An Application by Rodney District Council for A Declaration Under Section 311 of The Act

 
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[2010] NZEnvC 85

BEFORE THE ENVIRONMENT COURT

Court:

Environment Judge J A Smith1

(ENV-2009-AKL-000377)

In the Matter of an appeal under Section 120 of the Resource Management Act 1991

and

In the Matter of an application by Rodney District Council for a declaration under Section 311 of the Act
Appearances:

P M S McNamara & J A Gregor for Rodney District Council

A G Hazelton & R M Robertson for SL255 Limited and others

H Romaniuk for Romaniuk & Hope

R M Devine & S D Mills for Whisper Cove Limited (in receivership)

Application by Rodney District Council for declarations as to the enforceability of financial contribution conditions of consent regarding a development at Whisper Cove where the original developers had gone into liquidation and defaulted on contribution payments — whether all conditions of consent enured for all time and if conditions of consent had variable periods of application (e.g. as preconditions or conditions in force for a time), whether these financial conditions continued until such time as the payments were made.

Held: Any questions as to whether benefits and burdens are transferred under s134(1) were answered, by the words unless the consent expressly provides otherwise. A resource consent consisted of both the benefits and burdens, including all conditions of consent (s134(2)). Previous case law had indicated that successors and third parties were entitled to interpret a consent in terms of the written consent and any other documents expressly incorporated by reference to the consent. Therefore, any residual issue as to whether or not benefits and burdens were transferred by the operation of s134 RMA was overcome by the wording of s134(1) unless the consent stated the contrary. Accordingly, the consent must be interpreted as a whole.

To extent that D (the purchaser of the undeveloped balance of the land subject to the consent) or any other party sought to rely on the consents they would have to pay the financial contributions prior to commencing works or obtain an alternative resource consent. However, in the situation of individual purchasers of completed works for which RDC had issued a LIM and a new title, financial contributions did not apply to purchasers unless they undertook to be bound. RDC was aware of non-payment of financial contributions when it issued LIM and titles. The situation of RDC's own making. Council officers failed to identify the necessity for the payment of financial contributions for each stage of the works, and issued both building consents and completion certificates in circumstances where Whisper Cove had not made appropriate financial contribution and payments. Whisper Cove was clearly in breach. Declarations were made that any further works to be undertaken on the properties would require financial contributions to be made prior to the works commencing. The obligations also attached to the land covered in the consent to the extent that it had not been subject to the issue of a new title. To the extent that works had already been completed and were at an end and new Certificates of Title issued, the Council was unable to rely upon the resource consent conditions against subsequent new title holders issued (that is holders of Certificates of Title for each apartment) because:

  • (a) The consent wording did not contemplate such eventual purchasers as being bound by the financial contributions conditions;

  • (b) There was no registered encumbrance or bond taken; and

  • (c) The eventual owners have not given any written agreement to be bound by the financial contributions provisions. Declarations accordingly.

  • A. Parties are to circulate comment on the suggested declarations within ten (10) working days; reply within five (5) days thereafter; with a final reply after further three (3) working days.

  • B. The court will then consider the final form of declaration to be made.

  • C. Any application for costs within twenty (20) working days; reply ten (10) working days thereafter.

DECISION OF THE ENVIRONMENT COURT
Introduction
1

The Rodney District Council ( the Council) seek declarations relating to the enforceability of financial contribution conditions of consent in respect of a comprehensive development at Whisper Cove, Snells Beach, North Auckland.

2

The Application for Declaration itself is unfortunately worded. The form of declarations sought were as follows:

  • (a) that current and future owners of properties in stage 1 of the “Whisper Cove” development at Snells Beach, legally described in Schedule 1 to this application, are obliged to pay, on demand, financial contributions imposed on the “applicant” or “consent holder” under conditions 31 to 41 of the land use consent granted to Kawau Holdings Limited by a consent order of the Environment Court in appeal RMA 0023/04 dated 3 November 2004 (land use consent), but not yet paid; and

  • (b) failure by such current and future owners to pay, on demand, financial contributions imposed on the “applicant” or “consent holder” under condition 31 to 41 of the land use consent, but not yet paid, is a contravention of the land use consent; and

  • (C) if current and future owners of properties in the “Whisper Cove” development at Snells Beach, legally described in Schedule 2 to this application, further develop the properties, they will be obliged to pay any additional financial contributions imposed on the “applicant” or “consent holder” under conditions 31 to 41 of the land use consent on the earlier of the intended date of commencement of works for any further stage or part stage, or the date of issue by Council of building consent for any further stage or part stage; and

  • (d) failure by such current and future owners to pay any additional financial contributions imposed on the “applicant” or “consent holder” under conditions 31 to 41 of the land use consent on the earlier of the intended date of commencement of works for any further stage or part stage, or the date of issue by Council of building consent for any further stage or part stage, if they further develop the properties, is a contravention of the land use consent; and

  • (e) if current and future owners of properties in the “Whisper Cove” development at Snells Beach, legally described in Schedule 3 to this application, connect to the reticulated water supply that is currently available, they will be obliged to pay financial contributions for water imposed on the “applicant” or “consent holder” under conditions 41 of the land use consent not later than the issue of building consent for any dwelling construction; and

  • (f) failure by such current and future owners to pay any financial contributions imposed on the “applicant” or “consent holder” under condition 41 of the land use not later than the Issue of building consent for any dwelling construction, if they connect to the reticulated water supply, is a contravention of the land use consent.

3

As is evident from a perusal of these declarations, the Council seeks orders

requiring owners of individual units constructed pursuant to the resource consent to pay unpaid financial contributions to the District Council.

The Issues
4

As the case proceeded, a more fundamental issue arose for declaration. Put in broad terms, this is whether a financial contribution condition of this sort runs with the land under Section 134 of the Act and whether it is enforceable against new landowners where new titles have been created.

5

This in turn gives rise to questions of interpretation of resource consents:

  • [a] whether all conditions of consent enure for all time; and

  • [b] if conditions of consent have variable periods of application (e.g. as preconditions or conditions in force for a time), whether these particular financial conditions continue until such time as the payments are made.

6

It is important to note that no enforcement actions are before this Court currently. To that extent, this declaration does not seek to obtain some form of judgment for payment as against individual owners. Whether enforcement proceedings under the Act could be used for such purposes does not appear to have been argued previously. Certainly, civil action in the District Court may also be available and questions as to whether or not an individual land owner might not be liable i.e. by reasons of estoppel or the like are more properly addressed in that forum rather than in enforcement action.

7

There is a live and proper question for this Court's determination under Section 311 of the Act as to the nature of the conditions of consent. In that regard, the Application for Declaration appears to encompass Section 310(c):

…whether or not an act or omission, or a proposed act or omission, contravenes a resource consent.

8

The applicant, being a consent authority meets the requirements of Section 311(2), and Section 311(3) does not arise. Furthermore, Section 310(a) more generally gives rise to the ability to declare the existence or extent of any function, power, right, or duty under this Act. The requirement to meet a resource consent condition could be seen as arising as a duty in terms of both...

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