051-054 HRG - Key Retailers Group - Legal Submissions

Key Retailers Group
Submission numbers 2632, 2748, 2968, 5253, 5723, 6096
IN THE MATTER
Topic 051 - 054 - Business zones

Joint Legal submissions
of the Resource Management Act 1991
AND
IN THE MATTER
of the Proposed Auckland Unitary Plan
LEGAL SUBMISSIONS FOR KEY RETAILERS GROUP

TOPIC 051-054 CENTRE ZONES, BUSINESS PARK AND INDUSTRIES
ZONES, BUSINESS ACTIVITIES AND BUSINESS CONTROLS
8 SEPTEMBER 2015
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Key Retailers Group

1.
INTRODUCTION
1.1
These legal submissions are given on behalf of:

(a)
Bunnings Limited;
(b)
Kiwi Property Group Limited and Kiwi Property Holdings

Limited;
1.2
(c)
Progressive Enterprises Limited;
(d)
Scentre (New Zealand) Limited;
(e)
The National Trading Company of New Zealand Limited; and
(f)
The Warehouse Limited.
These submissions relate to Topics 051 - 054 - Centre zones,

Business and Industrial zones, Business activities and Business
controls ("Business zone provisions").
Key Retailers Group
1.3
The parties listed in paragraph 1.1 have formed the Key Retailers
Group ("KRG").
1.4
The KRG represents the major retail operators in Auckland, including

supermarkets, large format retail ("LFR"), trade suppliers, office
buildings and shopping centres. The extensive combined experience
of the KRG in relation to planning for retail activities in Auckland gives
the KRG a unique and detailed understanding of what is required to
provide for effective and workable provisions in the Unitary Plan.
1.5
The KRG has filed the following evidence:

(a)
a Joint Planning Statement ("JPS") from five independent

planners;
(b)
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urban design evidence from Clinton Bird; and
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Key Retailers Group
(c)

individual corporate, economic, and planning evidence on

behalf of members of the KRG, which details the memberspecific issues regarding the Business zone provisions.
Relief sought by KRG

1.6
The members of the KRG have spent over two years working as a
group to agree collective relief. They have engaged extensively both
informally, through direct discussions, and formally through mediation
with Auckland Council ("Council") to reduce outstanding issues, and
to present largely agreed provisions to this hearing. The result of that
lengthy engagement is the relief attached to the JPS ("the KRG
Version"), which identifies, in annotated form, very limited points of
difference with the Council.1
1.7
Considerable resource has been invested in achieving this outcome,

which reflects the clear direction of both the proposed RPS and the
compact growth strategy introduced in the legacy plan framework.
1.8
In addition to identifying the outstanding matters with the Council, the

KRG Version identifies, in green highlighting, a small number of
matters that remain outstanding between KRG members, particularly
in relation to objectives, policies and rules in the Mixed Use zone
regarding the agglomeration of retail activities.
Those outstanding
matters are addressed in statements of evidence filed by individual

KRG members and will be discussed when those KRG members
make their individual presentations. Those matters will not otherwise
be addressed during the collective presentation.
1.9
It is important to emphasise at this point how far the KRG has come in
respect of these provisions, given the concerns originally held with the
content of the draft Unitary Plan and then the notified Plan.
The
members of the KRG have invested many hours collectively in refining

the provisions, considering their implications, and proposing wording
1
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Following Council rebuttal evidence, we note that the Council has made some
further changes to its tracked-change provisions to reflect those changes proposed in
the KRG Version in relation to 8.1 Assessment Criteria - Building design and external
appearance.
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Key Retailers Group

that does not result in unintended consequences or unworkable /

unwieldy controls.
1.10
While the KRG was formed specifically to engage with the Council on
the Unitary Plan, members of the KRG have engaged with the Council
and with one another in respect of Auckland's plan provisions
governing commercial growth since the notification of Change 6 to the
Operative Auckland Regional Policy Statement in March 2005.
Through that process, changes were made to the RPS to:
(a)
promote quality compact urban environments (intensification);
(b)
contain the majority of growth within the Metropolitan Urban

Limits; and
(c)
primarily focus growth around high density centres and

corridors.
1.11
The KRG Version represents a collective position that the members of

the KRG consider forms an appropriate package of provisions in the
context of:
(a)
the Council's intensification strategy for addressing growth in

Auckland;
(b)
the framework of zones that the Council incorporated into the

Unitary Plan as notified;
(c)
the case law regarding the relevance under the Resource

Management
Act
1991
("RMA")
of
distributional
or
consequential effects that arise as a consequence of trade

competition but go beyond the effects of trade competition (a
matter addressed below); and
(d)
the inability to model over the life of the Unitary Plan adverse
effects on centres of retail and other development, and the
consequential desirability of enabling land owners to seek
consents in circumstances where the potential effects can be
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Key Retailers Group

assessed through a restricted discretionary activity status or

similar.
Outstanding issues on Topics 051-054
1.12
The KRG is grateful for the time invested by Council in direct

engagement with the Group on the Business zone provisions. As a
result of these direct discussions, most issues have now been agreed
with the Council. The primary outstanding issues are:
(a)
The need to give better effect to the centres hierarchy

outlined in the RPS (and originating from Change 6). In that
regard:
(i)
Changes are sought to the objectives of the

Metropolitan and Town Centre zones to encourage
the development of integrated retail developments.
(ii)
The KRG seeks provision for small and mediumsized supermarkets as restricted discretionary or
discretionary activities within the Neighbourhood
Centre zone.
(b)
The need to ensure some flexibility for retailers to develop in

response to the increased demand that will be generated by
intensification. To that end:
(i)
The KRG seeks the inclusion of six additional

Identified Growth Corridors ("IGC").
(ii)
The KRG seeks provision for supermarkets as

discretionary activities within the Light Industry zone.
(c)
The need to make a number of minor changes to policy

provisions and assessment criteria to better provide for the
functional requirements of major retail developments.
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Key Retailers Group
2.

