Spackman v Queenstown Lakes District Council
[2008] NZCA 234
•11 July 2008
IN THE COURT OF APPEAL OF NEW ZEALAND
CA193/07
[2008] NZCA 234BETWEENMICHAEL SPACKMAN
Appellant
ANDQUEENSTOWN LAKES DISTRICT COUNCIL
First RespondentANDRAYLENE JELLEY, WILLIAM JELLEY AND LYALL WILLIAM JELLEY
Second Respondents
Hearing:19 June 2008
Court:Ellen France, Ronald Young and Miller JJ
Counsel:C R Carruthers QC and P J Page for Appellant
R S Cunliffe and J E MacDonald for First Respondents
F B Barton for Second Respondent
Judgment:11 July 2008 at 3.45 pm
JUDGMENT OF THE COURT
A The appeal is dismissed.
BThe appellant is to pay costs of $2,000 plus usual disbursements to each of the respondents.
REASONS OF THE COURT
(Given by Ronald Young J)
Table of Contents
PARA NO.
Introduction [1]
Background facts [5]
The Council’s decision and the High Court’s judgment [11]
Submissions and discussion [25]
Severance of lot two [25]Clause 8(o) [48]
Should we send the application for consent back to the Council
for reconsideration? [62]
Delay [68]
Financial [71]
The appellant’s case [72]
Appellant’s submission rights [75]
New titles [76]
Subdivision rights in any event [77]
Loss of participation rights by appellant [78]
Costs [80]
Introduction
[1] In August 2005 the Queenstown Lakes District Council (the Council) granted resource consent to the Jelleys to subdivide their property on Mt Barker Road, Wanaka into four lots. The Council determined that the subdivision could proceed as a controlled activity and on a non-notified basis. Mr Spackman for the Miro Trust owns a property next-door to the Jelleys with a house some 40 metres from the boundary.
[2] When the appellant heard about the grant of the resource consent, he applied to the High Court for judicial review of the Council’s decision.
[3] All parties agreed, before Fogarty J (the trial Judge), that the application should not have been processed by the Council on the basis of a controlled activity but as a discretionary activity. The Judge therefore had to decide what, if any, remedy should be given to the appellant arising from this error. The Judge decided that the approval for the subdivision of lot two should be revoked leaving intact the remaining subdivision consent. With respect to lot three, the Jelleys were required to add a clause (8(o)) to the consent notice on the title advising prospective purchasers that a restricted discretionary activity consent would be required if any proposed building was within ten metres of the zone boundary that cut across the lot.
[4] The appellant’s case is that:
(i)When the Judge concluded the Council had wrongly proceeded to approve the subdivision, he should have revoked the whole of the subdivision approval and not just sever lot two; and
(ii)The Judge had no jurisdiction to declare clause 8(o) should be included in the consent notice relating to lot three.
Background facts
[5] The Jelleys’ original parcel of land on Mt Barker Road was 10.4101 hectares all within the rural lifestyle zone. This zone allows, as of right, low density rural living with subdivision down to one hectare and a minimum distance from any building to the boundary of ten metres.
[6] Prior to the appellant’s ownership of the neighbouring land, the Jelleys and the then owners of the appellant’s land swapped land on the Jelleys’ southern boundary. The Jelleys received a 7,082m2 strip of land in return for the land on which the appellant has now built a tennis court.
[7] The boundary between the rural lifestyle zone and the rural general zone was originally at the boundary of the Jelleys’ land with all the Jelleys’ land within the lifestyle zone. The 7,082m2 strip of land amalgamated with the Jelleys’ title was however all rural general land. Thus the boundary between the zones now passes through the Jelleys’ land. The rural general zone does not allow any residential building as of right.
[8] After the amalgamation of the land the Jelleys applied to subdivide the property into four lots: lot one, seven hectares; lot two, 1.53 hectares; lot three 1.15 hectares; and lot four, 1.33 hectares. The form of the subdivision was designed to ensure the building platforms for lots two, three and four were all on the higher ground with views of Lake Wanaka.
