AUCKLAND REGIONAL COUNCIL V LIVING EARTH LIMITED HC AK CIV-2006-404-6659

AUCKLAND REGIONAL COUNCIL V LIVING EARTH LIMITED HC AK CIV-2006-404-6659 15 November 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2006-404-6659UNDER the Resource Management Act 1991 ("the Act") IN THE MATTER OF an appeal under s 299 of the Act 1991 BETWEEN AUCKLAND REGIONAL COUNCIL Appellant AND LIVING EARTH LIMITED Respondent Hearing: 31 October 2007 Appearances: R B Enright and L S Fraser for the Appellant D A Kirkpatrick and T Daya-Winterbottom for the Respondent Judgment: 15 November 2007JUDGMENT OF DUFFY JThis judgment was delivered by Justice Duffy on 15 November 2007 at 10.00 am, pursuant to r 540(4) of the High Court Rules Registrar/Deputy Registrar Date:Counsel: D A Kirkpatrick P O Box 5844 Wellesley Street Auckland; and T Daya-Winterbottom P O Box 75945 Manurewa for the Respondent Solicitors: Kensington Swan Private Bag 92101 Auckland for the Appellant Martelli McKegg Wells and Cormack P O Box 5745 Auckland for the Respondent[1] The appellant, the Auckland Regional Council, seeks leave to appeal to the Court of Appeal in respect of a decision of this Court issued on 26 June 2007 by Frater J dismissing the appellant's appeal. The respondent, Living Earth Limited, opposes the application. [2] In issue is a decision of the Environment Court delivered on 4 October 2006 in which that Court granted resource consents to the respondent permitting it to establish a green-waste composting operation on Puketutu Island in the Manukau Harbour. This activity is a non-complying activity. The Environment Court described it in this way at [433]: the activity is a non-complying activity because it is so unusual and exceptional that it is not specifically provided for at all.[3] The principal issues raised in the appeal before the High Court and in the application for leave to appeal concern the manner in which the Environment Court dealt with the strategic direction provisions of the Auckland Regional Policy Statement (ARPS) and the Environment Court's application of the permitted baseline.Legal principles for grant of leave to appeal[4] The right to make this application is provided in s 308 of the Resource Management Act 1990, which in turn invokes s 144 of the Summary Proceedings Act 1957. Section 144 provides that a further appeal can be brought with leave. This Court can only grant leave if there a question of law which is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision. [5] The Court must first consider whether there is an identifiable question of law that is capable of serious and bona fide argument in a case involving some interest of sufficient importance to outweigh the cost and delay of a further appeal: Waller v Hider [1998] 1 NZLR 412 at 413. [6] If the Court has difficulty in identifying a clear and relevant question of law, leave to appeal should be declined: Housing New Zealand v Waitakere City CouncilHC AK AP41/SW000 19 October 2000, Fisher J upheld by the Court of Appeal 14 December 2000 CA158/00. Leave should not be granted where the appeal will not affect the outcome of the proceeding: Countdown Properties (Northland) Limited v The Dunedin City Council HC WN AP214/93 20 June 1994, Williamson and Fraser JJ. Where the proposed points of appeal differ significantly from those argued in the Courts below leave should be declined. This is especially so where the Court of Appeal will not have the advantage of the views of a specialist body like the Environment Court: Housing New Zealand at [12] to [15]. [7] An application for leave must be justified in the circumstances of the particular case. It is not sufficient that issues as a whole are of general public importance or interest. It is the question identified as the matter for appeal which must be of general or public interest: NZ Rail Limited v Marlborough DC HC WN AP169/93 14 December 1993, Greig J.The proposed questions of law for appeal[8] At the commencement of the hearing, the appellant advised that it would only be pursuing three of the five questions of law set out in its application for leave to appeal to the Court of Appeal. Those questions are:4.1 Whether the High Court erred in finding that the integrity of the regional planning instruments did not require separate evaluation to the integrity of the district planning instruments under s 104(1) of the Act. 4.2 Whether the High Court erred in finding that "provided [the Environment Court] has specifically considered the ARPS in reaching its ultimate decision, that decision, or the process in reaching it, can not be called into question" and in finding that it was sufficient for the Environment Court to address "themes" rather than the wording of material provisions of the Auckland Regional Policy Statement relating to the non-environmental effects of urban development. 4.4 Whether the High Court erred in its approach to the statutory baseline under s 104(2) including its finding that "Scale, intensity, duration and frequency [in comparisons between a proposed activity and a permitted activity] are irrelevant" to the application of the statutory baseline, and its finding that application of the statutory baseline involves a 2-step test involving a threshold question and the exercise of a discretion.