PROTECT PAUANUI INC v THE THAMES COROMANDEL DISTRICT Council & ANOR [2013] NZHC

1944 [2 August 2013]

IN THE HIGH COURT OF NEW ZEALAND

HAMILTON REGISTRY

CIV 2012-419-001542

[2013] NZHC 1944

BETWEEN

PROTECT PAUANUI INCORPORATED

Applicant

AND

THE THAMES COROMANDEL

DISTRICT COUNCIL

First Respondent

AND

PAUANUI SPORTS AND RECREATION

CLUB INCORPORATED

Second Respondent

Hearing:

18 July 2013

Appearances:

R B Enright for the Applicant

D J Neutze for the First Respondent

G Milner-White and N J Amos for the Second Respondent

Judgment:

2 August 2013

[RESERVED] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie

on 2 August 2013 at 4.00 pm

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Introduction

[1] The applicant, Protect Pauanui Incorporated (Protect Pauanui), seeks to

review a decision made by the first respondent, the Thames Coromandel District

Council (the Council), on 30 August 2006 in relation to a variation to the Council’s

proposed district plan. Inter alia, it rezoned land owned by the second respondent,

Pauanui Sports and Recreation Club Incorporated (the Club), on which tennis courts

are situated.

[2] The application for review is ambitious. Both respondents have asserted by

way of affirmative defence that s 83 of the Resource Management Act 1991 (the Act)

provides a complete answer to Protect Pauanui’s challenge. There is a significant

body of authority in support of this assertion. Moreover, the proceedings were not

filed until November 2012. The challenged decision was made on 30 August 2006.

Issues of delay and prejudice arise. Even if the Council’s decision can be impugned,

the exercise by the Court of its discretion to grant relief will be in issue.

[3] Broadly, the application raises the following issues:

(a) Did the Council make a reviewable error in preparing and approving

the variation, which was the subject of its decision on 30 August

2006?;

(b) If the Council did make a reviewable error, is its decision beyond

challenge pursuant to s 83 of the Act?;

(c) Was there apparent bias by the Council?; and

(d) Should the Court exercise its discretion to decline relief to

Protect Pauanui?

Relevant Facts

[4] In 1967, Pauanui Ocean Beach Resort Limited was formed to undertake the

development of the Pauanui area. Work got underway and the area was

progressively developed for residential and recreational purposes from the late 1960s

through to the mid 1980s.

[5] The Club was incorporated in 1972. It is a membership-based private club.

[6] Tennis courts were constructed on the land that is now the subject of the

application for review by Pauanui Beach Resort Limited in January 1982 or

thereabouts. The land was zoned residential A at the time in the then operative

Thames County Council’s District Scheme.

[7] A separate lot — lot 1 DPS 35191 — was created for the land on which the

tennis courts are situated, and that lot (generally referred to in this judgment as the

tennis court land) was sold to the Club in 1984. The Club acquired the tennis court

land, and Pauanui Ocean Beach Resort Limited acquired 200 memberships from the

Club, which it on sold to the purchasers of sections in the Pauanui development.

[8] The Club also owns two nine-hole golf courses within the Pauanui

development, along with other tennis courts, bowling greens and recreation facilities,

including dining and bar facilities.

[9] In 1986, the Council (which includes the former Thames County Council as a

result of local body amalgamation) notified a review of its district scheme. That

review proceeded and the scheme statement and code of ordinances became

operative, presumably as the Council’s district scheme, in September 1990. The

tennis court land was zoned as “Housing Zone (Outside all Policy Areas)”. There

was a notation recorded on the relevant planning map, pursuant to s 73 of the Town

and Country Planning Act 1977. The words “Tennis Courts” were noted on the

planning map and there was an asterisk which recorded that this was a “use of value

to the community”. The two pieces of land on which the golf courses owned by the

Club were situated were subject to similar notations.

[10] When the Act came into effect on 1 October 1991, the Council’s district

scheme became its transitional district plan, pursuant to s 373.

[11] A draft Thames-Coromandel District Plan was approved for public

consultation in June 1996. All ratepayers were advised and extensive consultation

was undertaken.

[12] The proposed district plan was notified in March 1997. It was proposed to

rezone the tennis court land as “Conservation Zone”. There was a general

submission against this proposal. Moreover, it seems that there was a specific

submission lodged by the Club, but only in relation to the golf course land owned by

it, and not in relation to the tennis court land.

[13] In the event, and after public hearings, in October 1998, the Council decided

not to proceed with conservation zoning in respect of land which was privately

owned, where the landowner did not agree to the zoning, and where the land did not

have identifiable conservation values. The Club did not agree, and the tennis court

land had no identifiable conservation values. It was zoned “Housing Zone

(Recreation Policy Area)”. At the same time, the Council resolved to introduce a

variation to its proposed plan to address recreation policy areas generally.

[14] The Club’s submission in regard to its golf course land was successful. Both

pieces of land were zoned “Housing Zone”, without any notation or reference to

recreation policy areas.

[15] In 1999, an options paper was prepared in relation to recreation policy areas,

and it was followed up by a draft variation. The draft variation proposed to include

the tennis court land in a recreation policy area.

[16] Local government elections intervened, and the newly elected Council

redrafted the variation. Inter alia, it was proposed to rezone the tennis court land as

“Recreation (Passive) Zone”. This zoning was intended to provide for informal

recreation activity.

