Project Hayes declined: a raising of the bar for windfarms?
In a recently released decision, the Environment Court has declined consent for Meridian Energy Limited's ("Meridian") proposed wind farm in Central Otago - "Project Hayes". The Project Hayes proposal involved 176 turbines, each of which was to have a maximum height of 160m. The site envelope was 135km2 on the high plateau of Lammermoor Range, generally more than 900 metres above sea level. It was estimated that the proposal would generate sufficient electricity to supply power for 278,000 average homes.
The Central Otago District Council and the Otago Regional Council granted consent for Project Hayes in 2006 and 2007. Various environmental protection parties / local residents appealed against the grant of consent, while Meridian appealed against the consent conditions.
The Environment Court allowed the appeals against Meridian and cancelled the grant of resource consents from the two Councils, on the basis that the nationally important factors of enabling economic and social welfare by providing a large quantity of renewable energy were outweighed by significant adverse considerations, primarily the substantial impact on an outstanding, highly natural, landscape nearly surrounded by public land.
The Court made a number of important findings across a range of topics.
Naturalness
In respect of natural landscape values, the Court found that the test of naturalness in section 6(b) was seen an important qualification of the word 'landscape' and introduced a 'considerable degree of objectivity' to the concept of a natural landscape. Specifically the Eastern Central Otago Upland landscape was found to be relatively unmodified, although certainly 'affected by human activity'. The several man-made lakes in the area did not detract from the naturalness, instead enhancing the 'cultured naturalness' of the landscape. The Court concluded that:
the naturalness and coherence of the landscape will be completely changed by the wind farm.
Alternatives
The Court heard evidence that New Zealand has a widespread and rich wind resource, and that an over-abundance of possible renewable generation projects could be used to meet New Zealand's electricity needs into the foreseeable future. Accordingly, the Court found that realistic alternatives to a Lammermoor wind farm existed and should have been considered. Particularly in Otago, the Court took notice of the already consented Mahinerangi and Kaiwera Downs windfarm proposals. The Court rejected Meridian's claim that it could not rely upon the these sites as alternatives to Project Hayes, stating:
If an alternative site has been identified in another resource consent application then that is useful whether or not it is used by another applicant.
Efficiency and cost / benefit analysis
The Court rejected Meridian's submissions that it would be efficient in terms of section 7(b) to use wind which is not currently utilised, as the Court noted that it might equally be alleged that it is efficient to spend the money needed to buy expensive wind turbines to buy cheap coal and cheap coal-driven plants, and pay carbon tax. The Court stated it was 'uncomfortable with a cherry-picking approach to efficiency' and preferred to follow the approach set out in the recent decision of Lower Waitaki River Management Society Incorporated v Canterbury Regional Council, where it was considered that efficiency in section 7(b) of the Resource Management Act 1991 ("RMA") requires a consent authority to consider the use of all the relevant resources and, preferably, their benefits and costs. The Court in that instance found that it was nearly meaningless to consider the benefits of only some of the resources involved in the proceeding.
The Court did note, in relation to climate change, that using wind generation, rather than a carbon emitting method of generating electricity, will reduce climate change and its effects. Meridian's proposal would thus contribute to reducing the effects of climate change as defined in the RMA. The Court therefore found it appropriate to consider that aspect of the proposal as a benefit to be included in the overall assessment under Part 2 of the RMA.
The Court also had regard to the fact that Project Hayes would make a 'real contribution' towards the policy in the New Zealand Efficiency and Conservation Strategy, namely that by 2025 90% of New Zealand's electricity generation is to be supplied by renewable resources. However, the Court did not give weight to the Emissions Trading Scheme legislation because the benefits under the Kyoto Protocol of carbon emission reductions had already been considered as a potential economic benefit, regardless of the form of an ETS adopted by New Zealand. The Court's view was that to give the potential emission reduction further weight under the Climate Change Response (Emissions Trading) Amendment Act 2008 would be to double count them.
The Court also lamented the failure by Meridian, the Council, and the Crown to put full evidence before the Court of all the costs and benefits of the proposal, and to address possible alternatives. For example, in terms of the economic value of ecosystems, the Court was not impressed that it received little or no evidence on the economic values of any 'intrinsic values' possessed by the land subject to the application. Without such evidence, the Court was unable to find that the net benefit of the proposal outweighed the qualitative or unmeasured costs (ie impact on landscape) raised by the appellants.
Where to from here?
Meridian has stated its disappointment at the decision but has not yet announced whether it will continue to pursue the project.
The Chief Executive of the New Zealand Wind Energy Association, Fraser Clark, also expressed disappointment over the decision and said that it would hinder the development of other renewable energy schemes:
We're already seen the bar gradually pushing up and up, in the amount of evidence needed to justify a project, and while that might be a good thing, there seems to be changing rules about the amount and information required.