[9] These questions are to be determined in accordance with the provisions of the Resource Management Act as amended in 2003; the later amendments made by the 2005 Amendment Act do not apply. This was the accepted position before Frater J and the basis on which the Environment Court approached the matter. [10] The following general comments can be made about the three questions: they identify clear questions of law that are relevant to the consent decision and they cover matters that were raised before the Environment Court and the High Court. Each question is considered in greater detail below.The judgment of the Environment Court[11] The Environment Court considered what adverse effects, if any, a grant of consent would have on the integrity and coherence of the planning instruments and public confidence in them: [423]. It recorded receiving submissions from the appellant that a grant of consent would undermine the integrity of the ARPS: [425]. But its decision on this issue is confined to a rejection of the likelihood a grant of consent would undermine the integrity of the district plan: [432] to [436]. No expressed finding was made on the effect the consent decision would have on the integrity of the ARPS. The High Court found nothing objectionable in this approach: [55]. [12] At [472] the Environment Court paid regard to the provisions of the ARPS by an examination of themes it had abstracted from the relevant provisions of the ARPS:Having previously identified the relevant provisions of the applicable planning instruments, we have now to have regard to them by considering the proposal by reference to them. To do so in a reasonably concise way, without making a point-by-point examination in respect of each provision, we have identified the important themes of the regional and district instruments. The themes are [13] The High Court found this approach acceptable: [65] to [67]. [14] The Environment Court found that the permitted baseline for activities on the subject site included: farming, farm-stay accommodation, greenhouses, pig-keeping,home enterprises, development of open space, buildings accessory to any permitted activity, household units on approved subdivisions, temporary household units, and clean fill involving deposit of less than 200 cubic metres of material: [380]. It considered what adverse effects those activities might have on the site and then considered the effects of the proposed activity on the site. The Environment Court concluded that it could disregard effects of the proposed activity that would be effects of permitted activities on the site: [390]. This view was reached without any comparable analysis of the effects of the proposed activity and the permitted activities with a view to identifying differences of intensity, frequency, duration and character between the noise, odour and earthworks of each group: [387]. The High Court found that the Environment Court's approach to this application of the permitted baseline was acceptable: [85] to [87].Question one[15] Question one questions whether the High Court erred in its finding (at [55]) that the integrity of the regional planning statement, in this case the ARPS, did not require separate evaluation to the integrity of the district plan under s 104(1) of the Act. [16] The Environment Court had referred to the ARC's submission on the effect granting approval would have on the integrity of the ARPS: [425]. The High Court found (at [54]) that the Environment Court was conscious of the impact its decision would have on the integrity of the RPS. But, the ultimate decision was reached through the Environment Court confining its decision in this regard to the district plan: [49](HC). There was no mention of the effect of a grant of consent on the integrity of the ARPS: [49] (HC). There was no dispute in the High Court that the "integrity issue" could arise in relation to the ARPS under s 104(1)(b)(iii) or (1)(c): [50]. [17] Ultimately, the High Court found that the Environment Court's failure to make a specific finding in relation to the impact of the proposal on the integrity of the ARPS was not an error of law or, at least, not a material error of law: [55]. Thereason given for this was because the ARPS and the district plan were seen to be consistent with each other: [55]. [18] The High Court's finding that the ARPS and the district plan were consistent and, therefore, a consideration of one was sufficient was not based on any comparative analysis of the two documents. It was, instead, derived from the Court's interpretation of s 75(2) of the Resource Management Act and the requirement this provision made of the two planning instruments: [52] (HC). Section 75(2) requires consistency between the ARPS and the district plan. There was no suggestion the district plan breached s 75(2). The Court concluded from this (at [55]) that it was acceptable for the Environment Court to confine its findings on the topic of integrity to the effect a consent would have on the integrity of the district plan. [19] The appellant argues that these findings ignore the different spheres within which the ARPS and the district plan work and that if this approach were correct, then at its logical extreme a regional policy statement (RPS) could be disregarded as being simply captured by the district plan. Furthermore, the