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Court finds RMA rezoning is not a public work

21 Apr 2023

| Author: Andrea Hilton

Successful application for declaration regarding assessment of compensation under the Public Works Act (PWA) – Public Works Act 1981 –  s 62-compensation compulsorily acquired land – s 2defintion “public work and work” – “local work”- Local Government Act 2002 -s 189 – power to acquire land – s 190 – compensation – Resource Management Act 1991 – ss 10 and 85 – structure plan – procedure.

Cooper v Hastings District Council [2023] NZHC 611 (Cooke J)

Karen Cooper and her neighbours (AH and HM Masters) owned land that was rezoned residential by the Hastings District Council, along with other land in the area.  A large part of Cooper’s land and a small part of Masters’ land was compulsorily acquired by the council to create a road and stormwater detention area to service the potential residential development enabled by the rezoning.

Before acquiring the land, the council identified land near Cooper and Masters’ land as future residential land in the Heretaunga Plains Urban Development Strategy 2010. The rezoning of the land in the District Plan commenced in 2015 and by the time the plan change became operative in 2019, Cooper’s and Masters’ land was included. At this time, the council also introduced a structure plan, indicating a roading corridor and stormwater detention area to be located on the land later acquired from Cooper and Masters.

Cooper and Masters claimed the amount of compensation for their land should be calculated by using its new residential zoning because the plan change was not a public work and was operative before their land was acquired. The council argued that the valuation should use the prior zoning “plains productive” because the rezoning was a public work. The council also argued in Cooper’s case that the increase in the value of her remaining land should be offset against the value of her land that was taken, citing s 62 (1) (e) of the Public Works Act. The betterment offset meant she was not entitled to any compensation. The parties filed an agreed statement of facts and affidavits.

Applicable principles: Common law establishes right for compensation when property taken – Public Works Act codifies right – must apply Public Works Act – s 60 Public Work Act provides for “full” compensation – compensation amount  should as much as possible place owner in same position – s 189 LGA stipulates Public Work Act compensation scheme applies – s 190 LGA states a person is entitled to full compensation – principle of full, fair applied in context of PWA scheme – causation of injury or betterment by public work essential for s62(1)(e) to apply – definition of work not limited to constructions -words “undertake, manage, operate or maintain” broaden definition -work must be something done by local authority – plan change not of itself a public work – plan change is an enabler – work must be under control of local authority – RMA procedure means zoning is not under control of local authority – roading and stormwater are public works, maintained, operated, managed by local authorities – rezoning could be  “work” when part of development project – “but for” test applies to compensation – compensation can be claimed only when causation established and public work causes rezoning – no causation if zoning causes public work – valuation should be at date land acquired -statements of claim should formulate real dispute – if real dispute not in statement of claim, difficult to formulate – leave reserved for parties to request formal declarations.

Held: The rezoning was not a public work, it occurred before the public work and is a separate process under the RMA. The road and stormwater detention areas are the public work. For compensation to be affected, the injury or betterment must be caused by the public work. An inextricable link does not always create causation. The rezoning caused the increase in value of the land.

Council counterclaim that residential zoning is part of the “work” dismissed.

Cooper v Hastings District Council [2023] NZHC 611 (1)

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