Hawthorn Estate Limited lodged its application for subdivision consent in 2000. The development concept was for 32 residential lots with extensive landscaping, including ponds as water features on each site and earth mounding to create privacy between the sites. It was declined by the Council at first instance, but granted on appeal by the Environment Court in 2004. The matter then went on appeal to the High Court and Court of Appeal, with the Environment Court finally settling the conditions of consent in 2006. The standard condition of consent that requires the development to proceed in accordance with the plans and specifications submitted with the application was imposed as Condition 1, but the only plan specifically referred to in Condition 1 was the "Approved Plan".
Half of the site was then purchased by Arcadian Triangle Limited, who intended to implement the subdivision consent but only wanted to create 9 ponds (instead of one on each site). Arcadian lodged an application to vary the consent to enable this to occur in 2007, suggesting 9 ponds should be mandatory but the other ponds should be optional. Independent Commissioners decided the application could be processed without public notification. In making this decision, the Independent Commissioners expressed a view that Condition 1 did not impose a requirement to build all the ponds, and that they were optional. They also expressed a view that the effects on the environment from the reduced number of ponds was no more than minor. Arcadian relied on these comments and withdrew its application to vary the consent.
The Council then sought a declaration from the Environment Court on the interpretation of Condition 1. The Council argued that the reference to plans and specifications submitted with the application in Condition 1 includes the AEE and all plans attached to it. Arcadian submitted that Condition 1 only applied to the "Approved Plan" specifically referenced in the condition.
The Environment Court decided that "a close examination of the 2004 and 2006 Decisions is required" to interpret Condition 1. In relation to the 2004 decision, it held: Whilst the Court did not expressly refer to the number of ponds authorised or the exact position of the mounds in its 2004 Decision, when read as a whole, taking into account reasonable inferences from the facts referred to by it, and the fact that the decision was finely balanced, I am in no doubt that the number and position of the ponds and mounds outlined in the application were important to the end result. The key issue was the potentially adverse effect the proposal would have on rural amenity given the scale and intensity of it. Had there been fewer ponds and mounds proposed the Court may not have found that the conservation gains from the proposal offset or mitigated this potentially adverse effect. In my view the conservation gains from the proposal were linked in a very key way to the Court's finely balanced decision in favour of the proposal proceeding. It is by no means certain that the Court would have reached this decision, had the proposal not contained any of the ponds or, alternatively, only some of them. It was clear to the Court from analysing the decision that the ponds and mounding were significant factors in tipping the balance in favour of granting the application