PRELIMINARY LEGAL ISSUE LEGAL PRINCIPLES APPLYING

TO DISTRIBUTIONAL OR CONSEQUENTIAL EFFECTS
2.1
In its interim guidance on Topic 013 B3.1 Commercial and Industrial

growth, the Panel stated:
14. The Panel supports commercial growth on transport
corridors as well as in centres.
15. Resource management policies should not be concerned
with the viability of activities, including centres of
activities. The proposed policies to protect centres from
adverse effects "beyond those effects ordinarily
associated with trade effects or trade competition" appear
to be seeking to protect the viability of those centres and
thus are contrary to s61(3) RMA.
2.2
The KRG acknowledges the comment at paragraph 14 and assumes

that it implies support for the IGC mechanism.
2.3
The KRG considers it important to address the analysis embodied at

paragraph 15 in light of extensive relevant case law, including
Supreme Court authority, that has been developed over many years.
The KRG appreciates the advisory nature of the Panel's interim
guidance and that submitters should be cautious about reading too
much into the brief passages quoted above. Sections 61(3) and 74(3)
of the RMA have significant implications for the business provisions,
however, and there is no further opportunity to clarify the legal position
before the Panel issues its recommendations. Thus the KRG
collectively has an interest in the Panel's analysis being consistent
with the legal authorities, and in avoiding any ongoing disputes as to
the legal basis for the Unitary Plan provisions.
Prohibition in sections 61(3) and 74(3) of the RMA
2.4
By virtue of sections 61(3) and 74(3) of the RMA, regard cannot be

had to "trade competition or the effects of trade competition" when
developing RPS or district plan provisions.
2.5
Prior
to
October
2009,
those
sections
simply
precluded
consideration of "trade competition", with the words, "or the effects of

trade competition" being added by section 58 of the Resource
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Key Retailers Group

Management (Simplifying and Streamlining) Amendment Act 2009

(2009 No 31). A similar change was made to section 104(3), which is
the corresponding provision with respect to resource consent
applications. For reasons discussed below, it is submitted that the
addition of those words made no substantive difference to the
interpretation and application of the section. Put simply, the sections
were applied prior to the 2009 amendment as if they included
reference to effects of trade competition, so the amendment
essentially reflected existing interpretation.
2.6
The case law, both before and after the 2009 amendment, is clear that
regard can be had to effects on the amenity of the public caused by
any significant reductions in the viability and vitality of commercial
centres that arise as a consequence of such trade competition what
can be termed "distributional" or "consequential" effects.
2.7
The point at which such effects become relevant and worthy of

consideration has been the subject of discussion in a large number of
cases. It is not proposed to review that material in detail, but instead
to focus on the chain of High Court, Court of Appeal and Supreme
Court
decisions
on
judicial
review
by
Northcote
Mainstreet
Incorporated and Westfield (NZ) Limited of North Shore City Council's

decision to deal on a non-notified basis with an application for
resource consent by Discount Brands Limited with respect to the Fox
Outlet
Centre
in
Northcote.
Those
decisions
concern
the
corresponding provision of the RMA regarding resource consent

applications (section 104(3)).
Discount Brands High Court Decision
2.8
In Northcote Mainstreet Incorporated v Discount Brands Limited,2 the

Court traversed the principles as they relate to the consideration of
trade and consequential effects under the RMA. The test, as
described by the High Court on that occasion was as follows:
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Northcote Mainstreet Incorporated v Discount Brands Limited (2004) 10 ELRNZ 146

at paragraphs 57 to 63.
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Key Retailers Group

The RMA's concern with the broader effects of proposals on

the community is consistent with the widely stated purpose of
the RMA in s5 with its reference to enabling "people and
communities to provide for their social, economic, and cultural
wellbeing". But, the Environment Court has made it clear
that adverse social or economic effects must be significant
before they could properly be regarded as going beyond the
effects ordinarily associated with trade competition on trade
competitors: see the discussion in Imrie Family Trust v
Whangarei District Council (1994) NZRMA 453 at 462-463...
The key point of distinction between the adverse effects of
trade competition on trade competitors and adverse effects
which may properly be considered under the RMA, is that
trade competition effects focus specifically on the impacts on
individual trade competitors. In contrast, where a proposal is
likely to have more general effects on the wider community,
then the RMA permits consideration of those effects...
In regard to shopping centres, I would not, with respect,
subscribe to the view that the adverse effects of some other
competing retail development must be such as to be ruinous
before they could be considered. But they must, at the least,
seriously threaten the viability of the centre as a whole with ongoing consequential effects for the community served by that
centre...
A community frequently invests substantial sums directly or
indirectly in relation to shopping centres. For example, in the
present case, the evidence shows that the Council itself owns
much of the land associated with the Northcote shopping
centre and a range of community facilities (in addition to retail
shopping) has been established there. Indirectly, substantial
sums may be spent on roading and other infrastructure to
support existing centres. It follows that it is entirely permissible
for a consent authority to take into account significant adverse
social and economic effects on such facilities which could flow
from the grant of consent to an application to establish a new
retailing centre.
(emphasis added)
2.9
Randerson J then noted with respect to the District Plan that the
distinction between the effect on individual trade competitors and the
wider effects had been recognised and specifically identified in the
relevant section 15.7.3.5 (which contained criteria for the assessment
of applications for discretionary activity consent). In respect of those
provisions he noted:3
It is noteworthy that this provision refers to the effects on the
commercial and community services and facilities of any
existing centre as a whole and refers to the overall availability
and accessibility of such services and facilities. It also speaks
in terms of significant adverse effects of that character.
(emphasis added)
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ibid, at paragraph 65.
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Key Retailers Group

