HDC V Bunnings: Before the Environment Court

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Bannister & von Dadelszen
Solicitor Acting: Mark von Dadelszen
T: (06) 870 7820 F: (06) 870 7827 E: P O Box 745 Hastings
Counsel Acting: Matthew Casey QC
T: (09) 337 0400 F: (09) 337 0800 E:P O Box 317 Auckland
Before the Environment Court
ENV-2009-WLG-182
In the matter of the Resource Management Act 1991
And
In the matter of an appeal under s 120 of the Act
Between Bunnings Limited
Appellant
And Hastings District Council
Respondent
Submissions by counsel for the respondent
Dated March 2011
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Introduction
1. Bunnings Ltd seeks non-complying activity consent to establish a new retail store on Pakowhai Road, Hastings, within an area designated as Plains Zone in the Hastings District Plan.
2. The application was lodged in December 2008, and attracted 25 submissions - 18 in opposition, 5 in support and 2 neutral. Following a public hearing, two independent commissioners declined the application. Hastings District Council appears at this hearing in support of their decision.
3. The Plains Zone is a zone that applies to some 26,000ha of productive land on the Heretaunga Plains within the Hastings District. The Heretaunga Plains are a highly valued resource, where the flat contours, fertile soils and unique combination of resources (including water and climate) make the land eminently suitable for a wide range of productive soil-based activities. They are a nationally important resource for horticulture and viticulture, and recognised as the premier region of the South Pacific1. The District Plan recognises the Plains as a finite resource over which the Council exercises a stewardship role, ensuring their life-supporting capacity is preserved for future generations.
4. The Court's decision on this proposal will be the latest in a series of cases involving attempts to establish non-complying activities in the Plains Zone. There is a great deal of pressure to undertake subdivisions, residential activities and now commercial activities in areas earmarked within the Plan for productive uses. The Council, consistent with its stewardship role, and the sustainable management of natural resources, has consistently resisted that pressure.
Key issues on appeal
5. From the Council's perspective, the key issues for the Court to determine are:
(a) Does the proposal meet the threshold tests under s 104D RMA for consideration of a non-complying activity consent? The
1 Evidence of Philip McKay paras 8, 38
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Council's position is that neither threshold is met, as the proposal will have more than minor effects on the environment and is directly contrary to the objectives and policies of the District Plan;
(b) If one of the threshold tests is met, should the proposal be given consent under s 104? The Council's position is that, having regard to the effects of the activity, to the relevant objectives and policies of the District Plan, and to other matters, consent should be declined.
(c) Of importance among the ‗other matters' is the very strong potential for a precedent to be set by the grant of consent to a commercial activity outside a commercial zone and within the Plains Zone. The Council considers that grant of consent to the Bunnings proposal will seriously undermine the integrity of the District Plan.
6. Because the proposal is in respect of a 4 ha site at Pakowhai Road, within the Plains Zone (where the activity is non-complying) the issues should be focussed on the Plan provisions for that site and the effects of the proposed development there. The appellant has attempted to divert the Court's attention from these fundamental issues by focussing on its commercial difficulty obtaining a site within the urban area, with the underlying assumption that it has a right to be accommodated somewhere.
Effects on the environment
7. In order for the Bunnings proposal to be considered under s 104 RMA, it must first pass one of the thresholds in s 104D. The Council says that the threshold in s 104D(1)(a) will not be met because the effects of the proposal will be more than minor.
8. The principal adverse effect relates to the loss of 4ha of a productive resource recognised (in the Plan and by the expert witnesses) as being of high quality and importance to the Act's purpose of sustainable management. The loss of this resource is more than minor, with or without any proposed mitigation or off-set compensation.
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9. Council accepts that other potential adverse effects such as noise, traffic, visual and landscape can be addressed through proper design and conditions of consent so that they will not be more than minor, although it recognises CDL's concerns. It is not correct to assert (appellant's opening para 6.2) that the Council decision found there would be no effect on the Hastings town centre – the finding was that distributional effects would be minor and effects on commercial activities elsewhere in Hastings would be minor and of short duration.
10. There is also the issue of cumulative effects. I address the issue of precedent and plan integrity below, and a related concern that a development of the size and scale of the Bunnings proposal (which its witnesses describe as a ‗destination') will attract other commercial operators seeking to take advantage of (Mr Kneebone says ‗feed off') the custom generated by the store. The concern in this case is not about the risk of flight from the town centre, but on the consequences to the Plains zone from other developments either seeking to co-locate or to locate elsewhere relying on the same arguments as are raised by Bunnings in this case.
11. Council's first concern is with the effects associated with loss of a sizeable area of Plains Zone land. Once that land is developed, its potential to be put to productive use ever again is lost. Despite the assertion in the notice of appeal that the loss "is not irreversible", the appellant has not sought to argue that the productive value of the land might somehow be restored in the future.