[9] In mid 2005 the Council decided that the application for subdivision could be dealt with on a non-notified basis. Shortly afterwards it granted resource consent to divide the property into the four lots. At the time of the granting of the consent, the Jelleys and the Council believed all the land owned by the Jelleys was within the rural lifestyle zone. It was only after these proceedings were issued that it became apparent that, because the small strip of land amalgamated into the Jelleys’ title before subdivision was zoned rural general, any subdivision should have been classified as fully discretionary.
[10] After the appellant became aware of the resource consent of August 2005 he sought judicial review of the Council’s decision. Fogarty J gave two substantive judgments, one on 4 April 2007 (now reported at [2007] NZRMA 327) and the second on 20 June 2007 dealing with the form of clause 8(o) (HC DUN IV 2006-412-000843).
The Council’s decision and the High Court’s judgment
[11] The Judge concluded that the Council’s decision was wrong in three aspects. Under the Council plan, subdivision of property within the rural lifestyle zone is a controlled activity provided it complies with the site and zone standards. However, subdivision of land within the rural general zone is typically a discretionary activity. The Judge accepted that, given the Jelleys’ property was a mix of rural general land and rural lifestyle, a subdivision was a restricted discretionary activity. The Council, therefore, had proceeded on a misapprehension as to zoning.
[12] The Judge also found that the Council had conflated ss 93 and 94 of the Resource Management Act 1991 (RMA) in deciding whether the application for subdivision should be notified. Section 93 requires the Council to notify the public of an application for subdivision unless an activity is a controlled activity or the Council is satisfied that adverse effects on the environment will be minor. Section 94 provides that where public notification is not required by s 93, the Council must serve notice of the application on all persons who may be adversely affected by the activity.
[13] As to this, the Judge said:
[22] One can have no confidence that the s 94 analysis paid attention to the distinction between being positively satisfied as to effects on the environment on the one hand (s 93), from having an opinion whether the second respondents may be adversely affected by the proposed development (s 94).
[23] It is not clear what the analysts thought was the effect on external and adjacent effect on amenity which they had classified as minor. It is likely they were referring to the Rural General zone amenity. However, on the face of it I conclude that the table analysis did conflate the ss 93 and 94 inquiries which Parliament intended to be kept separate. That was an error of law.
[14] The third error identified by the Judge was that the Council approved building platforms on lots two and three within ten metres of the rural general zone boundary. This was prohibited by the plan rules. On this, the Judge said:
[40] I am satisfied by classifying the proposed activity as a controlled activity the council could only approve within such an application building platforms which allowed any buildings on them to comply with the minimum site standards relative to the boundaries of the site. It was thus an error of law to approve the two building platforms which abut the Rural General zone boundary.
[15] Finally, the Judge rejected the appellant’s claim that if the actual earthworks completed on site were in excess of those approved in the resource consent then there would be an error of law.
[16] The Judge faced argument from the respondents that the Council errors did not matter because an owner of lots two, three or four wanting to construct a building closer than ten metres to the rural general zone would need restricted discretionary consent. This meant the Council would be faced with deciding whether, in terms of either s 93 or s 94, the appellant would be notified and thereby be able to make submissions to the Council on the application for building consent. The respondents argued this opportunity was sufficient to provide the appellant with a chance to challenge buildings on lots two, three and four.
[17] As to remedy the Judge said:
[60] I am not satisfied that the Court should refuse to intervene to rectify the error of law, conflating the ss 93 and 94 analyses, for I am not satisfied that separating the considerations and applying thereby the relevant considerations to each analysis would result in the same outcome, the same placement of lot 2. I would add that the most proximate error leading to the placement of lot 2 is the decision not to serve the application on the applicants. The other two errors, classification as a controlled activity and placing the building platform up against the Rural General zone boundary, leave no confidence in the Court that proper attention was paid by the council to the assessment matters in rule 15.2.7.3. These errors in the decision making leading to the resource consent are also material as properly directed the council will not repeat them, and at the least will have to consider the application of assessment matters (i) and (v).