Discount Brands Court of Appeal Decision

2.10
Randerson J's decision overturning the North Shore City Council

process in that case was then appealed to the Court of Appeal who
described the test as follows:4
As a general proposition, the adverse trade effects of a
proposed retail development must be such as to seriously
threaten the viability of existing retail centres, with ongoing
consequential effects for the community served by those
centres, before they can properly ground an objection to the
grant of a resource consent. The consequential effects might
take the form of an effect on public amenities or roading.
Those might, for instance, be rendered redundant, or
diminished in their community benefit, because the viability of
an existing retail centre might be undermined.
2.11
Applying this test to the particular facts in question, the Court of

Appeal held:5
It must be borne in mind that there would only be a relevant
environmental impact which was more than minor if there was
a major commercial and economic impact on existing centres.
The Commissioners took the view that any consequential
public and community effects would be no more than minor.
In the absence of directly affected parties, the Commissioners'
decision that the effects were not more than minor involved a
finding that the impact on other shopping centres in the area
would not be ruinous and that no other significant adverse
effect (e.g. on urban form objectives or transport strategies)
would result. In our view a reasonable consent authority could
have reached that conclusion on the basis of the information
before the Commissioners, particularly having regard to their
knowledge of the local environment. It is perhaps relevant in
this regard to note, as Randerson J did, that none of the
experts produced by the respondents in the High Court
expressed a view on the substantive merits which was
inconsistent with the conclusion of the Commissioners.
(emphasis added)
Discount Brands Supreme Court Decision

2.12
The Court of Appeal's decision as it related to the adequacy of

information provided with the application was then overturned by the
Supreme Court in Westfield (New Zealand) Limited v North Shore City
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Discount Brands Limited v Northcote Mainstreet Incorporated [2005] NZRMA 57 at

paragraph 10.
ibid, at paragraph 66 and 67.
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Key Retailers Group

Council.6 In relation to the appropriate test to be adopted with regard

to the potential adverse effects of the proposal, Blanchard J stated:7
An important matter which the Council's Regulatory and
Hearings Committee needed to inform itself upon was the
effect which the activity proposed by Discount Brands might
have on the amenity values of the existing centres on the
natural or physical qualities and characteristics of those areas
that contributed to people's appreciation of their pleasantness,
aesthetic coherence, and cultural and recreational attributes.
The committee was required to disregard the effects of trade
competition from the Discount Brands centre, since
competition effects would have to be disregarded upon the
substantive hearing of the resource consent application. But,
as Randerson J said, significant economic and social effects
did have to be taken into account. Such effects on amenity
values would be those which had a greater impact on people
and their communities than would be caused simply by trade
competition. To take a hypothetical example, suppose as a
result of trade competition some retailers in an existing centre
closed their shops and those premises were then devoted to
retailing of a different character. That might lead to a different
mix of customers coming to the centre. Those who had been
attracted by the shops which closed might choose not to
continue to go to the centre. Patronage of the centre might
drop, including patronage of facilities such as a library, which
in turn might close. People who used to shop locally and use
those facilities might find it necessary to travel to other centres,
thereby increasing the pressure on the roading system. The
character of the centre overall might change for the worse. At
an extreme, if the centre became unattractive it might in whole
or part cease to be viable.
The Court of Appeal considered that only 'major' effects
needed to be considered, since only then would the effect on
the environment be more than minor, in terms of s94(2)(a).
But in equating major effects with those which were 'ruinous'
the Court went too far. A better balance would seem to be
achieved in the statement of the Environment Court, which
Randerson J adopted, that social or economic effects must be
'significant' before they can properly be regarded as beyond
the effects ordinarily associated with trade competition on
trade competitors. It is of course necessary for a consent
authority first to consider how trading patterns may be affected
by a proposed activity in order that it can make an informed
prediction about whether amenity values may consequentially
be affected.
(emphasis added)
Subsequent case law

2.13
Those decisions have been followed since, notably in the High Court
and Court of Appeal decisions in General Distributors Ltd v Waipa
6
7
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Westfield (New Zealand) Limited v North Shore City Council [2005] NZRMA 337.
ibid, at paragraph 119 and 120.
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Key Retailers Group

District Council.8 In addition, the Environment Court has on a number of

occasions
approved
district
plan
provisions
that
address
such
distributional or consequential effects (see, for example, Advance

Properties Limited and others v Taupo District Council [2014] NZEnvC
126).
2.14
The matter has not been addressed further by the Supreme Court and
none of the subsequent cases appear to have questioned the
continued relevance of that case law.
Relevance and Implications of Case Law
2.15
It is submitted that the Discount Brands line of cases is relevant to the

Unitary Plan:
(a)
The wording of section 104(3), which was relevant to the

Discount Brands cases, has at all stages been consistent
with the wording in sections 61(3) and 74(3), which apply to
the Unitary Plan, and the issue of relevance is common.
(b)
The Discount Brands decisions explicitly and exclusively

address the effects of trade competition rather than trade
competition itself, despite the fact that the relevant section
104(3) referred only to trade completion at that time. That is,
they address the very point that is raised by the current
wording of sections 61(3), 74(3) and 104(3), being, as
Randerson J put it, the "point of distinction between the
adverse effects of trade competition on trade competitors and
adverse effects which may properly be considered under the
RMA".
2.16
The Discount Brands decisions:

