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HIGH COURT CASE CHANGES HOW RESOURCE CONSENT APPLICATIONS WILL BE CONSIDERED
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A recent decision of the High Court, R J Davidson Family Trust v Marlborough District Council [2017] NZHC 52, is likely to have significant implications for how all resource consent applications are decided in the future

The High Court applied the Supreme Court’s reasoning in EDS v NZ King Salmon [2014] NZSC 38 – which was previously confined to plan changes – and held that in most cases there is no need (or ability) to refer back to the purpose and principles of the RMA (‘Part 2’) in determining an application for resource consent.

In our view this decision is also likely to have implications for the development of RMA planning and policy instruments, given the new way in which they will now be applied.
 
Background – the Supreme Court’s decision in NZ King Salmon

Before the Supreme Court’s decision in 2014, Part 2 of the RMA (and in particular the section 5 purpose) was considered the ‘engine room’ or ‘lodestar’ of the RMA.  Policy instruments (such as national or regional policy statements) were important, but not always determinative.  It was common for decision makers to step back and carry out an ‘overall broad judgment’ under Part 2 of the Act before reaching their decision on a plan change or resource consent application.

However, the Supreme Court held that because a plan change is required to ‘give effect to’ (or ‘implement’) the NZ Coastal Policy Statement (NZCPS), and because the NZCPS itself is designed to achieve the purpose of the Act, a plan change which gives effect to the NZCPS must necessarily also be in accordance with Part 2.  This meant that, notwithstanding the statutory direction for a plan to be developed ‘in accordance with Part 2’, it was (unless one of three special circumstances applied) unnecessary to refer back to Part 2 of the RMA when determining a plan change.

The upshot of this approach was that strong directions in the NZCPS (to ‘avoid’ specified effects) had to be implemented in the plan change – there was no longer any ability to read down those directions by reference to countervailing considerations under Part 2.

At least initially, it appeared that the effects of the Supreme Court’s findings would be confined to plan changes, given that decisions on resource consents and designations are made under a different statutory framework (in particular, there is no requirement to ‘give effect to’ the NZCPS or other planning documents, and the consideration of the specified matters is expressed as being “subject to Part 2”).  This position was confirmed in relation to designations by the High Court in High Court in New Zealand Transport Agency v Architectural Centre Inc. [2015] NZHC 1991 (the ‘Basin Bridge’ case).
 
The High Court’s decision in R J Davidson

This case began with an application for resource consent to establish a mussel farm in Beatrix Bay, Marlborough Sounds.  The application was declined by Marlborough District Council, and also by the Environment Court on appeal. 
 
Among other matters, the Environment Court was concerned about potential adverse effects on the King Shag population.  The proposed mussel farm was to be located within a King Shag ‘Area of Significant Ecological Value’ in the Marlborough Environment Plan.

In declining the appeal, the Environment Court held that there was “no need to look to Part 2 of the RMA” in determining the application, and commented that “logically the King Salmon approach should apply when applying for resource consent under a district plan”. The applicant appealed this and other aspects of the decision to the High Court.
 
The High Court rejected the appeal, finding that (except in limited circumstances) there is no need (or ability) to refer back to Part 2 of the RMA when determining a resource consent application under section 104 of the Act.  Her Honour Justice Cull concluded on this point that:
 
I find that the reasoning in King Salmon does apply to s 104(1) because the relevant provisions of the planning documents, which include the NZCPS, have already given substance to the principles in Part 2.  Where, however, as the Supreme Court held, there has been invalidity, incomplete coverage or uncertainty of meaning within the planning documents, resort to Part 2 should then occur.

… I accept Council’s submissions that it would be inconsistent with the Scheme of the RMA and King Salmon to allow Regional or District Plans to be rendered ineffective by general recourse to Part 2 in deciding resource consent applications.
 
Justice Cull did not fully address the earlier decision of the High Court in the Basin Bridge case, but commented in passing that the Environment Court “did not apply Basin Bridge as it was inconsistent with King Salmon”.  Following these two cases the position seems to be that, at least for the time being, Part 2 can be considered in relation to a proposed designation (under section 171 RMA), but is generally not able to be considered in the resource consent or plan change contexts.
 
Comment – what the decision will mean

Unless and until it is either successfully appealed or revisited by the High Court, R J Davidson will be binding on Environment Court and Council level decision makers - including in relation to applications that have already been lodged. 
 
No longer being able to rely on Part 2 will mean that objectives and policies in plans and policy statements assume greater importance for resource consent applications.  In some cases, this will be unlikely to affect the outcome – for example, in many cases identified ‘enabling benefits’ of a project under Part 2 will be able to be reframed as ‘positive effects on the environment’ under section 104. 
 
However, resource consent could become much harder to obtain where there are strong or unqualified policy directions, such as to ‘avoid’ specified effects.  The obvious example is where the NZCPS applies, given its directions to “avoid” any adverse effects on outstanding landscape or natural character areas, and to otherwise avoid significant adverse effects on those values (where the area in question is not outstanding).  Proposals such as reclamations, dredging, or activities affecting outstanding natural landscapes will become more difficult to get consent for.  (This may in turn necessitate a review of the NZCPS, given the extent to which the way it must now be applied differs from what could have been foreseen at the time it was drafted.)
 
But the implications are not limited to the NZCPS; broad or unqualified policy directions in other national policy statements, regional policy statements, and even regional or district plans will now have a greater bearing on the outcome of resource consent applications.  The difficulty is that this was not anticipated at the time those instruments were prepared – the drafters would have assumed that consideration would also be given to Part 2.  We can therefore expect some debate in resource consent processes about whether or not particular policies adequately ‘cover the field’ in relation to the proposed activity – “incomplete coverage” is one of the three caveats or exceptions that allows Part 2 to be considered.
 
Finally, this decision is likely to affect future plan change processes as well.  Where in the past submitters on a plan change may have been content to settle for imperfect drafting, knowing they could always fall back on Part 2 in resource consent processes, they will no longer have that luxury.  More than ever, it will be vital to ensure that objectives and policies strike the right balance and ‘say what they mean’.  Matters of discretion and assessment criteria will also become more important, and will need to be more comprehensive.  We can expect to see aspects of Part 2 reproduced word for word in some cases, just to make sure those considerations can be taken into account. 
 
Overall, this decision could mean that plan change processes become more important, and therefore more contentious.  It will also be instructive for the Ministry for the Environment, which is understood to be preparing a number of new and updated National Policy Statements this year.
 
This case will be important for resource consent applicants (or submitters), and parties making submissions on RMA plans or policy statements.  If you have any questions about this topic, or any resource management issues that we can help with, please do not hesitate to contact Nicky McIndoe, or Ezekiel Hudspith.

This article was authored by Ezekiel Hudspith, Senior Associate, in our Environment and Planning team based in Wellington. Ezekiel appeared for the R J Davidson Trust at the Environment Court hearing, while working at a different law firm.  

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Ezekiel Hudspith

Senior Associate

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+64 4 498 0849

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Nicky McIndoe

Partner

Wellington and Auckland

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