In North Holdings Ltd v Rodney District Council [2004] 17 PRNZ 384, the Court of Appeal confirmed that a Council decision to notify a resource consent application could potentially be subject to judicial review. However, the recent decision in Reuters Homes Ltd v Wanganui District Council CIV-2010-583-278 14 June 2011 is the first time that a Council decision to publicly notify an application has been declared a wrongful exercise of the RMA's notification power.

Factual background

Reuters Homes Ltd (Reuters) applied to Wanganui District Council (WDC) for resource consent to subdivide land. As part of its proposal, Reuters planned to construct a new cul-de-sac in order to access the developed properties. The cul-de-sac option was endorsed by adjoining property owners (Hospice Wanganui and Presbyterian Support Services). However, rather than a cul-de-sac, WDC instead wanted a road to run through the development and connect with Hospice Wanganui's adjoining land (through road).

WDC issued a request under section 92 for further information which would require Reuters to consider and submit a revised roading configuration, which included WDC's preferred through road. Reuters was told that failure to provide this information would see WDC fully notify the application, and could result in the application being declined under section 104(6) of the RMA.

Reuters refused to provide the information, and considered WDC's request to be an abuse of process. Reuters' view was that the through road would be inconsistent with the character of its development, and would not be commercially feasible.

WDC considered that it was bound to notify the application under section 95C, as it is mandatory for a Council to publicly notify an application if the applicant refuses to comply with a section 92 request.

While consent for Reuters cul-de-sac proposal was ultimately granted by an independent commissioner, it commenced judicial review proceedings. Although consent had been granted, the High Court proceeded on the basis that declaratory relief was not moot and could have practical value because such conduct by local authorities was likely to recur.

Jurisdiction

A preliminary issue was whether the High Court had jurisdiction to review WDC's actions. If Reuters had a right of appeal to the Environment Court, section 296 of the RMA would prevent judicial review.

The wrongful exercise of the section 92 power was the primary issue, and could be the subject of an appeal to the Environment Court in the event that consent was refused. However, the Court held that WDC's section 95C decision to notify was the exercise of statutory power relevant to Reuters' complaint.

As there was no declaration power or direct right of appeal available to the Environment Court regarding the manner in which a consent authority decides to notify a resource consent application, any challenge to a decision under sections 95-95F should be made via judicial review.

Misuse of power to request further information

While the Court concluded that the relevant exercise of statutory power was the section 95C decision to notify, the Court's substantive findings related to WDC's section 92 request for further information.

With regard to the purpose of section 92, the Court referred to the case of Westfield New Zealand Ltd v North Shore City Council [2005] NZSC 17, [2005] 2 NZLR 597. In that case, the Supreme Court said a Council is authorised to request information under section 92(1) to enable that Council to better understand the nature of the proposed activity, the effect on the environment, or the ways in which adverse effects might be mitigated.

WDC's request did not seek information enabling it to better understand traffic effects of the cul-de-sac. Instead, WDC required Reuters to transform its proposal into one that satisfied WDC's objectives for the wider area (in terms of roading development). This was not a genuine request for further information on the application as lodged.

Because WDC's information request was not genuine, its subsequent decision to notify the application under section 95C (even though it was directed to notify by the RMA's statutory language) was an improper use of the notification power.

The Court noted that in some situations, a request for further information may require the applicant to rearrange details or include alternatives for some details.

If however the request an attempt to materially change an application, and is not a genuine request for further (necessary) information, the Council will not be able to rely on the applicant's refusal to comply with the request as a basis to notify the application under section 95C.

Implications for Councils

Councils should be wary about how the section 92 power to request further information is exercised. It needs to be a genuine request for necessary information relating to the proposal for which consent is sought, rather than a means of placing pressure on an applicant to materially change their proposal. It will be susceptible to challenge by way of judicial review, but could also be addressed in an appeal to the Environment Court if consent is declined.