Lambton Quay Properties Nominee Ltd v Wellington City Council

• Jurisdiction: New Zealand
• Judge: Collins J
• Judgment Date: 02 May 2014
• Neutral Citation: [2014] NZHC 878
• Docket Number: CIV-2013-485-007919
• Court: High Court
• Date: 02 May 2014

[2014] NZHC 878

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-007919

Between

Lambton Quay Properties Nominee Limited

Appellant

and

Wellington City Council

Respondent

and

New Zealand Historic Places Trust (Pouhere Taonga)

Section 274 Party

Counsel:

C Anastasiou for Appellant

S F Quinn for Respondent

R M Devine and K M Krumdiek for Section 274 Party

Appeal from an Environment Court (‘EC’) decision which upheld the respondent's refusal of the appellant's application to demolish its building — building had been assessed by Council (as being an earthquake-prone building under the Building Act 2004 (‘BA’) — was a category 1 heritage building under the Historic Places Act 1993 — council had issued a notice under s124BA (dangerous, earthquake-prone… buildings) requiring the appellant to either strengthen the building or demolish the building — appellant applied for resource consent for permission to demolish the building — council declined based upon the heritage provisions of the Council's District Plan which permitted demolition only if there was no reasonable alternative — whether the EC had erred in its interpretation of the expression, ‘no reasonable alternative to total demolition’ — whether the EC had erred by determining that ‘the tension’ between the BA and the Resource Management Act 1991 (‘RMA’) was not resolvable — whether the EC had erred by misinterpreting s87A(3) (restricted discretionary activity), s104 (consideration of applications and s104C (determination of applications for restricted discretionary activities) RMA and the relationship between those sections and Part 2 RMA (purpose and principles) — whether s104 required Part 2 RMA only to be taken into account when a consent authority considered any application for resource consent.

• A The appeal is dismissed.

• B The appellant is to pay the respondent's costs as for a standard appeal on a band A basis, with usual disbursements.

JUDGMENT OF Collins J

Collins J

Introduction

1 Lambton Quay Properties Nominee Ltd (the building owner) wishes to demolish its building on the corner of Lambton Quay and Grey Street in central Wellington. The building is known as the “Harcourts Building”.

2 The Harcourts Building has been assessed by the Wellington City Council (the Council) as being an earthquake-prone building under the Building Act. 1 It is also listed as a category 1 heritage building under the Historic Places Act. 2

3 After the Council assessed the Harcourts Building as being earthquake-prone it issued the building owner with a notice in July 2012 under s 124 of the Building Act requiring the building owner to either strengthen the building or demolish it by 27 July 2027.

4 After conducting investigations and consultations the building owner concluded that it was not economically viable to strengthen the Harcourts Building. On 4 September 2012 it applied to the Council for resource consent under the Resource Management Act for permission to demolish the building. 3 However, even though the Council had required the building owner to either strengthen or demolish the building, the consent authority declined the building owner's application to demolish the building. The consent authority's decision was primarily based upon its interpretation and application of the heritage provisions of the Council's District Plan created under the Resource Management Act. 4

5 The building owner appealed the consent authority's decision to the Environment Court. The Environment Court dismissed the building owner's appeal. 5 The building owner has now lodged 15 grounds of appeal in this Court. I will explain each of the building owner's grounds of appeal in paragraphs [68] to [110] of this judgment. For convenience I set out the 15 grounds of appeal in Appendix 1 to this judgment.

6 Determining the fate of the Harcourts Building has brought into focus a number of competing considerations, the most significant of which are:

• (1) the safety of the public;

• (2) the risk of damage to buildings which are in close proximity to the Harcourts Building;

• (3) the public interest in preserving heritage buildings; and

• (4) the private, financial and property interests of owners of heritage buildings.

7 While I am aware of the significance of these issues, my task is confined to determining if the Environment Court made an error of law. 6

8 I have decided that the Environment Court made two errors of law when it dismissed the building owner's appeal. The errors occurred when the Environment Court:

• (1) stated the wrong test when it said the onus on the building owner was to establish that alternatives to demolishing the building had been “exhaustively and convincingly excluded”; and

• (2) concluded that the relevant provisions of the Resource Management Act and the Building Act could not be reconciled, and in doing so, failed to give adequate consideration to the risk to public safety and surrounding buildings if the Harcourts Building remains as it is.