12. Whatever the precise descriptor of the class of soils on the property, all soils experts are agreed that the natural resource made up of the soils in situ are high class and versatile2; of high quality, free draining and with good moisture holding capacities, potentially very productive3; high quality (although not ‗perfect')4; high quality and versatility although somewhat degraded.5
13. The issue is not limited to one of ‗soil quality' alone, but to the combination of environmental factors that make up the ecosystem
2 Dr Brent Clothier at para10
3 Mr John Wilton, evidence in chief paras 11, 15, rebuttal para 7
4 Dr Douglas Edmeades, para 10(b), 11, 12
5 Dr Craig Ross paras 13(a) and 44
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services resulting in the ‗natural capital value' that will be lost if the Bunning proposal proceeds. The evidence from the land itself (supporting a vigorous maize crop at the time of inspection) and the surrounding land (showing excellent pip-fruit production) is that it fulfils the description in the District Plan and by the experts.
14. The District Plan's protection is not limited to those soils which are at the top of the class. The whole resource is protected. The soils on this site towards Pakowai Road are of high class (2w) and those further back (3w) while not as versatile are suitable for most types of orcharding and cropping and can readily be elevated to Class 2 by drainage.
15. The taxanomic changes identified in the recent update to Mr Harnsworth's evidence are not limited to this site alone, but apply across the whole region. Therefore the comparison with other areas of land within each of the siols classifications is also subject to change. However the issue, as identified by Dr Edmeades, is not about the classification but about its performance, and in my submission about the protection of the overall resource represented by the eco-system services, not just the soil. This is explained by Dr Clothier. The fundamental thrust of the District Plan objectives and policies to protect the life-sustaining capacity of the Heretaunga Plains soils is not altered by changes in taxonomy.
16. The experts are agreed that the productive capacity of the land will be lost if the Bunnings development proceeds. The development will be on the area of the highest value soils on the site.
17. The appellant argues that, because the area of Plains Zone land to be sacrificed is relatively small, the effects associated with its loss should be considered minor. The Council strongly resists that argument. The Environment Court too, has resisted that thinking, as in H B Land Protection Society v Hastings District Council:6
The Plains zone is generally reckoned to occupy about 26,000ha of the District, so 30ha represents about 0.115% of it — a very small amount. Probably its lost production would hardly be noticed in the overall scheme of things, and could be made up by more intensive or efficient production elsewhere. We do accept Dr Palmer's point though that looking at the issue that way can be misleading. He points out that even if no more than 0.5% of soils of this quality is lost per year, our
6 W57/2009 at [31]
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descendants will find, 100 years from now, that half of it no longer exists as a productive resource. In other words we need to think in terms of accumulative, as well as immediate, effects.
18. An area of 4 ha is not de minimis, and the assertion that it cannot be farmed as a stand-alone economic unit misses the point of the protection accorded by the District Plan (and the purpose of sustainable management in s 5 RMA). The extension of that argument would see every separately titled area below a certain assumed threshold no longer qualifying for protection, disregarding the potential for future aggregation and other changes, solely because of current farming economics.
19. As Mr McKay explains7, the Council has pro-actively addressed this issue through Variation 10, which promotes amalgamation and rationalisation of smaller holdings, with considerable success. Mr Mardon, who operates a successful agribusiness across the road, can explain how this site relates to its neighbours.
20. It is not valid to assert that the site will some day be taken over for urban expansion (such as a distant proposal for future industrial use). Mr McKay explains that process8, which is far from complete and speculative at best.
21. The claim that the loss of this 4 ha of productive land will somehow be off-set or mitigated by the translocation of some of its topsoil is dealt with under s 104(1)(c), below. Even if this was to be considered, it does not result in the adverse effects being rendered ‗no more than minor'.
District Plan objectives and policies
22. The Council also says that the Bunnings proposal is in direct conflict with the objectives and policies of the District Plan, and so fails the second threshold test in s 104D(1)(b).
23. Mr Matheson's evidence contains a thorough discussion of the relevant objectives and policies, and provides a robust and compelling analysis of the reasons why the proposal is contrary to them.
7 Philip McKay, para 21
8 Philip McKay, paras 26 ff
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24. Viewed overall, the objectives and policies of the District Plan are unequivocal that the versatile soils (and other resources) of the Heretaunga Plains are to be protected. In relation to Urban Development, UDO2 lists as an objective "to minimise the expansion of urban activity onto the versatile soils of the Heretaunga Plains"; For the Rural area, objective RO1 is "to promote the maintenance of life-supporting capacity of the Hastings District's rural resources at sustainable levels"; and for the Plains Zone, objective PLO1 is "to maintain the life-supporting capacity of the unique resource balance of the Heretaunga Plains". Each of these objectives has supporting policies which expand on the theme.
25. No one reading the Plan could be misled into thinking that the preservation of the Heretaunga Plains for productive use was anything other than a key issue for the District. The Bunnings proposal clashes directly and unavoidably with those key objectives and policies of the District Plan.
