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The Environment Court has largely allowed an appeal from an Outram venue operator to extend the hours staff can be on site.
The ruling comes despite opposition from the venue's neighbours, who say cars driving past late at night disturb their sleep.
An Environment Court panel of Judge Jon Jackson and commissioner Ian Buchanan have decided consent conditions imposed by the Dunedin City Council on the operators of Grandview Gardens differed from the council's own accepted reasoning, so the court had to allow the appeal and amend the conditions.
The amendments allow venue staff to stay on until 1am for functions on Thursday, Friday and Saturday nights, and 11.30 for functions on Sunday to Wednesday nights.
The panel said it understood the concerns of the other residents in Currie Rd, who had formed an incorporated society to oppose any changes.
The society gave evidence at a November hearing in Dunedin of its members' disquiet about dust and noise, including cars potentially waking them as they passed.
But noise tests had been done and the panel considered venue staff could drive past quietly and that it was reasonable to allow them to stay until 1am, not 12.30am, the panel said in its December 20 decision.
It said it had had to weigh up the desire of the applicants, Wayne and Jo Lindsay, for greater flexibility in clean-up and visiting hours, against further disruption to neighbours' amenity.
It noted the neighbours had originally agreed to the establishment of the venue in 2009.
But when the Lindsays sought a consent variation in 2012 to extend their hours of operation, the number of functions, the number of people allowed at them and the months in which they could operate, the neighbours objected.
The neighbours had concerns with the way the present operation was affecting the rural amenity of the area, and that the proposed variation would create additional negative effects - mainly from dust and noise from cars passing along the gravel road in front of their properties.
The council allowed the variation in part, approving an increase in the number of people allowed at the venue and extending operating times for daytime and night-time functions - but only by half an hour, not the hour the Lindsays had sought, which they said was a reasonable time to allow to clean up and set up for the next function.
The Lindsays appealed to the Environment Court, seeking to be allowed to operate for an extra half hour for night-time functions and an extra hour to 7.30pm for daytime functions, and a widening of hours for vehicle pick-ups, rehearsals and venue viewings among other things.
The neighbours opposed the application and gave evidence of how the hours already caused disruption to their sleep.
The council also opposed the application, saying the traffic would cause unreasonable adverse effects for neighbours in a sensitive and quiet environment.
But the panel said the council had accepted an hour was needed after functions to clean up, then, ''inconsistently'', imposed a condition that all people had to be off site within 30 minutes of functions ending.
It then allowed the extra 30 minutes sought, although it did not allow the extra hour sought after daytime functions.
It also struck out a condition imposed by the council restricting delivery, viewing and rehearsal times on non-function days to between 10am and 2pm, as it was considered unworkable because there was no way to differentiate between people using the road to visit the Lindsays' home or to make deliveries or have viewings.
Although it probably did not matter whether the venue was a commercial or rural tourist activity because an application to alter a land-use consent was discretionary, the panel ruled, given arguments made by all parties, that the venue fitted within the criteria of a rural tourist activity, because it dealt with visitors/guests and was complementary to the gardens, where tours were offered.
Costs were reserved, but applications were discouraged, the judgement said.
''At first sight, this is not a case for costs: we believe the society's resident members are entitled to considerable sympathy in relation to an activity they generously approved in the first instance, but which has grown much larger and had greater adverse effects than they anticipated.''