BARRHILL CHERTSEY IRRIGATION LIMITED v CANTERBURY REGIONAL COUNCIL [2018] NZHC 1960

BARRHILL CHERTSEY IRRIGATION LIMITED v CANTERBURY REGIONAL COUNCIL [2018] NZHC1960 [2 August 2018]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2017-409-000490CIV-2017-409-000491CIV-2017-409-000493CIV-2017-409-000500[2018] NZHC 1960BETWEEN BARRHILL CHERTSEY IRRIGATIONLIMITEDAppellantAND IRRIGATION NEW ZEALAND LIMITEDAppellantAND DAIRY HOLDINGS LIMITEDAppellantAND RANGITATA DIVERSION RACEMANAGEMENT LIMITEDAppellantAND CANTERBURY REGIONAL COUNCILRespondentHearing: On the papersAppearances: B G Williams for Barrhill Chertsey Irrigation Limited and DairyHoldings LimitedJ R King for Irrigation New Zealand LimitedV J Hamm for Rangitata Diversion Race Management LimitedP A C Maw for RespondentP R Gardner for First Interested PartyP D Anderson for Second Interested PartyJGA Winchester and C J McCallum for Third Interested PartyJudgment: 2 August 2018JUDGMENT OF DUNNINGHAM JAND COMBINED CANTERBURYPROVINCES, FEDERATED FARMERSOF NEW ZEALAND INCORPORATEDFirst Interested PartyAND ROYAL FOREST AND BIRDPROTECTION SOCIETY OF NEWZEALAND INCORPORATEDSecond Interested PartyAND TE RUNANGA O NGAI TAHUThird Interested Party[1] This judgment deals with the proposed settlement of appeals against thedecision of the Canterbury Regional Council (the Council) on Plan Change 5 to theCanterbury Land and Water Regional Plan (Plan Change 5).[2] The proposed settlement relates to four separate appeals made by BarrhillChertsey Irrigation Limited (BCIL), Dairy Holdings Limited (DHL), IrrigationNew Zealand Limited (INZ) and Rangitata Diversion Race Management Limited(RDRML).[3] All four appellants and the Council have reached agreement on how thoseappeals should be resolved. That agreement is supported by the following parties, allof whom have joined each of the appeals:(a) Combined Canterbury Provinces, Federated Farmers of New ZealandIncorporated;(b) Royal Forest and Bird Protection Society of New Zealand Incorporated;and(c) Te Rūnanga o Ngāi Tahu.[4] The agreement is also supported by Neil Barton, who joined the appeal lodgedby DHL.[5] The parties seek the Court's approval of the proposed amendments to theCanterbury Land and Water Regional Plan (the Plan) as negotiated, under the Court'spower to substitute its decision for that of the Council.[6] In support of the request that orders are made in accordance with the settlementnegotiated, the parties have filed a detailed memorandum setting out:(a) the issues each of the four appellants raise in their appeals;(b) the agreed position on the alleged errors of law made by the Council;and(c) the proposed amendments to Plan Change 5.The appealsBackground[7] Plan Change 5 was publicly notified on 13 February 2016 pursuant to clause 5of the First Schedule of the Resource Management Act 1991. BCIL, DHL, INZ andRDRML each lodged submissions and further submissions on Plan Change 5, as dida number of other parties.[8] The Council delegated the hearing of submissions on Plan Change 5 toindependent hearing commissioners. Their recommendations in the form of a narrativereport dated 1 June 2017 and appendices containing the provisions were adopted bythe Council as its decision on 15 June 2017 (the decision). The decision was publiclynotified on 24 June 2017.[9] Section 66 of the Environment Canterbury (Temporary Commissioners andImproved Water Management) Act 2010 (the ECan Act) restricts appeals to theHigh Court on errors of law only. All the appeals made by the appellants are under thissection.[10] The issues raised in the four appeals primarily relate to the policy frameworkas it relates to irrigation schemes, and the Good Management Practice modellingproxies introduced into the Plan by Plan Change 5.[11] Part A of Plan Change 5 amends the provisions of the Plan applicable throughthe Canterbury region for managing land use activities that discharge nutrients into theenvironment. An integral part of Plan Change 5 is the Farm Portal, an online spatialdata portal developed by the Council for two purposes; it enables the Council to fulfilits freshwater accounting obligations, and it provides users with an estimate of nutrientleaching losses for farming activities if operated at Good Management Practice.