tend to indicate that the harm caused by allegedly non-compliant activities does not call for urgent relief.
[63] In a similar vein, I observe that MTM’s director, Mr Chen, deposes that there are currently multiple other activities, including commercial activities, presently operating on the land subject to the Covenant. Mr Chen deposes that the eight rental vehicle tenancies within the airport terminal are closer to the main runway than the MTM proposed site, as are the existing car and campervan rentals on private land immediately adjacent to QAC’s land. In all cases, as far as Mr Chen is aware, these businesses have been operating for many years without issue and QAC has permitted and profited from many of the uses and activities. QAC has also granted leases on its own land for the purpose of operating rental vehicle facilities, which are not materially different from the activity proposed by MTM.
Harm to respondents
[64] I have considered the harm that the respondents assert they will suffer if interim relief is granted. There are risks and costs for the respondents in being prevented from pursuing their businesses as planned. MTM’s proposed development has been worked on for 12 months and expended over $450,000. MTM has a contractor engaged to begin work. No doubt that contractor has subcontractors lined up. The evidence is that if the interim orders are granted, third parties will almost certainly walk away from the project and the opportunity to do the development at all may well be lost. If
this occurs, the costs incurred to date will be unrecoverable, but there is also a lost opportunity. Ms Robertson raised the issue of a loss of reputation for MTM with investors, contractors and the proposed lessee, as an injury that would follow. I agree with Mr Casey that any reputational harm suffered by MTM is mitigated in that MTM was only incorporated in December 2023.
[65] I accept that AAMS has purchased land for the purpose of establishing a new business. The vehicle storage Park N Fly operations appear to be permissible within the Covenant. Interim relief would pressure AAMS to conduct its business over two sites.
Conclusion — balance of convenience
[66] On balance I am satisfied the harm that would result to the respondents, albeit harm that might be compensated in damages, is more real than the speculative harm advanced by QAC. I am not persuaded that the respondents’ activities will jeopardise the protection afforded by the Covenant between now and determination of the substantive proceeding in any meaningful way. The balance of convenience does not favour the granting of interim relief.
Overall justice assessment
[67] It is submitted that it is in the public interest for the status quo to be maintained whereby QAC retains the full extent of the protections provided by the Covenant. QAC submits that it is not an appropriate response from the respondents that pending final determination of the substantive application of these proceedings, the buildings can be repurposed if necessary to an activity permitted by the Covenant. QAC say that the respondents rely on non-complying activities to justify their own non-compliance.
[68] In my view the respondents are entitled to be heard and to assert their position in law. They must be well aware that carries the not insignificant risk the proposed activities will be found to be unlawful. They would be well advised to hold fire at least until the RPL proceeding has been determined.
[69] But, for the reasons I have outlined in relation to the balance of convenience, I am not persuaded by Mr Casey’s argument that, to permit the respondents to elect to proceed with their developments/operations would “irreparably erode the protections afforded by the Covenant” or provide “a very visible encouragement” to other purchasers from RPL or prospective developers, resulting in “any number of re-purposable buildings”.
[70] I have determined that the balance of convenience favours the respondents. At this stage, while QAC have good grounds to contend the respondents are operating outside of the permits of the Covenant, I am not satisfied it is appropriate to describe the plaintiff’s case as so overwhelming that the interests of justice favour granting interim relief.
Interim relief under the JRPA — the 054 proceeding
[71] QAC have applied for judicial review of the decision of the QLDC to grant a resource consent to MTM to develop the big box building on Lot 81 Purple Ash Avenue. That land is within Activity Area 8 (AA8) of the Remarkables Park Zone and adjoins the airport. Interim relief under s 15 of the JRPA is sought pending determination of the review proceeding.
Legal Principles
[72] An application for interim orders in a judicial review proceeding may be granted under s 15(1) of the JRPA. That section provides:17
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:
17 See also Wellington International Airport Ltd v Waka Kotahi New Zealand Transport Agency
[2022] NZHC 954 at [15] and [224]–[226].
(b)prohibiting or staying any proceedings, civil or criminal, in connection with any matter to which the application relates:
(c)declaring that any licence that has been revoked or suspended in the exercise of the statutory power, or that will expire by the passing of time before the final determination of the application, continues and, where necessary, that it be deemed to have continued in force.