26. It is also important to emphasise that the proposal runs counter to other objectives and policies of the Plan – ones that can be seen as the flipside of the aim of keeping urban development out of the rural areas. There is also a theme in the District Plan of concentrating commercial activities to retain Hastings City as a functional, vibrant, attractive centre. Read as a whole, the objectives and policies for the Commercial zones, which include the LFR Zone, provide a clear indication that grouping commercial activities together contributes to the continuing vitality of the town centre, and, by contrast, too great a separation can adversely impact on the retail core.9
27. By locating well outside the areas zoned for commercial activity, with no connection to existing commercial areas whatsoever, the proposal is contrary to those objectives and policies as well.
Section 104
28. As noted, Council's primary position is that the Bunnings proposal fails to meet both of the threshold tests for a non-complying activity, such that consent must be declined.
9 See for instance CZP24 and 25 and their explanations.
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29. If the Court decides that application passes s 104D, the Council's position is that the evaluative process under s 104 should still result in consent not being granted. Under s 104 the Court must, subject to Part 2, have regard to (relevantly):
(a) Any actual or potential effects on the environment of the activity;
(b) The relevant provisions of the District Plan;
(c) Any other matter considered relevant and reasonably necessary (in this case matters of precedent and Plan integrity).
30. The Court must not have regard to trade competition: s 104(3)(a), and must have regard to the decision under appeal: s 290A.
31. In the evaluative assessment, genuine consideration must be given to all of the above, but excluding any consideration of trade competition. Ultimately, however, the question to be addressed is whether the RMA's overarching purpose of the sustainable management of natural and physical resources will be met by granting or declining consent.
32. In short:
(a) As already discussed, the actual and potential effects of the activity on the environment are significant, particularly in relation to the loss of 4 ha of a significant resource having good versatility and productive capacity.
(b) The relevant provisions of the District Plan tell strongly against the grant of consent. Even if the effects of the activity are considered to be minor, and the activity is held to be not ‗contrary to' the objectives and policies of the Plan in the s 104D sense, consent can still be declined on the strength of its inconsistency with the Plan.10 The central importance of the District Plan in assessing resource consent applications was strongly emphasised by the Supreme Court in Discount Brands. 11
10 McKenna v Hastings District Council (2009) 15 ELRNZ 41
11 [2005] NZLR 597 at para [10], per Elias CJ.
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(c) The precedent effect, and the consequential effect on the integrity of the District Plan, will defeat the Council's efforts (through the Plan) to protect and preserve the life-supporting capacity of the Heretaunga Plains for future generations.
(d) The proposal does not achieve the Act's purpose of sustainable management, particularly in that it fails to sustain natural resources for future generations, or to safeguard the life-supporting capacity of soil and ecosystems, and does not avoid remedy or mitigate adverse effects.
33. The precedent and plan integrity issues are able to be taken into account under s 104(1)(c). Also relevant under that section would have been the appellant's principal claim to address the adverse effects of the proposal by off-site mitigation, which has been ruled to be beyond scope in this appeal. I have therefore not addressed that matter.
Precedent and integrity of the District Plan
34. The Council has a significant concern about the precedent effect should consent be granted to the proposal in this case. Given the strong emphasis in the District Plan on preserving the Heretaunga Plains for productive use, a precedent in favour of allowing retail uses to establish within the Plains Zone would seriously threaten the integrity of the Plan.
35. The Court of Appeal, in Dye v Auckland Regional Council, explained the concept of precedent in the RMA context as follows:12
The granting of a resource consent has no precedent effect in the strict sense. It is obviously necessary to have consistency in the application of legal principles, because all resource consent applications must be decided in accordance with a correct understanding of those principles. But a consent authority is not formally bound by a previous decision of the same or another authority. Indeed in factual terms no two applications are ever likely to be the same; albeit one may be similar to another. The most that can be said is that the granting of one consent may well have an influence on how another application should be dealt with. The extent of that influence will obviously depend on the extent of the similarities.
36. The potential for an undesirable precedent to be created – in the sense of an expectation of like cases being treated alike, if not an absolute right – is a matter that can be considered as an ―other
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matter‖, under s 104(1)(c) RMA.13 In Murphy v Rodney District Council the High Court observed that:14
Human experience is that not to treat similar cases alike will give rise to suspicion and a deep sense of injustice which it is the duty of the Courts, as well as others who make decisions on behalf of the public, to avoid.
37. Similarly, the Environment Court in Feron v Central Otago District Council observed that:15
...the precedent effect provided by earlier decisions is an expectation of like treatment, not an absolute entitlement. The public expects (quite rightly) that local authorities show a degree of consistency in the way they treat their citizens and enforce their District Plans.