appellant refers to the language of s 75(2) which requires that a RPS and a district plan not be inconsistent with the other. The appellant submits effectively that s 75(2) does not require sameness and that provided each planning instrument is not at odds with the other, differences are permissible and legitimate. It follows that consideration of one will not satisfy a requirement to consider the other as well. [20] The respondent counters that the logical extreme the appellant refers to is fallacious. The respondent submits that under s 104(b)(iii) the RPS is a mandatory relevant consideration. Consideration of the RPS will reveal whether there is something in it not covered by the district plan. Where the RPS and district plan are consistent, no issue arises. The respondent further submits that the RPS, as a statement of policy, does not impose any positive obligation and that the degree of relevance it is to be afforded by the decision-maker is a question of discretion and weight for the decision-maker.Discussion[21] The notion of the need to preserve the integrity of a planning instrument is a common law construct which is not mandated by s 104: Rodney DC v Gould [2006] NZRMA 217 at 238. It follows that a decision-maker under s 104 can lawfully reach a decision on a consent decision without reference to the consent's impact on a planning instrument's integrity. [22] What is in issue here, however, is the circumstance where the decision-maker (here the Environment Court) has decided to have regard to the consent decision's impact on the ARPS and then failed to make any specific evaluation on that issue. The respondent has submitted that this conduct falls within the category of weight to be given to considerations. And that weight is a matter for the decision-maker, subject to the weighting being so out of balance that it renders a decision unreasonable. The appellant contends that once a decision-maker has decided to take into account a discretionary consideration it must complete the consideration process by making some evaluation and finding in relation to that consideration. [23] A secondary issue which overlaps the first is that in the present case the Environment Court completed its consideration of the impact a consent would have on the integrity of relevant planning instruments by concentrating solely on the district plan. The respondent contends this was permissible as the ARPS and the district plan were consistent with each other. The appellant in turn contends that the statutory requirement that the two planning instruments not be inconsistent with each other is not enough on its own to justify the Environment Court's failure to consider the impact of the consent on the integrity of the ARPS. [24] I consider that the decision-making process of the Environment Court arguably raises a serious question of law. This decision-making process is arguably different from the category of decision-making process relating to the weight to be given to considerations taken into account. In terms of weight it usually happens that a decision-maker having identified a consideration then attributes a weight to it. It may be that once a discretionary consideration is evaluated the decision-makerdetermines not to place any weight on it. However, that is usually apparent from the decision-making process. Here there has been an abandonment of a discretionary consideration (the impact on the integrity of the ARPS) part way through the decision-making process. Coupled with this, there is the substitution of another discretionary consideration (the impact on the integrity of the district plan) to bring the decision on the topic of integrity to a conclusion. There may well be strength in the appellant's view that once a discretionary consideration is taken into account this exercise must be completed in order for it to be done properly. Failure to complete this exercise may well render this part of the decision-making process unlawful. [25] The substituted evaluation of the impact on integrity vis-à-vis the district plan may well be unable to save the decision. The statutory requirement that the district plan and the RPS are not to be inconsistent with each other may not be enough to establish the proposition that a consideration of the integrity issue in terms of one of those planning instruments will be sufficient. [26] The issues I have identified above raise a serious question of law that has a wider impact than the present case. The question raised applies to all future decisions where regard may be paid to the integrity of the planning instruments affected. In addition, it is arguable that had the Environment Court completed its consideration of the impact of a consent decision on the integrity of the ARPS it may have reached a different final result. To abandon a discretionary consideration part way through a decision-making process without explanation could make the ultimate decision unreasonable. I find, therefore, that the first question satisfies the legal tests for a grant of leave to appeal and accordingly leave to appeal is granted.Question two[27] Question two has two parts. The first part questions whether the High Court erred in finding that provided the Environment Court had specifically considered the ARPS in reaching its ultimate decision, that decision, or the process in reaching it, could not be called into question. The second part questions whether it was sufficient for the Environment Court to address themes, rather than the wording of material provisions of the ARPS.