In this edition:

Mineral potential of conservation land to be unlocked
On 22 March 2010 Energy and Resources Minister Gerry Brownlee and Conservation Minister Kate Wilkinson released a long-awaited discussion paper containing proposed measures to facilitate the "environmentally responsible development" of New Zealand's mineral estate. Responses to the discussion paper are due by 4 May 2010. more ...

The Government moves closer to repealing the Foreshore and Seabed Act 2004
In response to the ongoing foreshore and seabed debate in New Zealand, and the National Government's confidence and supply agreement with the Maori party, on 31 March 2010 the Government released its consultation document on the review of the Foreshore and Seabed Act 2004 ("Act"). Submissions on the consultation document are sought by 30 April 2010. more ...

New Threshold for Plan integrity?
The Environment Court decision of R J Berry v Gisborne District Council [2010] NZEnvC 71 provides an interesting update to previous case law with respect to the required threshold before an integrity / precedent type effect can legitimately be given weight. more ...

First direct referral case makes progress at through the Environment Court
As a result of the "simplifying and streamlining" reforms to the Resource Management Act 1991 applicants can now directly refer resource consent applications to the Environment Court.  The direct referral process applies to both notified resource consent applications and applications to change resource consent conditions. more ...

Commissioners for Canterbury
The Government has replaced Environment Canterbury's ("ECan") elected Councillors with a panel of Commissioners under a Bill that Parliament passed under urgency on 31 March 2010. In February a review team recommended that Commissioners be appointed urgently to replace ECan's Councillors and turn around what it considered to be a woeful performance in terms of administering water management responsibilities and resource consent processes. more ...

Priority for competing applications
The Supreme Court on 31 March 2010 granted leave to Synlait Limited to appeal the decision of the Court of Appeal on the issue of how priority of resource consent applications is determined. The question on appeal to be examined by the Supreme Court is how priority is determined as between competing applications under the Resource Management Act 1991 for a finite resource. more ...

On 22 March 2010 Energy and Resources Minister Gerry Brownlee and Conservation Minister Kate Wilkinson released a long-awaited discussion paper containing proposed measures to facilitate the "environmentally responsible development" of New Zealand's mineral estate.

The paper confirmed media speculation that the Government is proposing to open up parts of Great Barrier Island and other protected areas such as parts of the Coromandel Peninsula, the Otahu Ecological Area and Parakawai Geological Area for mineral exploration by removing that land from Schedule 4 of the Crown Minerals Act 1991.  Overall the Government is proposing to remove 7,058 hectares of land from Schedule 4, with an estimated mineral value of $4.3 billion.

As well as the proposed removal of land from Schedule 4, the discussion paper indicates that the Government will seek to add 12,400 hectares of land to Schedule 4, comprising national parks, marine reserves, scientific reserves, and scenic reserves.

Another key feature of the discussion document is a proposal to carry out further "low impact" technical investigation of other areas of the Conservation estate.  A range of areas are in line for investigation, including the Northland region, public conservation lands on the Coromandel Peninsula, and areas in the South Island, following which the Government will consider whether to propose the removal of further areas from Schedule 4. 

The paper also confirms the proposal to establish a Conservation Fund, which is seen as a major form of environmental mitigation to combat the effects of mineral exploration.  The Conservation Fund would established from future royalties received in relation to mining in public conservation areas and would be contestable and open to all applicants (not just Government departments) seeking funding for conservation projects.

The Government has set aside a six-week period for public submissions, with responses to the discussion paper due by 4 May 2010.  The Ministry of Economic Development proposes to make recommendations to Cabinet by August 2010, with Cabinet to decide on any changes to Schedule 4 in the fourth quarter of 2010.

Read more about the features of the discussion document in Russell McVeagh's Mining Update here.

In response to the ongoing foreshore and seabed debate in New Zealand, and the National Government's confidence and supply agreement with the Maori party, on 31 March 2010 the Government released its consultation document on the review of the Foreshore and Seabed Act 2004 ("Act").  For a full report on the Government's consultation document, and the background giving rise to the foreshore and seabed debate, please see our April 2010 report here.

