1-6 October 'J...0\2.. BEFORE THE ENVIRONMENT COURT. Decision No. [2012] NZEnvC ;(3 1 ENV WLG

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1 BEFORE THE ENVIRONMENT COURT Decision No. [2012] NZEnvC ;(3 1 ENV WLG IN THE MATTER of an appeal under Clause 14 of Schedule 1 to the Resource Management Act 1991 BETWEEN MOTOR MACHINISTS LIMITED Appellant AND PALMERSTON NORTH CITY COUNCIL Respondent Court: Environment Judge B P Dwyer sitting alone under section 279 of the Act Hearing: In Chambers at Wellington JURISDICTIONAL DECISION Decision issued: 1-6 October 'J...0\2.. A: Validity of submission upheld; B: Costs reserved.

2 2 Introduction [1] Motor Machinists Limited (MML) has filed a notice of appeal against a decision of Palmerston North City Council (the Council) on a submission by MML to Proposed Plan Change 1 (Plan Change 1) to the Palmerston Nmth City District Plan (the District Plan). The appeal is filed pursuant to Clause 14, Schedule 1 Resource Management Act 1991 (RMA). [2] Plan Change 1 was a review of the Inner and Outer Business Zone provisions of the District Plan which proposed to rezone 7.63 ha of Residential Zone land to Outer Business Zone. Plan Change 1 was notified on 23 December 2010 and MML filed a submission in respect of it. [3] The essence of the MML submission was that Residential Zone land, which it owns at Lombard Street, Palmerston Nmth (the Residential Land) ought to be rezoned Outer Business Zone by Plan Change 1 as the Council proposed for other Residential Zone land in the vicinity (including one other parcel of land in Lombard Street). The Council decision on the MML submission did not accept that proposition, thereby giving rise to this appeal. [ 4] Before the merits of the MML appeal can be determined, the Council has raised a jurisdictional question relating to the submission filed by MML. The question arises out of the provisions of Clause 6, Schedule 1 RMA which relevantly provides: (1) Once a proposed policy statement or plan is publicly notified under clause 5, the persons described in sub-clauses (2) to (4) may make a submission on it to the relevant local authority. (My emphasis) [5] The jurisdictional question to be determined by me is whether or not the submission filed by MML seeking that its Residential Land be rezoned from Residential to Outer Business Zone was on the Plan Change as required by Clause 6.

3 3 Bacl\ground [6] MML owns a parcel ofland containing 3,326m 2 which has street frontages to both Lombard Street and Taonui Street in Palmerston North. The land contains five separately identified allotments, all of which are contained in one Certificate of Title. 1 [7] Lots 16 and 17 DP 206 front onto Lombard Street and those are the two Residential Zone lots (37 and 39 Lombard Street) which I have described as the Residential Land. Part Lots 50, 5 I and 52 DP I front onto Taonui Street. These Part Lots are in the Outer Business Zone and were so zoned prior to the promulgation of Plan Change 1. I will refer to these Part Lots as the Business Land. [8] Accordingly, the zoning situation in respect of the MML land is that approximately half of the land is included in the Residential Zone and half in the Outer Business Zone, notwithstanding that the land is contained in one Certificate of Title. The zone boundary has been drawn along the line where Lots 16 and 17 DP206 abut Part Lots 50, 51 and 52 DP 1, approximately through the middle of the title. [9] It is apparent from the documents which the parties have filed in these proceedings (including the decision of the Council Hearings Commissioners) that MML operates an engineering business on its land. As I understand it, the engineering business has its frontage on Taonui Street (the Business Land), but its industrial/workshop buildings extend across the lot boundaries onto the Residential Land which has frontage on Lombard Street. According to the Council decision, approximately 49% of the Residential Land is occupied by industrial/workshop buildings with the remainder of the land occupied by two old houses. [10] Given that situation, it is not surprising that when Plan Change I was promulgated, MML sought to have the Outer Business Zone boundary extended to incorporate the Residential Land. The issue before the Court is whether the submission to that effect was on Plan Change 1, when Plan Change 1 itself did not propose any change to the zoning of the Residential Land.

