Wallace v Auckland Council
[2022] NZHC 1299
•3 June 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-439
[2022] NZHC 1299
UNDER The Judicial Review Procedure Act 2016 IN THE MATTER
of sections of the Resource Management Act 1991 in relation to statutory decisions to grant a resource consent on a non-notified basis under the RMA.
BETWEEN
GARY WALLACE AND VICKI WALLACE
First Applicants
RICHARD BRABANT AND ELEANOR BRABANT
Second ApplicantsJASON ORR AND LESLEY ORR
Third ApplicantsDAVID PEDERSEN AND TRACY PEDERSEN
Fourth Applicants
AND
THE AUCKLAND COUNCIL
First Respondent
44 VENTNOR LIMITED
Second Respondent
Hearing: 26 May 2022 Appearances:
M Williams for the Applicants
No appearance by or on behalf of First Respondent
A R Galbraith QC and C F Timbs for the Second RespondentsJudgment:
3 June 2022
JUDGMENT OF POWELL J
WALLACE & Ors v THE AUCKLAND COUNCIL & Anor [2022] NZHC 1299 [3 June 2022]
This judgment was delivered by me on 3 June 2022 at 10.30 am pursuant to R 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
[1] The applicants, Gary and Vicki Wallace, Richard and Eleanor Brabant, Jason and Lesley Orr and David and Tracy Pedersen, seek interim orders to prevent the completion of a development at 44 Ventnor Road, Remuera, Auckland (“the development”). Specifically, they seek an order which prevents the developer, the second respondent 44 Ventnor Limited from:
(a)requesting the issue of record of title under s 12 of the Land Transfer Act 2017 for each of the 13 units approved under the development; and
(b)settlement of the sale of any of the 13 units in the development at 44 Ventnor Road, Remuera, Auckland.
pending final determination of the applicants’ judicial review proceedings.
[2] The applicants’ opposition to the development is long-standing. After 44 Ventnor Ltd obtained a non-notified resource consent to develop 13 dwellings on the site at 44 Ventnor Road in March 2021, the applicants commenced judicial review proceedings in respect of both the notification decision and the substantive decision granting consent. No interim orders were sought however, and 44 Ventnor Ltd continued construction up until the release of the High Court judgment on 17 November 2021. In that decision, van Bohemen J identified that two errors of law had been made by the Auckland Council when determining whether the application should have been notified and in granting the consent for the development. Specifically:1
… the Council did not properly consider the adverse effects of the building intensity of the development on the neighbourhood character, residential amenity, safety and the surrounding residential area because, in assessing those effects on the environment and on who may be affected persons:
(i)the Council considered matters which are not part of the existing environment and which are not permitted as of right under the AUP;2 and
(ii)the Council did not turn its mind to the effects of building intensity neighbourhood character and residential amenity in
1 Wallace v Auckland Council [2021] NZHC 3095 at [193(b)].
2 Auckland Unitary Plan.
its consideration of the assessment criteria in H4.8.2 of the AUP.
[3] His Honour proceeded to set aside the notification decision and 44 Ventnor Ltd’s consents and directed Auckland Council:3
… to reconsider the application, subject to any amendments the applicant may wish to make, and to reconsider who may be affected persons for the purposes of s 95E of the Resource Management Act.
[4] In accordance with the judgment, 44 Ventnor Ltd ceased work on the development. A slightly amended application which incorporated some additional analysis on the issues identified by van Bohemen J was lodged with the Auckland Council on 9 December 2021. Following various requests for further information, Commissioners appointed on behalf of the Auckland Council again determined that the development should proceed on a non-notified basis (“the notification decision”), albeit that the notification decision was limited to the land use consent required for the development, leaving the notification decision on the subdivision consent that had also been applied for to be determined at a later date.
[5] Following the issue of the notification decision, on 4 March 2022 the same Commissioners granted the land use consents for the development (“the land use consent decision”).
