High Court strikes out a judicial review for trade competition

Tuesday 9 April, 2019

Sheffield Properties Ltd (“Sheffield”), with interests within the Paraparaumu Town Centre, sought judicial review of the decision by Kapiti Coast District Council (“the Council”) to approve Private Plan Change 84 - Airport Zone (“PC84”).

Kapiti Coast Airport Holdings Ltd (“KCAHL”) owned and operated the Kapiti Coast Airport and Kapiti Landing, a mixed-use development in Paraparaumu within the Airport Zone. KCAHL requested PC84 to enable it to seek resource consents for various developments in the Airport Zone. PC84 altered the rules in the operative District Plan for certain retail activities so that their activity status was changed from prohibited to discretionary or non-complying. After the Council publicly notified PC84, Sheffield made submissions in opposition to it. In July 2016, the Environment Court made declarations that Sheffield was a trade competitor of KCAHL. Despite those declarations, Sheffield pursued its submission on PC84. The Independent Hearing Panel (“IHP”) appointed by the Council recommended that PC84 be approved. The Council notified its decision approving PC84 in October 2017 (“the decision”).  The decision was not appealed.

Sheffield’s grounds for judicial review included that: (a) the decision failed to determine whether prohibited status was the most appropriate activity status and the IHP applied the wrong legal test; (b) changes were made to the District Plan which were not “on” PC84 and as such were not within the jurisdiction of the Council; and (c) the Council failed to take account of the Wellington Regional Policy Statement. In reply, KCAHL and the Council applied to strike out Sheffield’s application for review on the grounds that: (a) judicial review was barred by s 296 of the RMA; (b) the proceeding was brought with undue and prejudicial delay; and (c) the proceeding was an abuse of process.

The Court reviewed the principles of strike-out pursuant to r 15.1 of the High Court Rules 2016 and whether Sheffield was barred by s 296 of the Resource Management Act 1991 ("RMA"). The Court considered Part 11A of the Act, which limits the right of persons to appeal any proceedings, including those relating to a plan change, to circumstances where such an appeal was not for the purpose of preventing trade competition. The Court noted that under Part 11A of the RMA, trade competitors were required to show an interest greater than that of a member of the general public to be able to participate. The provisions in Part 11A were intended to restrict anti-competitive appeals motivated by trade competition. Furthermore, s 296 of the RMA prevented a party from applying for judicial review unless its right of appeal had been exercised. Although the Court accepted Sheffield’s reference to Privy Council authority to the effect that the administrative law jurisdiction of the High Court was not totally excluded by s 296 of the RMA, the present circumstances did not warrant the Court’s exercise of the residual jurisdiction. It was Parliament’s intention that the RMA not be used to further a trade competitor’s interest over its rival and the judicial review procedure should not be used to try to circumvent that. The Court stated that Sheffield elected not to appeal the decision and was now precluded by s 296 of the RMA from applying for judicial review.

The Court, in the event that it was wrong, also considered whether Sheffield’s delay justified its application being struck out. KCAHL submitted that if the application was not struck out, the final planning outcome for the Airport land would be held up for an indeterminate time and the uncertainty would be prejudicial to KCAHL. The Court found that, while delay alone would be insufficient to justify a strike-out, taken along with other considerations, the delay pointed to a pattern of behaviour by Sheffield of attempts to interfere with the development of a trade competitor. Furthermore, the High Court concluded from its findings that Sheffield brought the present proceeding not to raise legitimate public law concerns with the process followed by the Council but with the predominant ulterior motive of protecting its own commercial interests and stifling the development of KCAHL’s land holdings. The Court held that this ulterior motive was an abuse of process and the proceedings were struck out.

This decision illustrates how the trade competition provisions of the RMA are being implemented and that taking proceedings which are clearly for an ulterior purpose are likely to fail.  Any decision to pursue judicial review in circumstances where there is a potential trade competition issue at play should be carefully considered and legal advice sought on the risks of doing so.

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