9 To assist in understanding why I have reached these conclusions, I shall divide my judgment into the following parts:

Part 1

Background.

Relevant legislative provisions.

Part 2

Evidence in the Environment Court.

Reasons given by the Environment Court for its decision.

Part 3

Principles which govern the way I must decide this appeal. Reasons for allowing the appeal.

Reasons for dismissing the majority of the building owner's grounds of appeal.

Conclusion.

Part 1

Background

10 The Harcourts Building is an eight-storey building that was constructed in 1928 for the Australian Temperance & General Mutual Life Assurance Society. The building became known as the Harcourts Building when the real estate firm, Harcourt & Co Ltd, acquired the naming rights to the building in 1984. The building is constructed with a steel frame encased in concrete with a plastered brick facade. The facade has a number of features including columns, corbels and parapets that are constructed from masonry that is not reinforced.

11 The Harcourts Building was given a “C” classification under s 35 of the now repealed Historic Places Act 1980 on 1 October 1982. In August 1989 the building was re-classified as a “B” category building by the New Zealand Historic Places Trust (the Trust). This classification was upheld in an appeal to the High Court on 7 September 1992. 7 The building became classified as a category 1 building upon the passing of the Historic Places Act 1993. The building was listed on the heritage schedule of the Proposed Wellington City District Plan in 1994.

12 In 1999 the building was sold to Customhouse Quay Properties Ltd. The following year it was transferred to Lambton Quay Development Ltd and then in 2002 to the current building owner. The principal shareholder and sole director of

the building owner is Mr Dunajtschik who first became involved with the building in 1999 as a minority shareholder of the company that acquired the building that year

13 At the time Mr Dunajtschik and his company became involved in the ownership and development of the building, there were three adjoining buildings on Lambton Quay and Panama Street. An overall development was planned for all sites. This resulted in the demolition of the three adjoining buildings and the construction in 2002 of the 25-storey HSBC Tower on the corner of Panama Street and Lambton Quay.

14 Part of the HSBC Tower encroaches on the title to the land occupied by the Harcourts Building. The encroachment involves part of the HSBC Tower “dove tailing” into the light shaft of the Harcourts Building. At the time consent was given to this development the building owner agreed to retain and refurbish the Harcourts Building. The refurbishment work on the Harcourts Building was carried out in 2000 at a cost of $4.5 million.

15 On 4 September 2010 Christchurch suffered the first of a series of earthquakes which included a devastating earthquake in that city on 22 February 2011. Those events had a significant impact on the assessment of earthquake risks in earthquake-prone areas such as Wellington.

16 On 27 July 2012 the Council served the building owner with a “Earthquake-Prone Building Notice” under s 124(1)(c) of the Building Act (Building Act Notice). The Building Act Notice classified the building as earthquake-prone 8 and required the building owner by 27 July 2027 to either:

• (a) strengthen the building to a sufficient degree so that it is not earthquake-prone; or

• (b) demolish all or part of the building, so that the remainder of the building (if any) is not earthquake-prone.

17 An earthquake-prone building is one that fails to meet 34 per cent of the New Building Standard (NBS). 9

18 The Council initially assessed the building at four per cent of the NBS. The building owner engaged civil engineers to evaluate the Council's initial assessment of the extent to which the building complied with the NBS. Following consultations with the building owner's engineers the Council revised its assessment of the building to 17 per cent of NBS.

19 On 4 September 2012 the building owner applied to the Council for resource consent to demolish the Harcourts Building. It will not apply for consent to build a replacement building until it knows if it can demolish the building. 10

20 The building owner's application was opposed by the Trust, and six other individuals and entities, 11 but supported by the Council's planning manager and senior consents planner. The support of the Council's senior planners was subject to conditions, including the granting of resource consent for a replacement building for the site.

21 On 25 February 2013 Hearing Commissioners, 12 who were delegated by the Council to make the Council's decision, concluded that a compelling case had not been made to justify demolition of the building. 13

22 Accordingly the application for resource...