[73] If this Court is satisfied that orders are reasonably necessary to preserve the position of the application, then the statutory threshold is met, and the Court has a wide residual discretion to consider the circumstances of the case before determining whether to grant interim relief under s 16.18
[74] The purpose of s 15 is to protect an applicant from unfair prejudice that would arise by reason of delay in having a substantive hearing. Moreover, there must be a necessity, not just a simple desire to preserve a position.19 I accept that prejudice caused by delays and increased cost to contract works, as well as the risk of project failure, can be grounds for a refusal to grant interim relief.20
[75] In the recent decision of The Mahora Residents Society Incorporated v Hastings District Council, the High Court summarised the approach outlined by the Court of Appeal and adopted by the Supreme Court when considering an application under s 15.21 McQueen J said that:22
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.
[76] In Wallace v Auckland Council this Court considered an application for interim relief to stop the completion of a development.23 Powell J acknowledged the test in similar terms to McQueen J and observed further that consideration must also be given
18 Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 (CA) at 430.
19 Bishop v Central Regional Health Authority HC Palmerston North M47/97, 11 July 1997 at 21.
20 Thompson v Invercargill City Council [2020] NZHC 174 at [79]–[80].
21 The Mahora Residents Society Incorporated v Hastings District Council [2024] NZHC 893 at [26].
22 At [26], citing Minister of Fisheries v Antons Trawling Company Ltd (2007) 18 PRNZ 754 (SC) at [3], citing Carlton & United Breweries Ltd v Minister of Customs, above n 18, at 430.
23 Wallace v Auckland Council [2021] NZHC 3095.
to the purpose of interim relief power, being to relieve the applicant from the adverse effects of a challenged decision until the challenge is heard and determined to reserve the ability of the Court to grant effective relief if the challenge is successful.24
Strength of the Judicial Review application
[77] 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. Both parties addressed in some detail the merits of the judicial review application. I summarise the competing arguments briefly.
[78] Mr Casey submits the QLDC notification and consent decisions failed to have regard to the cumulative reverse sensitivity effect, precedent effect, affected person status of QAC, prohibited activity status, the purpose and structure of the RPZ, the Covenant, QAC’s correspondence with QLDC outlining areas of concern, special circumstances and the District Plan. QAC also says the proposed operations of MTM are contrary to the District Plan. As mentioned, Lot 81 is subject to District Plan provisions for AA8 of the Remarkables Park Zone. The activities for AA8 do not include commercial activities, rather that land is earmarked as a buffer area limited to activities of a rural/recreational nature, infrastructural utilities and parking.
[79] Mr Casey submits the decision that the activity the subject of the resource consent was not likely to have adverse effects on the environment that are more than minor or effects on QAC that would be less than minor was unreasonable. Finally, he submits that QLDC made errors of law, both in its interpretation and application of the District Plan provisions including the description of the commercial activity as a controlled activity, failing to recognise the application was, in part, for a prohibited activity, failing to assess special circumstances and failing to address the District Plan objectives and policies at the notification stage.
[80] More generally, Mr Casey submits the QLDC’s decisions are remarkable for their brevity and demonstrate only cursory consideration to what he described as the
24 At [9].
very significant issue of the activity’s non-compliant status and its immediate proximity to a large, commercial airport. Mr Casey submits the QLDC decisions ignored or misconstrued the District Plan provisions relating to AA8. He submits this failing is contrary to QLDC’s obligation as confirmed in Tasti Products Ltd v Auckland Council.25
[81] Mr Neutze for MTM described QAC’s grounds advanced in support of judicial review as weak. He highlights the very high threshold imposed by the Court in considering the judicial review ground of unreasonableness or irrationality. He submits QAC cannot meet that threshold given it is unable to establish any credible adverse environmental effect. He submits it was entirely reasonable for QLDC to process the resource consent on a non-notified basis because MTM’s activity is not sensitive to aircraft noise and there can be no adverse reverse sensitivity effect that would justify notification.
[82] Mr Neutze submits that the Covenant is a private law arrangement and not a mandatory relevant consideration in relation to either the notification or consent decisions. He submits that any disputes regarding the Covenant are appropriately resolved through civil proceedings in this Court and are not a matter for QLDC.
