Trade competition (and "other" vexatious litigants)
One of the areas of the Resource Management (Simplifying and Streamlining) Amendment Bill ("Bill") which has received significant attention is that which attempts to constrain participation by trade competitors and other frivolous or vexatious participants.
The perception by some is that trade competitors have been abusing the currently wide rights of participation to delay the entry of their competitors into the market, under the guise of legitimate resource management or environmental issues. Even if there are instances of some abuse, there has also been clear recognition by the Courts that participation by trade competitors can assist in achieving better environmental decisions as they have the motivation and means to put robust cases on environmental issues before councils and the Courts.
The package of provisions, particularly those requiring trade competitors to have "standing" before they can participate, represent a fundamental shift in policy, from one of open participation to a much more limited regime for trade competitors. In short, the Bill proposes to:
- Extend the prohibition on having regard to trade competition or its effects in relation to resource consent applications, notices of requirement, the preparation of plans and policy statements, and notification decisions (new sections 61(3), 66(3), 74(3), 94A(d), 104(3)(a)(i) and 171(1A)).
- Prevent trade competitors from participating in resource consent applications (new section 308A-D) and plan changes (new clause 6 to the First Schedule) unless they are directly affected by a potential adverse effect of the activity on the environment.
- Discourage covert opposition of trade competitors through third parties (new sections 308E-F).
- Provide an ability for the Environment Court to award indemnity costs against a trade competitor who does become involved in appeals, as well as the ability for the High Court to award damages for losses resulting from participation by a trade competitor (new section 308G-H).
- Amend the general costs provisions to emphasise the ability of the Environment Court to award more extensive costs (new section 285), and reinstate the power of the Environment Court to require security for costs (removal of section 284A).
These changes are set out in further detail below. A flow diagram also follows which sets out the potential implications of the changes.
No regard to be had to trade competition or effects of trade competition
The Bill makes it explicit that decision-makers are prohibited from having regard to trade competition or its effects - essentially in respect of all decisions, ie in respect of consent applications, notices of requirement, plans and policy statements, and notification decisions (new sections 61(3), 66(3), 74(3), 94A(d), 104(3)(a)(i) and 171(1A). This was already the case in respect of consent applications, and plans and policy statements.
The Bill provides no express definition for "trade competition" or "trade competitor", but is apparently intended to be applied broadly, as it also expressly extends to "the effects of trade competition". This is potentially significant as, when the trade competition provisions of the RMA were last considered in 1997, it was decided not to include the "effects of trade competition" in the prohibition. The Courts have clarified that this was on the basis that the term "trade competition" was well understood by the Courts and practitioners.
Notwithstanding the failure to specifically include the "effects of trade competition" last time round, the Courts have in any event been excluding both trade competition and the effects of trade competition (other than significant effects going beyond those ordinarily associated with trade competition) - so this particular amendment in itself may not have a significant effect. However, combined with the limitations on participation which are summarised below, the increased emphasis on excluding consideration of the effects of trade competition may have significant consequences for councils and applicants as they try to understand what is excluded from consideration.
Limits on participation by trade competitors
The Bill is intended to prevent trade competitors from participating in proceedings unless they are directly affected by an effect of the subject matter of the consent application or plan change at issue that (new sections 308A-C and clause 6 to the First Schedule):
- adversely affects the environment; and
- does not relate to trade competition or the effects of trade competition.
For consent applications, trade competitors are also prohibited from appealing or joining an appeal for the purpose of (new section 308D):
- protecting that trade competitor from trade competition; and/or
- preventing or deterring another trade competitor from engaging in competitive conduct in the same market.
Plan appeals are limited in any event to points of law only, unless special leave from the Environment Court is obtained (refer new clause 14(2A) to the First Schedule 1, and sections 290AA and 280A).
The Bill also contains provisions to prevent the use of third parties to advance arguments on behalf of a trade competitor (new sections 308E-F), as that would otherwise be an obvious way around the limitations on involvement by trade competitors.
A new costs regime for trade competitors who do participate
Even if a trade competitor can show direct effects and therefore participate, a new costs regime provides a further disincentive to their participation.
