Reuters Homes Limited owns a relatively large block of land in suburban Wanganui, adjoining two substantial properties owned by Presbyterian Support Services ("PSS") and Hospice Wanganui ("Hospice"). Reuters developed a subdivision proposal for its land, in consultation with PSS and Hospice, that created 35 small residential sites accessed by a cul-de-sac off the main road, Virginia Road. The intention was to create small units for elderly occupants in a quiet and secure living environment. However, the District Plan showed an indicative road running through the Reuters land, connecting Virginia Road through to Edmonds Drive. Council officers expressed a wish for this connection at the first meeting with the developer post-lodgement. Reuters responded by explaining that the concept plan had been under development for two years in negotiations with PSS, and that providing a through road would require significant changes in design involving yet further negotiations with PSS. Reuters advised that in light of the adverse financial implications and adverse effect on the character that Reuters and PSS were hoping to create, the request for road connectivity was unreasonable.
The Council then followed up with a request for further information under s92 of the RMA, seeking "a revised roading layout and configuration showing the connections required." Reuters responded, objecting to the request, and explaining why it was neither desirable nor feasible to provide the roading connection. The Council considered it was left with no option, but to fully notify the proposal under s95C of the RMA.
Reuters judicially reviewed the Council's decision to notify, seeking orders that the request for further information was unlawful, the decision to publicly notify was unlawful, and that the Council had acted in abuse of its powers. Reuters claimed that the context in which the Council resorted to s92 as a device to force it to introduce a significant change construed a misuse of the power to request information in relation to an application, leading to an unlawful exercise of the default power under s95C to require public notification on account of the perceived inadequacy of the information.
While acknowledging that issuing declaratory relief could no longer affect the course of dealing between Reuters and WDC (as Reuters obtained its resource consent) the Court considered that a declaration should nonetheless be issued because: the use of statutory powers arising in the pre-determination stages of processing resource consent applications was a matter of some importance; a declaration could have practical value because such conduct by local authorities was likely to recur for other developers.
The High Court declared that: WDC could not require the provision of an amended proposal addressing its road connectivity aspirations for a through road, pursuant to an information request under section 92 of the RMA. WDC erred in law in treating Reuters' refusal to provide information on an amended plan as a refusal to provide further information for the purposes of a decision under section 95C(2) of the RMA to publicly notify the resource consent application.
The High Court confirmed that a statutory power can only be exercised for proper purposes, in the sense of purposes consistent with the reason for it being available to those who might exercise it. In this case, WDC had misconstrued the scope of the power to request further information. WDC did not seek information enabling it to better understand the traffic effects of the proposed cul-de-sac, but rather to substantially amend Reuters' application so it satisfied WDC’s roading aspirations.