Palmerston North Industrial and Residential Developments Limited v Palmerston North City Council
The land owned by PNIRD (“PNIRD land“) is zoned Rural in the District Plan. The PNIRD land has been subject to a notation since the District Plan was first notified in 1995 that identifies it as part of the Urban Growth Path (“UGP“) for possible future development. The UGP does not constitute a zone under the District Plan or contain any rules directing the form of urban growth; however, it is subject to an Objective along with related Policies and an Explanation that relate to protecting the land from adverse effects of unnecessary and unplanned urban expansion.
Since the District Plan was notified, changes occurred that directly impacted PNIRD’s land:
(a) In 1998, Variation 1 to the (then) proposed plan was introduced which included air noise contours around Palmerston North Airport (“Airport”). Most of the UGP land, and therefore PNIRD’s land, is included within these air noise contours.
(b) The Council reviewed its urban growth strategy (“UGS”) and in 2010, formally adopted a Residential Growth Strategy (“RGS”). This strategy identified land, now known as the Whakarongo Residential Area (“WRA”), as appropriate for residential development (despite not being part of the UGP). However, it also noted that the land affected by the air noise contours (including the PNIRD land) “may be best suited to industrial development” given concerns about potential conflicts between residential development and airport activities.
The Council introduced PC6 to give effect to the RGS, with the primary purpose being to rezone land in the WRA from rural to residential. Although PC6 is not a general review of the rural zone provisions, it does propose to remove the UGP notation affecting the PNIRD land and to amend the Objective and associated Policies and Explanation relating to land affected by the UGP notation.
PNIRD’s submission on PC6 opposed PC6 and, in particular, the removal of support for urban growth on PNIRD and other UGP land. It sought relief that:
(a) PC6 should be put on hold until airport noise reviews, which were overdue, had been completed (paragraph 16(a) of the submission);
(b) PC6 should be amended to incorporate the PNIRD land into the WRA, or alternatively to enable the PNIRD land to be subject to the urban growth provisions equivalent to those in the WRA (paragraphs 16(b) and 16(c) of the submission);
(c) the proposed deletion of the UGP notation and amendments to the related UGP provisions from the District Plan should be rejected (paragraph 16(d) of the submission).
PNIRD sought declarations from the Court that, in respect of (a) and (b) above, the relief sought was within jurisdiction and was “on” PC6. All parties agreed that (c) was on PC6.
In response, the Council and the Airport Company sought declarations as to the content of any evaluation under section 32 of the Resource Management Act (“RMA“) to rezone other land within the UGP (not within the WRA under PC6). The Council agreed that, if the Court declined to make PNIRD’s declarations, there was no need for the Court to make the declarations sought by the Council.
Prior to the hearing, the Council agreed to put PC6 on hold pending completion of the airport noise review, therefore a declaration on this matter (paragraph 16(a)) was no longer before the Court. The Court did, however, note that this was an administrative matter for the Council in any case, and was not the appropriate subject of a Court declaration.
The remaining issue for the Court was whether the relief in 16(b) and 16(c) of the submission was on PC6.
In reaching its decision, the Court considered the approach in the High Court decisions of Clearwater Resort Limited v Christchurch City Council (HC Christchurch SP34/02, 14 March 2003) and Motor Machinists Limited v Palmerston North City Council ( NZHC 1290). In summary, these cases held that a submission will only be reasonably considered as “on” a variation or plan change if it directly addressed the degree to which the variation or plan change altered the pre-existing status quo and could reasonably be said to be within the ambit of the plan change.
The Court considered the following four questions in reaching its decision.
What is the breadth of the alteration to the status quo entailed in PC6?
In support of paragraphs 16(b) and 16(c) of its submission, PNIRD argued that PC6 changed the status quo of the PNIRD land by uplifting the UGP notation and amending the associated Objective and Policies. PNIRD raised a number of potential consequences for the PNIRD land if the UGP notation was uplifted (for example, how residential development within the UGP would be treated in the future).