38. So, while there may not be an absolute obligation on a consent authority to grant consent to a future application that relies on consent having been granted to the Bunnings proposal, in reality, if this proposal was allowed, it would make it very difficult to resist future such applications. The Court in Feron (above) went on to observe that a council is not absolutely bound by what, in hindsight, may have been an inappropriate or questionable decision. In this case, however, if the Environment Court approves the Bunnings proposal, the Council, as a lower order decision-maker, would be unable to justify a departure from the Court's decision.
39. The focus then falls on whether the proposal is somehow ‗exceptional' in the sense that it is unlikely future applications would be on all fours with the proposal. As noted by the High Court in Rodney District Council v Gould:16
Concerns about precedent, about coherence, about like cases being treated alike are all legitimate matters able to be taken into account, as the recent decision of Baragwanath J in Murphy v Rodney District Council ...again emphasises. But if a case is truly exceptional, and can properly be said to be not contrary to the objectives and policies of the district plan, such concerns may be mitigated, may not even exist.
40. The evidence of Mr Matheson on behalf of the Council is that "the characteristics of this proposal could easily be replicated" and "there are no qualities in the Bunnings proposal that distinguish it from
12 [2002] 1 NZLR 337 at 351
13 Supra at 351.
14 [2004] 3 NZLR 421 at 432
15 C075/2009, 11 September 2009, Judge Dwyer, at [65]
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other commercial service/large format retail proposals of this type".17 It would appear that the only feature distinguishing this proposal from any other LFR store is the claimed exceptional size. However any number of smaller retail, commercial or industrial aspirants who also encounter difficulty obtaining enough land in the LFR / Commercial Services / Industrial zones would set their sights on the easier and cheaper option of a Plains Zone site, perhaps alongside Bunnings but with a choice of anywhere on the fringes of the urban areas of the District. The precedent effect is not limited to exact replicas of the Bunnings proposal.
41. Far from being exceptional or unusual, the fact that land within the Plains Zone is cheaper to buy and develop than land specifically zoned for commercial service / large format retail development makes it highly likely that future similar applications would follow the grant of consent to Bunnings. This is especially so if the appellant's ‗key issue', being the difficulty of aggregating within-zone land to form larger sites, is accepted as a reason for consenting a greenfield site in the Plains Zone.
42. The appellant has placed much store on its inability to acquire, within the LFR, Commercial or Industrial Zones, a site meeting its exacting standards for the store which its demographer says is the only one it can consider for Hastings18. It has experienced difficulties in this regard, and therefore argues that its problems should be solved by allowing the inappropriate and ad-hoc out-of-zone encroachment beyond the urban fringe and into the Plains Zone. Indeed, it claims the right to have provision made for it, either by a sufficiently large single-title land within a suitable zoning or by this resource consent.
43. The evidence shows that there was a recent period during which suitable land was available, but commercial terms were not agreed. The land has now been sold to Bunnings' major competitor, and it
16 [2006] NZRMA 217 at [102].
17 Alan Matheson, para 93. Mr Spencer and Mr Tansley acknowledged interest being shown by Placemakers in establishing in Hastings and that to compete with Bunnings / Mitre 10 Mega, a store of comparable size and product range would be likely (or indeed necessary).
18 Note that this was selected long before the comparably sized Mitre 10 Mega
proposal on the Nelson Park site
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was accepted that this will result in a Mitre 10 Mega of similar size and operations to Bunnings' proposal.
44. Counsel for the appellants relies on Bilimag Holdings Ltd v Waipa District Council19 for the proposition that when a particular activity cannot be accommodated on a single site in the current zoning, it is appropriate that a new zone be introduced to provide for it. That case is of no assistance here. Bunnings could have engaged in Plan Change 21 to ensure adequate provision was made in the LFR zone (or by extension of the Commercial Services Zone) but did not. It had the option of pursuing a plan change which would have allowed consideration of a properly planned outcome, but elected to seek a one-off resource consent instead. In Bilimag the plan change did not offend the objectives of the District Plan (seeking to protect the town centre), unlike in this case where the protection of the plains resource is directly challenged.
45. The Progressive Enterprises case referred to by the appellant in submissions was for a discretionary activity consent, and held that as such activities were actually contemplated by the Plan, precedent effects and Plan integrity would not arise. The situation is otherwise when the consent is for a non-complying activity.
46. Even with discretionary activities, precedent and Plan integrity issues can tell against the grant of consent. On appeal, the High Court held that ―Precedent effect is a legitimate consideration under [s 104(1)(c)]. It can be a relevant consideration, even in the context of a discretionary activity‖.20
47. In Stirling v Christchurch City Council21 discretionary activity consent was refused to an out-of-zone large format retailing proposal without direct adverse environmental effects (and some positives), because the precedent effect would make the Council ―hard pressed to distinguish future applications for other large format retail seeking to establish along Moorhouse Avenue in the B3 zone‖.22
19 Decision A 72/2008
20 Progressive Enterprises v North Shore City Council H Ct, Auckland CIV 2008404-2584, 25 February 2009, Venning J
21 [2010] EnvC 401 (on appeal to the High Court)
22 Supra, at [140]
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48. A case involving a non-complying activity was Heaney v Rodney District Council23 which I address in more detail later in these submissions.