[28] The appellant argues that the proper approach to the interpretation of a RPS is the same as the interpretation of a district plan. It argues that Powell v Dunedin CC[2005] NZRMA 174 (CA) and Beach Road Preservation Society v Whangarei DC[2001] 4 NZRMA 176 indicate that the proper approach to the interpretation of the district plan is to focus upon the wording of issues, objectives and policies. A similar approach should be taken to interpretation of a RPS and, as with a district plan, misinterpretation of a RPS should be considered an error of law. [29] The respondent counters that the ARC has not pointed to a specific error in interpretation: it says the ARC has argued that there has been a methodological error without giving particulars of the error of methodology. Further, it argues that there was no error in that the important themes of the regional and district instruments that the Environment Court identified at [472] of its decision included everything of relevance.Discussion[30] Section 104 (1)(b)(iii) mandates that the consent authority must have regard to a regional policy statement or proposed regional policy statement. The High Court found at [53] that provided the Environment Court had given specific consideration to the ARPS in reaching the ultimate decision, the decision and the process in reaching it could not be called into question. [31] The finding that the process by which the consent decision was reached can not be called into question is something that can arguably be disputed. This is especially so when the process being questioned is whether the Environment Court has properly discharged its statutory obligations to consider mandatory considerations. Furthermore, it is arguable that for the ultimate decision to stand it must be apparent that mandatory considerations were properly addressed. It may not be enough for a decision-maker simply to refer to the requirement to consider the mandatory considerations without demonstrating, in the consent decision, that they have been properly addressed.[32] The second part of this question raised questions about how the mandatory statutory considerations in s 104 (1)(b)(iii) are properly met. In the present case the Environment Court sought to discharge this obligation by having regard to what it described as themes to address the issues arising under the ARPS: [472] to [473]. The Environment Court did not go through the process of identifying the relevant provisions of the ARPS and then pay regard to the wording of those provisions. What it did instead was to abstract a series of themes from the ARPS's provisions and pay regard to those themes. [33] The High Court found that this thematic approach was sufficient to meet the statutory obligations under s 104(1))b)(iii): [65]. [34] It is arguable that focus on abstracted themes from a RPS will produce a different outcome from focus on the actual wording of the provisions that are relevant to the consent decision. It is arguable that Parliament intended the drafters of RPSs to determine the expression of a RPS and for a consent authority to have regard to the RPS's expressed words. The abstraction of themes from the wording of the relevant provisions may result in a loss of meaning or emphasis. This would mean the consent authority will be having regard to considerations that are different from those mandated by Parliament. [35] Objection to a thematic approach as not meeting the requirements of s 104(1)(b)(iii) may well differ from the circumstance referred to at [64] of the High Court's judgment where reference is made to the comments in Gould that: the Environment Court is not obliged to refer in its decision to every objective or policy of a district plan which might be of marginal relevance to its decision.[36] The issue the appellant raises here is not one relating to the scope of the Environment Court's consideration of the provisions in terms of the provisions' materiality or relevance. The issue raised here is that by moving from the language of the actual provisions to a thematic approach, the Environment Court has failed to have lawful regard to the considerations s 104(1)(b)(iii) required it to have regard to.[37] The question whether a consent authority can properly be said to have had regard to mandatory statutory considerations when, instead of identifying the relevant provisions and then considering them, it abstracts and considers a series of themes raises a serious question of law. It is arguable that there has been no regard paid to the mandatory considerations. This would have significant consequences for the outcome of the consent decision as well as for future consent decision-making. Failure to consider a mandatory consideration usually renders a decision invalid. I find, therefore, that the second question satisfies the legal tests for a grant of leave to appeal and accordingly leave to appeal is granted.Question three[38] The final question of law the appellant advanced was whether the High Court had erred in its approach at [85] to the