[6] Following the release of the land use consent decision, 44 Ventnor Ltd resumed work on the development. This resulted in the present proceedings, filed on 23 March 2022. As by that point it was apparent to the applicants that the development was not far from completion, the applicants sought undertakings from 44 Ventnor Ltd to enable the substantive judicial review proceedings to be heard before the development was completed. As no undertakings were provided the present application for interim orders was filed on 12 April 2022.
[7] Since the filing of the application for interim orders 44 Ventnor Ltd has confirmed the development will be completed around 6 June 2022, with settlement of the 13 units likely to take place within five working days of that date.
3 Wallace v Auckland Council, above n 1, at [215(c)].
Legal principles
[8] The interim order sought is pursuant to s 15 of the Judicial Review Procedure Act 2016 (JRPA) which states, as relevant:
(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:
(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.
…
(4)An order under subsection (2) or (3) may—
(a) be made subject to such terms and conditions as the court thinks fit; and
(b) be expressed to continue in force until the application is finally determined or until such other date, or the happening of such other event, as the court may specify.
[9] The legal test for determining an interim order application under s 15 of the Act is well established, as set out in Carlton & United Breweries Ltd v Minister of Customs.4 The Court must be satisfied that the orders sought are necessary to preserve the position of the applicant for interim relief, “which must mean reasonably necessary”.5 The Court has a wide discretion to consider all the circumstances of the case, including the apparent strengths or weaknesses of the claim, the statutory framework, the public interest, and the private and public repercussions of granting
4 Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 (CA).
5 At 430.
relief. Consideration must also be given to the purpose of interim relief power, being to:6
(a)Relieve the applicant from the adverse effects of a challenged decision until the challenge is heard and determined; and
(b)Reserve the ability of the Court to grant effective relief if the challenge is successful.
[10] Although the strengths and weaknesses of the claim are relevant to the Court’s discretion, a detailed discussion of the merits of the application, beyond the limited purposes for which the merits are relevant to interim relief, is not required.7
[11] Relevantly in the context of this case the High Court in Te Rūnanga-Ā-Iwi O Ngāti Kahu v Far North District Council stated that while an undertaking as to damages is not mandatory, there are some cases where the Court may require one as a condition of granting interim relief.8 A lack of merit may point to an undertaking being required, although this must be exercised sparingly where judicial review is sought in relation to public law issues, so as to avoid fiscal barriers in relation to possibly meritorious claims to review administrative decisions. This is particularly relevant where there is a high degree of public interest.
[12] On the other hand, a failure or refusal to provide an undertaking may weigh against the Court’s decision to grant an interim order.9 Furthermore, where a party has in good faith carried out work and incurred cost in reliance upon a particular decision having been made lawfully and appropriately, it is appropriate for the applicant to undertake to bear any losses suffered by that party if the claims are not made out on a substantive basis.10
6 Greer v Chief Executive, Department of Corrections [2018] NZHC 1240 at [24].
7 Criminal Bar Association of New Zealand Inc v Attorney-General [2012] NZHC 400, (2012) 21 PRNZ 221 at [21].
8 Te Rūnanga-Ā-Iwi O Ngāti Kahu v Far North District Council HC Whangarei CIV-2010-488-348, 13 September 2010 at [33].
9 At [33].
10 Videbeck v Auckland City Council [2002] NZRMA 481 (HC) at [28].
The case for the applicants
[13] On behalf of the applicants Mr Williams submitted that an interim order was “clearly necessary to preserve the applicants’ position” to the extent that “this point cannot seriously or credibly be contested”. In Mr Williams submission, if the development is completed and the individual units subdivided and sold, the development becomes “essentially irreversible”. At that point, even if the substantive judicial review proceedings are successful, there will be no prospect of the applicants obtaining the remedy provided in the initial proceedings, and therefore the prospect of effective relief would be “essentially if not entirely thwarted”. In the applicants’ submission, this would mean “there is no realistic prospect that a lesser number (i.e intensity) of units would ultimately be approved on reconsideration of the matter by the Council, following intervention by this Court”.