As reported in our July 2009 newsletter, a Ministerial Review Panel ("Panel") undertook an independent review of the Act last year and recommended repeal.  The Government's consultation document entitled Reviewing the Foreshore and Seabed Act 2004 outlines the Government's response to the recommendations and calls for further public submissions on a new proposal.  The key elements of the new proposal are:

• Repeal of the 2004 Act.

• Foreshore and seabed to be in the "public domain/takiwā iwi whānui" (ie no longer in Crown ownership).

• Public assess affirmed.

• New legislation to be passed.

• Extinguished customary title to be restored.

• Legislated tests and awards for the recognition of customary interests.

The Government's proposed regime would mean that no one would own the foreshore and seabed (except existing land held in private title).  This is a new concept for New Zealand and instead of identifying an owner of the public foreshore and seabed, the proposed legislation (which has not yet been released) would specify roles and responsibilities within it.  The Crown and local government would continue to have regulatory responsibility, with input from those coastal hapū / iwi groups granted awards under the new Act. 

The Government has been careful to emphasise that the treatment of areas in private title, public access, fishing and navigation within the foreshore and seabed, and existing use rights will not change from the current situation.  However the grant of future rights could be significantly impacted, particularly if customary rights are recognised over areas where development is proposed or likely. 

The Government has also developed proposals on other specific important matters namely:

• Who can use areas of the foreshore and seabed (allocation of space).

• Structures.

• Reclamations.

• Local authority-owned land.

• Adverse possession and prescriptive title.

The Government recognises that this is not an exhaustive list of matters that need to be addressed and welcomes submitters' views on other matters concerning the foreshore and seabed whether they are referred to in the consultation document or not.  This leaves the door open for interested parties to submit on a wide range of issues pertaining to the foreshore and seabed.

On the same day as Government's proposal was released, the Iwi Leaders Group ("ILG") released its commentary on the proposal.  The ILG has been clear throughout that its commentary is intended to provoke thought and debate amongst hapū and iwi, rather than assert a "pan-Maori" position.  The ILG considers the Government's proposal may not satisfy the rights, expectations and values of hapū and iwi especially as, under the revised proposal, coastal hapū and iwi still have to apply to have their customary rights recognised through legislation.  The ILG identified the following elements of the Government's proposal as needing further work and clarification:

• The definition of "public domain".

• Identification of who holds the rights to go to the courts and/or negotiate.

• The scope of the right to development (including the right to share in the benefits of commercial developments).

• The status of non-nationalised minerals.

• Resourcing the processes (ie whether Legal Aid would be available to those iwi and hapū who go through the courts or negotiations).

The ILG also describes four possible alternatives to the Government's proposal.  (For a full report on the ILG's commentary, including details as to the possible alternatives, please see our April 2010 report here). Although phrased as "a commentary", the ILG was consulted throughout the Government's review and it is likely its proposals will be given due consideration and weight.

Submissions on the Government's consultation document are sought by 30 April 2010.  Between now and then the Government is facilitating hui and public meetings around the country consulting with interested parties.  For a full list of consultation times and locations please see here.  Following this consultation round the Attorney General will report to Cabinet with the final Cabinet decision expected in late May / June 2010.

If the decision is made to repeal the current Act and enact new legislation, the public will have another opportunity to provide input into the proposed legislation during the Select Committee process.  If the Government cannot make a decision on reform, the status quo will remain and, despite the inadequacies recognised across the board, the 2004 Act will stay in force.

The Environment Court decision of R J Berry v Gisborne District Council [2010] NZEnvC 71 provides an interesting update to previous case law with respect to the required threshold before an integrity/precedent type effect can legitimately be given weight.

Resource consent was sought for a car service centre in Te Karaka.  The relevant property is zoned general residential in the partly operative Combined Regional Land and District Plan. The proposed operation required consent as a non-complying activity. 

The Council granted consent, finding that the adverse effects of the business would be no more than minor and that the overall thrust of the objectives and policies of the Plan would not be contravened.  The appellant was the owner of an empty residential section two properties away.  Her appeal cited various adverse environmental effects (noise, potential run-off pollution, fire hazard, traffic and visual amenity effects) as reasons why consent should be declined.  The appellant also claimed that these same factors lowered the value of her property.

