Local Authority Liability for Natural Hazards: High Court Strikes Out Claims Against Councils
Local Authority Liability for Natural Hazards: High Court Strikes Out Claims Against Councils
Tuesday 31 March, 2026
In the recent case of Tangoio Developments Ltd v Hastings District Council, the High Court assessed local authority liability for the economic loss of a developer following the effects of Cyclone Gabrielle on subdivided land zoned as Coastal Settlement Residential. The High Court struck out all causes of action brought by Tangoio Developments Limited, finding that some of the causes of action were time-barred, the duties of care claimed either did not exist or were not breached, and the statutory duties claimed did not exist.
Background
Tawanui Developments Limited (“Tawanui”) owned land at Tangoio Beach, just north of Napier, and obtained a subdivision consent in April 2019 from Hastings District Council (“HDC”) to create 36 residential lots. In June 2022, Tangoio Developments Limited (“TDL”) acquired the land from Tawanui and undertook the subdivision. When Cyclone Gabrielle arrived in February 2023, TDL still retained 12 lots. Following Cyclone Gabrielle, it was no longer possible to build on the retained lots.
Causes of Action
TDL brought proceedings against Hastings District Council (“HDC”) and Hawke’s Bay Regional Council (“HBRC”) seeking damages on the basis that HDC and HBRC had been negligent and breached statutory duties in respect of:
- Private Plan Change 31 to the District Plan (“PC31”);
- the 10-yearly District Plan review;
- the granting of the subdivision resource consent; and
- Plan Change 4 of the Regional Resource Management Plan (“PC4”).
None of these causes of action were allowed to proceed to trial. Each cause of action was struck out for different reasons, which we address in turn below.
Private Plan Change 31
The causes of action in relation to PC31, which rezoned TDL’s land as Coastal Settlement Residential, were struck out on the basis that the claims were subject to a 15-year limitation period under section 23B of the Limitation Act 1950 which expired before the proceedings were filed.
HDC 10-yearly District Plan Review
TDL submitted that HDC had a duty of care to review PC31 along with its compulsory review of the District Plan under the Resource Management Act 1991 (“RMA”). The Court found that there was no such duty of care, as plan changes within 10 years of the review are exempted. The submission that adverse reports in respect of PC31 and climate change considerations triggered a review obligation failed as the Court found that it would subject councils to a “never-ending cycle of reviews”.
TDL also submitted that HDC breached a statutory duty to ensure District Plan provisions appropriately control land use to avoid or mitigate natural hazards. The Court rejected this, finding it would make section 85 of the RMA redundant and that the RMA was not intended to prevent economic loss of the type TDL claimed.
As PC31 was not part of the review, TDL’s other causes of action against HBRC for not submitting an opposition to the review were also struck out.
Subdivision Consent
TDL submitted that, by granting the subdivision resource consent, HDC had breached a duty of care by failing to consider whether granting the consent was consistent with its function of controlling the effects of the use, development and protection of land for the purposes of avoiding/mitigating natural hazards and failing to consider the risk/likelihood of a natural hazard occurring.
The Court struck out the cause of action, finding that Tawanui had shown awareness of the flood risks at the time of applying for the consent, by referring to the mitigation measures in PC31 and proposing conditions to further mitigate the risk. HDC had assessed the application, concluded that the mitigation measures were adequate and granted the consent with conditions consistent with those proposed by Tawanui.
The Court noted that the decision in Bella Vista Resort Ltd v Western Bay of Plenty District Council [2007] NZCA 33 (“Bella Vista”) was “clear authority that no duty of care is owed by a local authority to protect an applicant for a resource consent or subsequent owners against economic loss”.
Plan Change 4
TDL pleaded that HBRC breached a duty of care to control the use of the land for the purpose of avoiding or mitigating natural hazards, by identifying the land surrounding TDL’s land as an inappropriate area for greenfield residential development in PC4 but including TDL’s land as an area that was appropriate for residential development.
The Court found that the status of TDL’s land had already been determined under PC31, not created by PC4. As HBRC followed the Schedule 1 RMA process, its PC4 decision was quasi-judicial and, citing Bella Vista, the Court held that local authorities do not owe a duty of care when exercising judicial functions.
The Court further found that HBRC did not owe a duty of care to TDL to review the suitability of TDL's land for residential development and noted that to find a duty of care for HBRC to challenge PC31 would be inconsistent with its finding that HDC did not have a duty to review PC31 as part of the District Plan review.
TDL submitted that HBRC had a duty of care under the Soil Conservation and Rivers Control Act 1941 to TDL to prevent damage caused by flooding and erosion. It submitted that HBRC breached its duty of care by adopting PC4 without excluding TDL’s land as inappropriate for residential development. The Court found that HBRC did not have power under the SCRCA to change PC4 and therefore the duty of care could not exist.
Takeaway
The case raised fundamental questions about the scope of local authority liability, particularly whether local authorities owe duties of care to landowners and developers to protect them against economic loss arising from planning decisions and resource consenting processes. The Court comprehensively struck out TDL's claims, finding that:
- the limitation period for making claims regarding PC31 had expired;
- PC31 did not need to be included in the 10-yearly district plan review because it had been made within the 10 years prior to the review date;
- there had been adequate consideration of natural hazard risk when the subdivision resource consent was issued; and
- PC4 did not need to re-assess the zoning of TDL’s land, as it had already been determined in PC31.
For advice regarding the implications of this decision, please contact one of our experts below.