[83] Mr Neutze submits that no adverse precedent effect can arise from MTM’s activities because of the numerous other similar activities already in existence in the same or closer proximity to airport noise including on QAC’s land. He says MTM’s activities does not set any precedent for the establishment of activity sensitive to aircraft noise around the airport. He disputes that the AA8 buffer is limited to activities of a rural/recreational nature, infrastructure or utilities and parking as suggested by QAC.
[84] It is clear there are serious issues to be considered in the judicial review proceedings. I am satisfied that there are meritorious arguments to be determined. In my view the merits of the substantive proceeding do not favour either party as regards the s 15 relief application.
25 Tasti Products Ltd v Auckland Council [2016] NZHC 1673, [2017] NZRMA 22.
Does QAC have a position to preserve and is an order reasonably necessary to preserve the position?
[85] There is significant overlap between the arguments raised in relation to the applications for relief and the 054 proceeding, albeit to legal questions that are framed differently. The parties’ submissions regarding a position to preserve largely reflect those made in relation to the balance of convenience and interests of justice in the 050 proceeding.
[86] Put shortly, QAC say that absent interim orders until the substantive hearing, it will suffer “prejudice and risk of irremediable harm” because MTM’s intended activities weaken the protections provided by the Covenant and District Plan. Mr Casey submits that the damage that will be occasioned to QAC if MTM’s activities are permitted to commence, would be impossible to quantify and could not be compensated by an award of damages. Conversely, he submits that if QAC was ultimately unsuccessful in obtaining the substantive relief sought, damages would provide an adequate remedy for MTM. He again reminds the Court of QAC’s concern that other proceedings are afoot and interim relief is necessary to preserve QAC’s position in relation to those proceedings. He refers particularly to other resource consent applications within the burdened land to operate businesses that QAC maintain are not permitted by the Covenant. He refers to the “cumulative weakening effect” of the protections provided by the Covenant and District Plan. Mr Casey says that if relief is granted, the private repercussions for MTM would be limited to delay and financial loss, whereas the public repercussions of not granting relief are significant.
[87] Mr Neutze submits that the primary protection afforded by the Covenant relates to noise sensitivity. He contends that the respondent’s evidence strongly supports the submissions that its proposed activities are not noise sensitive. Further, he says those activities are similar to other vehicle hire and sale businesses that have operated in close proximity (often closer) to the airport, without incident, over a number of years. Mr Neutze says the campervan hire and sale activity can be ceased if the resource consent for this activity is ultimately quashed, and no new consent is granted on reconsideration by QLDC. Hence, he says, interim relief cannot be necessary.
[88] Mr Neutze submits there is a very real risk that MTM’s third parties in the development would likely walk away from the project if interim relief was granted, effectively providing substantive relief to QAC.
Analysis
[89] A degree of pragmatism is called for. Absent interim relief, it is most unlikely over the next few months or so, that if MTM elect to take the risk of committing to the development of the big box building, the development will move beyond earthworks.
[90] As I have discussed, I consider it to be for MTM to assess the commercial risks and determine how to proceed. The resource consent allows the construction of the building. There can be no legitimate objection from QAC to MTM carrying out the earthworks and construction works. It is the activity within the building to which QAC alleges breach of Covenant, not the earthworks or building works. QAC’s primary concern is that MTM propose constructing a building for the purpose of an activity that it says will be in breach of the Covenant. Presently, no activity is being carried out in breach of the Covenant. In the event the Court determines that the proposed activity is contrary to those permitted, and MTM have constructed the building, they could be required to repurpose the building.
[91] In my view that would provide effective relief for QAC. I do not accept, for the reasons I have set out in relation to the interim injunction application, that the works to be carried out by MTM, in construction of the building, would flag a green light to other developers to embark on arguably non-permitted activities on the burdened land.
[92] Mr Neutze points to authorities that suggest that interim orders in a resource management context are not made lightly.26 There are few examples of interim orders being made in a resource management context, where the applicant has obtained a resource consent. Generally, the holder of a resource consent will simply take the risk
26 Wallace v Auckland Council, above n 23; Thompson v Invercargill City Council, above n 20; and
Bailey v Auckland Council, above n 11.
of proceeding with any development, in the knowledge that the resource consent may be overturned if it is challenged.