statutory baseline test under s 104(2), including its finding that scale, intensity, duration and frequency of the effects (in comparisons between a proposed activity and a permitted activity) are irrelevant. [39] The appellant argues that the test only allows an effect (e.g. noise, odour) of the proposed non-complying activity to be considered if the plan permits an activity with like effect. The appellant submits that the two effects (e.g. the noise of the permitted activity and the noise of the proposed non-complying activity) must be directly comparable. The appellant argues that the Environment Court erred in concluding that the noise, odour and earthworks effects of the respondent's activity should be disregarded in their entirety, presumably without comparing each effect with a similar effect that is already allowed. Finally, the appellant suggests that the difficulty of comparing "soft edge" effects (requiring a subjective analysis) means that perhaps the baseline should not even be applied to such effects. [40] The respondent counters that the Environment Court gave extensive consideration to actual effects and that it acknowledged at [387] of its decision that there would be differences of intensity, frequency, duration and character between the noise, odour and earthworks effects of the permitted activities and those of the proposed activity. The respondent further argues that the Resource Management Actdoes not support a mathematical approach, rather an evaluative approach is required by s 104(2).Discussion[41] The concept of a "permitted baseline" developed as a common law construct and has since emerged as a discretionary consideration in s 104(2). The concept and how it can be applied is explained in Tairua Marine Farms Limited & Pacific Paradise Limited v Waikato Regional Council & Anor HC AK CIV 2005- 484-1490 29 June 2006, Asher J at [37] to [40]. At [52] Asher J found that:the essence of the concept is that there is a firm measure against which to assess and effect.[42] In the present case the Environment Court applied the concept as a discretionary consideration in its assessment of the effect the proposed activity would have. The High Court found at [85] that:if a consent authority is satisfied that a permitted activity and proposed activity each produce an adverse effect of the same type – be it noise, odour, visual effect or whatever, the threshold for applying the baseline is established.[43] The High Court then found at [85] that:As long as the consent authority has indicated a basis for comparison that is not unreasonable its decision cannot be called into question.[44] The basis for comparison mentioned in the judgment is the permitted activities of pig keeping, silage and dairy shed wastes. [45] At [86] the High Court found that the Environment Court had specifically acknowledged there were differences of degree between the permitted activities and the proposed activities but without spelling out what these differences were. The High Court found the Environment Court did not have to identify the differences of degree. [46] It is arguable that any assessment of the permitted baseline and how the proposed activity fits with the permitted baseline requires an analysis of differencesof intensity, frequency, duration and character between the noise, odour and earthworks effects of the permitted activities and those of the proposed activity. It is also arguable that the reasoning process behind such an analysis should be disclosed. The importance of providing reasons for reaching decisions that have wide, public effect impinging on rights is becoming more recognised: Lewis v Wilson & Horton Ltd [2000] 3 NZLR 546 at 566. The absence of reasons in such circumstances can leave a decision open to the complaint it is unreasonable. Without knowing the reasons for the Environment Court's conclusion that despite differences in degree, between the effects of the proposed activity and the effects of the permitted baseline activities, such differences were nonetheless acceptable it is hard to know if the conclusion is supported by reason. [47] The extent to which a consent authority should undertake a comparative analysis of the effects of the proposed activity and those of the permitted baseline activities, and articulate its reasoning process raises a serious question of law. The answer to this question impacts on the consent decision in this case. The absence of any reasoned comparative analysis of the scale, intensity, duration and frequency of the effects of the proposed activity against those of the permitted baseline activities may well make the consent decision unreasonable. The answer also has ongoing significance, as it will affect how the permitted baseline test is applied in the future. I find, therefore, that the third question satisfies the legal tests for a grant of leave to appeal and accordingly leave to appeal is granted.Result[48] I find, for the reasons set out above, that the three questions on which the appellant seeks leave to appeal raise serious questions of law that impact on the present consent decision and impact on future consent decisions. Accordingly, leave is granted to appeal to the Court of Appeal on all three questions. The parties have 10 days in which to file memoranda on costs. Duffy J