Review with caution: trade competitors and judicial review under the Resource Management Act 1991
By: Mike Doesburg, Jesse Aimer
Published: 14/06/2019
Sheffield Properties Limited v Kapiti Coast District Council & Ors [2018] NZHC 3290
A recent High Court decision demonstrates the difficulties faced by trade competitors, with ulterior commercial motives, challenging decisions made under the Resource Management Act 1991 (Act).

Background

In early 2016, the Kapiti Coast District Council (Council) notified a private plan change known as “Private Plan Change 84 – Airport Zone” (Plan Change).  The Plan Change sought to alter the activity status of certain retail activities in the Airport Zone of the Kapiti Coast District Plan (District Plan) from prohibited to discretionary or non-complying.  The Plan Change was requested by Kapiti Coast Airport Holdings Ltd (KCAHL) to allow it to seek resource consents for retail development in the Airport Zone.

Seven parties made submissions on the Plan Change, including Sheffield Properties Ltd (Sheffield), the owner of Coastlands Shopping Centre and other interests in the Paraparaumu town centre.  While the Plan Change was being processed, KCAHL successfully applied for a declaration from the Environment Court that Sheffield was a trade competitor of KCAHL.  However, despite the Environment Court’s declaration, Sheffield provided written submissions and evidence, and made oral submissions, on the proposed Plan Change.  In September 2017, the Independent Hearing Panel recommended that the Plan Change be approved.  The Council adopted the recommendation and publicly notified its decision.  The decision was not appealed.

Sheffield sought a judicial review of the Council’s decision to approve the plan change on three grounds:
  1. The decision failed to determine whether prohibited activity status was the most appropriate activity status, with the Panel applying the wrong legal test in relation to prohibited activity status;
  2. Changes were made to the District Plan which were not on the Plan Change and were, therefore, outside of the Council’s jurisdiction; and
  3. The Council failed to take into account the Wellington Regional Policy Statement.
 
Both KCAHL and the Council applied to strike-out Sheffield’s application for judicial review.  The grounds relied on were:
  1. Judicial review is barred by s 296 of the Act;
  2. The proceeding was brought with undue and prejudicial delay; and
  3. The proceeding was an abuse of the Court’s process.
 
The Court’s findings

Section 296 RMA

After reviewing the strike-out principles contained in High Court Rule 15.1, the Court considered section 296 of the Act, which prevents a party from applying to the High Court for judicial review if it has a right of appeal to the Environment Court. 
The Council submitted that, as Sheffield made submissions in opposition to the Plan Change, it had a right of appeal to the Environment Court.  Therefore, section 296 of the Act barred Sheffield from applying to the High Court for judicial review.  In the alternative, it argued that, if Sheffield was barred from appealing to the Environment Court because its submissions were on trade competition issues, then it had no genuine interest in the Council’s decision and, as a result, lacked standing to bring the proceeding.

Sheffield submitted that, as a trade competitor, it was barred from applying to the Environment Court. As such, Sheffield argued it was barred by section 296 of the Act from bringing judicial review proceedings in the High Court.  Sheffield also relied upon the Privy Council’s decision in McGuire v Hastings District Council, which held the High Court has a residual jurisdiction to hear proceedings that would otherwise be prevented by section 296 of the Act.

The Court accepted that its jurisdiction may not be totally excluded by section 296.  However, the Court emphasised that any residual jurisdiction was intended to be limited and did not apply in this case.  It was Parliament’s intention that the Act not be used to further a trade competitor’s interests over its rivals and the judicial review procedure should not be used to circumvent that.  The Court accepted the Council’s submissions and held Sheffield had an opportunity to appeal under the Act but chose not to do so.  As Sheffield did not exercise its right of appeal, section 296 precluded it from applying for judicial review.  The Court held this ground was sufficient reason to strike out Sheffield’s judicial review application.

Delay

The Court also found that Sheffield’s delay in bringing the proceedings, pointed to a pattern of behaviour on the part of Sheffield of attempting to interfere with the development of a trade competitor.  This finding contributed to the Court’s overall decision that Sheffield’s claim was an abuse of the Court’s process. 

Ulterior motive

In light of its findings in relation to Sheffield’s failure to appeal the Council’s decision, and the delay in filing the judicial review application, the Court concluded that Sheffield brought the proceeding:
not to raise legitimate public law concerns with the process followed by the Council, but with the predominant ulterior purpose of protecting its commercial interests and stifling the development of KCAHL’s land holdings.

Accordingly, the Court held Sheffield’s ulterior motive was an abuse of process and the application for judicial review should be struck out.

Our comment

The decision confirms the wide reach of section 296 of the Act.  In most cases, parties must utilise their right of appeal to the Environment Court, or lose the ability to seek review of a council decision altogether.  While the High Court retains some residual jurisdiction to hear judicial review applications despite the section 296 bar, trade competitors will find it particularly challenging to fit within this residual scope.
 
The decision fits within the Act’s wider scheme of limiting the participation of trade competitors in resource management decisions.  The Court’s finding that Sheffield’s application was an abuse of the Court’s process acts as a warning to trade competitors to tread carefully when considering judicial review of resource management decisions.                    
 
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