If a trade competitor involves itself at the Environment Court level, then it is potentially liable for indemnity costs in respect of the Environment Court hearing. This follows automatically (unless there are exceptional circumstances) if a declaration is given by the Environment Court that the trade competitor was not directly affected, raised trade competition effects, or was motivated by trade competitive purposes - ie contravened the 'trade competition provisions' (new sections 308G-H).
Additionally, if the Environment Court makes such a declaration, the applicant can seek orders from the High Court for damages for losses arising from the conduct of the trade competitor (ie delay).
Costs generally and security for costs
Even if a declaration is not made triggering "indemnity costs", the Bill does rework the Environment Court's powers to award costs in a way that suggests that greater costs will be awarded, particularly where appeals are lodged by those with anti-competitive, frivolous or vexatious motives, or where appeals have little merit (new section 285).
Additionally (and this is aimed more at bodies like incorporated societies, rather than at trade competitors), the Environment Court will again have the power to order security for costs. In other words, the Environment Court can require a party to pay to the Court a sum in case that party is unsuccessful, so that the other parties have some prospect of recovering costs associated with the proceedings. This will be welcomed by business sector participants generally, who have been left out of pocket with costs orders unable to be met by incorporated societies.
Observations
Together the limitations on standing for trade competitors, the potential "penalties" even if standing is achieved, and the clear emphasis that councils are not to have regard to trade competition or its effects, are intended to mean significantly less involvement in plan changes and resource consent applications by business interests.
On one view, any submission or appeal by a business interest - at least where one or more of the other parties is a trade competitor - is motivated by trade competition. When coupled with the penalty provisions, should the threshold of standing be reached, businesses may be reluctant to avoid participation at least at the Environment Court level, unless there are very clear and direct environmental effects on their business (eg direct traffic impacts, shading, noise, etc). Indeed, motive has never been the RMA's focus. Accordingly, this represents a significant change in philosophy, and appears to be a problematic aspect of the Bill.
While this could be a positive overall in respect of resource consents, it has the potential to cut business out of plan changes entirely, depriving the councils of business support - or at least the bringing by business of independent expert evidence on relevant environmental matters to their attention. This positive contribution that trade competitors have had in terms of environmental decision making is well recognised by the Courts.
For example, in the future, trade competitors could be locked out of urban form plan changes, such as the present:
- LGAAA plan changes regarding urban intensification and integration of land use and transportation planning within the Auckland Region;
- Wellington City Council urban form centre hierarchy changes (eg Plan Change 66); and
- Environment Canterbury urban form changes to its Regional Policy Statement.
These changes concern a number of effects which could be categorised as "effects of trade competition", including (arguably) the traffic and transportation effects which can flow from the location of business activities.
It will be interesting to see how councils will respond to claims that they cannot control the location of business activities - as that would be to have regard to trade competition or its effects. Business itself will not be able to make those claims, as it will be shut out from the debate. It will therefore be left to others to make those claims, for their own reasons.
Perversely, the Bill could preclude trade competitors from seeking rules that enable their development as that may 'relate to trade competition'. It could also embroil trade competitors in litigation about whether the effect of concern to them is simply 'trade competition'. There are examples in the law now where direct physical effects have been deemed to be 'trade competition' (Southern Alps Air Ltd v Queenstown Lakes District Council).
Accordingly, if the Bill goes through in its present form, it may spawn litigation designed to stop legitimate objections on the basis that they relate to trade competition. It may also lead to more "behind the scenes" lobbying of councils, as well as greater participation by business in some of the strategic and non-RMA planning processes (eg long term council community plans, structure plans etc).
Update on the RM "Simplify And Streamline" Bill
The Local Government and Environment Select Committee has called for submissions on the Resource Management (Simplifying and Streamlining) Amendment Bill. Submissions close on Friday, 3 April 2009.
We have released a separate paper on the proposed reforms which is available on our website. If you would like to discuss the proposed reforms or lodge a submission on the Bill, please contact a member of our Resource Management team, based in Auckland and Wellington.
Wellington waterfront project extended
The Wellington City Council has announced that it intends to extend the time frame for the implementation of the Wellington Waterfront Project to 10 years.