[14] On the basis that the threshold test was therefore met, Mr Williams submitted that the various errors identified with regard to the notification and consent decisions are “not only seriously arguable, but at least a prima facie case has been made out”. In Mr Williams submission the issues raised demonstrate “a genuine neighbourhood concern… with broader consequences for administration of the [AUP]”.
[15] Against that, Mr Williams discounts the “commercial interest” of 44 Ventnor Ltd, submitting that they elected to take a commercial risk in continuing to work on the development notwithstanding the operation of the applicants, the previous successful challenge, and the knowledge of the present proceedings. Likewise, Mr Williams also minimised any effects on third parties, noting that the 13 purchasers entered into their respective agreements for sale and purchase with 44 Ventnor “on the clear understanding that the development may not be completed until December 2023” and thus will not be adversely affected by any interim orders.
[16] Finally, Mr Williams noted that it is not mandatory for the applicant to give an undertaking and such an undertaking would not be appropriate in the circumstances in any event, given the commercial risks assumed by 44 Ventnor Ltd and the applicants’ lack of understanding of precisely what “damages” any undertaking would extend to or embrace.
Discussion
[17] Having considered the matters raised on behalf of the applicants, I accept Mr Galbraith’s submissions on behalf of 44 Ventnor Ltd that interim orders are not necessary to protect the position of the applicants and such orders are in any event inappropriate, particularly in the absence of any undertakings provided by the applicants.
[18] First, although there is some superficial logic to the submissions that the substantive relief desired by the applicants would be more difficult to obtain if the units were transferred to the purchasers, ultimately this does not stand detailed scrutiny. Specifically, the development is already substantially complete in accordance with the consents issued by the Council. It follows that even if the applicants can show that there is a reviewable error, they must also convince the Court hearing the substantive application to cancel the current decisions on notification and consent and order that the Council be given a further opportunity to reconsider the consents in circumstances where:
(a)The Commissioners who decided the current notification and consent decisions have explicitly addressed the issues identified by van Bohemen J in his previous decision.11
(b)The applicants have acknowledged, through Mr Williams, that they apparently no longer seek the removal of the three buildings that comprise the development, but rather all they are trying to do is limit the number of units contained within those already constructed buildings, notwithstanding the effect that that will have on the rights of the purchasers.
(c)Even if the High Court could be persuaded to again refer the consents back to the Council, the Council would not be able to take into account
11 Decision on notification at pages 8, 9, 10, 12 and 14, and decision on consent at pages 3 and 4 (Application number: LUC60392244).
the fact that the dwellings have been completed, nor the rights of the owners of the units.
[19] These obstacles will arise whether or not the interim orders sought are granted. They are a consequence of the advanced stage of the construction of the development, as a result of the applicants not previously seeking interim orders. I therefore conclude interim orders are not necessary to protect the applicants’ position, the threshold requirement has not been met and as a result the application must be dismissed.
[20] Even if the applicants could satisfy the threshold test, I am otherwise satisfied that the wider circumstances of the case do not favour the making of the interim orders sought.
[21] In particular, while it is not necessary or appropriate to consider the merits of the substantive judicial review application in any detail, the applicants’ principal challenge contained in the first four causes of action does not appear to be strong:
(a)The first and second causes of action focus primarily upon the number of units appropriate for the site and that in the absence of the Council considering the number of dwellings, that dwelling intensity was erroneously assessed. That the number of dwellings is relevant per se, as opposed to the environmental effects of the development, is not at all apparent from either the earlier High Court decision nor from Mr Williams submissions. On the contrary, while van Bohemen J was clear that the number of buildings and the activities within those buildings were relevant,12 there is no suggestion from his judgment that the number of dwellings by itself was relevant.