4 4 Discussion [11] The issue of whether or not a submission is on a Plan Change has been the subject of a number of decisions of this and other Courts. The leading case on the subject is the High Court decision in Clearwater Resort Limited v Christchurch City Counciz2 where William Young J identified the following preferred approach: 3 I. A submission can only fairly be regarded as "on" a variation if it is addressed to the extent to which the variation changes the preexisting status quo. 2. But if the effect of regarding a submission as "on" a variation would be to permit a planning instrument to be appreciably amended without real opportunity for participation by those potentially affected, this is a powe1jul consideration against any argument that the submission is truly "on'' the variation. [12] I consider that (in summary) the application of Clearwater requires me to address two issues: Firstly, the extent to which MML's submission addressed the subject matter of Plan Change I; Secondly, issues of procedural fairness. [13] Insofar as the first matter is concerned, I have had regard to the helpful questions identified by the Environment Court in Naturally Best New Zealand Limited v Queenstown Lakes District Counci/..4 What is the scope of the plan change or variation? What is the extent of the submission in propottion to the plan change or variation? Does the submission relate to the notified variation or plan change?

5 5 [14] Plan Change 1 was quite wide in scope. The Council submission in these proceedings identified the purpose of Plan Change 1 as follows: The primmy purpose of PPCJ is a review of the Inner and Outer Business Zone sections of the District Plan that manage the use and development of land in the City's commercial centre. A secondary focus ofppcj is to reduce the size of the JBZ, review parking standards for the two zones, and rezone additional Outer and Fringe Business Zone land [15] Plan Change 1 proposed the rezoning of six blocks of Residential Zone land containing 7.63 ha to Outer Business Zone. It is apparent on considering the notified Plan Change that the areas to be rezoned were spread over a comparatively wide area of Residential Zone land on the fringes of the Outer Business Zone. The land to be rezoned in each case appears to be either contiguous with, or in close proximity to, Outer Business Zone land. In its submissions in these proceedings, the Council observed that: 7. Plan Change 1 did therefore, as one of its ancillmy purposes, address the following resource management question: what existing residential pockets either: (a) Aqjacentto the OBZ; or (b) By virtue of their existing use; or (c) As a result of changes to the transportation network. warrant rezoning to OBZ? [16] Accordingly, on the basis of the Council's own submissions, the Residential Land fits neatly within two of the three resource management questions considered by the Council in identifying land for rezoning in Plan Change I. It is immediately adjacent to the Outer Business Zone and nearly one half of it is already used for industrial/workshop purposes which are apparently provided for in that zone. [17] The Residential Land contains a total of approximately 1619 m 2 (2 x 32 perches). I consider that a submission seeking the addition of that area of additional land to the 7.63 ha proposed to be rezoned is not out of scale with the plan change nor would the inclusion of the additional land make Plan Change I

6 6 something distinctly different to what it was intended to be. When those factors are combined with the facts that the Residential Land is immediately adjacent to the Outer Business Zone and is already used for purposes provided for in the Outer Business Zone, then I consider that the MML submission must be on the Plan Change. [18) Turning to the issue of procedural fairness, the Council submitted that the request by MML to rezone the Residential Land comes fi'om out of lefi field and that it would be procedurally unfair to consider the submission on that basis. The Council advanced the following propositions in that regard: MML's immediate neighbours were not directly notified of Plan Change I nor ofmml's submission; The Residential Land was not evaluated by the Council as part of Plan Change 1; Most of the Residential Land involves existing residential activity and is situated within a residential enclave; Rezoning the Residential Land would have significant potential effects from a transportation, amenity and compatibility of use perspective. [19) I propose to consider only the matter identified in the first bullet point above. The remaining three points are all issues that must be dealt with by the Comi should the appeal proceed. The Court is obliged to undertake an evaluation pursuant to s32 RMA. The appropriateness of the requested zoning, having regard to the zoning of surrounding sites and potential effects of the rezoning are all matters going to the merits of the submission which would be taken into account at any appeal hearing. [20) Turning now to the procedural aspect which I must consider, it is instructive to return to the Clearwater decision and in particular paragraph [69) of that decision where William Young J discussed the question of opportunity for participation by persons appreciably affected: [69} The second of the considerations is consistent with the judgment of the Environment Court in Halswater Holdings Limited v Selwyn District Council (1999) 5 ELRNZ 192. It is common for a submission on a variation or proposed plan to suggest/hat the particular issue in question be addressed in

7 7 a way entirely different from that envisaged by the local authority. It may be that the process of submissions and cross-submissions will be sufficient to ensure that all those likely to be affected by or interested in the alternative method suggested in the submission have an opportunity to participate. In a situation, however, where the proposition advanced by the submitter can be regarded as coming out of "left field", there may be little or no real scope for public participation. Where this is the situation, it is appropriate to be cautious before concluding that the submission (to the extent to which it proposes something completely novel) is "on" the variation. [21] In determining whether or not there has been any real scope for public participation, it must be observed that the process contained in Schedule 1 for notification of submissions on plan changes is considerably restricted in extent. [22] Clause 6 of Schedule 1 does not require a submitter to serve a copy of a submission on persons who might be affected by it. The submitter is simply required to lodge a copy of the submission with the local authority. [23] Neither does Clause 7 of Schedule 1 require the local authority to notify persons who might be affected by submissions. All that Clause 7 requires is that the local authority gives public notice (by newspaper or internet) advising: The availability of a summary of decisions requested by submitters; Where that summary of decisions requested and submissions can be inspected; That no later than ten working days after public notice, certain identified persons may make further submissions. [24] Accordingly, unless people take particular interest in the public notices contained in their newspapers, there is a real possibility that they may not be aware of plan changes or of submissions on those plan changes which potentially affect them. It is clear that William Young J recognised the limited scope for public rticipation when he made the remarks set out in paragraph [20] (above) and it is in