[17] The variation became known as variation 3. In December 2004, a letter was

sent to a number of persons considered to be affected and to statutory authorities

advising that the variation to the proposed plan was to be notified, and on 20/21

December 2004, variation 3 was publicly notified.

[18] On 24 February 2005, the Club lodged a submission in relation to variation 3.

It opposed the Recreation Passive zoning proposed, and requested that it be changed

to Housing, with removal of the notation, “tennis courts — use of value to the

community”, contained in the transitional plan.

[19] A summary of submissions was notified on 20 May 2005, and the Council

called for further submissions. The Club lodged a further submission on 3 June

2005. The period for lodging further submissions closed on 24 June 2005.

[20] Hearings into variation 3 were held in May 2006 before a Commissioner and

a small number of appointed councillors. The Club submitted that its assets had

been purchased from Pauanui Ocean Beach Resort Limited for the use of its

members, and that the assets had not been gifted or vested in the Club for public

recreational purposes. It argued that it was inequitable for facilities owned by the

Club to be zoned for public recreational use. It was noted that this argument had

previously been accepted in relation to the golf course land owned by the Club.

[21] The Commissioner and appointed counsellors reported to the Council and, on

30 August 2006, the Council resolved to allow the Club’s submission, and to zone

the tennis Court land “Housing Zone”, with the transitional plan notation removed.

The Council’s decision noted that although the land was developed with tennis

courts, it was suitable for residential development, and that the housing zoning was

consistent with other land owned by the Club that provided recreational facilities for

its members.

[22] A letter was sent out to submitters advising them of the various decisions

made on 5 September 2006, and the Council’s decisions were publicly notified on

6 September 2006.

[23] Six appeals were lodged. None of them affected the tennis court land.

[24] On 27 August 2007, the proposed district plan became operative in part. In

particular, variation 3 became operative. Thereafter, the tennis court land was zoned

Housing Zone.

[25] All appeals were ultimately disposed of and the proposed plan became fully

operative on 30 April 2010.

[26] In October 2010, the Club reviewed its various facilities, and determined that

there was an oversupply of tennis courts in Pauanui. It considered that the cost of

maintaining the tennis courts on the land was significantly greater than the revenue

from tennis memberships, and from casual players paying a fee to use the courts.

The courts were considered to be underutilised.

[27] At a special meeting of the club held in October 2010, members voted in

favour of selling the tennis court land. However, a group of members took legal

proceedings. They successfully challenged the decision on procedural grounds.1

[28] The matter came back before members at the Club’s Annual General Meeting

on 30 January 2011. A fresh motion to sell the tennis Court land was passed; a

counterproposal to seek rezoning of club facilities to recreational zoning was

defeated.

[29] The tennis court land was advertised for sale in early 2012, and in October

2012, an agreement for sale and purchase was entered into, conditional upon the

purchaser obtaining resource consent for subdivision of the land.

[30] The purchaser subsequently lodged a four-lot subdivision application with the

Council. As a result of the issue of these proceedings, the Council required that the

subdivision application be notified. The purchaser considered that the expense and

uncertainty of a notified application was untenable. He elected to cancel the

agreement for sale and purchase, and withdrew the subdivision application.

1 Reeves v Pauanui Sports and Recreation Club Inc HC Hamilton CIV 2010-419-1599,

16 December 2010.

[31] Following cancellation, the Club determined to proceed with its own

subdivision of the tennis court land into four allotments. It has lodged a further

application with the Council for subdivision consent. The Council has required that

this application also be notified for public submissions on the basis of special

circumstances — principally because of the challenge the subject of these

proceedings.

The Pleadings

[32] The statement of claim identified that there were two decisions being

challenged:

(a) The decision made by the Council on 30 August 2006 to rezone the

tennis court land, and

(b) Such decision as it was anticipated the Council might make in relation

to the subdivision application lodged by the conditional purchaser of

the land.

As noted, the subdivision application was withdrawn, and Mr Enright for

Protect Pauanui accepted that, in the circumstances, he could not pursue the

application for review in this regard. Hence, before me, the application for review

was limited to the first decision made by the Council on 30 August 2006 in relation

to the rezoning of the land.

[33] It is alleged that the Council breached various obligations imposed on it by

the Act as it stood at the relevant time. In particular, it is asserted that:

(a) The Council failed to send a copy of the public notice in relation to

variation 3 to members of the society, who it is said were persons

directly affected by the proposed variation.

(b) The public notice was misleading because it did not disclose the

possibility that the tennis court land might lose its recreation policy

area “overlay”, or be rezoned as a Housing Zone.

(c) The Council should not have accepted the submission lodged by the

Club, because the relief the Club sought, namely rezoning the tennis

court land to a Housing Zone, was not “on” variation 3, and was

outside its scope.

(d) There was bias by members of the committee which inquired into the

variation, and reported on the same to the Council, because the

Council was the recipient of Club assets on a winding up.

Protect Pauanui

[34] Protect Pauanui was incorporated in September 2012 for the purpose of

advocating for and protecting what is said to be the original vision for Pauanui,

including the retention of open space and recreational amenities.

[35] Although the incorporation documents have been exhibited, it is not clear

how many members it now has. Nine affidavits have been sworn by residents in

support of its application for review. Most of these deponents do not however make

it clear whether or not they belong to the Society.