[18] As to lot two he said:
[58] If the subdivision consent for lot 2 is left in place the only issue that can be engaged in in later hearings is the setback, as distinct from the position of the building platform as such. The concern of the applicant always has been more than the location of a house closer than ten metres to the boundary of the Rural General zone. The concern is that the building platform in lot 2 is located as close as is possible to the house on the applicant’s property, the Wallis house.
[19] He concluded:
[61] For these reasons the consent of the council is set aside as to the subdivision creating lot 2, leaving intact subdivision consent to lots 3 and 4. However, in respect of lot 3, the second respondent shall add cl 8(o) to the consent notice on the title.
[62] The council is directed to reconsider the application for resource consent for lot 2. In this regard it should proceed on the basis either of treating the file as containing an application for subdivision consent for lot 2 with the building platform in place as per the resource consent that has been set aside or receiving a new application by the second respondents in respect of lot 2 (an option at the second respondents’ discretion).
[63] Either way the council is directed to start afresh its ss 93 and 94 analyses with a view to making a decision as to public notification and/or service of the application on persons who may be adversely affected.
[20] In his second judgment of 20 June 2007 the Judge considered whether he should impose the relief he had suggested in his earlier judgment by adding clause 8(o) to the consent notice on the title of lot three.
[21] The appellant’s submissions to the High Court before the second judgment were:
(i)That the Court had no jurisdiction to impose clause 8(o) as a condition of consent;
(ii)The Court had no jurisdiction to exclude references to lot two from the resource consent;
(iii)The effect of the Court’s decision was to render the boundaries between lot two and lot three a fait accompli thereby failing to return the appellant to the position he would have been in if he had been properly notified by the Council in the first place; and
(iv)The concern as to the position of the building platform on lot two also arose with respect to the lot three platform.
[22] The Judge considered he was functus officio as far as submissions (ii), (iii) and (iv) were concerned given his first judgment.
[23] The Judge accepted that:
[21] The applicant is correct that this Court does not have the power either at common law or under s 4 of the Act to add conditions. If there is any question of adding conditions the matter should be sent back for reconsideration. However, the Court does have, alongside the remedy of certiorari the power to make a declaration. It has this power at common law and under s 4(1).
[24] His Honour continued:
[23] Declarations by the Court are intended to be efficacious and it is within the inherent jurisdiction of this Court to give directions as to the publication of such declarations. If publication is volunteered by the parties the Court can approve it.
…
[25] There is nothing in s 221 which precludes the consent notice containing an explanation or declaration. The purpose of s 221 is to give public notice of the consequences following upon a subdivision consent.
[26] As part of the relief of declaration, and exercising the power reserved to further direction under paragraph [65] of the judgment the terms of proposed clause/condition 8(o) shall be inserted at the end of cl 8 in a box border lined with a solid border with a sub-heading “Take Notice”.
Submissions and discussion
Severance of lot two
[25] The appellant submits that there should have been no severance of lot two from lot three and four because the whole of the Council’s decision to approve the subdivision was “one decision on a single application with a single activity status.” Given the Council’s errors the whole subdivision should have been reconsidered by the Council. The decision to only quash the lot two subdivision meant that the boundaries of lot three and lot four were fixed and so the shape of the development itself was fixed. This means that when the Council comes to consider the subdivision of lot two the only issue will be where to locate the building platform. The appellant stressed that this is not equivalent to the rights he would have had if the Council had decided the application for subdivision according to law. In those circumstances the appellant would have been free to make submissions to the Council about any aspect of the whole subdivision. The appellant would not have been restricted to making submissions only about lot two.
[26] The appellant’s complaint is therefore that, while the Judge recognised, as a result of the Council’s failures, the appellant could establish adverse effect (through the effect from lot two), he did not then go on to acknowledge that this gave the appellant a right to make submissions about the whole of the subdivision and was not restricted to submit only on lot two.
[27] The respondents’ case is that when the Judge considered remedy he correctly focused on the appellant’s complaint that the building platform on lot two was too close to his property. Thus the Judge severed the lot two approval (the bad) to give the appellant a chance to make submissions to the Council with respect to this effect. The appellant had not claimed the same problem of effect from lot three or lot four and therefore the Judge did not revoke this approval (the good). The respondents acknowledge severance came as a result of an invitation to the Judge by the second respondent, as an alternative to their preferred position of merely requiring a notice to prospective purchasers regarding the consent that may be required before construction of a building could commence.