The view that the bar has been raised for windfarms finds some support in other high-profile windfarm consenting cases. Unison's Te Waka proposal was declined on reapplication to the Environment Court earlier this year, while Mighty River Power's Turitea proposal was called-in to a Board of Inquiry. That hearing is currently on hold to allow Mighty River Power to revise the proposal to mitigate concerns. Conversely, Mighty River Power / Windflow Technology's small scale Long Gully proposal in Wellington (25 turbines) was granted consent last month by Wellington City Council and earlier this year TrustPower Limited obtained consent for 83 turbines at Kaiwera Downs.
The Project Hayes decision does make a clear statement about the type and quantity of evidence that developers of large-scale windfarms affecting matters of national importance will need to adduce, including an assessment of all possible alternative sites. One outcome of the decision may be a race to develop proposals for all potential windfarm sites not located in outstanding natural landscapes, to avoid the expense and uncertainty involved in pursuing projects in more contentious locations.
The Environment Court and the "threat" of costs
A recent decision of the Environment Court has highlighted the danger of parties threatening to recover costs awards in a way which can be seen as overbearing. C Butterworth v Auckland City Council A90/2009 concerned an appeal against a decision of the Auckland City Council to decline resource consent to fell a large oak tree. Ms Butterworth was successful in her appeal as the Environment Court disagreed with the Council in relation to the balance of the adverse effects of removing the tree on the amenity of the area versus the positive effects in terms of health and safety and social and economic effects.
In its decision the Court commented on what it saw as a "threatening" letter sent by the Council to Ms Butterworth prior to the hearing. The letter recommended that Ms Butterworth withdraw her appeal and that, as a public body, the Council might have to apply for costs if it succeeded, and that the costs of the final preparation for the hearing would be capable of recovery in a discretionary costs award from the Court. The Court's decision records the following quote from the letter:
We therefore put you on notice that all legal costs incurred by the council from the date of this letter are capable of being recovered in the form of a discretionary costs award from the Court.
In the Court's view Ms Butterworth, as a self represented party, would perceive a threat from the use "put on notice", and the phrase "all legal costs" was seen as overbearing and misleading. This decision highlights the sensitivity around costs in the Environment Court, particularly where lay litigants are involved.
The nature of costs awards in the Environment Court is very different from general civil courts like the District Court or the High Court. In the District Court and High Court there is a presumption that the winning party will be awarded costs. Costs are then granted on the basis of a formula, including examining the steps involved, the length of the hearing etc.
However, in the Environment Court there is no presumption that costs will be awarded to the successful party to a proceedings. Section 285 of the RMA governs the power of the Environment Court to make a costs award, and it is broadly worded:
The Environment Court may order any party to proceedings before it to pay to any other party the costs and expenses (including witness expenses) incurred by the other party that the Court considers reasonable.
Should the Court decide that it will grant an award of costs, it is not guided by any scale, but sets the amount at whatever it considers "reasonable".
The very discretionary nature of the Environment Court regime makes informing parties of their exposure to a costs award (particularly unrepresented parties) a fraught business. It can only be proper that all parties consider carefully their case, and the risk of costs being awarded, before proceeding to court. In this sense the spectre of costs has a role to play in ensuring that matters are not casually litigated. However, this case shows the sensitivity with which the potential for costs being awarded needs to be approached. Especially in cases where there is a perceived power imbalance, parties will need to avoid giving the impression that they are using the Court's discretion to award costs as a threat to strong arm weaker parties out the process.
Recent changes to the RMA introduced by the Resource Management (Simplifying and Streamlining) Amendment Act 2009, which restrict a council's ability to include general tree protection rules in its district plan, have generated a considerable amount of media attention. The debate was particularly heated in the Auckland Region where general tree protection rules are commonplace in district plans.
Critics of the amendments claim that the removal of general tree protection rules will result in an open attack on trees, or 'death by a thousand cuts' to the region's tree population. However, in contrast, those in support of the changes refer to the excessive costs and inefficiencies involved in obtaining resource consents to remove or trim trees. Auckland City Council has been involved in more than one proceeding before the Environment Court where it has tried to defend its decision to refuse consent for tree removal and has had its decision overturned in no less than three cases, most recently in Butterworth v Auckland City Council (discussed above).
Trimming
The recent amendments to the RMA mean that no rule in a district plan may prohibit or restrict the trimming of any tree in the urban environment. While this may at first appear to be a drastic change, there are a number of exceptions to the rule that need to be considered. The provision does not apply if the tree is specifically scheduled, located in a reserve, or subject to a conservation management plan or strategy. It is also limited to the "urban environment", which is defined as an allotment no greater than 4,000m2, connected to reticulated water supply and sewerage systems and on which an
industrial / commercial building or dwelling is located. Therefore, there are a number of places where councils can still control tree-trimming.