8 8 that respect that his observation as to a proposition being advanced by a submitter coming out of lefl field is particularly pertinent. My understanding of His Honour's comments is that because there is limited scope for public pmticipation, it is necessary to adopt a cautious approach in determining whether or not a submission is on a plan change. Submissions which are out of lefl field potentially expand the scope of what is legitimately before the public. [26] I understand the expression coming out of lefl field as indicating that a submission seeks a remedy or change which is not readily foreseeable, is unusual in character or potentially leads to the plan change being something different than what was intended. I do not consider that the relief requested by MML can be regarded as falling within any of those descriptions. Indeed I go further and find that it was entirely predictable, given the circumstances set out in paragraphs [16] and [17] (above), that MML might seek relief of the sott which it has. Even adopting the cautious approach suggested in Clearwater, I find that the MML submission was on Plan Change I. [27] In making that finding I am conscious of the claims made by the Council that any rezoning of the Residential Land could impact on immediate neighbours of that land, who might be unaware of the rezoning which could arise as a result of the MML submission. Apparently the Council did not give personal notice of Plan Change I to persons in Lombard Street, notwithstanding that at least one property in that Street was proposed for rezoning under the plan change. Accordingly, neighbours may not have been aware of Plan Change I at all, let alone have known that MML made submissions on it. [28] However, I refer to my earlier observation as to the limited extent of notice of submissions provided for in Schedule I. Schedule I requires a proactive approach on the part of those persons who might be affected by submissions to a Plan Change. Those persons are required to make enquiry on their own account once a local authority has given public notice of the availability of a summary of decisions. I appreciate that reality may be considerably different, but that is the scheme envisaged by Schedule I.

9 9 [29] MML has acted entirely in accordance with the requirements of Schedule I and cannot be denied the opportunity to advance its submission due to any limitations in the notice provisions of that Schedule. Counsel for MML submitted that any concerns I might have regarding effect on neighbours could be dealt with by application of Clause 16A of Schedule 1 or by operation of s293 RMA. I do not consider that either is applicable in this case. [30] Clause 16A enables a Council to initiate variations to a plan change before approving that plan change. I understand Counsel to suggest that the Council could initiate a variation of Plan Change 1 to incorporate the rezoning of the Residential Land requested by MML. Setting aside the practicalities of that suggestion (such as who is to meet the costs of such variation), I have no power to direct the Council to undertake such a variation, even if I was minded to do so. [31] Nor do I accept that the answer lies in application of s293. Although s293 enables the Court to direct a local authority to prepare changes and consult other parties, those powers do not become applicable until after the Court has actually heard the appeal in the first place. In any event, s293 does not give other affected patiies standing before the local authority or the Court, but merely requires consultation with them. [32] However, I consider that there is a potential mechanism to enable other parties to patiicipate if that was considered appropriate. That mechanism is described in this Court's decision in PN Industrial and Residential Developments Ltd v Palmerston North City Counci/ 5. It requires the application of ss269, 274 and 278 RMA together with Rule 103 ofthe District Court Rules That is a matter for any party so interested to pursue. I do not presently know whether it is required or appropriate in this case. Outcome [33] I find that MML had filed a submission which is on Plan Change 1 and that there is accordingly a valid appeal before this Court. 5 Decision W 73/ Now see District Courts Rules 2009, Rule

10 lo [34] I direct the parties to file memoranda within 10 working days suggesting appropriate timetabling directions to progress this appeal. It would be preferred if such memoranda took the form of a joint memorandum after discussion between the parties, however that is in their hands. Costs [35] Somewhat unusually for proceedings of this nature, I reserve the issue of costs. Given the issues identified in this decision, I consider that MML's case as to the validity of its submission was very strong and it is debateable whether the intervention of the Court should have been required. I make no final ruling in that regard but leave the matter open for resolution if need be. I th DATED at WELL! GTON this J-6 day of October 2012 B P Dwyer Envirorunent Judge (