(a)
Draw a clear distinction between the effects of trade

competition on competitors and the wider social and
economic effects on the viability of and amenity provided by
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High Court CIV 2008-404-004857 and Court of Appeal CA160/2009 [2009] NZCA
213.
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Key Retailers Group

centres that may be generated (at least in part) as a

consequence of such trade competition.
(b)
Indicate that, in circumstances where trade competition

produces social and economic effects that are not significant
and are not beyond the effects ordinarily associated with
trade competition, those effects should be disregarded.
(c)
Reinforce a common element in Environment Court decisions

whereby it is only after an assessment of the trade
competition effects has been undertaken that an assessment
can be made of the consequential social and economic
effects.
(d)
Imply that where a proposal will generate competition and will

redistribute trade but will not threaten the viability of a centre,
will not affect the range of services provided at that centre
and will not alter the character of a centre, then there are no
social and economic effects that warrant consideration under
the RMA.
2.17
With respect, in that context the Panel's interim conclusion that,

"policies to protect centres from adverse effects 'beyond those effects
ordinarily associated with trade effects or trade competition' appear to
be seeking to protect the viability of those centres and thus are
contrary to s61(3) RMA" appears to equate:
(a)
effects on the viability of trade competitors, which are

rendered irrelevant by sections 61(3), 74(3) and 104(3) of the
RMA; with
(b)
the relevant and wider effects on centre viability that may be

generated as a consequence of the redistribution of
expenditure and custom that flows in part from such trade
competition.
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Key Retailers Group

The KRG considers that those consequential effects are matters that
the Unitary Plan is able to address and that the KRG Version
represents an appropriate balance in that regard.
2.18
The KRG has agreed with the Council that the appropriate form of
words to adopt when identifying the point at which consequential
effects become relevant is, "beyond those effects ordinarily associated
with trade effects on trade competitors":
(a)
That wording is taken from the description of the test in the

Supreme Court decision, which reads, "social or economic
effects must be 'significant' before they can properly be
regarded as beyond the effects ordinarily associated with
trade competition on trade competitors".
(b)
That wording is also similar, albeit not identical, to the

requirement in sections 61(3), 74(3) and 104(3) of the RMA
that regard must not be had to "trade competition or the
effects of trade competition". It is therefore related to the
statutory enquiry required for determining relevance.
2.19
Consideration was given to using the phrase "significant effects" on

the basis that it reflects the currently accepted analysis of where
effects become relevant under the RMA. The phraseology preferred
in case law for defining that point of difference may change with time,
however, even if the statutory test itself does not. Thus, the use of
wording that is more closely tied to the legislation is considered a
more robust approach.
Use of Function, role and amenity
2.20
In its questioning of the Council witnesses, the Panel raised an issue

regarding the use of the phrase function, role and amenity of
centres.
2.21
The KRG considers that there are a range of phrases that might be
used to summarise the relevant RMA issues concerning distributional
effects. District plans around the country variously refer to effects on
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Key Retailers Group

the function, viability, role, amenity and vitality of centres. The KRG
considers that the wording chosen in this case is appropriate:
(a)
Reference to the function of centres invites consideration of

whether the new activity will compromise the range of services
provided by a centre.
(b)
Reference to the role of centres invites consideration of how

the centre sits within the hierarchy of centres.
(c)
Reference to amenity refers to the physical quality of the

centre and the vitality that is generated by visitors attracted by
services.
2.22
Collectively those terms address interrelated aspects of social and

economic wellbeing. In each case, the presence of such an effect will not
necessarily lead to resource consent being declined to a new proposal,
but is a factor that should at least be taken into consideration when
making that substantive decision. It is possible that the decision maker
will conclude that any adverse effects on the centre are outweighed by
positive social and economic effects generated by the new activity.
3.
RELIEF SOUGHT
3.1
The KRG is supportive of the comprehensive and graduated approach

reflected in the version of Part B.3.1 of the Unitary Plan that was
agreed between the Council and the KRG.
3.2
Broadly those provisions:

(a)
Encourage
commercial
intensification
and
commercial
activities to locate in the city centre, metropolitan and town

centres, and encourage the growth of those activities. (B.3.1
Policy 2, 3 and 4).
(b)
Enable appropriate commercial activities on identified growth

corridors (B.3.1 Policy 7).
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Key Retailers Group
(c)

Where appropriate, having regard to the hierarchy of centres

and corridors, enable commercial activities in locations other
than the city centre, metropolitan and town centres and
identified growth corridors (B.3.1 Policy 8).
3.3
The KRG considers that the following key amendments are required in
the Business zone provisions, to better reflect those provisions of
B.3.1:
(a)
Commercial activities within centres:

(i)
Encourage the development of integrated retail

developments in Metropolitan and Town Centres
through inclusion of appropriate wording in 3.3 Policy 9 and 3.4 Policy 6.
(ii)
Provide for small and medium-sized supermarkets

as restricted discretionary or discretionary activities
within the Neighbourhood Centre zone.
(b)
Enable commercial activities on growth corridors:

(i)
Include the following additional growth corridors on

the planning maps:
(aa)
Constellation Drive, Albany.
(bb)
Great North Road, Arch Hill.
(cc)
Lunn Avenue, Mt Wellington.
(dd)
Ellerslie-Panmure Highway.
(ee)
Great South Road, Takanini (west of

Walters Road).
(ff)
Great South Road, Takanini (east of

Walters Road).
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Key Retailers Group
(c)

Where appropriate, enable commercial activities outside of

centres and corridors:
(i)
Provide for supermarkets as discretionary activities

within the Light Industry zone.
3.4
These are addressed below.