(b)The third cause of action argues that the Council “irrationally and unreasonably” applied the “permitted baseline concept” in its assessment of the notification and land use consent decisions. This is a reference to a planning exercise undertaken by 44 Ventnor Ltd’s planning consultants which concluded that three buildings of a similar
12 Wallace v Auckland Council, above n 1, at [162].
scale to those proposed were permitted under the plan. The applicants’ concerns on this issue are clearly difficult to sustain given:
(i)the Commissioners explicitly recorded in their decisions that they did not rely upon the permitted baseline discount;13 and
(ii)in any event, in oral argument Mr Williams accepted, with regard to the site as it is presently contoured, that the permitted baseline model provided was essentially accurate.
(c)The fourth cause of action alleges a “bundling error”, in that the Council should have considered the necessary subdivision consent at the same time as the land use consents.14 This was not pursued in the first High Court judicial review application, notwithstanding the subdivision consents were similarly unbundled from the land use consents in the consent decision. Moreover, the current judicial review proceedings did not challenge the subdivision consent until after the hearing of the application for interim orders, although Mr Williams indicated at the hearing it was intended to do so, while at the same time also contending/confirming that the applicants’ issue was not with the subdivision consents but rather the land use consents.
[22] The remaining causes of action were not as developed, raising a range of what appear to be relatively minor errors in the way in which the notification and consent decisions were made.
[23] I am likewise satisfied that contrary to the submissions advanced by Mr Williams on behalf of the applicants, the likely prejudice to both 44 Ventnor Ltd and the purchasers far outweighs any possible benefits to the applicants of making the orders.
13 Decision on notification at pages 14 and 16.
14 Instead, the Council deferred the subdivision consent on the basis that they could not make either a notification or substantive decision on the subdivision until the land use consent had been granted. While the applicants’ accepted that this was factually correct, their submission is that the two aspects of the overall proposal “cannot be divorced or segregated”. In their submission this comprises a further reviewable error in the approach taken to the assessment.
[24] In particular it is clear from the evidence of Kurt Gibbons, filed on behalf of 44 Ventnor Ltd, that it has expended significant sums to date (some $15 million) and should settlement of the sale of the units be prevented, 44 Ventnor Ltd will face immediate and significant holdings costs on the development. Mr Gibbons has calculated these costs will amount to approximately $29,003.70 per week, consisting of interest of $20,667.63 per week and holding costs (including security, insurance and rates) of approximately $8,336.07. While, as Mr Williams has submitted, 44 Ventnor Ltd has taken the commercial risk of construction, at no stage have the applicants previously sought interim orders so as to stop 44 Ventnor Ltd from continuing with construction in accordance with the resource consents it has obtained. At the same time, and despite two High Court proceedings, there is no suggestion that 44 Ventnor Ltd has at any point acted improperly in undertaking the development. In particular:
(a)initial construction commenced after the initial consents were obtained;
(b)construction paused when the High Court set aside the first notification decision and the consents; and
(c)only resumed again after the amended resource consent application had been granted by the Council.
[25] There is likewise an air of unreality about the applicants’ submissions that the purchasers’ interests can simply be disregarded on the basis of the sunset clause contained in the agreements for sale and purchase and other possible legal avenues that would enable 44 Ventnor Ltd to escape liability from the purchasers. The purchasers will no doubt be aware that the development is nearly finished and that, all things being equal, settlement will occur soon. Although there is little evidence about the identity of the purchasers, other than that nine of the 13 are owner-occupiers, it is not speculative to foresee that any interim orders will not only require alternative living arrangements to be made, but also that significantly higher interest rates on borrowings by the purchasers are likely the longer settlement is delayed.
[26] When these obvious and substantial effects on both 44 Ventnor Ltd and the purchasers are coupled with the fact that the applicants are not prepared to even offer
an undertaking as to damages it makes it very clear that the wider circumstances of this case simply do not favour the making of interim orders.
Decision
[27]The applicants’ application for interim orders is dismissed.
[28] 44 Ventnor Ltd is entitled to costs on the application. If these cannot be agreed within one month, I will determine the issue following the filing of memoranda.
Powell J
Solicitors:
Grove Darlow & Partners, Auckland Berry Simons, Auckland
Counsel:
Martin Williams, Shakespeare Chambers, Napier AR Galbraith QC, Auckland
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