The new trimming rules came into effect on 1 October 2009 (rather than coming into effect in 2012 as originally intended) as a result of a supplementary order paper. This last minute amendment appeared to spark a knee-jerk reaction from councils in the Auckland region, who agreed to adopt a common definition of "trimming" (consistent across all councils except Auckland City Council, which preferred a different definition). In some cases, these new "trimming" definitions have been inserted into district plans without being notified, on the assumption that they will correct "minor errors". The validity of these definitions has not been challenged to date and while this represents a pragmatic approach, there are some questions about the procedural propriety of the process adopted by the councils. After all, it would have been a relatively straightforward process to promote the amendments through a public plan change process, which would have allowed public submissions on the definitions adopted to be made and considered.
Tree Removal
The amendments to the RMA have also restricted councils' ability to include rules in district plans which prohibit or restrict the felling, damage or removal of any tree or group of trees in the urban environment. This rule does not come into effect until 1 January 2012.
As with trimming, this amendment is subject to the same limits and definition of urban environment. At this stage, councils have not sought to make any further changes to their plans in response to this amendment; however, it is likely that councils will seek to schedule a number of trees over the next two years. We would certainly expect this scheduling to occur by way of a public process.
Conditional enforceability - the scope of Augier
Caution should be taken when making undertakings to regulatory authorities or parties during the application process - such a promise is likely to be enforceable in certain circumstances.
The High Court's decision in Frasers Papamoa Limited v Tauranga City Council (CIV 2008-470-465) considered the scope of the "Augier" principle. The Augier principle originates from an English planning decision involving the decline of planning permission for sand and gravel extraction. In that case, the applicant gave an undertaking to the Council offering an agreement to provide land for traffic splays to improve visibility at a nearby intersection. It was subsequently argued that the Council had no power to require compliance with the undertaking. The English Court held that where an applicant gives an undertaking, and the planning authority on appeal grants planning permission in reliance on it subject to conditions broad enough to embrace the undertaking, the applicant cannot later say that there is no power to require compliance with the undertaking.
In Frasers Papamoa Limited the appellant owned a large area of land at Papamoa. It developed a proposal for comprehensive mixed residential and commercial development on sites comprising 741 residential units (reduced to 711 units in the Environment Court) and four commercial buildings. The proposal consisted of seven separate precincts for which individual land use consents were sought. The applications were heard together and the Council granted consent to five out of the seven applications. The applicant appealed the Council's decision to the Environment Court.
The Environment Court upheld the Council's decision to grant five out of seven of the resource consents and imposed a condition requiring the appellant to vest land in the Council for the purpose of widening an existing access way that linked to Papamoa beach. As part of its original proposal, the applicant had indicated to both the Council and the Environment Court an intention to provide an enhanced access way to Papamoa beach to mitigate the effects of proposed over-height buildings adjacent to the access way, as well as to generally improve pedestrian connectivity. However, resource consent for the precinct adjoining the access way was declined by the Environment Court. The appellant considered that the proposal to widen the access way was therefore removed from the proposal "package".
The Environment Court held that the intention expressed to provide the enhanced access way was an undertaking, and was therefore an "Augier condition" and that the appellant was bound by its undertaking irrespective of whether the requirements of s108(10) regarding financial contributions were met. However, it did not analyse the Augier principle in any detail and considered the appellant's argument, ie that it could not be required to provide a widened access way because the master plan as a whole had not been approved, was a question of reasonableness rather than an issue of jurisdiction. The Environment Court considered that if that was the applicant's position, it should have been clearly and unequivocally spelt out at the appeal hearing.
In the High Court it was agreed between the parties that if the Augier principle did not apply, the Environment Court had no jurisdiction to impose a condition requiring the vesting of land for a pedestrian access strip, as the condition was neither a financial contribution for the purposes of the RMA, nor a development contribution under the Local Government Act 2002. The legal issue was therefore whether the appellant's offer to vest the enhanced access way was subject to the rule in Augier when the Court had declined consent for part of the comprehensive development proposal.
The High Court rejected any notion that there was an onus at law that an appellant must spell out clearly and unequivocally the supposed undertaking. After reviewing the Augier decision, and decisions applying the principle in the New Zealand planning context, the High Court held that four elements are required to activate the rule in Augier:
- a clear and unequivocal undertaking to the court and/or the other parties;
- receipt of the grant of resource consents in reliance on that undertaking;
- the imposition of a condition on those resource consents which broadly encompassed the undertaking; and
- detriment to the Court or other parties if the undertaking is not complied with.