Commercial Activities within Centres
Encourage integrated retail developments in Metropolitan and Town
Centres
3.5
The KRG seeks that integrated retail developments ("IRDs") be

encouraged in the Metropolitan Centre zone and the Town Centre
zone.
3.6
IRDs form a key aspect of Auckland's main centres, providing

vibrancy and vitality to the area and ensuring the economic and social
well-being of the community in which such developments sit. The
Unitary Plan disregards the existence and critical role of those
developments, however. The KRG considers that ignoring such an
important form of development risks overlooking the contribution that
they make and results in the Unitary Plan failing to identify and
address the issues that they raise which should be planned for.
3.7
The merits of IRDs have been acknowledged in the rebuttal evidence

of Mr Munro on behalf of the Council.9
Integrated retail developments can bring many benefits (see
32
also the evidence of Mr Clinton Bird , with which I
substantially agree). While the Plan does not currently discuss
the desirability of integrated retail developments within centres,
neither does it talk specifically about the desirability of retail
"main streets" or many other elements that are commonly
associated with centres and which are important. This does
not mean that the many other outcomes desirable in centres
which have not been so specifically targeted lack significance
or have been left behind.
3.8
However in legal submissions,10 counsel for the Council have said that
IRDs "should not necessarily be encouraged in preference to
alternative configurations such as a main street".
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Evidence of Ian Munro, on behalf of Auckland Council, at paragraph 12.4.
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Key Retailers Group
3.9

That approach ignores the social and economic benefits associated

with these activities, and the positive benefits that they bring to
Auckland's successful centres. As discussed in detail in the evidence
of Mr Drew11 and Mr Bird,12 IRDs are no longer just large collections of
retail shops, they are hubs of entertainment, medical services,
community facilities, local services, and food and beverage activities.
The benefits of those activities co-locating within an integrated
development include efficiencies associated with transport and
infrastructure, and the ability to develop integrated design solutions.
3.10
The KRG considers that Metropolitan and Town Centre zones are the
most appropriate locations for integrated retail developments in order
to most efficiently accommodate the growth and intensification that will
occur in Auckland over the next decade. That ought to be recognised
within a Business zones policy framework that reflects the provisions
of B.3.1, which seek to:
(a)
Provide employment and business opportunities to meet the

current and future needs of Aucklanders.
(b)
Provide centres that function as commercial, social and

community focal points.
(c)
Encourage appropriate commercial activities to locate within

centres.
3.11
In our submission, IRDs achieve those outcomes. To emphasise the

benefits of integrated retail developments, the KRG seeks additions to
Policy 9 of the Metropolitan Centre and Policy 6 of the Town Centre
zone as follows:
Encourage the development location of supermarkets,
integrated retail developments, and department stores within
town centres by recognising:
a. recognising the positive contribution these activities make
to centre viability and function, and
10
11
12
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Auckland Council legal submissions, 7 September 2015, at paragraph 6.18.

Corporate evidence of David Drew, on behalf of Scentre (New Zealand) Ltd at
paragraph 3.5.
Evidence of Clinton Bird, for multiple parties, at paragraph 3.5.
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Key Retailers Group

b. balancing the functional and operational requirements of

these activities with the need to achieve a quality built
environment.
c. where preferred built form outcomes are not achieved, the
development needs to achieve a quality built environment by
positively contributing to public open space, including the
activation of streets
3.12
This topic will be addressed in more detail when Kiwi and Scentre
make their presentation later in the week.
Supermarkets in the Neighbourhood Centre zone
3.13
In summary, the KRG considers that:

(a)
Supermarkets
provide
convenient
service
for
their
immediate catchment, which in many parts of the city is

residential in nature.
Significant numbers of additional
supermarkets of various sizes will be needed within the

existing urban areas to serve the increased demand that will
flow from residential intensification.
(b)
Neighbourhood Centres are intended to provide a convenient

node for commercial and social activities and facilities. They
are appropriate locations for supermarkets provided effects,
including interface effects with any surrounding activities, are
addressed appropriately.
(c)
The Council has proposed that all supermarkets larger than

450m2 GFA be non-complying activities in the Neighbourhood
Centre zone. The KRG considers that such an approach will
push supermarkets into out of centre locations when they
could contribute to the functionality and amenity provided by
Neighbourhood Centres.
3.14
The KRG seeks that supermarkets from 450m2 to 2,000m2 GFA be

given Restricted Discretionary Activity status, and supermarkets from
2,000m2 to 4,000m2 GFA be given Discretionary Activity status in the
Neighbourhood Centre zone. This topic will be addressed in more
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18
Key Retailers Group

detail when the supermarket operators make their presentation later in

the week.
Identified growth corridors and Supermarkets in the Light

Industry Zone
3.15
The relief sought by the KRG with regard to additional IGCs and
discretionary activity status for supermarkets in the Light Industry zone
has a common rationale.
3.16
The KRG considers that the Unitary Plan needs to make increased
provision for additional retail activities outside the centres hierarchy.
In that regard, the KRG's position is as follows;
(a)
By way of background:
(i)
The provisions in Part B3.1 and those in the KRG

Version acknowledge and reinforce a hierarchy of
centres in Auckland.
Those centres are a key
element of the intensification policy and compact

urban form proposed by the Council and should
become increasingly important nodes for the public
transport system.
(ii)
The intensification that is an inherent part of the