[28] It was common ground amongst all counsel that the High Court is empowered, in judicial review proceedings, to sever that part of a decision it considers good from that which it considers bad, in appropriate circumstances.
[29] The Judge proceeded in his first judgment on the basis that the appellant’s objection to the subdivision would be satisfied if the appellant could have a chance to have a say about the siting of a building on lot two, given that concern had been to the forefront of the appellant’s case. As to this the Judge said:
[55] The issue as to materiality of error reduces then to whether there has been a significant loss of an opportunity to argue for a different position and size of the building platform on lot 2 as a s 94 consideration.
[30] However, the appellant says that the Judge’s comments at [55] were a misunderstanding of his approach to the case. The appellant submits that the lot two position was emphasised because, having established error by the Council, the appellant had to meet the argument that unless he could establish the materiality of the error no remedy would be given.
[31] The respondents say the focus of the case, once error by the Council was established, was on a remedy for the lost opportunity to make submissions on lot two. They accept, however, that the appellant did not expressly abandon his claim that the whole of the consent should be set aside.
[32] It is impossible to now accurately reconstruct what was said and what, if anything, conceded at the hearing of 28 March. Certainly by 20 June it was clear from Judgment (No 2) that the appellant’s case was that severance of lot two would not meet the appellant’s complaint.
[33] The appellant’s pleadings sought comprehensive orders setting aside the whole of the subdivision approval. The judgment of 4 April 2007 does not record any express concession by the appellant abandoning that relief. On the other hand, in Judgment (No 5) of 14 September 2007, the Judge made it clear he considered this argument had never been raised at the substantive hearing leading to the first judgment.
[34] Given the acceptance of Council error, the Judge could have concluded either:
(i) No remedy was required for the error; or
(ii)The error required the whole of the decision of the Council to be revisited; or
(iii)The “good” part of the decision of the Council could be severed from the “bad” part of the decision.
[35] The Judge chose the latter approach, in part on the basis that he considered it met the appellant’s concerns.
[36] It may be that there was a mismatch between what the appellant thought he was submitting and what the Judge thought the appellant’s case was. It may be that the appellant did not understand the full impact of not clearly opposing the severance proposal until the second judgment. However, in the absence of an express abandonment of its pleadings, we think the Judge was bound to deal with the question of whether the error required the whole of the decision of the Council to be revisited.
[37] We do not consider this was an appropriate case to sever the lot two approval from lots three and four. To appropriately sever the “good” it must be able to be fairly separated from the “bad”. Here, two of the errors identified by the Judge relating to the subdivision – the erroneous classification, and the s 93, s 94 conflation – affected the approval for the entire subdivision. The building platform ten metre error affected at least lots two and three. Looked at in that way, therefore, the whole of the consent was “bad”. The decision the Council faced was whether to approve the subdivision as a whole. In such circumstances for the High Court to sever part seems inapt.
[38] If the Council had correctly identified the subdivision as requiring a restricted discretionary consent then s 93 required the application to be publicly notified unless the Council concluded the adverse effects on the environment would be minor.
[39] Section 93(1) provides as follows:
93 When public notification of consent applications is required
(1)A consent authority must notify an application for a resource consent unless—
(a) the application is for a controlled activity; or
(b)the consent authority is satisfied that the adverse effects of the activity on the environment will be minor.
[40] The Council, however, did not consider adverse effect because it assessed the application as being within s 93(1)(a).
[41] Section 94(1) provides as follows:
94 When public notification of consent applications is not required
(1)If notification is not required under section 93(1), the consent authority must serve notice of the application on all persons who, in the opinion of the consent authority, may be adversely affected by the activity, even if some of those persons have given their written approval to the activity.
[42] By implication, the Council must have concluded that there were no persons who may be adversely affected. However, the Judge found the Council wrongly conflated the s 93 and s 94 “tests” and therefore did not properly consider whether the appellant may be adversely affected.
