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9 Commerce findings

The following cases were reviewed that included references to the subject of commerce in an urban context:

  • Affco New Zealand Limited and Richmond Limited and Napier Sandblasting Limited v Napier City Council and Land Equity Group (W82/04)

  • Canterbury Regional Council v Waimakariri District Council [2002] NZRMA 208

  • Eldamos Investments Ltd and Gladiator Investments (Gisborne) Ltd v Gisborne District Council (W47/05)

  • Howick Ratepayers and Residents Association Inc v Manukau City Council (A167/04)

  • The Warehouse Ltd and Foodstuffs (South Island) v Dunedin City Council (C101/01).

Some cases also referenced other urban subjects and, accordingly, may or may not be referred to under those subjects. Each case is summarised in Appendix 1.

In terms of commerce, this section focuses on both business and retail activity types. Most of the case law, however, relates to larger retail activities rather than other urban forms of commerce, such as office, local centres or service-type activities.

9.1 Mixed use

A common urban design objective is to provide for mixed-use urban areas, thereby increasing opportunities for people to work and play within the places they live. The mixed-use objective can be frustrated, however, if activities are separated into different zones because this tends to separate employment from residential or residential from commercial locations. Although examples exist where mixed-use approaches have been applied in the development of structure or strategic growth plans (eg, the cases of Canterbury Regional Council v Christchurch City Council), this is an emerging policy area and will require councils to introduce changes to ensure it is embedded into district plans. (Note: none of the cases studied in this review involved challenges to this type of approach.)

9.2 Enabling mixed use over time

A major challenge to the future viability of mixed-use development, particularly in new growth areas, is the conditions that exist that support the establishment of commercial activities.

Only one case was reviewed that is relevant to this issue: it involved a residential activity that was permitted to temporarily inhabit an area earmarked for future commercial usage (Canterbury Regional Council v Waimakariri District Council). Here, the Court allowed residential activity to establish on the ground floor of the ‘future’ town centre block until such time as sufficient growth had occurred to support it being used for commercial purposes.

9.3 Commercial character

The interrelationships between activities with different characters have been considered by the courts, and could be seen as a ‘commerce’ consideration. In one case (Affco New Zealand Limited and Richmond Limited and Napier Sandblasting Limited v Napier City Council and Land Equity Group), maintaining an area’s existing industrial character, given a perceived scarcity of industrial land, was considered important and sufficient enough to disallow a retail development to establish there.

In this case, it had been identified there was a shortage of industrial land; hence the Court considered the introduction of a new retail development within the existing industrial area would adversely affect the area’s ability to retain and attract industrial activity. Even though the addition of retail may have increased mixed-use opportunities, the empirical data on alternative industrial activities within the overall urban area clearly overrode any potential mixed-use benefits.

9.4 Trade competition

Case law frequently focuses on trade competition issues. In one of the cases reviewed, the Supreme Court held that a normal level of trade competition will always occur within and between urban areas (Eldamos Investments Ltd and Gladiator Investments (Gisborne) Ltd v Gisborne District Council). Where competition is at a ‘normal’ level, considerations are not given weight. But, where the commercial effect is beyond normal ‘competitive’ levels, such as might arise when a new regional shopping centre is proposed outside a traditional town centre, the courts may then consider these effects.

9.5 Large-format retail

The Environment Court encourages councils to maintain up-to-date plans. This assists the Court when it is considering cases involving urban environments and the changing nature of activities that occur within them.

There are cases where non-provision in district plans for large-format retail activities has been considered an insufficient reason to disallow such activities. Where no provisions exist such activities tend, by default, to be located on large sites that are peripheral to urban areas by default (The Warehouse Ltd and Foodstuffs (South Island) v Dunedin City Council). To address this situation, it would be useful for councils to identify the types of environment they are seeking to create and maintain, and ensure adequate provision is made in their plans to manage the mix of activities likely to occur within these environments. (Note: no case was considered in this review that provides the basis for a council to completely prevent large-format activities from establishing within or on the periphery of urban areas.)

9.6 Effects of large-format buildings on urban quality

The Court has recognised the effects of large-format buildings on the urban context within which they are located. In one case (Eldamos Investments Ltd and Gladiator Investments (Gisborne) Ltd v Gisborne District Council), the Court considered a suite of urban quality references, including the effects of the building on scale, shading, views, urban pattern and legibility, and found the building to be appropriate.

It appears as if the courts are considering a relatively fine level of urban design quality measures to help inform their decisions on the fit of development into existing urban contexts. This is particularly noticeable in decisions involving large-format developments.

 

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