[36] It is noteworthy that neither defendant has put in issue Protect Pauanui’s

standing to bring these proceedings. Accordingly, I have not taken this issue any

further.

[37] The common theme running through the affidavits which have been filed in

support of the application is that the owners of land adjoining or near to the tennis

court land were not informed of variation 3 by the Council. The deponents fall into

two groups — those who say they only became aware of the change in 2010 or later,

and those who became aware at an earlier stage:

(a) A Ms McDougall asserts that the intention to remove the notation

from the tennis court land was not notified to the community. A

Mr Allan, who, together with his wife, owns land adjoining the tennis

court land, says that he only found out about variation 3 in a series of

email exchanges with Council officers in late November 2010. A

Ms Fleming, who owns land adjacent to the tennis court land, says

that she only became aware of the variation or when the tennis court

land was put up for sale by the Club. As already noted, that occurred

in early 2012. A Ms George says the same thing. Similarly, a

Mr Angus first heard of the change of zoning when he heard that the

Club intended to sell the tennis court land.

(b) In contrast, a Mr Hartstone, who is the Chair of Protect Pauanui, says

that he first heard of the change of zoning from a neighbour in late

2006. A Mr Moffitt, who was a member of the Club, became aware of

the Club’s intention to oppose the Council’s proposal to rezone the

tennis court land at its AGM in January 2006. He spoke to Council

officers about the issue in February 2006, but then did no more about

it. A Mr St Leger-Reeves, who owns properties adjoining the tennis

court land, says that he became aware of rumours about the rezoning

as early as 2003/2004. He says that he telephoned the Council at the

time, and was told then that the zoning had been changed.

For the sake of completeness, I note that there was also an affidavit from a

Ms McDonald. It does not address notification or timing.

Analysis

[38] The First Schedule to the Act dealt with the preparation, change and review

of policy statements and plans. Clause 16A in the Schedule provided that a local

authority could initiate variations to a proposed plan, at any time before the plan was

approved. Once notified, a variation was treated as if it were a plan change.2 It had

immediate effect, and it merged in and became part of the proposed plan, as soon as

the variation and proposed plan were both at the same procedural stage.

[39] As at the date of notification of variation 3, the tennis court land effectively

had three zonings:

2 Clause 16A(2).

(a) The operative zoning under the transitional plan — Housing Zone

(Outside all Policy Areas) — with the notation on the planning map;

(b) The proposed zoning under the proposed district plan — Housing

Zone (Recreational Policy Area); and

(c) The proposed zoning under variation 3 — Recreation (Passive) Zone.

Any application for land use or subdivision at that time would have been considered

by reference to all zonings.3 The weight attributed to the operative and proposed

zonings would have depended on the stage reached in the statutory process.4

[40] I now turn to consider whether the Council made a reviewable error in

preparing and processing variation 3, leading to its decision to rezone the tennis

court land in August 2006. I do so by reference to the three allegations made in the

statement of claim and set out in [33](a) to (c) above.

a) Notification of Persons Directly Affected

[41] Clause 5 of the First Schedule required a territorial authority, not earlier than

60 working days before or later than 10 working days after public notification, to

send a copy of the public notice to “any other person who in the territorial authority’s

opinion, is directly affected by the plan”.

[42] Mr Enright asserted that the Council did not turn its mind to the question of

directly affected ratepayers, and that it did not notify the owners and occupiers of

properties directly adjacent to the tennis court land. He asserted that it did not

undertake “a spatial planning exercise” to identify who might be impacted by the

rezoning proposal.

[43] The leading authority in this area is the decision of this Court in Creswick

Valley Residents’ Association Inc v Wellington City Council.5 MacKenzie J there

3 Sections 9 and 11.

4 Section 104(1); Keystone Ridge Ltd v Auckland City Council HC Auckland AB 24/01, 3 April

2001. 5 Creswick Valley Residents’ Association Inc v Wellington City Council [2012] NZHC 644.

considered a Council’s obligations in relation to notification under cl 5. He held that

it is not sufficient for a Council to generically notify ratepayers as a whole, and that a

Council must in addition decide which ratepayers are likely to be directly affected by

a proposed plan, and what (if any), further information should be sent with the public

notice to those ratepayers. On the facts before him, MacKenzie J held that no

specific consideration had been given by the Council to the question of whether any

ratepayers were likely to be directly affected by the change of zoning there in issue.

He also observed that it is for Councils to determine which ratepayers are likely to be

directly affected and that it is not for the Court to decide what decision the Council

should have reached in this regard.6

[44] In the present case, it is clear from the evidence of the responsible Council

officer, a Mr Baker, that the Council did turn its mind to the question of which

ratepayers were likely to be directly affected. Twenty five persons were considered

to be directly affected because they had submitted on similar issues in the proposed

district plan (which the variation was intended to alter). These persons were sent an

explanatory letter advising that variation 3 was to be notified. In addition, various

statutory authorities, all community boards, Thames-Coromandel District Council

area managers, and all local iwi authorities were directly notified of the variation in a

letter sent to them along with the public notice.

[45] While there is no appeal against a Council’s decision under cl 5, the

Council’s observance of the Schedule 1 requirements could have been raised before

the Environment Court by way of an application for an enforcement order under

s 316(3).7 That did not occur in the present case. For the reasons which follow

below when considering s 83, the Council’s decision on who was directly affected is

now well beyond challenge.

