Several Environment Court decisions from earlier this year have related to the development of a Bunnings store on the Frankton Flats in Queenstown. Here, we address the substantive decision on the relationship between the District Plan and the NPS-UDC.5 The related decisions confirmed that the Environment Court will pierce the corporate veil when considering matters of trade competition, costs follow a finding of trade competitive behaviour and that the Court may award costs against Council’s defending resource consent decisions.6

In short, even though the proposal was (likely) contrary to the objectives and policies of the District Plan, the NPS-UDC is an enabling document that is designed to open doors for business and household development. The NPS-UDC requires Council’s to take an enabling, as opposed to constraining, approach to out of zone development. The Court considered that the most relevant policy within the NPS-UDC to resource consent decision making was PA3 (which applies to all local authorities).

The Council decision was to decline the proposal on the basis that the proposal failed to pass through either of the non-complying activity gateway tests in section 104D of the RMA. After that decline, the proposal had been amended to address the adverse effects issues identified in the Council decision. The effects argument before the Environment Court on appeal was focused on whether there were adverse environmental effects arising in respect of the loss of industrial land to a retail activity in an environment where industrial land is scarce.

The Court confirmed that the reduction in an already scarce land resource can be an adverse environmental effect. However, it simply disagreed with the Council, and its evidence, as to the significance of that effect in this case. The Court was satisfied that the level of effect was minor or less and therefore, the proposal passed through the effects gateway test in section 104D of the RMA

This then enabled the Court to consider the NPSUDC. While the Court acknowledged that all experts considered that the proposal was contrary to the objectives and policies of the District Plan, it found policy support for the proposal in the NPS-UDC. The Environment Court did so on the basis that:

  • It considered that the District Plan, when read as a whole, is not completely coherent on the issue of industrial zoning (relying on the Court of Appeal decision R J Davidson Family Trust v Marlborough District Council. This resulted from a policy that provided for the expansion of the Industrial Zone away from SH6 but others that effectively prevent anything other than industrial in an area abutting SH6. 
  • The relevant part of the District Plan became operative prior to the NPS-UDC, so cannot be said to give effect to it. Further it considered that a policy to avoid other activities in an industrial zone cannot be said to promote effective use of urban land or limit adverse effects on competition in real estate which are required by the NPS-UDC. The Court considered that the District Plan appears to be inconsistent with the NPS-UDC and will probably need to be changed to give effect to the latter.

In our view, this decision requires where a District Plan was made operative prior to the NPS-UDC, consideration of all relevant objectives and policies in both the NPS-UDC and the Plan is required under section 104 of the RMA. Where provisions conflict, you must attempt to reconcile them through the King Salmon line of authority around more directive policies trumping more passive policies. If conflict remains, resolve in favour of the NPS-UDC.