By Thomas Gibbons - March 2019
The recent Enterprise Miramar Peninsula Incorporated v Wellington City Council  NZCA 541 (“the Case”) provides important commentary on the interpretation of section 34 of the Housing Accords and Special Housing Areas Act 2013 (“the Act”) and on apparent bias in relation to local authority decisions.
Section 34 of the Act outlines the factors that must be taken into account when considering an application for a qualifying development resource consent under the Act. The Act states that the following factors must be given weight in the order listed as follows:
The Court of Appeal found that the Wellington City Council (“the Council”) failed to correctly consider the s 34 matters. The key issues on appeal were:
While the purpose of the Act is to be given the most weight, the Council was found to have used the relative weight given to this factor in order to neutralise the other considerations. The factors outlined in s 34(b)-(e) were held to have ‘no more than a minor effect’ in comparison to the purpose, so the Council did not consider the true adverse effects on the application.
This meant that Council had not properly considered all five factors properly. It had considered one factor in detail (the purpose of the Act), and had used this to give less attention to the other factors.
Decision-makers are required to assess the matters listed under s 34 uninfluenced by the purpose of the Act, before standing back and looking at the overall balance.
In other words, a council should independently assess each matter first and then weigh them in that order to reach a decision. The matters cannot have been weighed appropriately if s 34(1)(a) was used to neutralise the matters in
Failing to sufficiently consider the required factors before weighing themwas a significant error as the correct application of s 34 could have resulted in a different outcome to the application.
The Court ordered the Council to reconsider the application. The Court did not believe that it was necessary to appoint independent commissioners to conduct the review, but Council was encouraged to consider councillors’ ability to bring an open mind to the decision due to the possibility of apparent bias following the proceedings.
In terms of bias, the Court held that in many local authority regulatory decisions it is inappropriate to require a standard of complete impartiality. Due to the dual functions of local authorities, there are limits to the application of apparent bias, as councils will often be required to make regulatory decisions about a matter in which a council has an interest.
For this reason, the Court clarified the legal test for local authority bias as being whether the ultimate decision was made by open minds, in which case a predisposition to a particular result will not render the decision invalid.
The Enterprise Miramar case clarifies the way in which s 34 of the Act should be applied, finding that each factor must be assessed individually before being weighed against the purpose of the Act.
Further, the Court clarified the test for apparent bias in local authority decisions, requiring only an open mind to be brought to the matter.
Thomas acknowledges the assistance of Kaylee Bird in preparing this article.