49. There are a number of cases, discussed below, in which the Court has had to consider proposals for development of land within the Plains Zone – the number of cases of itself illustrates that the Council is under consistent pressure to allow non-complying development within the Plains Zone. The District Plan has a strong policy of preserving the versatile soils of the Heretaunga Plains for productive use, and the Council has resisted pressure for development that does not achieve that objective more or less successfully to date. However if consent to the Bunnings proposal is granted, those efforts would be seriously undermined, and the integrity of the District Plan would be threatened.
50. In Gannet Beach Adventures Ltd v Hastings District Council, the Court observed that if a development being considered was given consent "there would inevitably be a major question mark over the Plan's ability to control the effects of inappropriate developments in the [relevant zone]". 24 The Council submits, similarly, that if the Bunnings proposal is allowed to proceed, the ability to control inappropriate development establishing in the Plains Zone will be undermined.
51. The Bunnings proposal fits squarely within the category of cases contemplated in Beacham v Hasting District Council, where the Court arguably placed the test at its highest:25
Only in the clearest of cases, involving an irreconcilable clash with the important provisions, when read overall, of the District Plan and a clear proposition that there will be materially indistinguishable and equally clashing further applications to follow, will it be that Plan integrity will be imperilled to the point of dictating that the instant application should be declined.
52. There is no clearer case of an ‗irreconcilable clash' between the District Plan's vision of preserving the versatile capacity of the Plains soils for productive use and the proposal to construct a large format
23 H Ct, Auckland CIV 2003-404-3480, 16 March 2004, Gendall J
24 [2005] NZRMA 311 (ENC) at [99]
25 W075/2009 at [25]
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retail store within that area. The evidence for the Council is that there will almost certainly be further applications to follow.
Plains Zone Cases
53. The Court will be assisted in this case by the number of recent Environment Court decisions that have considered District Plan provisions for the Plains and Rural Zones.
54. Mr Matheson describes the pressure for development within the Plains Zone as ‗unrelenting', and the considerable body of existing case law dealing with such applications supports that view. In reviewing the Council's decisions to resist non-complying development within the Plains Zone, the Court has consistently recognised that the Council has a ‗stewardship' role in protecting the finite soil resource of Plains Zone land.26
55. Most recently, in Beacham v Hasting District Council, the Court allowed a non-complying resource consent to operate a car restoration activity within the Plains Zone. The Court noted that the objectives and policies applying to the Plains Zone aimed:27
... to promote the sustainable management of the Heretaunga Plains land resource, finite in nature and with a productive and life supporting capacity, not just for the present but also for future generations.
56. In its conclusion, the Court noted that:28
The effective, and likely permanent, loss of the life-supporting capacity of the Plains zone soils, even of such a small area as this, to a non-rural industry is not to be accepted lightly – we must have accumulative effects in mind. For many proposals that factor alone would likely be decisive.
57. However, the Court held that particular features of the proposal in that case "make it unlikely that a materially indistinguishable proposal would come over the horizon".29 Those features included that the activity could be carried out within existing buildings; that the soil was of poor productive capacity; that land ownership would not be fragmented; and that it involved reorganisation of an existing business and that a restrictive covenant was offered.
26 For instance see H B Land Protection Society Inc v Hastings District Council W57/2009 at [28].
27 W075/2009 at [16]
28 Supra at [31]
29 Supra at [27]
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58. By contrast, the proposal considered in Ngatarawa Development Trust Ltd v Hastings District Council "would fragment and convert rural land for residential uses ...and diminish, rather than maintain, the life-supporting capacity of the Plains for the future".30 There the Court considered a residential subdivision proposal within the Rural Zone would irreconcilably conflict with the Plan's objectives and policies. In considering s 104(1)(c), the Court observed that:31
Because this proposal is, in our judgement, so irreconcilably contrary to the provisions of the District Plan, to allow it would call into question the ability of the Council to use the Plan as a means of managing the potential effects identified during the Plan development process.
59. Development within the Plains Zone was again considered by the Environment Court in McKenna v Hastings District Council, where it considered a proposal to subdivide one lot into two. In that case, while the adverse effects of the proposal were accepted as being minor, it nevertheless "irreconcilably conflict[ed] with the provisions of the Plan relating to the soil resource in the Plains zone".32
60. Features of that proposal said to be distinguishing were held, on the contrary, to be applicable to many potential applications. A claim that the proposal would affect only a very small proportion of the productive soils protected by the Plains Zone could apply to any similar small-scale application; that the property was on the border of the Havelock North residential area was not seen as favourable because it could start "an insidious movement" to the subdivision of such lots.