[46] I agree with MacKenzie J in Creswick that it is not for this Court, on an

application for review, to decide what decision the Council should have reached on

whether any particular neighbouring ratepayer was likely to be affected by the

proposed rezoning.

6 Ibid at [63], [69]–[75].

7 And see s 314(1)(f).

[47] While I agree with Mr Enright that the Council could reasonably readily have

identified property owners adjacent to or within a defined distance from the tennis

court land, the fact that people resided close to the tennis court land does not compel

the conclusion that they were directly affected. Indeed, where people lived, is in my

view, irrelevant in this case. It is clear from their affidavits that the deponents in

support of this application consider that they are affected because of the potential

loss of the open space amenity presently offered by the tennis courts. This argument

however overlooks the fact that the land was and is privately owned, and that it has

long been zoned for housing purposes. It is not a reserve. It is surrounded by

residential development. There can be no legitimate expectation of permanent or

continued open space amenity on private land zoned for development. Adjoining

landowners have no right or interest in the tennis court land by virtue of their

proximity to the property.

b) Notification Misleading?

[48] Once again, the Council’s notification obligations were set out in cl 5 of the

First Schedule.

[49] Pursuant to cl 5(2), any public notice was required to state:

(a) where the variation could be inspected;

(b) that any person could make a submission on the variation;

(c) the process for public participation in the consideration of the

proposed variation;

(d) the closing date for submissions; and

(e) the address for service of the local authority.

There was no specific requirement to describe the plan change or to detail what it

addressed.

[50] Here, the public notice read as follows:

The Thames-Coromandel District Council gives notice that it wishes to

initiate a variation to its Proposed District Plan, to propose appropriate

standards and activity status for activities in each of the newly created

Recreation and Open Space zones.

The new plan provisions will introduce zones over existing Recreation and

Open Space Policy Areas. Existing Recreation Policy Areas will become

Recreation (Passive) Zone, and Open Space Policy Area (sic) will become

Open Space Zone, unless shown otherwise in the schedule and maps

attached to the variation. The Recreation (Active) Zone is on land used for

purposes such as sportsfields.

The Recreation and Open Space variation provides the opportunity to

introduce appropriate standards for development and use of these areas.

Recognition is given to reserve management plans as an effective way to

manage the development and operation of reserves within their site

boundaries.

These new zones will be placed in Section 6 of the plan along with their own

objectives, policies, methods of implementation, and rules.

The notice went on to say where the variation could be inspected. It invited

members of the public to make submissions. It recorded the form that submissions

should take, and detailed that all submissions would be recorded, and that a summary

would be prepared. It advised that a public notice would advise of the summary, that

it would be available for public inspection, and that copies of the original

submissions would also be made available for inspection. It noted that persons

would be given the opportunity to make further submissions, and once again,

detailed the appropriate form to use in this regard. It then went on to note that the

Council, or a committee of Council, would consider all submissions, and that

persons who wished to be heard would be given the opportunity to do so. It noted

that the Council would ultimately make a decision, and that any person who

disagreed with the Council’s decision could refer the matter on to the

Environment Court. A time was put in place for the lodging of submissions. The

address for service of the local authority was given.

[51] As can be seen, the Council went well beyond the minimum statutory

requirements.

[52] Mr Enright suggested that there was no indication that the “recreation

overlay” was at risk or that the land might be rezoned “Housing”.

[53] With respect, these arguments are flawed. The Council was, inter alia,

seeking to rezone the tennis court land. This meant that the recreation overlay was

likely to go. The appropriate zoning, and necessarily the recreation overlay, was in

issue, and any reasonable reader could and should have appreciated that.

[54] In my judgment, there was nothing in the public notice which was

misleading.

c) Scope of Submission

[55] Pursuant to cl 6 of the First Schedule, once a proposed plan was publicly

notified, any person could make a submission “on it” to the relevant local authority.

[56] Mr Enright submitted that the Club’s submission on variation 3 was not “on”

the variation, and that it would only have been “on” the variation, if it had addressed

the extent to which the variation changed the pre-existing status quo.

[57] Mr Neutze for the Council, and Mr Milner-White for the Club, disputed this

assertion. They argued that variation 3 was a district wide variation, all about

zoning, not only of the tennis court land, but also of other sites. They submitted that

the Club’s submission about the zoning of the tennis court land was clearly “on” the

variation.

[58] The leading authority in this area is the decision of William Young J in

Clearwater Resort Limited v Christchurch City Council.8 He held that an assessment

of whether or not a submission is on a variation can only be made in the general

context of the scheme and purpose of the Act.9 He considered that a submission can

fairly be regarded as “on” a variation if it is addressed to the extent to which the

variation changes the pre-existing status quo. If the effect of regarding a submission

as “on” a variation would be to permit a planning instrument to be appreciably

8 Clearwater Resort Ltd v Christchurch City Council HC Christchurch AP 34/02, 14 March 2003.

9 At [58].

amended without real opportunity for participation by those potentially affected, this

will be a powerful consideration against finding that this submission was truly on the

variation.10

[59] In my judgment, the Club’s submission was “on” the variation. I say this for

the following reasons:

(a) Variation 3 was wide ranging. It sought to introduce new zoning and

zone provisions for recreation and open space areas throughout the

district. All land within recreational policy areas was to be placed in

either the Recreation (Active) or Recreation (Passive) Zone,

depending on each piece of land’s characteristics, and its current or

future recreational use. All of this was made clear in the variation.