[43] The Judge concluded that the Council would have been obliged to serve the application on the appellant because in his assessment the appellant may have been adversely affected by the proposed subdivision, particularly lot two. Once this adverse effect, and thus rights to notification, were established, the appellant was free at any hearing before the Council, on the application to subdivide, to make submissions on any aspect of the proposed subdivision. The appellant was not restricted to making submissions on the adverse effect it identified in its submissions relating to lot two. The appellant says, should he have the opportunity, he will make submissions to the Council on the position of the boundaries of the subdivision which may in turn influence where the building platform is located on lots two and three.
[44] It is impossible for this Court to know whether, if such a submission is made to the Council, it has any prospect of influencing their decision. However, by refusing to return the whole of the application for subdivision to the Council to reconsider, there is no prospect that such a submission could influence the Council’s decision-making. Severance should only be fairly undertaken to split the good (lot three and lot four) from the bad (lot two) if it is clear the appellant could not make any submission which could influence the Council’s decision-making with respect to the whole of the application. Given that the possibility remains that the appellant’s submission could influence the Council’s view of the position of the boundaries within the proposed subdivision, severance cannot be fairly undertaken.
[45] In Discount Brands Ltd v Westfield (New Zealand) Limited [2005] 2 NZLR 597 (SC), Blanchard J dealing with notification said:
[116] Because the consequence of a decision not to notify an application is to shut out from participation in the process those who might have sought to oppose it, the Court will upon a judicial review application carefully scrutinise the material on which the consent authority’s non-notification decision was based in order to determine whether the authority could reasonably have been satisfied that in the circumstances the information was adequate in the various respects discussed above.
[46] This reinforces our view that it can only be where it is abundantly clear that no submission by an appellant could possibly influence the Council that part of a decision which ordinarily would have been required to be notified can be severed and confirmed by a reviewing court.
[47] We are satisfied therefore that the Judge was wrong to sever the lot two subdivision approval from lots three and four. As to remedy we will deal with that issue later in this judgment.
Clause 8(o)
[48] The Judge accepted that he did not have power either at common law or pursuant to s 4 of the Judicature Amendment Act 1972 to impose a condition on the consent granted by the Council. He acknowledged that if there was any question of adding conditions to the consent then this should be sent back to the Council for reconsideration. However, he said, given the Jelleys had volunteered that a declaration be included in the consent notice of the Council and the Council agreed to its inclusion, then such a declaration could be made.
[49] The Judge was satisfied that he could give directions as to the publication of the declaration by the exercise of his inherent jurisdiction. The Judge said there was nothing within s 221 of the RMA which precluded a consent notice issued by the Council containing such a declaration.
[50] The declaration as settled provided as follows:
Any building within the building platforms on Lots 2 or 3 within ten metres of the boundary between the Rural Lifestyle and the Rural General Zone will require a Restricted Discretionary Activity Consent to allow the erection of those buildings.
[51] The Judge directed that clause 8(o) be inserted into the consent notice. Accordingly, pursuant to s 221 of the RMA, the Council requested the District Land Registrar to “annotate his memorial” with the consent notice with respect to lots one, three and four. The titles to these lots have now issued with clause 8(o) (now clause 8(n)) part of the consent notice noted on each title.
[52] The declaration was intended to deal with the Judge’s conclusion that the building platforms for lots two and three were in breach of the rules in the Council’s District Plan because the platforms were closer than ten metres to the rural general zone boundary. This meant in turn that building on the platforms within ten metres of the boundary would require additional consent from the Council as it would be a discretionary activity. The Judge concluded that, within a controlled activity subdivision consent (as the Council had approached the Jelleys’ application), the Council could only approve building platforms on which all building would be a controlled activity. The Judge’s particular concern was for future purchasers who might imagine the building platform was in an area approved by the Council on which a building could be constructed as of right.
[53] However, the Judge also concluded that while the ten metre setback was to protect the rural general zone, the appellant may have been adversely affected by allowing construction within ten metres of the zone boundary on either of the lots.