61. The Environment Court's decision was upheld in the High Court, which observed that it was "entirely open" to the Court to take into account the precedent effect of the proposal.33
62. While it concerned a plan change, rather than a consent application, the Court's decision in H B Land Protection Society Inc v Hastings District Council is also relevant. In that case the Court upheld the rezoning of an area of Plains Zone land to accommodate a regional sports park. Because it involved a plan change, precedent issues did not strictly arise, but nevertheless the Court considered the
30 W017/2008 at [51]
31 Supra at [69]
32 W016/2008 at [34]
33 McKenna v Hastings District Council (2009) 15 ELRNZ 41 at [67] – [68].
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uniqueness of the specific proposal as highly relevant to it meeting the purpose and principles of the RMA. It noted:
... the effective, and likely permanent, loss of the life supporting capacity of these soils is not be accepted lightly. For a proposal other than this one, that factor alone would likely be decisive. But there is no doubt that the [Regional Sports Park] will be a valuable community resource, contributing well to providing for social and cultural, and perhaps economic also, wellbeing. Given its nature, it is a genuine one-off and there is unlikely to be any demand for its replication elsewhere in the District.
63. The positive features associated with the Sports Park in that case narrowly outweighed the value in protecting the productive soils within the Plains Zone. The Bunnings proposal offers no such overriding community benefit to justify the permanent loss of Plains zone land.
64. The H B Lands case is interesting, too, for its record of the Council's reasons for promoting the rezoning for the sports park. For instance, having one sports park made good use of resources, and avoided the proliferation of smaller ones as permitted activities within the Plains zone which might have had a greater accumulative effect.
65. Of note also was that the Council planners supported the plan change as the rezoning "may also save Plains zone land from commercial, particularly LFR, encroachment, in that the former sports facilities at Nelson Park have been reassigned to that kind of activity".34 The concerns about a push of LFR commercial activity into the Plains Zone was clearly a valid one, then and now.
66. Also relevant to this series of cases is the decision in Te Awanga Lifestyle Ltd v Hastings District Council.35 The land sought to be subdivided in that case was zoned Rural, not Plains, but some provisions of the Plan – for instance the discussion of the Rural Resource Strategy in section 2.8 of the Plan – are common to both zones. The Court observed that:36
Taken overall the District Plan contains comprehensive and consistent provisions which emphasise the need to safeguard the life-supporting capacity of the rural resource, particularly the soils, and to provide for urban and residential development
34 H B Land Protection Society Inc v Hastings District Council W57/2009 at [28]
35 W77/2009
36 Supra at [51]
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through an integrated strategic approach, rather than in an ad hoc manner.
67. The Court noted the proposal to subdivide for 18 residential sites would not maintain the life-supporting capacity of this land and sat "most uneasily" with the policies and objectives seeking to avoid the intrusion of urban activity into rural land.37
68. The Court again discussed the potential for an undesirable precedent to be set noting that "the likelihood of other, materially similar, proposals coming forward and thus making it difficult, if not impossible, for a Council to rely on its Plan, is the material factor".38 The Court recorded that developments of the same kind, and supported by the same reasoning, could be pursued. It ultimately concluded that the purpose of the Act was best achieved by declining the appeal and upholding the Council's decision to decline consent.39
Claimed non-availability of alternative space for the proposal
69. An argument for the appellant is that establishing the new store within the Plains zone is justified because there is insufficient space available within the LFR, Commercial and Industrial zones for what Bunnings says is its required, no-compromise development.
70. The evidence for the Council is that there are a number of possibilities where Bunnings could establish, albeit requiring some modifications or compromises from its stated ideal layout. It is also apparent that the market and other circumstances change, and that opportunities have existed in the past and are likely to arise in the future.
71. More fundamentally though, in my submission, the argument put forward for the appellant is tantamount to asserting a ‗right' to establish a store to the appellant's own idiosyncratic specifications somewhere in the District, and if there is insufficient commercially zoned land available, then the integrity of the District Plan must yield to allow the store to establish elsewhere, as must the important resource of the Heretaunga Plains. This was acknowledged by Bunnings' witnesses (eg Mr Serjeant).
37 Supra at [32] – [33]
38 Supra at [45]
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72. The fact is that the District Plan does provide for significant areas of land for commercial use, including large format and commercial service uses. By Plan Change 21, approved by the Court in November 2006,40 the Council changed its Plan to extend the commercial area by around 20 ha, and to expressly provide for LFR developments. Through that public process, and relatively recently in planning terms, the Council made available an area of land considered to be sufficient to meet the demands of the District for commercial development, including the type of development proposed in this case.
73. One of the Council's stated reasons for making that land available was to accommodate expansion desires by the Warehouse, partly out of a fear that the Warehouse may relocate to a greenfields site on the Hastings urban fringe41, followed by others.42 It made sufficient land available explicitly to avoid pressure to expand into the highly valued Plains area.