Similarly, the public notice recorded that it was intended to introduce

new zones over existing recreation and open space policy areas. It

was patently obvious that the zoning of each piece of land affected by

the variation was in issue.

(b) The variation and public notice made it clear that Recreation (Active)

or Recreation (Passive) zoning was proposed in respect of all existing

recreation and open space policy areas, unless shown otherwise in a

schedule and maps which were attached to the variation. There were

no attachments to the variation which covered the tennis court land, or

which indicated proposed zoning for it other than Recreation (Passive)

Zoning. It was clear that the proposed rezoning extended specifically

to the tennis court land.

(c) The Council’s intent to rezone the land, including the tennis court

land, was subject to the submission process detailed in the Act.

(d) The tennis court land was zoned for housing in the transitional plan

and in the proposed district plan. The Council had initially suggested

10

Ibid at [66] and [69]; and see Halswater Holdings Ltd v Selwyn District Council (1999) 5

ELRNZ 192 (EnvC); Option 5 Inc v Marlborough District Council (2009) 16 ELRNZ 1 (HC);

Palmerston North City Council v Motor Machinists Ltd [2013] NZHC 1290.

in the proposed plan that it be in the conservation zone. It had

decided against this early in the proposed plan process, and put in

place, effectively on an interim basis, housing zoning subject to the

recreation policy area overlay. It decided at the same time to

introduce a variation to address recreation policy areas. The zoning of

the tennis court land and other land in recreation policy areas was

clearly evolving. As noted by William Young J in Clearwater,11

the

scheme of the Act contemplates a progressive and orderly resolution

of planning issues. That is precisely what was occurring in this case.

(e) At no stage was housing on the tennis court land a non-complying or

prohibited activity. Preservation of the existing zoning, either with or

without the recreation policy area overlay, was always a possibility.

The Club’s submission was effectively seeking no more than

confirmation of the Housing Zone contained in both the operative and

proposed plans, but with removal of the community use notation in

the transitional plan and the recreation policy area overlay in the

proposed plan.

[60] In my judgment, the submission was “on” the variation. There was no error

by the Council in accepting the Club’s submission. Indeed, the Council had no

alternative but to accept it.

[61] I now turn to consider s 83 of the Act.

Section 83

[62] Section 83 of the Act provided as follows:

83 Procedural requirements deemed to be observed

A policy statement or plan that is held out by a local authority as being

operative shall be deemed to have been prepared and approved in accordance

with Schedule 1 and shall not be challenged except by an application for an

enforcement order under section 316(3).

11

Clearwater Resort Ltd v Christchurch City Council, above n 8, at [68].

Section 316(3) provided as follows:

316 Application for enforcement order

…

(3) An application for an enforcement order under section 314(1)(f) may

be lodged—

(a) by a local authority (or the Minister of Conservation in

regard to a regional coastal plan) at any time; or

(b) by any other person, no later than 3 months after the date on

which the policy statement or plan becomes operative.

Section 314(1)(f) provided as follows:

314 Scope of enforcement order

(1) An enforcement order is an order made under section 319 by the

Environment Court that may do any 1 or more of the following:

…

(f) where the court determines that any 1 or more of the

requirements of Schedule 1 have not been observed in

respect of a policy statement or a plan, do any 1 or more of

the following:

(i) grant a dispensation from the need to comply with

those requirements:

(ii) direct compliance with any of those requirements:

(iii) suspend the whole or any part of the policy

statement or plan from a particular date (which may

be on or after the date of the order, but no such

suspension shall affect any court order made before

the date of the suspension order).

[63] It is clear that any of the alleged errors discussed in (a) to (c) above, could

have been raised with the Environment Court under s 316(3) either by

Protect Pauanui if it had existed at the relevant time, or by any of its members on an

individual basis. No-one took advantage of that opportunity within the relevant

timeframe — namely three months from 30 April 2010.

[64] Both Mr Neutze and Mr Milner-White relied on s 83. They argued that

whether or not the matter was properly notified, whether or not the public notice was

misleading, and whether or not the Club’s submission was on the variation, were all

procedural arguments and part of the preparation and approval process. They argued

that they were clearly caught by s 83, and that it provides an answer to Pauanui’s

claims in regard to these matters.

[65] Mr Enright argued that the Court should read strictly any attempt to shut out

its ability to review the exercise of statutory powers by statutory bodies, particularly

where it is asserted that persons with a direct interest have been excluded from

public notification. He argued that it is unnecessary to read s 83 in a literal sense,

and that the review proceedings in this case do not challenge the plan itself, but are

focussed upon the rezoning of a single site. He argued that the grounds on which the

plan is challenged, do not involve the preparation and approval process.

Alternatively, he argued that they raise issues that go to jurisdiction, and that s 83 is

not intended to preclude review proceedings in relation to jurisdictional challenges.

He argued that the section should be read consistently with s 27(1) of the

New Zealand Bill of Rights Act 1990, and that it does not constitute a privative

clause depriving Protect Pauanui of its ability to issue judicial review proceedings.