[54] Once the Judge reached the conclusion that the appellant may have been adversely affected by this aspect of the subdivision application then the proper course was to send the consent back to the Council to be reconsidered. If the appellant could convince the Council, as the Judge thought likely, that he may have been adversely affected by the siting of the building platforms on lots two and three then the appellant would have had the right to notification of the application and in turn the right to make submissions about the whole of the subdivision, not merely the ten metre setback (s 94).
[55] We also consider the Judge was wrong to make the declaration (clause 8(o)) in the way that he did. The declaration was effectively the imposition of a condition to consent and was outside of the Judge’s jurisdiction. As the Judge acknowledged, s 4(5B) of the Judicature Amendment Act 1972 could not have provided jurisdiction for the order. Section 4(5B) provides:
4 Application for review
…
(5B)Where any matter is referred back to any person under subsection (5) of this section, that person shall have jurisdiction to reconsider and determine the matter in accordance with the Court's direction notwithstanding anything in any other enactment.
[56] The consent to the subdivision of lot three was not being sent back to the Council for reconsideration and therefore no direction by the Court could be given.
[57] Nor was clause 8(o) simply a declaration of the existing law. It involved a direction that the clause be added to the consent notice which in turn formed part of the ultimate title to the land. In its form, it is effectively indistinguishable from other conditions in the consent notice. For example, clause (d) provides as follows:
(d)In the event that the number of persons to be accommodated on any of Lots 1, 3 and 4 is to be greater than five, then the Queenstown Lakes District Council will require commensurate increases in the water supply to that lot at the rate of 200 litres per extra person per day.
[58] Clause (d) advises purchasers that the Council will require an increased water supply if more than five people are accommodated on the land. Clause 8(o) requires that a restricted discretionary activity consent be obtained before building will be allowed on lot three within ten metres of the boundary. Both are similar in approach.
[59] The other difficulty with clause 8(o) is how, once the notice on the title is registered, it might be amended should the relevant zoning of the area be changed.
[60] Clause 8(o) is advice to third parties that they will be required to obtain a particular resource management consent if they wish to build on the section. The declaration, therefore, does not determine the legal position between the parties or the validity of any legislation (here the District Plan, as subordinate law). This may be outside the traditional ambit of a declaration: see Joseph Constitutional & Administrative Law in New Zealand (3ed 2007) at 26.3.3.
[61] In summary, we consider that the Judge’s declaration was effectively an imposition of a condition of consent beyond his power. We consider that, having concluded the Council erred in classification of the consent (given the breach of the ten metre rule) and that the appellant was adversely affected, the Judge should have revoked the consent and sent the application back to the Council for reconsideration.
Should we send the application for consent back to the Council for reconsideration?
[62] At the hearing of this appeal we were advised that subsequent to this Court’s refusal to grant a stay of the High Court judgment, the Jelleys had obtained separate titles to lots one, three and four. All counsel accepted that this development would not prevent this Court (if appropriate when allowing the appeal) directing, as part of the consequential orders, that the Jelleys amalgamate lots one, three and four into one title. Counsel accepted that an application for amalgamation by the Jelleys would be no more than an administrative function by the District Land Registrar. This amalgamation would then return the land to the position it was in when the original application for subdivision was made.
[63] We are therefore satisfied that it would be within our power to return the parties to the position they were in when the application by the Jelleys was made for subdivision. In those circumstances the Council could proceed to consider the Jelleys’ application based on the directions of law from the High Court and this Court.
[64] Because we have differed from the Judge in the High Court as to whether this is an appropriate case for severance, and whether the declaration in clause 8(o) could be made a condition of consent, it is appropriate that we consider whether in our discretion such an order directing amalgamation and returning the application for consent to the subdivision should now be made.
[65] Counsel for the second respondent submitted and the appellant accepted, that if we concluded the High Court erred there remained a discretionary power, in the circumstances to be exercised by this Court, as to whether, given the facts of this case, we should send the matter back for rehearing by the Council. We have decided, given the particular facts of this case, at this time, that we should not do so.