[12] During the hearing on Plan Change 5, a number of submitters sought analternative to the Farm Portal for estimating nutrient leaching losses if operated atGood Management Practice. In response to those submissions, the decision version ofPlan Change 5 provides for an alternative consent framework to the Farm Portal(alternative pathway). The alternative pathway allows, in limited circumstances, anapplication for resource consent to be made with the relevant Good ManagementPractice nutrient loss rates to be determined through the resource consent process.BCIL's appeal[13] BCIL's appeal alleges five errors of law and raises six questions of law inrelation to Policy 4.41C(b); alleges three errors of law and raises three questions oflaw in relation to Table s28 and Method s28.4 of Schedule 28 (irrigation proxy); andalleges two errors of law and raises two questions of law in relation to Method s28.3of Schedule 28 (fertiliser proxy).[14] BCIL's appeal concerns the way that the decision treats irrigation schemes,particularly in respect of the policy framework (namely Policy 4.41C(b)) that wouldapply on the reconsenting of activities authorised under existing consented irrigationschemes, and the application of the alternative pathway to irrigation schemes. Theappeal also raises questions regarding the decision to delete an exception underMethod s28.4 contained in the irrigation proxy, and raises issues with the fertiliserproxy.DHL's appeal[15] DHL's appeal alleges four errors of law and raises four questions of law inrelation to Policy 4.38A; alleges two errors of law and raises two questions of law inrelation to Policy 4.38AB alleges five errors of law and raises seven questions of lawin relation to Policy 4.41C(b); and alleges three errors of law and raises three questionsof law in relation to the irrigation proxy.[16] DHL's appeal concerns the way that the decision treats irrigation schemes,particularly the policy framework (namely Policy 4.41C(b) and Policy 4.38A) thatwould apply on the reconsenting of activities authorised under existing consentedirrigation schemes, and the application of the alternative pathway to irrigationschemes. The appeal also relates to the decision to include Policy 4.38AB whichprovides guidance on the application of the permitted baseline in particularcircumstances. DHL's appeal also raises questions regarding the decision to delete anexception under Method s28.4 contained in the irrigation proxy.RDRML's appeal[17] RDRML's appeal alleges seven errors of law and raises seven questions of lawin relation to Policy 4.41C(b) and alleges three errors of law and raises three questionsof law in relation to the irrigation proxy.[18] RDRML's appeal concerns the way that the decision treats irrigation schemes,particularly in respect of the policy framework (namely Policy 4.41C(b)) that wouldapply on the reconsenting of activities authorised under existing consented irrigationschemes, and the application of the alternative pathway to irrigation schemes. Theappeal also raises questions regarding the decision to delete an exception underMethod s28.4 contained in the irrigation proxy, and raises issues with the fertiliserproxy.INZ's appeal[19] INZ's appeal alleges seven errors of law and raises seven questions of law inrelation to the irrigation proxy.[20] INZ's appeal challenges the Council's decision in relation to the irrigationproxy, including the decision to delete an exception under Method s28.4 contained inthe irrigation proxy.Proposed settlement[21] The Council has engaged in settlement discussions with BCIL, DHL, INZ andRDRML together with the interested parties. The parties consider that two errors oflaw have occurred in relation to:(a) Policy 4.41C(b); and(b) Method s28.4 (which forms part of the irrigation proxy).[22] If the Court accepts the errors of law alleged to have been made by the Counciland grants the orders sought by the parties, the four appellants will not pursue theremaining alleged errors and corresponding questions of law in each of their appeals.Policy 4.41C(b) issue[23] This issue relates to the question of whether irrigation schemes and principalwater suppliers can access the alternative pathway to estimate nutrient loss rates. TheCouncil inserted the alternative pathway into the decision in response to submissions.Policy 4.41C(b) appears to provide for the use of the alternative pathway in relationto irrigation schemes and principal water suppliers. However, BCIL, DHL andRDRML each allege that the Council's decision on Policy 4.41C(b) does not properlyprovide for irrigation schemes and principal water suppliers to access the alternativepathway.[24] BCIL, DHL and RDRML allege that errors of law were made in respect of thealleged failure of Policy 4.41C(b) to provide a clear alternative pathway for irrigationschemes and principal water suppliers. In summary, the alleged errors are that thedecision to word Policy 4.41C(b) as it stands:(a) does not give effect to the reasons for the decision; and(b) lacks clarity and is a decision which on the evidence could notreasonably be made.