The non-complying status of the activity meant that before it could be considered under s104 and Part 2 of the Resource Management Act 1991 ("RMA"), it had to pass through one of the threshold tests or "gateways" contained in s104D.  That is, the activity had to be shown to have adverse effects on the environment that were not more than minor, or that it was not contrary to the objectives and policies of the Plan.

For a number of reasons the Environment Court held that the adverse effects of the activity were not more than minor or that they could be mitigated with appropriate consent conditions (and therefore that it was not necessary to consider the second limb of the s104D test).  On the overall balancing approach required by s5, the Court was satisfied that the proposal met the purpose of enabling people and communities to provide for their economic welfare, while avoiding or mitigating, to an acceptable level, any adverse effects on the environment, especially given the imposition of various conditions.

In terms of s104(1)(c), the appellant relied heavily on the arguments of plan integrity and precedent.  It has been well established since the Court of Appeal case of Dye v Auckland Regional Council that the precedent effect of a consent decision, with its associated impact on plan integrity, can be a relevant matter to be taken into account under s104. In this case, Mrs Berry suggested that to grant consent would create a precedent for similar applications which would have an adverse effect on the integrity of the Plan.

On the issues of precedent effect and plan integrity, the Environment Court stated that "... this argument does tend to be overused, and needs to be treated with some reserve."  It was stressed that each proposal needs to be considered on a case by case basis and in paragraphs [24]-[25] it was stated:

Decision-makers need to be conscious of the views expressed in cases such as Dye v Auckland RC [2001] NZRMA 513 that there is no true concept of precedent in this area of the law... [I]t is not necessary for a site being considered for a non-complying activity to be truly unique before Plan integrity ceases to be a potentially important factor.

... Only in the clearest of cases, involving an irreconcilable clash with the important provisions... of the Plan and a clear proposition that there will be materially indistinguishable and equally clashing further applications to follow, will it be that Plan integrity will be imperilled to the point of dictating that the instant application should be declined.

In the Court's view, these necessary characteristics were not present in this case and so considerations of precedent and plan integrity carried little weight.  The appeal was declined and the Council's decision to grant consent was confirmed (with the imposition of various minor conditions).

This case is a timely reminder that the Court does not look favourably on overzealous reliance on precedent / integrity arguments as a basis for declining consent.  Also, where an applicant is seeking consent for non-complying activities, it pays to keep in mind that the necessary threshold before precedent and integrity effects will be relevant is a high one. 

As a result of the "simplifying and streamlining" reforms to the RMA, applicants can now directly refer resource consent applications to the Environment Court.  The direct referral process applies to both notified resource consent applications and applications to change resource consent conditions.  The process allows the matter to be decided by the Environment Court in the first instance, therefore bypassing a Council level hearing.

The first direct referral application is currently before Judge Smith in the Environment Court.  The case concerns an application by Progressive Enterprises Limited ("Progressive") to develop a Countdown supermarket in the Warkworth town centre.  The Rodney District Council ("Council") subsequently agreed to directly refer the matter to the Environment Court (agreement from the local authority is a requirement under the Act).  The Council then publicly notified Progressive's application with submissions closing late last year. 

As required under the Act, the Council then began processing Progressive's application, and was required to prepare a report within the period that ends 20 working days after the date on which the period for submissions on the application closed.¹ The Council's report recommended grant of the consent (subject to conditions) and, in accordance with the Act, Progressive then lodged the necessary direct referral papers (a notice of motion and accompanying affidavit in support) with the Environment Court on earlier this year.

Since the originating documents were filed with the Environment Court, Judge Smith has taken an active role in managing the case.  Through directions and minutes, Judge Smith has stated:

• The Court does not appear to have any discretion to refuse a direct referral application.
• The applicant must make it clear in the affidavit it produces in support of the direct referral application that all of the procedural requirements under the Act have been fulfilled. 
• The District Council is required to provide the Environment Court with a report on the application, and is also required to forward the report, all submissions, and all other information supplied on the Application to the Court.
• The intent of direct referral is that the local authority is a party, and must be represented at the hearing as the respondent.  Judge Smith went so far as to say it could not be the intention of Parliament that officers of the local authority would be expected to appear and support their reports, including provision of detailed evidence, as required by direction of the Court without local authority support.
• Submitters on resource consent applications that are directly referred to the Environment Court must join the proceedings under section 274 in order to have a voice in the hearing.
• Trade competition matters could be heard in a preliminary hearing (for example, as to whether a particular trade competitor had standing).  Of course, any ruling on trade competition matters would not be without contention and there would be a strong prospect that a party might appeal any preliminary ruling as to standing.
• Where matters are of such a similar nature, it is appropriate for those matters to be heard together.²