[93] Mr Casey submits this case is analogous to Smith v Taupo District Council.27 In that case, the plaintiffs sought interim orders under s 8 of the Judicature Amendment Act 1992 that pending the determination of their application for judicial review no steps be taken by the second defendants to implement the resource consent issued by the Taupo District Council. The consent holders were prepared to carry the risk of undertaking earthworks, but the Court nonetheless held that if this was done it may have “a significant psychological effect in achieving a favourable decision” for the defendants.28 Nicholson J found that an interim order was reasonably necessary to preserve the status quo.
[94] Relevantly in my view, in Smith the parties (other than the observer council) were couples who were neighbours in dispute over the views that would be blocked by a proposed private residence. They were not experienced commercial operators contesting permissible commercial activities. The defendants would have lost their precious view if the neighbours were to build in accordance with the resource consent.29 It was in that context that the Judge referred to psychological effects. I am satisfied no such considerations arise in the present case. What is clear is that a fact specific inquiry is essential when considering an application for interim relief.
[95] Mr Casey also refers to the decision of Duffy J in Bailey v Auckland Council.30 In that case Duffy J granted interim relief under s 15 of the JRPA to restrain a neighbour’s breach of a registered encumbrance. That encumbrance was directed to environmental and amenity concerns and was a relevant consideration that the Council had failed to consider. Duffy J considered there was public interest in ensuring that encumbrances were given proper recognition and consideration by territorial authorities when resource consents are in issue. Mr Casey submits the private Covenant is a matter the QLDC should have considered. Mr Neutze highlights that in
27 Smith v Taupo District Council HC Rotorua CP36/01, 23 November 2001.
28 At [21].
29 See [23] where Nicholson J covers all the reasons why he considered it fair and just to exercise his overall discretion to order that the status quo be preserved until the position was decided at the substantive hearing.
30 Bailey v Auckland Council, above n 11.
Bailey the Court was not referred to a line of authorities, suggesting the courts have treated disputes about private property rights as not being relevant to a consent authority’s decision-making process under the Resource Management Act 1991.
[96] More significantly in my view, the key factor in granting relief in Bailey was that once the arguably protected Pōhutukawa boughs were cut, they could not be replaced. That irreparable consequence was significant in leading the Court to consider it was necessary to grant interim relief to permit the Court to grant effective relief if the ultimate judicial review challenge was successful. Again, the application for relief turned on the facts of the case.
[97] The essential purpose of a grant of interim relief is to relieve the applicant of the adverse effects of a challenged decision and to ensure the Court can ultimately grant effective relief if the challenge is successful. I agree that if the proposed activity is ultimately found to be in breach of the Covenant, it is a viable remedy that the building be repurposed. If MTM choose to pursue the development in the interim, it does so with eyes wide open to the well-ventilated risks. QAC appear to have approached this litigation with the view that an unsuccessful application for interim relief equates to a judicial determination that the proposed activities are permitted by the Covenant. Plainly that is not so.
[98] For the reasons I have outlined both in relation to proceeding 050 at [40]–[66] and above in relation to proceeding 054, I am not satisfied that interim relief is necessary to preserve QAC’s position.
Exercise of discretion
[99] As the s 15(1) threshold is not satisfied, it is not necessary to consider whether to exercise the wide discretion, including weighing up the apparent strengths or weaknesses of the applicant's claim for relief. As I have indicated I am satisfied there are serious issues to be tried.
[100] Standing back and applying the interests of justice consideration, I am not satisfied that it is appropriate to grant interim relief.
[101] Finally, I accept that the prohibition of activities that are of a noise-sensitive nature is a most important protection afforded by the Covenant. In my view, the risk of harm to QAC, if one or either of the respondents’ activities is considered to be noise-sensitive, can be addressed by the “no noise objection” covenant offered by both respondents.
Result
[102]I make the following orders:
(a)The plaintiff’s applications for interim relief in the 050 proceeding is declined.
(b)The plaintiff’s applications for interim relief under the Judicial Review Procedure Act 2016 in the 054 proceeding is declined.
(c)At the request of QAC the respondents in both proceedings are to provide a “non-objection to noise” covenant in the form as proposed by the respondents, or as otherwise agreed between the parties.
[103] The respondents are entitled to costs. If agreement cannot be reached as to costs, I will provide further directions.
...................................................
Eaton J
Solicitors:
Lane Neave, Christchurch Brookfields, Auckland
Counsel:
M E Casey KC, Auckland
S L Robertson KC, Auckland
0
13
1