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Council and District Court slug it out in complex dispute over sewage pond

16 Jun 2023

| Author: Andrea Hilton

Procedure – Rule 18.16 of the District Court Rules 2014 – Rule 10.22 of the High Court Rules 2016 – ss 7, 8, 13, 14, 14A, 14B, 16, 17, 40, 41, 42A, 43, 100 – 111, 108, 112, 114, 115, 116, 16A, 124, 133AL, 163, 164, 168, 177, 188, 208, 211, 362V, 363, and 388 – sch 1, pt 1, cl 22 – Building (Forms) Regulations 2005 – Building Code (Building Regulations 1992 Schedule 1) – Building Code cl B1 – s 10(1) of the Legislation Act 2019 – notice to fix – specified person – exempted work – dam – building consent– s 314 of the Resource Management Act 1991 – judicial review – Building Act determinations – statutory interpretation

Waikato Regional Council v the District Court at Hamilton [2023] NZHC 1271 per Wylie J

The High Court declined the Waikato Regional Council’s application to review a decision by the District Court at Hamilton, which upheld a determination by the Ministry of Business, Innovation and Employment (MBIE) that the council’s notice to fix was invalid.

MBIE has jurisdiction under the Building Act 2004 to determine building code compliance issues and the exercise of the power of decision by building consent authorities, territorial authorities, regional authorities and responsible persons.

There is a right of appeal to the District Court. However, no further right of appeal to the High Court exists for MBIE determinations. The regional council applied to the High Court for a review on the basis the judge erred in law by misconstruing ss 163 and 164 of the Building Act and relying incorrectly on s 314 of the Resource Management Act, which was irrelevant.

The issue was whether a building owner, who complied with the Building Code, could be validly issued with a notice to fix requiring compliance.

The council’s notice was issued to Poseidon Holdings Ltd (PHL) under the Building Act in relation to an effluent pond on its land.

Under the Act, effluent ponds are defined as “dams”; their construction is a “building work”. Any building work mustn’t be carried out unless consented. However, building consents are not required in certain situations, including for works listed in sch 1 of the Act.

Clause 22 of pt 1 of sch 1 exempts dams (other than large dams) from the consenting requirement. PHL’s effluent pond wasn’t a large dam as defined in the Act; its construction was exempted.

However, notwithstanding that no building consent was required, ss 17 and 42A(2)(a) required the building work comply with the building code to the extent that the Act required.

Under the Act, regional authorities are responsible for dams and have authority to issue notices to fix. WRC’s notice to fix required PHL to make the effluent pond on its land compliant with the Act as there were concerns the pond’s embankments weren’t stable.

PHL did not build the dam, having purchased the land and dam from NZ Pork, which first arranged for the building work. PHL did not comply with the notice and after some discussions and an exchange of correspondence, the council infringed it for failing to comply with the notice. PHL sought a determination from MBIE that the notice was invalid on the grounds it had been incorrectly issued.

 

Applicable principles: Error of District Court must be material to be reviewed – court may appoint counsel to assist – building consent not always required – all building work must comply with building code – only “large dams” require consent – all dams must comply with building code – unlikely Parliament intends DC to finally determine law – land owner not automatically liable under Building Act – notice to fix requires reasonable grounds that work is noncomplying – whole Act relevant for purposive interpretation – an error must be material to be relevant – accountability is a primary purpose of Act – courts reluctant to interfere with policy decisions – court cautious about filling legislation gaps – purpose of Act healthy and safe buildings – practical difficulties relevant interpretation consideration.

 

Held: The High Court could review the District Court’s decision as the reference to s 314 was not material to the decision.

Section 164 of the Building Act regulates the issuing of notices to fix through two cumulative tests. First, the notice must be issued to a “specified person”. The High Court agreed with the District Court’s acceptance that PHL was a specified person.

The second test – that the authority must have reasonable grounds to consider the specified person is contravening or failing to comply – was not met. PHL could not be issued with the notice because it was not “contravening” or “failing to comply” with the Act.

A current owner, who did not build a non-compliant building, could not be required to make it compliant under s 164. Owners had obligations and liabilities defined in the Act and these were included in the Act due to policy decisions. The High Court was not persuaded to impose an obligation on current owners to remedy past owners’ non-compliance. WRC’s application for review declined.

Waikato Regional Council v The District Court at Hamitlon [2023] NZHC 1271-26 May 2023

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