Council's policy for addressing growth will result not
only in greater population densities but also
increased demand for facilities that serve and cater
for that population.
education,
That will include retail,
entertainment,
employment
and
recreational facilities.
(iii)
Land for additional facilities is already scarce within

the built up parts of the region. The intensification
2943591
19
Key Retailers Group

that is proposed will exacerbate that scarcity whilst

simultaneously increasing demand.
(iv)
Not all facilities required to serve the increasing

population of Auckland will be able to be located
within centres and, in some cases, the convenience
of the public will be increased if additional services
can be located between centres, close to residential
areas.
(v)
There is already in some areas insufficient land to

meet demand. Any sites that are available may not
be appropriately located in terms of a given retailer's
network of stores. That problem will become worse
with time.
(b)
The General Business zone makes provision for LFR. The

zone is limited in physical extent, however, and has largely
been applied to areas that are already occupied by extensive
LFR. Thus it offers limited opportunities for additional retail
activities.
(c)
There is some provision for retail in the Mixed Use zones but
those areas provide for residential activities with limited retail.
The KRG has accepted the Council's suggestion that only
smaller shops be encouraged in this zone. It accepts that
larger retail outlets will require consideration of their interface
with surrounding residential activities.
(d)
The IGC mechanism will act as a safety valve by enabling

applications to be lodged for a limited range of activities along
identified parts of the arterial road network. Retail is only one
of the uses to which such land may be able to be put,
however, so there is no certainty that land subject to an IGC
will be used for retail. The IGC has been applied to only one
location in the notified Unitary Plan and the Council planners
2943591
20
Key Retailers Group

are now recommending a total of five corridors around the

region. The KRG considers that to be inadequate.
(e)
LFR is not provided for in the Light Industry Zone apart from
Trade Suppliers, which are now proposed to have Permitted
Activity status (which the KRG supports on the basis that
such activities have an industrial character and because it
may help to free up space in other zones for other forms of
LFR).
3.17
As a result, the KRG's position is that:

(a)
The Unitary Plan still makes insufficient provision for retail to

develop in response to the planned population growth, even if
the changes now suggested by the Council are adopted.
(b)
It is appropriate to identify additional IGCs if that mechanism

is to function effectively. Proposed additional locations are
identified in the JPS.
(c)
Supermarkets should have discretionary activity status in the

Light Industry zone.13
(d)
Without these additional provisions, the Unitary Plan will fail

to provide sufficient opportunities at a local level for retailers
and in doing so will compromise the amenity and
convenience of residents.
(e)
It is not feasible for the Council to identify and zone specific

sites exclusively for retail as doing so:
(i)
will prevent that land being used for other activities

which also require space; and
(ii)
may not resolve the particular commercial and

network planning requirements of retailers.
13
2943591
This issue will be addressed in detail when the supermarket operators present their
case.
21
Key Retailers Group

4.
ASSESSMENT CRITERIA
4.1
The KRG has generally reached agreement with the Council regarding
the approach to the proposed assessment criteria.
The KRG is
supportive of the significantly amended assessment criteria proposed

in the Council's primary evidence and consider it is a significant
improvement on the notified provisions, which did not accurately
provide for the reality of LFR developments.
4.2
The KRG continues to seek minor amendments relating to parking,

new buildings, frontages and the benefits of integrated retail
development, supermarkets and department stores. The reasons for
these further changes will be discussed by the planners for the KRG.
5.
FUNCTIONAL VS OPERATIONAL
5.1
With regard to the question of whether there is a difference between

"functional" and "operational" requirements, counsel for the Council
has stated:14
This question is addressed in the rebuttal evidence of
Mr Wyatt on behalf of the Council. Mr Wyatt notes that
this issue has been discussed in other Topics and the
Council has consistently taken the position that
"functional" includes "operational". Mr Wyatt supports
this view. In doing so he notes that the Oxford English
Dictionary uses the two terms as synonyms and he
considers that there is no meaningful distinction
between the two. For these reasons the Council's
position is that "functional" is sufficient and appropriate
without the word "operational". This approach will also
maintain consistency with other parts of the plan.
5.2
With respect, that is not correct. In Topics 033 and 034 - General
Coastal Marine zone and Other Coastal zones, the Council's evidence
and legal submissions were unequivocal that there is a distinction
between the two concepts.
5.3
In respect of the dispute at those hearings between the "functional"

and "operational" need to locate in the CMA, the Council's legal
submissions identified that functional need has a narrow definition and
14
2943591
Legal Submissions on behalf of Auckland Council for Topics 051 / 054, 7 September
2015, at [6.25].
22
Key Retailers Group

is different to operational need.15 Recognising that the phrases would

be relevant to other parts of the Unitary Plan outside the CMA, the
Council proposed definitions to clarify the distinction. The evidence of
Ms Coombes on behalf of Auckland Council stated:16
... This issue is complex as other parts of the PAUP also use
functional need (for example in relation to natural hazards and
to development in ONLs and ONC areas). A pragmatic solution
would be to use definitions of both terms as follows:
Functional need A proposal or activity needs to
locate or operate in a particular environment or
location because it can only occur in that
environment or location.
Operational need A proposal or activity needs to
locate or operate in a particular environment or
location because the operational characteristics of
the activity mean that it needs to locate in, or
traverse across, the location occupied by that
environment.
5.4
It would be artificial for the functional and operational requirements of

particular retail activities to be treated as synonymous for Topic 051,
where a distinction is proposed by the Council in the Unitary Plan's
coastal provisions and definitions.
From a practical perspective,
treating functional and operational as separate matters in the coastal

provisions, but referring to functional requirements only in the
business provisions, will invite legal submissions to the effect that the
difference is intentional and that, accordingly, functional requirements
in the business provisions does not include operational requirements.
Given that Council is not arguing that operational requirements should
be ignored in the business provisions, it is essential to include
reference to functional and operational requirements in order to avoid
ambiguity.
5.5
The JPS's reasoning is consistent with the definitions proposed for the
coastal provisions - in terms of LFR, functional considerations relate to
the
specific
purpose
of
the
development,
while
operational
considerations relate to how the function is delivered.