[66] The proper approach to the exercise of such a discretion is to concede, given our prima facie view, that the discretionary factors would need to be very clearly in favour of no order being made before the balance could be tipped in favour of that approach. The appellant should ordinarily be given the opportunity to try and convince the Council to hear his submissions on the proposed subdivision. There must be clear and compelling reasons now why this opportunity should not be given.
[67] The factors which influence us against making an order setting aside the Council’s consent and returning the application for subdivision to the Council to reconsider are as follows.
Delay
[68] The second High Court judgment dealing with the clause 8(o) was delivered on 20 June 2007. An interim stay of the first and second judgments was given on that date by the High Court. The question of stay came back before the Court in September of that year when the High Court refused to continue the stay. The Judge refused the stay in part because he considered the appellant’s then counsel had dragged out the appeal process and had engaged in “gaming” behaviour. A later application for extension of the stay was also refused. The appellant then sought a stay from this Court.
[69] This Court said ([2007] NZCA 463):
[27] We have already noted that Mr and Mrs Jelley’s circumstances provide a context in which gaming behaviour involving the stringing out of the appeal might have advantages for Mr Spackman. The reality is that there have been significant delays associated with the appeal because even now, more than six months after the substantive judgment was given, the case on appeal has not been prepared. The consequence of this delay is that if a stay is allowed, Mr and Mrs Jelley will probably be delayed a further year in terms of their ability to market lots 3 and 4. In that context, the quite extraordinary conduct over the 20 March “decisions” casts a serious shadow over the bona fides of the conduct of the appeal. As well, in seeking to prevent, without any good cause, the Council reconsidering the application as to lot 2, Mr Spackman, already in something of a hole, made the mistake of continuing to dig.
[28] For all that, we are reluctant to decide the case on the basis that there was gaming behaviour. The events in relation to the appeal against the “decisions” of 20 March have not made any actual difference to the course which events have taken. The conduct of Mr Spackman’s advisers associated with that appeal are susceptible to an explanation involving errors of judgment and perhaps a desire to preserve all possible arguments. A similar comment could be made about the appeal against the refusal of a stay. This appeal was unnecessary but perfectly explicable as being a belt and braces response to the situation in which Mr Spackman found himself. In those circumstances we are not prepared to find that the conduct of Mr Spackman, through his legal advisors, was deliberately abusive.
…
[32] We assess the prejudice to Mr and Mrs Jelley of allowing a stay as equivalent to the prejudice to Mr Spackman if a stay is denied.
[33] In this context, we see delay (and associated prejudice to Mr and Mrs Jelley) as the decisive consideration.
[34] In a context where time is money, it was incumbent upon Mr Spackman to proceed promptly if he wished to hold up the subdivision while he appealed against the judgment. It is perfectly clear that he has failed to do so. Even now, the case on appeal has not been lodged. We reject any suggestion that Mr Spackman had an entitlement to defer the lodging of a case on appeal until just before the expiry of the period of six months from the date of the filing of his appeal contemplated by the Court of Appeal (Civil Rules) 2005.
[35] If Mr Spackman’s appeal had been prosecuted promptly and urgency sought it is at least likely that it would have been resolved in time to allow Mr and Mrs Jelley, if successful, to market lots 3 and 4 over the summer. To grant a stay now would have the practical effect of preventing that and thus creating a situation where they may be forced to compromise with Mr Spackman on his terms if they are to free up any money.
[70] This appeal, from judgments given in April and June 2007, could have been heard six months earlier if the appellant had diligently pursued the appeal. The respondents make no criticism of any appellant delay since this Court’s decision on stay. However, it is now four years since the Jelleys applied for consent to the subdivision and almost three years since the Council’s decision.
Financial
[71] The result of the delay in the drawn out process has had significant economic consequences for the second respondents. They have spent over $250,000 on the subdivision and the litigation. The Jelleys are retired and now live solely on their New Zealand superannuation payments. Their savings have been exhausted. The land is their only asset. After four years and $250,000 they now face the prospect of starting the whole process again before the Council. There is no suggestion that they are at any fault in these proceedings. They now also face a falling market for their sections.