The High Court was required to determine whether the material presented in the Environment Court was capable of amounting to an undertaking to provide the enhanced access way otherwise than in the context of a grant of consent to the whole of the proposed development. It held that the Environment Court was incorrect in finding there was an undertaking falling within the Augier principle. It held that the Environment Court appeared to impose the access way condition on the basis that it was reasonable to do so, rather than any clear and unequivocal undertaking by the appellant. It is clear that the question of reasonableness or even desirability of a condition falls outside the scope of the Augier principle. The Court further criticised the Environment Court for "pick[ing] through the appellant's documents for the purpose of constructing what could be no more than an implied undertaking". It therefore held that the Court had no jurisdiction to impose the condition.
While the Court ultimately found that no clear and unequivocal undertaking was made, applicants should take care when proposing conditions of consent to the Court and/or parties that are general in nature, to avoid being tied to undertakings in circumstances where desired outcomes are not achieved. If an undertaking is conditional on certain future events occurring, this should clearly be spelt out by the applicant. Likewise, neighbours and other affected persons should be careful when relying on undertakings made by an applicant as these will only be enforceable in the circumstances outlined above.
Government mining review discussion paper to be released in February 2010
In August of this year, Hon Gerry Brownlee, Minister of Energy and Resources, announced that there would be a joint Ministry of Economic Development ("MED") and Department of Conservation review of minerals in conservation land protected under Schedule 4 of the Crown Minerals Act 1991 ("CMA").
Under the CMA, the Minister of Conservation cannot grant access for the purposes of mining to a special "protected class" of land identified in Schedule 4 of the Act. (There are exceptions to this prohibition, including the exercise of certain historical mining permits.)
The MED report, which recommended the review of Schedule 4, highlighted "significant mineral potential" in the Fiordland, Kahurangi and Paparoa national parks. Initially expected to report back on findings on 30 October 2009, the Government on 3 November indicated that the discussion paper will be delayed now for release in February 2009.
The discussion paper will be followed by a six week public consultation period, with a final paper seeking policy approvals to go to Cabinet by June 2010. The delay is at least partially due to the practical and process difficulties of assembling the technical and policy information necessary to undertake the review. In the meantime, the Government is making "cautious progress" by engaging expert assessment of the location and value of mineral resources in the conservation estate. It remains to be seen who will get the benefit of any minerals in the conservation estate.
The Schedule 4 review is to be followed by improvements to DOC processes for access arrangements to Crown-owned land under the Act; and improved consultation on the reclassification of DOC administered land into or out of the conservation estate.
Read more about the review, along with other developments in mining, in Russell McVeagh's Mining Update here.
Government closer to taking a position on the Foreshore and Seabed
Further to the update in the July edition of Carbon Copy, the Government is closer to taking a position on the future of the Foreshore and Seabed Act 2004 ("FSA"). By way of background, on 4 March 2009 a Ministerial Review Panel ("Panel") was appointed to undertake a review of the FSA. On 1 July 2009 it released its report entitled Pākia ki uta, pākia ki tai ("Report"). Following a series of public meetings, hui, discussions with stakeholders, academics, judges, lawyers, and a review of over 580 submissions, the panel recommended that the FSA be repealed.
On 2 November 2009 the Government announced that Cabinet was looking at amending the FSA. It is likely that the FSA may be repealed in its entirety, however it is unclear at this stage what the replacement regime will be. The Panel recommended an interim Act which would contain transitional provisions to provide for a framework for the settlement of customary interests and vest legal title in trust to the Crown until further issues are resolved between stakeholders. The interim Act would repeal the FSA, recognise that entitled hapu and iwi have customary rights in the coastal marine area and also recognise that the general public have rights of use and enjoyment. The interim Act would also provide mechanisms for Maori and the public to respond to the two proposals put forward by the Panel (the National Policy proposal and the Regional Iwi Proposal).
This publication is included in Russell McVeagh's website on the Internet:
www.russellmcveagh.com
The publication is intended only to provide a brief summary of the subjects covered. It does not constitute legal advice and should not be relied on as such without first obtaining specific professional advice based on your unique circumstances.
Russell McVeagh has New Zealand's longest established and most experienced environmental and resource management practice. We are here to work with you, and if you require any advice or further information on the matters dealt with in this publication please contact the partner/solicitor in the firm who normally advises you, or alternatively contact:
AUCKLAND
Derek Nolan
Christian Whata
Bal Matheson
VERO CENTRE 48 SHORTLAND STREET
PO BOX 8 AUCKLAND 1140 NEW ZEALAND
PHONE 64 9 367 8000 FAX 64 9 367 8613
|
WELLINGTON
James Gardner-Hopkins
VODAFONE ON THE QUAY
157 LAMBTON QUAY
PO BOX 10-214
WELLINGTON 6143 NEW ZEALAND
PHONE 64 4 499 9555 FAX 64 4 499 9556
|
