Australia: Environmental & Public Law Bulletin

In December last year the High Court held that the Resource Management Amendment Act 2003 extended the default lapsing period for all unimplemented resource consents from two to five years.

It was always clear that the Resource Management Amendment Act 2003 (the Amendment Act) altered the period between commencement of a resource consent and its expiry from two to five years for all new consents issued after 1 August 2003. In Re Auckland City Council, the Environment Court had held that this extended period applied to all consents, whether issued before 1 August 2003 or after. The Art Deco Society (Auckland) Inc appealed that decision, arguing that the BNZ’s resource consent to demolish the Jean Batten State Building and other surrounding buildings expires two years from when it was issued, not five.

The appeal was unsuccessful. The High Court, like the Environment Court, held that the extended period introduced by the Amendment Act also applied to consents that existed before 1 August 2003.

As a starting point, the Court determined that the natural and ordinary meaning of the amended Act is that all resource consents in existence from 1 August 2003 onwards will have a 5 year term. The Court found that this is consistent with the principle that legislation is given a commonsense interpretation, in accordance with ordinary notions of fairness.

In considering whether this interpretation was indeed ‘fair’, the Court examined how the extension of the default lapsing period for consents that were issued prior to 1 August 2003 would affect existing rights or interests. The Court noted that although the public’s ability to observe and challenge extension requests after the two year expiry will be effected if a further three years is granted, this does not amount to such unfairness that it would warrant an interpretation of the amendment that is different from the ordinary, natural and ‘perfectly logical’ meaning.

This is a significant decision for the holders of resource consents that were granted before 1 August 2003 and which do not specify an alternative lapsing period. These consents now lapse after five years, which means that some may have close to three years still to run.

Another effect of the 2005 Resource Management Act (RMA) amendments is that Councils no longer need to apply to the Environment Court to make a proposed policy statement or plan partly operative.

The Court confirmed in Karaka Lakes Ltd & others v Papakura District Council (ENV A 270/05) that as a result of the amendments it no longer has jurisdiction to hear an application to make a plan operative in part. The amendments delete the phrase ‘with the consent of the Environment Court’ from Clause 17(2) of the 1st Schedule, allowing a Council to simply resolve to make a plan change or a change to a policy statement partly operative without applying to the Court.

While the effect of s19 RMA means that many proposed rules in a plan change can be deemed to be operative straight away if they are not challenged during the appeal period on the Council’s decision, there is still pressure on Councils from those wanting to rely on new plan change provisions to make as many of the underlying objectives and policies operative through the Clause 17 process as possible.

In the Karaka Lakes decision, the referrer had applied for a direction to make part of a proposed plan change operative with the consent of the Council and remaining referrers. The plan change had been notified before the 2005 amendments took effect, but the Court noted that – unlike most of the 2005 changes which do not apply to plan changes notified before the amendments took effect - s131(8) of the transitional provisions expressly states that the deletion to Clause 17(2) applies immediately.

The Court’s scrutiny of past Clause 17(2) applications has been a final check and balance to determine whether an outstanding appeal will be prejudiced by making parts of a plan change operative before that appeal is resolved. Now, however, a Council can make its own determination of whether an appeal will be prejudiced without this review by the Court. The only avenues available to an affected appellant will be to apply for a declaration or judicial review of the Council’s decision if it does not agree.

We consider good practice requires Councils to exercise this power carefully and, in addition to seeking their own internal advice, requires them to consult with appellants to obtain their views on the scope of their appeals before making a resolution under Clause 17(2).

The change from a mandatory to a discretionary permitted baseline test (by virtue of the 2003 RMA Amendments) means that consent authorities can now consider the appropriateness of applying the permitted baseline on a case by case basis. To date, the new test has received little judicial attention, so there has been limited help from the courts on how it will apply in practice.

One particular issue for authorities is what procedure, if any, should be followed if it decides the baseline should not apply. A recent decision of the High Court Wise v Thames-Coromandel District Council (High Court, Auckland, 14 December 2005, CIV-2004-485-278, Frater J) sheds some light on this issue.

The appeal in Wise was from an Environment Court decision confirming the Thames-Coromandel District Council’s decision to decline a subdivision consent. The proposed subdivision was in a location near Whangamata in an area with a low residential density and a semi-rural character. The proposal did not meet either the minimum lot area or the average net lot requirements in the plan.

The decision of the Environment Court focused on the effect that the proposal would have on the character and amenity of the area. The Environment Court did not mention the permitted baseline in its judgment and, subsequently, failure to take the baseline into account was raised as a ground on appeal. The High Court found that because the Environment Court had not mentioned the baseline in its decision, it could not be satisfied that the baseline had been taken into account and strictly speaking there had been an error of law. After reviewing the transcripts of the hearing Justice Frater noted that the Environment Court had been mindful of the baseline test, had considered evidence on the point and it had factored in its decision. As a result the error of law had not been material to the outcome and the appeal was dismissed.

While this decision has to be read with caution (as the pre-2003 baseline test is applied, at the relevant time consideration of the baseline was still mandatory), it still provides a useful insight into how the issue might be approached in the future. To reduce the risk of the baseline being used as a ground of appeal or review, consent authorities should, in each case, consider whether the baseline should be applied or not. In other words, an authority must at least turn its mind to the baseline and if its decision is not to apply it, then it should record the reasons why it was considered inappropriate.

An appellant may be obliged to pay substantial (higher than usual) costs if it withdraws its appeal at a late stage, and where that appeal appears to have been lodged for improper or collateral purposes.

In this case, the developer, Remarkables Park, appealed against the Council’s decision to decline variation of a condition of its resource consent. However, it withdrew its appeal after the parties had already prepared and exchanged evidence.

The Court took the view that Remarkables Park had lodged the appeal as tactical leverage for negotiations with another party, and doubted that it had been ‘really serious’ about proceeding with the hearing, warning that ‘an appeal under the RMA is not a bargaining chip’.

Besides putting the other parties to unnecessary costs, costs that would be unfairly borne by the public purse, in the Court’s opinion, ‘such actions come close to being an abuse of the Court’s processes’.

The appellant was ordered to pay more than three quarters of each of the other two parties’ total costs.

The Court also ruled that a further reply in response to a reply on costs cannot be provided as of right. Leave is required, consistent with the general practice of allowing parties to address the Court only once on any issue. Thus in this case leave was not granted, and replies already submitted by the parties were not considered.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.