Supreme Court rules on non-notification process under Resource Management Act

June 2005

The Supreme Court's decision in Westfield (New Zealand) Ltd v North Shore City Council, issued 19 April 2005, considers the vexed question of the legal requirements for a Council decision not to notify an application for resource consent. 

At the time of the application, section 94(2) of the Resource Management Act 1992 (RMA) provided that, in relation to a discretionary activity, the application did not have to be notified if:

(a)  the Council "is satisfied that the adverse effect on the environment of the activity… will be minor"; and

(b)  "Written approval has been obtained from every person whom the consent authority is satisfied may be adversely affected by the granting of the resource consent" unless to do so would be unreasonable.

The case concerned the decision by the North Shore City Council not to notify an application by Discount Brands to build a discount store on the site of an old garden centre.  The Council had done so on the basis of the evidence provided by Discount Brands and written approval from an adjoining landowner (McDonald's). 

The decision was challenged in judicial review proceedings brought by Westfield, the owner of the Takapuna and Glenfield shopping centres, and Northcote Mainstreet Inc., a non-profit organisation set up (with Council assistance) to promote the Northcote shopping centre. 

High Court and Court of Appeal

The High Court (Auckland, CIV-2003-404-5292, 5/02/04, Randerson J) concluded that the Council's decision had been made on insufficient information and was therefore invalid. 

The Court of Appeal ([2004] 3 NZLR 619), however, took the view that the usual "Wednesbury" standard applied, and the question for the Court was whether there was some information capable of supporting the decision. 

The Court rejected the suggestion that, because the decision not to notify precludes participation and opposition by others, the standard required of that decision on review should be higher (a "hard look" or "super-Wednesbury" standard). 

The question of a higher standard was, however, not really pursued in the Supreme Court, where the consent was successfully challenged on other grounds. 

The Supreme Court

The Supreme Court unanimously agreed that the appeal should be allowed and the resource consent overturned. 

In five separate judgments, the Court held that the Council had not met the requirements of section 94(2). 

The Court emphasised that a decision not to notify has significant consequences because it precludes the opportunity for comment and the system of reference and appeal through the Environment Court. 

In terms of section 94(2)(a), the Court held that once the Council was "satisfied that it has received adequate information" in terms of section 93 the Council must, as Justice Elias put it, ask itself whether it could be satisfied, without notification, that the effects were minor - or, put another way, whether the Council could be satisfied that notification would not elicit information which would cause it to view the effects as more than minor. 

All five judges agreed that the Council could not be satisfied on the information it had, in particular in relation to the effects on the amenity values of the existing shopping centres, that the threshold requirements of section 94 were met. 

The evidence was that the Council's own officials considered that the material before the Council was insufficient to enable a proper assessment of the social and economic impacts on existing centres. 

In relation to section 94(2)(b), the court divided 3:2 on the question whether "Northcote Mainstreet" was a person capable of being affected under section 94 and whose approval therefore had to be obtained. 

Justices Elias and Tipping considered that it was, but Justices Keith, Blanchard, and Richardson considered that it was not, finding that what was required was a property interest that was likely to be directly affected by the application. 

The Court also considered and upheld the "discount stipulation" - which required that goods be sold at a minimum discount ("35% less than their regular retail price") - which the council had imposed on the development.  The court considered that such a stipulation was not "impermissible" (as Justice Blanchard put it) under the RMA.

Finally, the Court considered whether it should refuse to exercise its discretion against granting relief.  The Court declined to do so on the grounds that events had moved on.  In the wake of the High Court decision, Discount Brands had lodged a new resource consent and the Council had again decided not to notify. 

Proceedings relating to the second resource consent are continuing in the High Court.  The Supreme Court noted that a decision on any exercise of the High Court's residual discretion could be made in that proceeding if the present appellants are otherwise successful.

Postscript: statutory amendments

Although the relevant sections of the statute have been amended, the key aspects of the old section 94 can be found in the new sections 93 and 94 and 94A to 94D.  The Supreme Court's decision therefore remains relevant as the last word (for now) on the approach to be taken to non-notification.

Advice and information

Bell Gully's Litigation Team can advise on all aspects of resource management and local government law.

If you require any advice or further information, please contact any of the Litigation Team members listed below: 

Auckland

David Cooper
Partner

Ian Gault
Partner

Brian Latimour
Partner

Roger Partridge
Partner

Alan Ringwood
Partner

Ralph Simpson
Partner

Murray Tingey
Partner

Rob Towner
Partner

Wellington

Mike Colson
Partner

Mark O’Brien
Partner

† The views in this article are those of the author and not of Bell Gully or its clients.