[66] There is a formidable body of authority in relation to this matter. It is against

the arguments made for Protect Pauanui.

[67] There was a provision similar to s 83 in the now repealed Town and Country

Planning Act 1953. It was s 28(2A). In Wellington City v Cowie,12

the Court of

Appeal, referring to s 28(2A), observed as follows:13

Now I think it is plain enough that once the district scheme has become

operative in accordance with the provisions of s 28, no Court is entitled to

examine into the question whether there had been any failure on the part of

the council to comply with any of the requirements of the Act or regulations

in the preparation, completing or changing of its district scheme. But prior

to that point of time, a person attacking the legality of a district scheme is

not faced with a conclusive presumption that all the steps taken by the

council had been observed and complied with…

12

Wellington City v Cowie & Ors [1971] NZLR 1089 (CA). 13

At 1103.

[68] In Ellett v Manukau City Corporation,14

Mahon J held as follows:15

… As I have said, the applicants understandably failed to detect from the

massive summary of advertised objections the particular objection here in

issue, and in that regard they suffered a fate which has been common to

many landowners throughout New Zealand. But the regulation authorises a

summary of these objections to be advertised in this manner and subject to

the relevant local authority taking care to comply with subcl (2) of reg 20,

which prescribes the contents of publication of objections, the landowner has

no legal complaint if he fails to identify his own land as being the subject of

a particular objection. In the present case I think the objections were

sufficiently notified. Because the applicants were unaware of the objection

lodged by the Auckland Institute and Museum, they took no action in that

matter and were neither notified of nor were present at the hearing of that

particular objection and, as I have already said, they did not become aware

of the fact that part of their land was subject to the registration until 1972.

…

I can have no doubt that Mr Bollard is right in his argument that s 28(2A) is

indeed a bar to the submissions in the present case founded upon locus standi

and upon the alleged breach of the rules of natural justice. The natural

justice point is the material argument in this context and while it may seem

on the surface a severe construction of the statute to say that the

transformation of a proposed scheme to an operative scheme completely bars

any recourse to the courts against a restriction placed on an owner's land

without his knowledge, nevertheless the words of s 28(2A) must be given

their plain effect.

…

By s 28(2A) of the Town and Country Planning Act, in which the phrase

"conclusively presumed" is also used, the legislature has determined that the

presumption of validity is to be conclusive for all purposes except in the case

of an application to the board under s 28A. The point seems to me to be free

from any doubt. No matter what injustices an owner of land may have

sustained and no matter what remedies he may have had at common law or

under the Judicature Amendment Act 1972 or under the Town and Country

Planning Act itself arising out of the procedures adopted to impose

restrictions upon the use of his land, all such remedies disappear as from the

date when the relevant district scheme becomes operative. His only recourse

from that time is to apply to the Town and Country Planning Appeal Board

under s 28A within the time limited for that purpose. No doubt extreme

injustices may occur, just as they may and do occur under the penal

provisions of the Transport Act governed by the same type of conclusive

presumption to which I have been referring. But in the case of each statute

the legislative policy has been to subordinate occasional individual injustice

to the wider interests which each statute is designed to effectuate. For the

various reasons given above, I therefore conclude that the application cannot

succeed.

14

Ellett v Manukau City Corporation [1976] 1 NZLR 343 (SC). 15

At 350 – 352.

[69] The leading decision in this regard under the present Act is M R Wylie & Ors

v Clutha District Council.16

In that case, the District Council had included land in a

coastal resource area on various planning maps. The land was not within the coastal

environment. No submission had suggested that the land should be included within

the coastal marine area. The appellants sought a declaration. The

Environment Court held that it was not open to them to do so, because of s 83. The

appellants appealed to the High Court. The issue in this Court was whether s 83

precluded the grant of relief, notwithstanding that the Council’s actions were

accepted to be ultra vires. John Hanson J confirmed the Environment Court’s

finding that the word “deemed” in s 83 carries the usual meaning of “conclusively

presumed”. He stated:

[36] … Given the matter is outside the three month timeframe, the Plan,

which has clearly been held out as operative since 1998, is conclusively

presumed to have been prepared and approved in accordance with the First

Schedule. The time has passed for the Appellant to challenge pursuant to

s316(3)(b).

The Judge also noted as follows:

[40] I do not consider Mr Withnall’s reliance on Anisminic (supra) assists.

There the House of Lords was dealing with a privative provision that

prohibited review by the courts of a decision of the Foreign Compensation

Commission at any stage. That must be distinguished from the present

situation. Section 316(3)(b) of the Act provides opportunity to apply for an

enforcement order. While that section imposes a limitation period, the

provision in Anisminic did not allow for a review at any stage. Statutory

limitation periods are accepted methods of providing for degrees of

certainty, while granting limited opportunity for affected persons to take

action.

