The High Court recently considered an appeal relating to a request by Southern Cross Healthcare Ltd (“Southern Cross”) for a private plan change to the Auckland Unitary Plan.[1] The High Court’s decision has several important implications. We pick up on two key points in this article:
the way in which "enabling” plan provisions are to be interpreted, including in the context of other directive “avoid” provisions; and
assessments of alternatives.[2]
Background
Southern Cross owns and operates Brightside Hospital in Epsom and also owns several adjacent properties on Gillies Ave (the “Gillies Ave Properties”). The plan change sought to rezone all of these properties to Special Purpose – Healthcare Facility and Hospital Zone and to remove the Special Character Areas Overlay from the Gillies Ave properties. The objective of the plan change is to enable the efficient operation and expansion of Brightside Hospital, while managing the effects on the adjacent residential amenity.
The plan change request was opposed by the Eden Epsom Residential Protection Society (the “Society”). Auckland Council approved the plan change request with modifications. The Society appealed to the Environment Court.
The Environment Court considered the relevant provisions of the Regional Policy Statement (“RPS”). It found that certain provisions relating to special character were framed in strong directive language and should therefore be accorded “quite significant weight” over other policies relating to social facilities (which includes private hospitals) that were framed in less directive – or more/more flexible – terms. The Environment Court rejected Southern Cross’s submission that “enable” was a strong directive to do something, and held that none of the policies could be interpreted to direct establishment or intensification of social facilities on any given site.
The Environment Court also addressed whether it was necessary to consider alternative sites as part of examining other reasonably practicable options in accordance with s 32(1)(b)(i) RMA. It found that King Salmon had sharpened the focus on alternative sites and held that Southern Cross’s evidence about cost-benefits, alternatives, and other options was “distinctly lacking” and had “not measured up”.
The Environment Court was not able to reconcile the proposed plan change provisions with the wording of the relevant RPS provisions and refused the plan change request.
Appeal to the High Court
Southern Cross appealed, alleging nine errors of law, including that the Environment Court:
Erred in finding that special character objectives and policies in the RPS (e.g. to “maintain and enhance” and to “require”) were strongly directive and therefore should be accorded quite significant weight over social facility policies (e.g. to “enable”); and
Reached a conclusion which it could not reasonably have come to with respect to alternative sites and assessment of costs and benefits.
Interpretation of the RPS provisions
As outlined above, the objectives and policies in the RPS that are concerned with social facilities such as private hospitals use the verb “enable”. The Environment Court had held that this word, and therefore those provisions, did not provide a direction. The High Court disagreed, finding that the use of the word “enable” does not mean that the policies provide no direction, but rather requires that provision “had to” be made for the activities in the policies. The High Court held that:[3]
Many of the policies in the [RPS] are concerned with achieving positive rather than with controlling or restricting negative outcomes. Given most positive outcomes will be achieved by private actors rather than the Council, it is only natural that these policies use verbs such as “enable”, “encourage” or “promote” rather than verbs such as “require”. It would be odd, for example, if [the policy] was expressed to be: “Require intensive use and development of existing and new social facility sites”
The High Court favoured Southern Cross’s submission that the approach taken by the Environment Court would have the effect that negative directions would always be given more weight than positive ones. The High Court also noted that as all of the policies relating to social facilities use the word “enable”, the Environment Court’s approach relegates the entirely of that part of the RPS to insignificance, which is at odds with the statement of issues for that part and the stated reason for the policies, which is that existing social facilities need to be expanded.
The High Court therefore found that the provisions concerned with social facilities are directive and are expressed in strong directive language. The High Court gave the examples of weaker language being “take account of”, “encourage” or “promote” and noted that “enable” is more directive than those terms.
Assessment of alternatives
The High Court stated that the RMA does not require consideration of alternative sites as a matter of course, but noted that there may be circumstances in which consideration of alternative sites might be necessary in relation to a private plan change request, depending on the nature and circumstances of the application.
The RMA refers to “other reasonably practicable options for achieving the objectives” of the proposal.[4] As outlined above, the objective of the Plan Change is to enable the efficient operation and expansion of the existing Brightside hospital, while managing the effects of that expansion and operation on the adjacent residential amenity. The High Court found that, by its nature, this objective is site-specific. It also noted that one of the relevant policies had a site-specific aspect, being “enable intensive use and development of existing…social facility sites”. Further, the High Court noted that the provisions referred to the by Environment Court were not matters of national significance (in contrast to the matters at issue in King Salmon).
In terms of the evidence adduced by Southern Cross as to its assessment of alternatives, the High Court found that this was detailed. It held that the Environment Court did not comment on or analyse this evidence and had come to a conclusion it could not reasonably arrive at in finding that the evidence in this area was “distinctly lacking”.
Result
The appeal was allowed, and the matter was referred back to the Environment Court.
Southern Cross was recently successful in seeking costs against the Society and Auckland Council.[5]
Comment
The High Court’s interpretation of “enable” in a policy setting will be welcomed by developers as it elevates positive directive policy wording in the context of other negative directive policy wording such as “avoid”. The interpretation of strict “avoid” policies has often presented a very challenging pathway, and in some cases has presented a barrier to proposals, in the post-King Salmon environment.
Another aspect that will be welcomed by plan change proponents is the High Court’s confirmation that s32’s requirement to identify “other reasonably practicable options for achieving the objectives” does not necessarily require an assessment of alternative sites. However, while there is no default requirement for such assessment, it may be appropriate in some cases.
[1] Southern Cross Healthcare Ltd v Eden Epsom Residential Protection Society Inc [2023] NZHC 948.
[2] The decision also addresses other important topics, including the interpretation of the National Policy Statement on Urban Development.
[3] At [119].
[4] Section 32(1)(b)(i).
[5] Southern Cross Healthcare Ltd v Eden Epsom Residential Protection Society Inc [2023] NZHC 1560.