The appellant’s case
[72] In November 2006, before the High Court hearing, the appellant suggested a resolution of this case in this way:
Our client’s preference was not to inhibit your client dealing with Lots 3 and 4 of the subdivision, but instead to preserve the status quo in respect of Lot 2, this being achieved by the building platform approved by the Council for Lot 2 being surrendered to allow the balance of the subdivision to proceed and titles to issue without delay. Our client will provide an undertaking as to damages in respect of Lot 2 in that event. Your client has the opportunity to apply again for an approved building platform on Lot 2 or seek a discretionary activity consent for a dwelling. In fact, such an arrangement would be a complete solution to the High Court proceedings if it could be agreed that our client would be notified of a fresh application for a building platform on Lot 2.
[73] Apart from guaranteed notification rights the suggested resolution by the appellant in this letter is similar to the decision in the High Court. It seems, therefore, that pre‑trial at least, the appellant was content to leave the boundaries, other than lot two as proposed in the subdivision approved by the Council.
[74] The appellant must bear significant responsibility for what occurred at the 20 March hearing in the High Court. We consider that the appellant did fail to make it clear to the Judge that he continued to seek an order that the whole of the subdivision be returned to the Council for reconsideration.
Appellant’s submission rights
[75] We keep in mind that if we refuse to exercise our discretion in the appellant’s favour then the orders of the High Court remain. The Council will need to decide if the appellant should be notified under s 94. Fogarty J indicated that in his view the test for s 94 notification was met with respect to the appellant. Should the Council accept this position then the appellant will have broad submission rights with respect to the whole subdivision.
New titles
[76] There are now three new titles for lots one, three and four. Currently, therefore, subject to compliance with the Council’s land use requirements (and possibly obtaining a restricted discretionary activity consent with respect to lot three), the second respondents, or a subsequent purchaser of one of the lots, can commence the construction of a house on lots three or four. To now require the re‑amalgamation of all titles is a significant step for this Court to take.
Subdivision rights in any event
[77] Finally, we agree with Fogarty J’s comments in Judgment (No 5) of 14 September 2007 on the stay application when he said:
[8] Of course, if the applicant achieves his goal of obtaining by way of judicial review an order quashing the entirety of the subdivision consent, then it is in a stronger position, theoretically, to argue for a redesign of the whole subdivision.
[9] I say “theoretically” because it needs to be kept in mind that the second respondents’ property with an area in excess of 11 hectares is largely located, as to 10.4 hectares, in the district Rural Lifestyle Zone. The proposal is to divide that property into Lot 1 of 7 hectares approximately and then three lots, Lot 2 – 1.53 hectares, Lot 3 – 1.15 hectares, and Lot 4 – 1.33 hectares. This is the sort of subdivision contemplated by the rules for the Rural Lifestyle Zones. The applicant will have to face the fact sooner or later, quite independently of the judicial review proceedings in this Court or in the Court of Appeal, that neighbouring property will likely be subdivided. It is quite unlikely that as a neighbouring submitter the applicant will be able to design the second respondents’ subdivision. The sort of subdivision the applicant would like to see would have a building platform (the one now on Lot 3) more than 60 metres away from his boundary. His house is another 40 metres away.
Loss of participation rights by appellant
[78] Against these factors is the appellant’s loss of notification and submission rights with respect to lots three and four and the overall subdivision should we refuse relief. As we have said, we do not undervalue the importance of these rights. They cannot and should not be lightly overcome when considering remedy. However, we consider that the circumstances we have identified which favour the Jelleys are sufficiently strong to overcome the presumption in favour of revocation of the consent and return for reconsideration.
[79] Finally, although we have concluded that it was unlawful to impose clause 8(o), the condition need not be set aside because the Jelleys consent to it. We therefore refuse to make any orders consequent upon our findings. The appeal will therefore be dismissed.
Costs
[80] The respondents having succeeded, they are entitled to costs. We make an order that the appellant pay to each of the respondents the sum of $2,000 plus usual disbursements.
Solicitors:
M Garnham, Wellington, for Appellant
Macalister Todd Phillips, Queenstown, for First Respondent
Anderson Lloyd, Dunedin, for Second Respondent
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