In the latest development, the Court of Appeal in R J Davidson Family Trust v Marlborough District Council [2018] NZCA 316 has shed some light on the relevance of the purpose and principles of the RMA ("Part 2") for resource consent decision making, but perhaps raises as many questions as it answers.

This was an appeal from a decision of the High Court released early last year. As we discussed at the time, that case applied the Supreme Court’s reasoning in King Salmon – which was previously confined to plan changes – and held that in most cases there is no need (or ability) to refer back to Part 2 in determining an application for resource consent.

The Court of Appeal has now revisited that approach, and to some extent revived Part 2 for resource consent applications, but in a greatly reduced capacity.

This case has significant implications for the preparation and determination of resource consent applications, and also informs how submitters and decision makers should approach plan change processes.

Background – why this matters

In considering an application for resource consent, decision makers are directed by section 104 RMA to “have regard” to matters such as the effects of the activity on the environment, and the relevant RMA planning provisions (district plans, regional plans, and national and regional policy statements).

Planning instruments typically contain a range of objectives and policies for managing effects of activities on the environment, and often include aspirational or unqualified directions such as to “avoid effects” of a certain kind or on a certain area.

However, section 104 specifies these considerations as being “subject to Part 2” – the sustainable management purpose of the Act, and associated principles. Sustainable management in Part 2 has an environmental emphasis but also speaks to enabling "people and communities to provide for their social, economic and cultural wellbeing". As a result, recourse to Part 2 under section 104 had historically been used to enable an "overall broad judgment" of the merits of a proposal, such that applications might be granted despite not being entirely consistent with the strict wording of the objectives and policies.

This changed with the High Court’s decision in Davidson, being an appeal from the Environment Court’s decision to decline resource consent for a mussel farm. It followed and applied the Supreme Court’s decision in King Salmon. In a different statutory context the Supreme Court had found that it was necessary for a regional plan to "give effect" to the NZ Coastal Policy Statement (NZCPS) without further recourse to Part 2 of the Act, on the basis that Part 2 had already been "given substance" in preparing the NZCPS itself.

The High Court in Davidson then held 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.”

Part of the High Court’s reasoning was 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.”

As such, following this decision, decision makers on a resource consent were only permitted to consider Part 2 in narrow circumstances where there had been “invalidity, incomplete coverage or uncertainty of meaning within the planning documents” (being the three ‘caveats’ set out in King Salmon).

The Court of Appeal’s decision

The original applicant, R J Davidson Family Trust, appealed to the Court of Appeal, arguing that the High Court had erred in holding that the Environment Court was not able or required to consider Part 2 of the RMA directly (being instead bound by its expression in the relevant planning documents).

The Court of Appeal did find the High Court had erred insofar as it proceeded on the basis that consent authorities were not permitted to consider the provisions of Part 2 in evaluating resource consent applications (unless the plan is deficient). In light of the wording and legislative history of section 104, the Court of Appeal accepted that the words "subject to Part 2" (which are not present in equivalent sections relating to plan change processes) “clearly show that a consent authority must have regard to the provisions of pt 2 when it is appropriate to do so”. It also found the Supreme Court’s decision in King Salmon could not properly be interpreted as intended to apply to resource consent decision making.

Notwithstanding this, the Court agreed with the conclusion of Justice Cull in the High Court that it would be inconsistent with the scheme of the Act to allow regional or district plans to be ‘rendered ineffective’ by general recourse to Part 2 in deciding resource consent applications. In later summing up its approach, the Court of Appeal went on to say:

We do not consider however that King Salmon prevents recourse to pt 2 in the case of applications for resource consent. Its implications in this context are rather that genuine consideration and application of relevant plan considerations may leave little room for pt 2 to influence the outcome.

Thus, in the present case, it found that while the Environment Court might properly have considered Part 2 more extensively than it did, the thrust of the NZCPS policies and the Sounds Plan could not properly have been put to one side in reliance on Part 2.

As a result, the error in question was not material, and the appeal was dismissed.

So does Part 2 apply or not? It depends.

The Court of Appeal’s approach (now the current law) is more nuanced than the position either before or after the High Court’s decision was released. While simply referring to Part 2 in determining a resource consent is no longer an error of law in itself, the Court of Appeal contemplated that the extent to which Part 2 has a bearing on the outcome will depend on the nature and content of the statutory instruments in question.