[41] I think Mr Page was correct to submit that such an interpretation is

supported by analogy in Kirkland v Dunedin City Council (supra). At issue

in that case was the restriction on challenges to the s32 process contained in

s32(3). In its decision the Court of Appeal held that the legislative policy

was to prevent challenges after a plan had come into force (paragraph 17);

that Parliament had intended challenges to the plan to be limited to the

substantive merits of a provision and not procedural deficiencies (paragraph

18); that Parliament did not provide for the Environment Court to exercise

powers as if it were judicially reviewing council’s decisions. Mr Page

correctly submitted that is the practical effect of what the Appellants contend

for in this proceeding. Mr Page submitted that if the declaration was made

that the map was ultra vires that would have the same effect as an order

quashing a provision in a judicial review proceeding. Finally, if an

Environment Court was able to strike down provisions for procedural non-

16

M R Wylie v Clutha District Council HC Dunedin CIV 2004-485-1839, 29 September 2005.

compliance a council would be left with no operative plan for the relevant

area.

[42] All of those findings have relevance here. Notwithstanding

Mr Withnall’s submission, it seems to me it is not simply a matter of

substituting what is set out in clause 4.2.1 on the plan. As an example, it is

conceded that in some areas, involving headlands, this would not apply.

Consideration would also have to be given as to the effects of sub-clause (ii).

In my view it would cause a planning hiatus in relation to a plan that has

been operative since 1998. I do not consider Parliament intended this, and

given that the line was drawn on the map was part of the First Schedule

process I consider the provisions of s83 a complete answer.

[70] Wylie has been followed in subsequent decisions in the Environment Court.17

[71] In my view, s 83 is clear in its terms. The grounds advanced by

Protect Pauanui, and detailed in (a) to (c) above, each involve the preparation and

approval process under Schedule 1. Section 83 applies in its terms. Unless there is a

challenge by way of an application for an enforcement order under s 316(3) brought

within the applicable time limit, the variation is deemed to have been prepared and

approved in accordance with Schedule 1. If no challenge is made, that is the end of

the matter. The policy behind the section is clear. All who deal with district plans,

including Councils, landowners, developers, purchasers, lessees, and the like, need

certainty once a proposed plan, (which by definition at the time, included a

variation,18

) is held out as being operative and the timeframe put in place by

s 316(3)(b) has expired. It would be intolerable if a disgruntled litigant could

challenge the validity of a plan on procedural grounds some years later. The need for

certainty provides ample public policy justification for s 83, and requires that it be

given its clear meaning. There is, in my judgment, no justification for reading the

section down. Rather, there is every reason for not doing so.

[72] I reject the arguments advanced on behalf of Protect Pauanui in this regard.

In my judgment, its challenges to the Council’s decision making processes in respect

of variation 3, insofar as that challenges involve the procedural requirements put in

place by Schedule 1, must fail.

17

Waiareka Valley Preservation Society Inc v Waitaki District Council ENC Christchurch C159/07,

30 November 2007 at [30]–[34]; Re Thames-Coromandel District Council ENC Wellington

W 034/09, 15 May 2009 at [4]. 18

Section 2.

Bias

[73] Rule 28.2 of the Club’s rules read as follows:

In the event of the Club being wound up the funds and assets of the Club

remaining after payment and satisfaction of its debts and liabilities and costs

and expenses of winding up shall be vested in the Thames-Coromandel

District Council for the benefit of the Pauanui areas sporting and recreational

activities.

[74] This clause was inserted following the Club’s 1979 AGM. It was recorded in

the minutes that the purpose of inserting the clause was to ensure that the Club was

not liable for tax.

[75] Mr Enright submitted that it followed that the Council had a potential

financial interest in the rezoning of the tennis court land for housing, and that it

failed to take appropriate steps to address this interest in the variation 3 process. As

a result, it was said that the Council acted with apparent bias in making its decision

to rezone the land. He referred to Muir v Commissioner of Inland Revenue,19

and

Saxmere Co Limited v Wool Board Disestablishment Co Limited.20

[76] Mr Neutze and Mr Milner-White submitted that, in relation to decision

making by local authorities carrying out statutory duties, something more than the

appearance of bias must be shown.

[77] I start by noting that there is no evidence that the hearings committee knew

about the Council’s potential interest on any winding up of the Club. Nor can it be

realistically suggested that the Council’s decision advanced such financial interest as

it had. The decision potentially strengthened the Club’s financial position, making

its winding up even more unlikely.

[78] Once again, there is applicable law in this area.

19

Muir v Commissioner of Inland Revenue [2007] 3 NZLR 495 (CA). 20

Saxmere Co Ltd v Wool Board Disestablishment Co Ltd [2009] NZSC 72, [2010] 1 NZLR 35.

[79] In Travis Holdings Limited v Christchurch City Council,21

it was argued that

the Council had a vested interest in approving a medical centre, on land which it

owned, and which the applicant wished to purchase. Tipping J noted as follows:22

The full council must come to the meeting at which the s 230 resolution is to

be considered with an open mind as to whether the land in question should

be sold. The councillors must be prepared to give a fair and open-minded

hearing to anyone who appears at the meeting and submits for whatever

reason that the land should not be sold. If it could be shown that the council

had not approached the meeting on that basis, then the resolution to sell

would prima facie be invalid and, subject to any relevant discretionary

matters, liable to review. What I am saying is that in my judgment, in the

particular statutory and factual setting with which this case is concerned,

anyone challenging a s 230 resolution on the basis of predetermination or

fettering of discretion is required to show actual predetermination or

fettering rather than the appearance of the same.