The Court held that, while these concerns were addressed in other parts of PNIRD’s submission, paragraphs 16(b) and 16(c) went further by seeking to rezone and impose new District Plan rules on the PNIRD land (as opposed to simply challenging the uplifiting of the UGP notation).
The Court noted that PC6 did not amount to a re-zoning or a rule change to land within the UGP. The change to the status quo with respect to the UGP land was limited to removing references to it being suitable for urban growth, not altering the zoning or rules that apply.
Does PNIRD’s submission address that alteration?
PNIRD argued that its relief sought the same outcome as PC6, just in a different area and that the UGP was already a subject of PC6. The Court rejected both these arguments, noting that by identifying a different area, PNIRD was ipso facto seeking a different outcome and that while the PNIRD land was part of PC6, it was only included to the extent that it proposed the removal of the UGP notation and sought to amend the associated provisions.
In support of PNIRD’s case, counsel argued that section 79(3) of the RMA as amended in 2009 ensures that there is an opportunity to submit on any aspect of a District Plan through this review process. The Court did not agree that section 79 was of assistance to PNIRD. Rather, the Court found that section 79(3) provides that, where a provision is considered for review but the Council decides not to amend it, that decision must still be considered as part of the plan change. However, it was clear from the PC6 documents, that the Council did not re-evaluate or make any decisions regarding the Rural zoning of the UGP land that was the subject of the PNIRD submission.
The remedy sought by PNIRD was not just challenging the uplifting of the UGP and the re-zoning of the WRA, but was seeking to re-zone and apply new rules to the PNIRD land. The Court held there were extensive barriers in the way of those who wished to challenge zonings of properties outside the boundaries of land that were subject to a plan review. The Court agreed with the Council that “proposing an area to be rezoned does not open the door to submissions on “where else” but “whether and how””.
Does PNIRD’s submission raise matters that should have been addressed in the section 32 evaluation?
The Court in Motor Machinists observed that one way of analysing whether a submission was on a plan change was “…to ask whether the submission raised matters that should have been addressed in the section 32 report. If so, the submission is unlikely to fall within the ambit of the plan change”. PNIRD argued that its submission did not raise matters which should have been addressed to any greater degree than they were in the section 32 evaluation and that, in any event, this was only one way of approaching the question. However, the Court held that PNIRD’s argument overlooked the context in which the reports were included in PC6. The impression given by the reports was not that the UGP was being considered for re-zoning or that this was a potential outcome of the PC6 process. Instead, the context was the promotion of the WRA for development.
The section 32 analysis had evaluated alternatives and indentified the preferred option for development. After considering those options, which did not look into the UGP land, the analysis concluded the best option for the WRA was to continue with PC6. Further, a comprehensive Structure Plan was created for the WRA. There was no equivalent for the UGP. Acknowledging that a section 32 analysis was just one way of considering whether or not a submission is on a plan change, the Court noted that in this case it highlighted the precise nature of PC6. The UGP could not be considered the subject matter of PC6.
Is the management regime for the relevant resource (PNIRD’s land and other UGP land) altered by PC6?
The Court reiterated that PC6 altered the management regime of the PNIRD land by removing the UGP notation and changing the corresponding Objective and Policies. However, the remedy that PNIRD sought (ie the rezoning or amendment of rules affecting its land) did not arise out of the PC6 proposals and therefore was not applicable.
The Court declined to issue the declarations sought by PNIRD and, therefore, did not go on to consider the Council’s application for declarations.
The Court was generally unconvinced by PNIRD’s arguments. PNIRD were undoubtedly entitled to make a submission and in many instances accurately summarised the consequences of uplifting the UGP notation contained in the District Plan. The uplifting of the notation was able to be challenged, but the other relief seeking to include the land within the WRA or to otherwise amend the provisions to enable residential development was not on the plan change and could not be pursued.