The Court discussed a number of scenarios. In doing so, it distinguished the NZCPS from other RMA instruments (prepared “without the need to comply with ministerial directions”), because the NZCPS has now been confirmed as complying with the Act’s requirements by the Supreme Court. 

In respect of the NZCPS, the Court held that:

• Where a proposal would be “demonstrably in breach of one of the policies in the NZCPS”, then separate recourse to Part 2 would not be required as it is already reflected in the NZCPS. Referring to Part 2 would be unnecessary at best, and “resort[ing] to pt 2 for the purpose of subverting a clearly relevant restriction in the NZCPS adverse to the applicant would ... expose the consent authority to being overturned on appeal”.
• However, if it were unclear from the NZCPS whether resource consent for a proposal should be granted or refused, then the consent authority would be in a position to exercise a judgment, and as part of that could “consider pt 2 for such assistance as it might provide”.

The Court appeared to envisage a similar approach being taken for other RMA instruments, noting that a plan provision is not properly “had regard to” if it is simply “considered for the purpose of putting it on one side”. It might also be that on a fair appraisal of the provisions “the appropriate response to an application is obvious”.

In circumstances where it is clear that a plan is “prepared having regard to pt 2 and with a coherent set of policies designed to achieve clear environmental outcomes” the Court envisaged that “the result of a genuine process that has regard to those policies in accordance with s 104(1) should be to implement those policies.” Reference to Part 2 would not add anything, and “could not justify an outcome contrary to the thrust of the policies.”

On the other hand, the Court indicated that if it appears that the plan has not been prepared in a manner that appropriately reflects the provisions of Part 2, then the consent authority “will be required to give emphasis to pt 2”.

Determining which of these last two scenarios applies is likely to require a preliminary (and subjective) assessment by the consent authority. However, the language used by the Court of Appeal suggests the emphasis should be on the plan development process, not whether the plan in question accords with the decision maker's own vision of what Part 2 requires. The Court indicated that if a plan "has been competently prepared” then a decision maker may well “feel assured” in taking the view there is no need to refer to Part 2 because “doing so would not add anything to the evaluative exercise”. However, “absent such assurance, or if in doubt” it would be appropriate and necessary for decision makers to refer to Part 2 RMA (this being the implication of the words “subject to Part 2”). The Court expressly preferred this expression of the position to the narrower exceptions of “invalidity, incomplete coverage or uncertainty” that had been applied by the Supreme Court with respect to the NZCPS (and adopted by the High Court).

Comment – likely implications

The upshot of this decision is that it is now permissible to refer to Part 2 once again in the context of a resource consent application; but doing so might not advance matters very far. The pendulum has only swung back part of the way to where it was prior to the High Court’s decision.

Particularly in the coastal environment where the NZCPS applies, very little has changed. While strictly speaking the High Court’s approach has been overturned, this decision is likely to be of little comfort to those looking to advance proposals such as port developments, airport extensions, reclamations, dredging, renewal applications for marine farms, or any other activities affecting outstanding natural landscapes along the coast. Part 2 is nominally back in the game, and will have a role to play on matters where NZCPS policies are less prescriptive (or if it is genuinely unclear whether the NZCPS as a whole mandates grant or decline). However, the NZCPS still rules the roost.

Beyond the coastal environment, it will be interesting to see how the case law develops from here; in particular, how confident decision makers will be in "feeling assured" that plans have been "competently prepared" with a “coherent set of policies”, such that there is no need to refer to Part 2 and their role is instead to “implement the policies” in determining the application. Again there will be debate about when the outcome directed by plan provisions is unclear. Such that Part 2 would assist we can expect these tests or criteria to be refined over time. At least initially, applicants and decision makers would be wise to "appeal proof" decisions by having regard to Part 2 "just in case".

Strong or unqualified directions in planning instruments (e.g. to "avoid" specified effects) will continue to carry greater weight than before the High Court’s decision. Over time (assuming the Court of Appeal’s decision is not itself overturned) planning instruments will be updated to reflect that they will be interpreted in this way, but there will be a lag period while provisions drafted before Davidson are applied in the new legal framework.

As for plan change processes, clearly no council sets out to produce a document that is not “competently prepared” (and so on, in the words of the Court of Appeal). As such, it remains important that objectives and policies strike the right balance and "say what they mean" – given there is no guarantee that Part 2 will be available when it comes time to consider resource consent applications made under them. 

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