Court rules against developer in resource consent fee dispute – and rejects negligence and breach of contract arguments
Judge K G Davenport KC has sided with Tauranga City Council (TCC), granting summary judgment for $15,387.45 in unpaid resource consent fees and striking out the developer’s counterclaims against TCC for negligence, contract, and legitimate expectation.
The developer, BGT Developments, obtained a subdivision resource consent for a Bethlehem subdivision. Despite obtaining a consent, BGT then later refused to pay TCC’s fees, blaming delays in the process. Out of principle, TCC pursued the debt. BGT counterclaimed, arguing:
- Breach of contract – that TCC had entered into a contractual relationship with BGT, was required to process the consent efficiently, and had breached its contract.
- Breach of legitimate expectation – that TCC had breached BGT’s legitimate expectation of a fair and timely process.
- Negligence – that TCC’s actions, in requesting information under s 92 of the RMA, delayed the development, causing BGT financial loss.
The Court granted TCC summary judgment for the debt owed by BGT and in turn struck out all three of BGT’s counterclaims. The Court considered them to be legally untenable, finding that:
- TCC was performing its statutory functions under the RMA, not entering a contract with the developer, and there was no contract in existence.
- Legitimate expectation was not available (and is limited to applications for judicial review).
- TCC did not owe BGT a duty of care when performing its quasi-judicial functions (in this case, requesting further information in relation to a resource consent under s 92 RMA).
The Court entered judgment in favour of TCC, finding that BGT had no arguable defence to TCC’s claim. BGT had not followed the statutory procedures to challenge fees under s 357 of the RMA and TCC was not required to consider the late objection.
Brief comments
It is a high bar to get a claim struck out, so this is a very useful decision for TCC and councils more generally. In particular, the decision strengthens local authorities’ ability to recover processing costs and should help discourage developers from using legal challenges to delay or avoid payment.
The decision confirms that there is no duty of care on a consent authority when seeking information in relation to a resource consent under s 92 of the RMA and that the authority is not in a contractual relationship with an applicant in these circumstances. The decision should give consent authorities added comfort that they will be protected from a claim in negligence when issuing requests for information under s 92 of the RMA.
Rice Speir was pleased to assist TCC in successfully striking out this claim and obtaining judgment for the resource consent fees owed. A copy of the decision can be found here.
