Tainui has won its battle against Hamilton City Council's proposed district plan change that would have made further retail and office developments outside the central business district almost impossible.
But the council is appealing against the decision, saying it unfairly gives the iwi more rights than other property developers.
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Hamilton City Council last year notified a variation to its district plan - a last-ditch move to protect the city's struggling CBD.
Variation 21 proposed a commercial services zone which rings the CBD. Office space outside this zone and over 250sq m, or retail over 150sq m - including new developments at Tainui's $200 million The Base in Te Rapa - would be deemed non-compliant and would require resource consent.
In the High Court at Hamilton, Tainui argued the council breached its duty to consult with it as the relevant iwi authority over the proposed changes, and sought to have quashed its decision to publicly notify the proposed variation.
The court ruled in the iwi's favour ordering the council to consult Tainui with respect to any proposed variation to the proposed district plan affecting it before any further variation is approved and publicly notified.
Tainui spokesman Tukoroirangi Morgan was yesterday ecstatic with the decision.
"It sends a very clear message that the council did not follow proper process in relation to Waikato Tainui," he said.
"They should have consulted us, we have always been here and are not moving ... but they did not and the rest is history."
But Hamilton mayor Bob Simcock said he was astounded by the ruling and said the council would appeal against it.
He feared the city would lose its ability to plan and manage growth outside the city centre and would leave existing infrastructure underused.
Mr Simcock said the council made the variation notification public because Tainui, which is one of the Waikato's biggest commercial landowners, would have gained an advantage by being in the position to lodge pre-emptive planning applications under the old rules before other developers.
He wants the Resource Management Act reviewed.
Mike McLennan, development manager of Porter Group which owns 12ha of land opposite The Base, was pleased with the decision but said the city needed multiple business zones and should create an inclusive district plan that would give the whole city direction.