15
16
2943591
(We
Legal Submissions on behalf of Auckland Council for Topics 033 / 034, 25 March
2015, at [4.12].
Primary evidence of Kathryn Anne Coombes on behalf of Auckland Council for Topic
s 033 / 034, 23 February 2015, at [29.10].
23
Key Retailers Group

understand that the Council is currently considering these definitions

in light of the Topic 065 - Definitions mediation.)
5.6
The KRG seeks that the provisions proposed in the JPS that
recognise
the
distinction
between
functional
and
operational
requirements be preferred over those proposed by the Council.
6.
COMMENTS ON EVIDENCE OF THIRD PARTIES
6.1
The following passages comment on aspects of the evidence filed by

third parties that are particularly germane to the KRG case.
Evidence of John Mackay
6.2
John Mackay has filed three statements of evidence in chief and

rebuttal,17 much of which is opposed to the KRG's position.
6.3
Of particular consequence is Mr Mackay's suggestion that the General

Business and Business Park zones be deleted in their entirety18 or, as
an alternative, that the provision of retail in the General Business
zones be limited.19 The KRG opposes those suggestions and makes
the following submissions.
6.4
The General Business and Business Park zones each have a specific
purpose and function in the Unitary Plan.
(a)
The General Business zone is, in effect, the LFR zone; ie the
zone in which it is expected that LFR will be able to be
established,
addressed.
provided
potential
adverse
effects
are
The zone is a critical part of the strategy for
accommodating the increased retail that will be needed as

the city intensifies.
(b)
The Business Park zone enables office parks, which do not

have all of the functions and components of a centre but
17
18
19
2943591
On behalf of Urban Design Forum, New Zealand Institute of Architects and

Generation Zero.
Evidence of John MacKay, on behalf of the New Zealand Institute of Architects Inc,
Auckland Branch, at paragraphs 2 and 3.
ibid, at paragraphs 12-15.
24
Key Retailers Group

provide a very high amenity location for offices and related

activities.
It appears that the Council does not intend to
create more business parks in the future, but it has chosen to

recognise the particular qualities of those that exist.
(c)
Both zones have largely been applied to areas that already fit
the anticipated outcome. Thus the General Business zones
are largely occupied by LFR and the Business Park zone has
been applied to a small number of existing office parks.
6.5
For the reasons discussed above, removing or reducing the LFR

function of the General Business zone would alter its purpose and
exacerbate the difficulty in developing new retail in the existing urban
areas. That might be of sufficient significance to require the Unitary
Plan approach to retail to be revisited in its entirety.
6.6
Removing the zones will require the application of another zone to that
land. Mr Mackay has variously suggested that the General Business
and Business Park zones be allocated Light Industry, Mixed Use or
Centre zoning.20 All of those suggestions are problematic:
(a)
The Light Industry zone makes almost no provision for retail

other than Trade Suppliers and has very limited provision for
offices.
Thus it does not reflect the activities that are
currently present in the General Business or Business Park

zoned areas or that will need to establish there over time to
serve the intensified city.
(b)
The Mixed Use zone makes some provision for small scale
retail but is unsuited to the existing General Business areas
with their LFR. Similarly, it makes almost no provision for
offices, which are the key activity in the Business Park zone
and the reason for the zone existing in the first place.
(c)
While the office parks could feasibly be zoned as centres,

they have not been developed as such but instead create a
20
2943591
ibid, at paragraphs 9, 11, 52 and 54.
25
Key Retailers Group

distinct character as office parks. They are not necessarily in

appropriate locations for centres.
(d)
The Unitary Plan rightly seeks different urban design and

functional outcomes for the General Business and Centre
zones so there would be very limited potential for altering
General Business to Centre zoning.
6.7
Mr Mackay has also responded to the KRG's use of the phrase

"functional requirements" in his evidence on behalf of the Urban
Design Forum. Mr Mackay considers that "functional preferences" is a
more appropriate term, as the characteristics of LFR (eg blank walls,
cold storage rooms, loading bays etc) are not strictly necessary.
6.8
The KRG strongly disputes this. The witnesses for a number of the
KRG members have referred to the functional and operational
requirements of their businesses both in relation to this topic, and
other earlier topics.21
Each KRG member needs to design their
buildings in a way that adequately provides for their specific needs.

For example, large integrated retail developments may house cinemas
where it is not a "preference" but a requirement that there be no
windows.
Similarly supermarkets stock a substantial number of
perishable items. These need to be kept under certain conditions,

which require a particular type of design.
Again, these design
constraints cannot be said to be a "preference", but is a necessity in

order to have a functional and operational supermarket.22
6.9
Mr MacKay's comments regarding the role of supermarkets in centres

will be addressed when the supermarket operators present their case.
21
22
2943591
Evidence of Mike Foster, in relation to Topic 005 - RPS Issues, on behalf of

Progressive, at paragraphs 3.2, 3.5 and 3.6; Evidence of Angela Bull in relation to
Topic 051 - 054 - Business zones, on behalf of The National Trading Company of
New Zealand, at paragraphs 4.5 and 5.4; Joint Planning Statement in relation to Topic
043 / 044 - Transport, on behalf of KRG, at section 8.
In Mr Mackay's own experience with supermarket consent applications, he admits that
he accepted the "functional requirements" because they were reasonable in the
"specific circumstances".
26
Key Retailers Group

