26 March 2019

Housing Accords and Special Housing Areas Act update

The recent Enterprise Miramar Peninsula Incorporated v Wellington City Council [2018] 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 considerations

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 purpose of the Act, which is stated at section 4 as being to “enhance housing affordability by facilitating an increase in land and housing supply in certain regions… identified as having housing supply and affordability issues”;
• The matters in Part 2 of the Resource Management Act 1991 (“RMA”) which relate to the sustainable use, development, and protection of natural and physical resources;
• Any relevant proposed plan;
• Other matters that would arise under sections 104-104F of the RMA or other enactment as applicable;
• The key urban design qualities expressed by the Ministry for the Environment.

The case

The Court of Appeal found that the Wellington City Council (“the Council”) failed to correctly consider the section 34 matters.  The key issues on appeal were:

• Error of law, in the Council’s approach that the purpose of the Act trumped other considerations;
• Error of law, around the adequacy of infrastructure under section 34(2);
• Apparent bias.

Weight of the purpose of the Act

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 sections 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 section 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 section 34(1)(a) was used to neutralise the matters in sections 34(1)(b)-(e).

Failing to sufficiently consider the required factors before weighing themwas a significant error as the correct application of section 34 could have resulted in a different outcome to the application.

Apparent bias

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.

Conclusion

The Enterprise Miramar case clarifies the way in which section 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.

The firm acknowledges the assistance of Kaylee Bird in preparing this article.

If you would like further information please contact Dale Thomas on 07 958 7428.