74. That newly zoned land was available, and it was up to the market to decide the up-take of that land. The evidence of Mr Ash describes how Bunnings would have taken up the site now owned by Mitre 10 Mega but for a difference over bonding for infrastructure. Not to take up that site was a commercial decision by Bunnings, and not one that it should be able to leverage off to gain consent for the current proposal.
75. The issue was not simply one of Bunnings requiring security for its contribution towards the cost of infrastructural development at the site. As the letter of November 2009 indicates that the initial requirement was that the infrastructure should all be completed before CHOF5 (the vendor) could access the $1.24m needed to pay for the works. Later iterations involved progressive draw-down as the works were to be carried out. As its final position, Bunnings required security for $4 million on terms that were not commercially reasonable, nor financially tenable, for the vendor.
76. There can be no obligation on the Council, or the District Plan, to provide for enough greenfields land to accommodate 2 very large
39 Supra at [53]
40 W100/2006, evidence of Philip McKay
41 W100/2006 at [10]
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(and land-hungry) near-identical stores both competing in the same market.
77. That Bunnings wants to establish in Hastings but can't find land in an appropriate zone on which it suits it to do so is a function of the ‗market' in operation and not a matter that should be given any weight by the Court in deciding whether it should be allowed to establish on land in an inappropriate zone. The supply of land is limited and there can be no requirement to ease the path of every aspirant who finds market conditions difficult.
78. In Heaney v Rodney District Council43 the Environment Court had granted consent on the basis (wrongly, as the High Court held) that there was ―effectively no provision in the district plan that will assist the appellant to establish his operation elsewhere in the large Rodney District. The Environment Court had held that the proposal was ‗truly exceptional' on that account. There were provisions in the district plan for helicopter operations, the problem being that the applicant was unable, for commercial reasons, to access the relevantly zoned land. It sought non-complying activity consent for an out-of-zone site elsewhere.
79. The High Court held that ―it cannot be relevant to a resource consent application in respect of one site that commercial difficulties might exist in a practical sense to the undertaking of the activity at a different site which is not the subject of the application‖.44
80. In the present case, the appellant likewise relies on the commercial difficulty of obtaining sufficient land in an appropriate zone as a reason why it should be treated as sufficiently exceptional so as to justify the grant of a non-complying activity consent in the Plains Zone. The appellant's ‗Central Issue' of alternative sites is not a basis in law or in fact for the grant of consent. The ‗market forces' may mean that an operator such as Bunnings simply misses out.
Consideration of trade competition not permissible
81. The only claimed benefit of any significance is the assertion that the people of Hastings and the surrounding catchment will benefit from
42 Evidence of Philip McKay, para 49
43 H Ct, Auckland CIV 2003-404-3480, 16 March 2004, Gendall J
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the effects of trade competition between a Bunnings Warehouse and the Mitre 10 Mega store under development. This benefit has not been quantified in any way, and appears to be an assumption rather than the subject of actual evidence.
82. The first question however, is whether any consideration could be given to it, even if it had been adequately described. The RMA prohibits consideration of ‗trade competition' in s 104(3)(a). The claimed benefit is said to be the result of trade competition, so cannot be considered.
83. Originally, the section prohibited consideration of the effects of trade competition on trade competitors only. This was amended in 1997 to remove that limitation. The High Court in General Distributors Ltd v Waipa District Council45 recently considered the identical provision in s 74(3) prohibiting consideration of trade competition in the preparation or change of a district plan. Wylie J held that the 1997 amendment ―widened the scope of the subsection to trade competition per se regardless of who is affected‖46.
84. His Honour also noted that Parliament had seen fit not to define ‗trade competition', and that it should carry the ordinary meaning of ―the rivalrous behaviour which can occur between those involved in commerce‖47. He also rejected as sophistry the argument that the section simply requires that ‗trade competition' be disregarded, not its effects. His interpretation in that respect has been confirmed by the 2009 amendment.
85. After discussing the Northcote Mainstreet / Discount Brands decisions, Wylie J noted that the Courts had made it clear that ―it is only trade competition and those effects ordinarily associated with trade competition, which are required to be ignored under s 104(3)(a)‖ and it is only when the effects go beyond those ordinarily associated with trade competition, and become significant, that they can be considered48.
44 Supra at para [53]
45 (2008) 15 ELRNZ 59. This was an appeal against the Bilimag decision.
46 Supra at [81]
47 Supra at [82]
48 Supra at [87], [88].
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86. While for the most part, s 104(3)(a) has been raised in relation to the claimed adverse effects of trade competition, the section is not limited to that. The definition of effects in s 3 includes both positive and adverse effects. There is no reason in logic or principle why only the adverse effects of trade competition should be excluded from consideration. For example a proposal could have both positive and adverse trade competition effects. There is no reason why consideration of one should be allowed with no account taken of the other.
87. There is nothing in this case to suggest that the claimed benefits to the community are any more than what would ordinarily be associated with trade competition. The prohibition of consideration of those effects is not limited to effects on Bunnings' trade competitors but applies ‗regardless of who is affected'. Thus the claimed beneficial effects of having Bunnings as a competitor to Mitre 10 Mega are to be disregarded.