Don McKenzie and Robert Philpott
6.10
Don McKenzie's evidence for DNZ Property Fund Limited opposes a

number of the proposed IGCs on the basis that they will generate
transport issues.23
Robert Philpott's evidence for the same party
supports a very limited approach to IGCs on the basis that they may
generate adverse consequential effects on centres and that "the
modelling shows there is no purely economic case for providing
additional capacity by way of IGC".24
6.11
The KRG disagrees with the approach taken by both witnesses and
considers that their evidence fails to recognise the fundamental
purpose of the IGC:
(a)
The evidence appears to be written on the assumption that

identification of land as an IGC will necessarily result in the
development of retail on that land.
An IGC will not
necessarily lead to retail activity occurring, however:

(i)
The land identified for an IGC has an underlying

zoning and hence a range of activities that will still
be able to occur there without relying on the IGC
status.
(ii)
Any retail activity in an IGC will still need consent

and that process will involve consideration of traffic
effects,
transport
effects
and
factors
and
consequential effects for centres. Thus the factors

that the witnesses are concerned about will be
assessed at the time of the resource consent
23
24
2943591
Evidence of Don McKenzie, on behalf of DNZ Property Fund Limited, at paragraph

6.3.
Evidence of Robert Philpott, on behalf of DNZ Property Fund Limited, at paragraph
1.10 and Part 7.
27
Key Retailers Group
application.

It is unnecessary to determine them
now.
(b)
Mr Philpott relies on the Council modelling and supports

identifying IGCs only where he is convinced there is an
economic case to provide additional capacity. That ignores:
(i)
the impossibility of modelling factors such as

landowner preferences and plans (which may not
coincide with retailer plans);
(ii)
the need for supply and demand to coincide in time,

site size, site shape and topography and price for
development to occur; and
(iii)
the need for a site to be appropriately located in

terms of a retailer's existing store network before it
will make sense to develop.
(c)
The IGC mechanism creates flexibility and opportunity over

the life of the Unitary Plan.
In contrast, Mr Philpott's
approach removes flexibility and endeavours to predict both:

(i)
where and to what extent retailers will want to

expand their activities in the future; and
(ii)
the attitude and actions of landowners in those areas

where he considers an "economic" case has been
made.
7.
CONCLUSION
7.1
The KRG respectfully requests that the Hearings Panel recommend

that the Council accepts the amendments to the Business zone
provisions set out in Annexure 2 of the Joint Planning Statement filed
on behalf of the KRG.
2943591
28
Key Retailers Group

8 September 2015
Douglas Allan - The National Trading Company of New Zealand Limited and
Kiwi Income Property Trust
Paula Brosnahan - The Warehouse Limited
Bronwyn Carruthers - Bunnings Limited
Allison Arthur-Young - Progressive Enterprises Limited
Francelle Lupis - Scentre (New Zealand) Limited
.
2943591

051-054 HRG - Key Retailers Group - Legal Submissions

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051-054 HRG - Key Retailers Group - Legal Submissions

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Key Retailers Group

Submission numbers 2632, 2748, 2968, 5253, 5723, 6096

Topic 051 - 054 - Business zones

of the Resource Management Act 1991

of the Proposed Auckland Unitary Plan

LEGAL SUBMISSIONS FOR KEY RETAILERS GROUP

Topic 051 - 054 - Business zones

These legal submissions are given on behalf of:

Kiwi Property Group Limited and Kiwi Property Holdings

Progressive Enterprises Limited;

Scentre (New Zealand) Limited;

The National Trading Company of New Zealand Limited; and

The Warehouse Limited.

These submissions relate to Topics 051 - 054 - Centre zones,

The KRG represents the major retail operators in Auckland, including

The KRG has filed the following evidence:

a Joint Planning Statement ("JPS") from five independent

urban design evidence from Clinton Bird; and

Topic 051 - 054 - Business zones

individual corporate, economic, and planning evidence on

Relief sought by KRG

Considerable resource has been invested in achieving this outcome,

In addition to identifying the outstanding matters with the Council, the

matters are addressed in statements of evidence filed by individual

members of the KRG have invested many hours collectively in refining

Topic 051 - 054 - Business zones

that does not result in unintended consequences or unworkable /

promote quality compact urban environments (intensification);

contain the majority of growth within the Metropolitan Urban

primarily focus growth around high density centres and

The KRG Version represents a collective position that the members of

the Council's intensification strategy for addressing growth in

the framework of zones that the Council incorporated into the

the case law regarding the relevance under the Resource

consequential effects that arise as a consequence of trade

Topic 051 - 054 - Business zones

assessed through a restricted discretionary activity status or

The KRG is grateful for the time invested by Council in direct

The need to give better effect to the centres hierarchy

Changes are sought to the objectives of the

The need to ensure some flexibility for retailers to develop in

The KRG seeks the inclusion of six additional

The KRG seeks provision for supermarkets as

The need to make a number of minor changes to policy

Topic 051 - 054 - Business zones

PRELIMINARY LEGAL ISSUE LEGAL PRINCIPLES APPLYING

In its interim guidance on Topic 013 B3.1 Commercial and Industrial

The KRG acknowledges the comment at paragraph 14 and assumes

The KRG considers it important to address the analysis embodied at

By virtue of sections 61(3) and 74(3) of the RMA, regard cannot be

consideration of "trade competition", with the words, "or the effects of

Topic 051 - 054 - Business zones

Management (Simplifying and Streamlining) Amendment Act 2009

The point at which such effects become relevant and worthy of

Incorporated and Westfield (NZ) Limited of North Shore City Council's

corresponding provision of the RMA regarding resource consent

In Northcote Mainstreet Incorporated v Discount Brands Limited,2 the

Northcote Mainstreet Incorporated v Discount Brands Limited (2004) 10 ELRNZ 146

Topic 051 - 054 - Business zones

The RMA's concern with the broader effects of proposals on

ibid, at paragraph 65.

Topic 051 - 054 - Business zones

Discount Brands Court of Appeal Decision