[80] This dictum was cited with approval by Baragwanath J in Friends of Turitea

Reserve Society Inc v Palmerston North City Council.23

This case concerned a

challenge by the Friends of Turitea to a grant of permission to Mighty River Power

to build wind turbines on Council reserve land. The Friends of Turitea argued that a

wind farm could not be established on a local purpose reserve, and that the Council

was biased and had unlawfully fettered its discretion by entering into an agreement

to receive payments from Mighty River for changing the purpose of the reserve.

Baragwanath J held that the rule against bias by decision makers generally applied to

the judicial sphere, and rejected an argument by the Society that “a mere

appearance” of bias was sufficient to establish its case. He considered relevant

authorities and noted as follows:24

…certainly the decision of any judge who received payment whether or not

it was made in contemplation of a particular result, would be set aside

(Dimes v Grand Junction Canal Proprietors (1853) 3 HL Cas 759). But a

judge has no role as proprietor or as local body. The notion of bias for

reasons of self-interest does not travel comfortably across from the role of a

judge to that of a council which is in substance a trustee for its ratepayers.

21

Travis Holdings Limited v Christchurch City Council [1993] 3 NZLR 32 (HC). 22

At 47. 23

Friends of Turitea Reserve Society Inc v Palmerston North City Council [2008] 2 NZLR 661

(HC) at [97]. 24

At [105].

He also noted that unless a Council failed to adequately perform its statutory

function:25

…the manner of its accountability is to electors at the next election, not by

an application of bias rules taken from another context.

The Judge also quoted the following passage from R v Sevenoaks District Council,

ex p Terry26

in support of the proposition that judicial impartiality is to be viewed as

being in a different context from local authority decision making:

… Of course, the council must act honestly and fairly, but it is not

uncommon for a local authority to be obliged to make a decision relating to

land or other property in which it has an interest. In such a situation, the

application of the rule designed to ensure that a judicial officer does not

appear to be biased would, in my view, often produce an administrative

impasse.

[81] Much the same stance was recently taken by Kós J in Back County

Helicopters Limited v Minister of Conservation,27

and by Duffy J in Whakatane

District Council v The Bay of Plenty Regional Council.28

[82] In the present case, there is nothing to suggest actual bias by the Council’s

hearing committee. The mere fact that the Council had a remote and contingent

interest in the financial position of the Club is not sufficient to establish actual bias.

The cases cited by Mr Enright — Muir, and Saxmere — both of which deal with

judicial recusal, have no application. Once again, this ground of challenge is

rejected.

[83] It may also be arguable that s 83 precluded challenge in relation to this

allegation as well. The issue was not fully argued before me. Given this, and given

my finding that there was no bias, I take the issue no further.

25

At [103]. 26

R v Sevenoaks District Council, ex p Terry [1985] 3 All ER 226 at 233. 27

Back Country Helicopters Limited v Minister of Conservation [2013] NZHC 982 at [130]–[131]. 28

Whakatane District Council v Bay of Plenty Regional Council [2009] 3 NZLR 799 (HC) at [112]

(subsequently overturned by Court of Appeal on other grounds — [2010] 3 NZLR 826).

Discretion

[84] If I am wrong in any of the conclusions which I have reached above, I

nevertheless record that I would have declined relief in the exercise of the inherent

discretion available to me on the application for review.

[85] It is clear that some members of Protect Pauanui were aware of the rezoning,

perhaps as early as 2003/2004, but certainly by 2006. There is no explanation

advanced for the delay through until November 2012 when the proceedings were

issued.

[86] There has been significant prejudice to the Club in the interim and as a result

of the delay. It sold its land conditionally to a purchaser, who applied for subdivision

consent. The purchaser withdrew the application and cancelled the contract when

the present proceedings were issued. The Club’s accountant has filed an affidavit,

which records that as a result of its inability to sell its land as originally intended, the

Club has been unable to refurbish its clubrooms as planned, and additional debt

servicing costs have been incurred in the sum of approximately $40,000. The Club

has been forced to abandon its plans to sell the land while these proceedings have

been on foot, and it has reluctantly decided to apply to subdivide the land itself. That

is not the core business for the Club, and it has incurred significant consultant’s

expenses as a result.

[87] Even if I had found that there was a jurisdictional error, I would have

declined relief to Protect Pauanui on the basis of its delay, and on the basis of

prejudice to the Club as the affected landowner.

Summary

[88] I summarise my conclusions as follows:

(a) There was no reviewable error made by the Council in preparing and

processing the variation under Schedule 1 of the Act;

(b) Even if there had been a reviewable error, and a failure by the Council

to follow the procedural requirements set out the First Schedule to the

Act, s 83 of the Act precludes a challenge at this stage;

(c) The allegation of bias made by Protect Pauanui is not made out.

There was no actual bias;

(d) In any event, relief would have been declined in the exercise of the

Court’s discretion, given Protect Pauanui’s inordinate and unexplained

delay, and the prejudice which would result to the Club were relief to

be granted.

Costs

[89] The Council and the Club are entitled to their costs and reasonable

disbursements. In this regard, I direct as follows:

(a) Any memoranda in support of applications for costs are to be lodged

within 20 working days of the date of release of this judgment;

(b) Any memorandum in reply from Protect Pauanui is to be lodged

within a further 20 working-day period;

(c) Memoranda are not to exceed 10 pages in length.

[90] I will then deal with the issues of costs on the papers, unless I require the

assistance of counsel.

_________________________

Wylie J