Part 2 considerations
88. For all of the reasons already discussed, and in the evidence to follow, it is clear that the proposal does not meet the purpose of the Act. The proposal will not promote the sustainable management of natural and physical resources but will undermine such management.
89. If consent is refused, the people and communities of Hastings and its surounds will still have ample provision to meet their social, economic and cultural well-being. They will be more than adequately supplied with retail (and trade) stores at which to buy a full range of building products, home improvement and houseware, and gardening equipment and supplies. The most that can be said is that there will be somewhat less trade competition than there might be if a full-size Bunnings Warehouse was to establish.
90. There is nothing in s 5 (or elsewhere in Part 2) of the RMA that supports the view that provision should be made for two near-identical, massively land-consuming retail stores in a city the size of Hastings (and one within the accepted 20 minute driving distance at Napier, where it seems another one is likely).
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91. On the other hand to grant consent would significantly and irrevocably fail the sustainable management edicts of safeguarding the life-supporting capacity of soil and eco-systems, and of sustaining the potential of natural resources for future generations. In terms of the proposed location in the Plains Zone, and the thrust of the most relevant objective and policies of the Plan realting to the zone, this protection is by far the most significant issue in this case.
Section 290A – the Council's decision
92. Section 290A RMA provides that "in determining an appeal or inquiry, the Environment Court must have regard to the decision that is the subject of the appeal or inquiry".
93. The purpose of s 290A is to make explicit what was already implicit: see Waitakere City Council v Estate Homes Ltd49 in which the Supreme Court noted (at [29]) in the context of the appeal before the Environment Court being a de novo hearing, that the first instance decision will "almost always be relevant because of [the council's] general knowledge of the local context in which the issues arises".
94. In HB Land Protection Society Inc v Hastings District Council, the Court emphasised the requirement to ‗have regard' to the Council's decision, noting that:50
The Court has interpreted that not as creating a presumption that the Council's decision is correct, but requiring genuine consideration of it and, impliedly at least, requiring an explanation if we should come to a different view. We also have the view that if we find the decision is a finely balanced one, the Council's decision can be given weight as an expression of informed local opinion.
95. As to the meaning of ‗have regard to', the High Court's decision in Unison Networks Ltd v Hastings District Council considered that phrase required the Court "to give genuine attention and thought to the matter, and give such weight to it as the case suggests is suitable".51 It is the same phrase as that used in s 104, and should be applied accordingly.
49 [2007] 2 NZLR 149
50 W 57/2009 at [7]
51 CIV 2007-485-896, High Court, Wellington, 11 December 2007, Potter J
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96. In Upper Clutha Environmental Society Inc v Queenstown Lakes District Council, the Environment Court considered the obligation imposed by s 290A, noting six factors that it said might limit the relevance of the council's decision at first instance.52 Those factors included the different evidence heard by the Court as opposed to the primary decision-makers, differing levels of legal representation in the first instance and on appeal, and the different composition and experience of the decision-making body.
97. In this case, none of those limiting factors apply. The Council's decision in this case was made by two experienced independent hearings commissioners with delegated authority to hear and decide on the application. Their 23 page decision carefully considers all of the issues, concluding with a comprehensive list of findings which resulted in consent being declined.53 The applicant was represented by an experienced counsel and called 15 witnesses in support of its case, covering the same matters as have been raised by the appellant in this hearing.
98. In the circumstances, the commissioners' decision should, in my submission, be given considerable weight.
Witnesses
99. The Council will call the following witnesses in support of its position that consent should be declined:
(a) Dr John Small, an economist dealing with economic issues raised by the appellant;
(b) Mr Michael Penrose, on matters relating to valuation and property, responding to the claims by the appellant that suitably zoned land is hard to come by;
(c) Mr Jonathan Ash, formerly with Charter Hall, on the availability of land within the LFR Zone and on negotiations between Bunnings and CHOF5, the owner of the Nelson Park land;
(d) Mr Sharn Hainsworth, as to the nature and description of the soils on the site;
52 C 113/2009 at para [62].
53 Decision of Independent Hearings Commissioners, 24 December 2009, p22
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(e) Dr Brent Clothier, on the characteristics of the soils and broader eco-system services at the proposed development site, and the effects of their loss;
(f) Mr Philip McKay, a senior Council planner, on the Council's strategic approach to management of the Plains zone. Having regard to Mr McKay's detailed knowledge of the relevant strategies and Plan history, the Court is respectfully invited to refer in detail to his evidence; and
(g) Mr Alan Matheson, who gives a planning analysis of the proposal and responds to the planning issues raised by the appellant, concluding that the statutory tests are not met.
Dated this day of March 2011.
______________________________
Matthew Casey QC / Mark von Dadelszen
Counsel for respondent