The Wellington Waterfront Project involves the development and enhancement of the Waterfront and has been run in three stages. Stage One (creating the Wellington Waterfront Framework), and Stage Two (the development of design briefs for each precinct within the waterfront) are complete. Stage Three, the implementation of each precinct’s design brief, is now under way. At all stages the public has had, and will continue to have, opportunity to provide input.
The Wellington Waterfront Framework identifies five distinct waterfront areas, and the key attributes of each area. Areas are maintained and developed according to the principles, values and objectives of the Framework.
While it was anticipated that the Waterfront Project would be implemented by 2006 -2007, the impact of the current economic downturn and time delays related to Resource Management Act processes has meant that this initial completion date is not achievable.
A new completion date of 2018 - 2019 has been agreed. It is also likely that City Council will take over from Wellington Waterfront Limited to manage implementation from July 2010.
Additional information can be found at Wellington Waterfront Project.
Terms of reference for regulatory reviews to be set by April
Rodney Hide, Minister for Regulatory Reform, has announced that the terms of reference for further key resource management and local government legislative reform are to be set by April. Legislation to be reviewed includes the second phase of the Resource Management Act, the Building Act, and the Overseas Investment Act.
Additionally Mr Hide, in his role as Minister for Local Government, has confirmed that a review of the Local Government Act is on the Agenda.
Similarly to the Resource Management Act, the Local Government Act is considered unwieldy and encouraging of unnecessary bureaucracy and paperwork in its current form. Mr Hide has signalled that it is likely to undergo a "simplify and streamline" type change to reduce these issues. Mr Hide has also indicated that his intention is to see legal responsibility and liability taken away from the councils and placed back with contractors and suppliers.
Review of Foreshore and Seabed Act
Attorney-General Chris Finlayson has announced the terms of reference and membership of the Government's Ministerial Panel to review the Foreshore and Seabed Act.
The Ministerial Panel will be chaired by former High Court judge and Waitangi Tribunal chair Justice Edward Taihakurei Durie. The other members are barrister Richard Boast, an Associate Professor at Victoria University specialising in property law and Maori legal issues, and Hana O'Regan, an educationalist specialising in Maori culture and identity.
The panel's mandate in a general sense is to investigate whether the Foreshore and Seabed Act is the best way to address Mäori customary rights, balanced against the New Zealander's rights to access beaches. It will also consider the state of the law concerning Maori customary interests in the foreshore and seabed prior to the Court of Appeal's decision in Attorney-General v Ngäti Apa to review what options were open to the government in responding to that decision.
The terms of reference set out the scope timing and consultation requirements of the review and can be found in full at:
http://www.beehive.govt.nz/sites/all/files/Terms_of_Reference_F&S_Act_review.pdf
The Panel is likely to hold public meetings and hui around the country in April and May and will also seek to hear evidence form key commentators on the act. It will also reconsider the submissions made to parliament when the original Act was passed.
The review of the Foreshore and Seabed Act was a key part of the National's Confidence and Supply agreement with the Maori Party, and is a key issue for the Maori party - the enactment of the Foreshore and Seabed in 2004 being the catalyst for the formation of the Maori party.
The panel is to provide Mr Finlayson with a written report by 30 June 2009.
Standards New Zealand has released a revised draft standard, "DZ 6808 Acoustics - Wind Farm Noise", for public comment. The Standard replaces NZS 6808:1998 and seeks to provide suitable methods for the prediction, measurement and assessment of sound from wind turbines for use in both wind farm development and local authority planning procedures. The Standard also includes guidance on the limits of acceptability for sound received at noise sensitive locations emitted from wind farms containing one or more wind turbines. It is intended to be applied to the processes of planning and developing a wind farm, for confirming compliance with resource consent conditions, and for the investigation and assessment of noise complaints from completed wind farms.
The draft Standard is available for public comment until 30 April 2009. All comments received on the Standard will then be considered by the technical committee before the revised standard is published in October 2009. A copy of the draft can be downloaded from http://shop.standards.co.nz/goto?id=97, or by visiting www.standards.co.nz, and clicking on the ‘Public comment’ tab and selecting DZ 6808.