As this is the first direct referral application under the ammended RMA, it is important to take notice of the Environment Court's directions for future applications.  As these proceedings also involve trade competitors, it will be interesting to observe the Court's comments with respect to the recent amendments in that area will play out in practice.  Definitely one to watch!

The Government has replaced Environment Canterbury's ("ECan") elected Councillors with a panel of Commissioners under a Bill that Parliament passed under urgency on 31 March 2010. In February a review team recommended that Commissioners be appointed urgently to replace ECan's Councillors and turn around what it considered to be a woeful performance in terms of administering water management responsibilities and resource consent processes.  Under the Environment Canterbury (Temporary Commissioners and Improved Water Management) Bill ("Bill") no date has been given as to when the appointed Commissioners, chaired by Dame Margaret Bazley, will take over ECan. The Commissioners are: Hon David Caygill (Deputy Chair), David Bedford, Donald Couch, Tom Lambie, Professor Peter Skelton and Rex Williams.

The Bill provides ECan's new commissioners with the power to impose targeted moratoria, subject to the approval of the Minster for the Environment, to prevent the granting of further resource consents for water takes in groundwater zones or other fresh water resources in Canterbury that are nearing or beyond full allocation.  This power enables the Commissioners to refuse to accept new applications and put existing applications on hold for a specific period while a new planning framework is put in place.  At the end of the moratorium, the Bill requires all applications to be processed under the new planning framework.  This power does not affect applications that have already been decided or are currently subject to appeal in the Environment Court.

The Bill has various implications with regard to Water Conservation Orders ("WCO") in Canterbury.  Under the Bill, the Minister for the Environment will now direct new WCO applications (including variations and revocations) in Canterbury to the Commissioners rather than a special tribunal.  The Commissioners' recommendations in relation to WCOs are now subject to the general provisions of Part 2 of the RMA, when they were not previously, and the Commissioners' decision is only subject to appeal to the High Court on a question of law rather than to the Environment Court.

The Bill alters certain aspects of the process for approving regional policy statements and plans.  The Bill removes the ability to appeal the Commissioners' decision in relation to Canterbury resource management planning and policy framework.  Again, decisions may be appealed to the High Court on points of law only. 

Minister for the Environment Nick Smith said of the Bill: "Canterbury is strategically important with it holding more than half of the country's irrigation water and hydro storage.  Government leadership is needed to address Canterbury's lack of a proper allocation plan, increasing problems with water quality and the failure to progress opportunities for water storage".

The Supreme Court on 31 March 2010 granted leave to Synlait Limited¹ to appeal the decision of the Court of Appeal on the issue of how priority of resource consent applications is determined. The question on appeal to be examined by the Supreme Court is how priority is determined as between competing applications under the RMA for a finite resource.

In an earlier set of parallel proceedings, the Supreme Court granted leave to appeal against the decision of the Court of Appeal in Ngai Tahu Property Limited v Central Plains Water Trust [2008] NZCA 49 regarding the issue of priority for competing applications for resource consent. Subsequently the Supreme Court sought to hear further argument from the parties as to the issue of priority.  However, the proceedings were settled before the Supreme Court issued any substantive decision.

While the facts of the Synlait case are unique, it is clear from the Supreme Court's very wide question for determination that the Court wishes to consider the broader question of priority and there is potential for a decision with wide implications.

Priority, by definition, gives rise to a legitimate expectation that the application will be assessed and granted on its own merits ahead of lower ranking applications.  The Supreme Court ruling on this matter may mean it is no longer possible to rely on the certainty provided by Fleetwing² and Aoraki.³

We will report on the decision of the Supreme Court as soon as it is released.

© Russell McVeagh 2010. All rights reserved. www.russellmcveagh.com