[25] The questions of law raised by the appellants in relation to Policy 4.41C(b) asit relates to the application of the alternative pathway are:(a) Did the Council reach a decision on the wording of Policy 4.41C(b) thatdoes not give effect to the reasons for the decision?(b) Did the Council reach a decision on the wording of Policy 4.41C(b) (asit relates to use of an alternative consenting pathway) that lacks claritysuch that it is a decision that could not have been reasonably reached?[26] The agreed position between all parties is that while the Council's amendmentsto Policy 4.41C(b) appear to enable irrigation schemes and principal water suppliersto use the alternative pathway in certain circumstances, on a close reading they maynot always have access to it. There is no indication that this was an intendedconsequence.[27] This part of the Council's decision on the amendments to Policy 4.41C(b) isinconsistent with the Council's decision on the use of the alternative pathway. Inparticular, the parties consider that the inconsistency between the reasoning in thedecision and the wording of the Policy amounted to an error of law.[28] In order to remedy the error of law, the parties consider that amendments toPolicy 4.41C(b) are required. The proposed amendments are set out in Appendix A tothe joint memorandum. These amendments would enable irrigation schemes andprincipal water suppliers to also have access to the alternative pathway.Method s28.4 issue[29] This issue relates to the Council's decision to delete the exception in Methods28.4, as raised in the appeals by BCIL, DHL, INZ and RDRML.[30] Table s28 in Schedule 28 sets out each of the Good Management Practicesmodelled by the Farm Portal. One of the Good Management Practices in Table s28relates to "irrigation and water use". For cropping blocks, Table s28 requires thatirrigation occurs in accordance with Method s28.4, which contains the methodologyfor the application of irrigation water by spray irrigation systems under GoodManagement Practices.[31] In the notified version of Plan Change 5, Method s28.4 included an "exception"to Good Management Practices for cropping blocks using travelling and spraylineirrigation systems on medium soils to recognise the specific constraints of thoseirrigation systems, which restrict the minimum depth of irrigation application.[32] In the decision, the exception in Method s28.4 was deleted and Method s28.4was amended so that a consistent application rate is applied to travelling irrigators andsprayline irrigators irrespective of the physical constraints of those systems. Thedecisions version also notes that the required application rate is unachievable withtravelling irrigation systems, requiring a system change to linear or centre pivot.[33] All four appellants allege that the Council's decision to delete the "exception"for travelling and sprayline irrigators on medium soils in Method s28.4 will have theeffect of requiring a large number of farming activities irrigating on light to mediumsoils to make substantial capital investments in upgrading or implementing irrigationsystem changes. The appellants allege that the decision to delete the "exception" wasan error of law in that it was a decision:(a) for which the Council had no jurisdiction to make;(b) for which there was no evidence or which on the evidence could notreasonably have been made; and(c) for which a further evaluation in accordance with s 32AA of theResource Management Act was required but not undertaken.[34] The questions of law raised by the appellants in relation to Method s28.4 are:(a) Did the Council have jurisdiction to delete the exception and makeconsequential changes to Method s28.4?(b) Did the Council, in deleting the exception and making consequentialchanges to Method s28.4, make a decision that was not open to it onthe evidence?(c) Did the Council fail to undertake a proper analysis under s 32AA of theResource Management Act, in that it failed to:(i) identify and assess the benefits and costs of the environmental,economic, social and cultural effects that are anticipatedthrough the implementation of Method s28.4 as amended by thedecision, as required by ss 32(2) and 32AA(1)(b)?(ii) undertake an evaluation at a level of detail that corresponds tothe scale and significance of the environment, economic, socialand cultural effects that are anticipated through theimplementation of Method s28.4 as amended by the decision,as required by ss 32(1)(c) and 32AA(1)(c)?[35] The agreed position between all parties is that the Council had no jurisdictionto delete the exception for travelling and sprayline irrigators on medium soils fromMethod s28.4. The Council had no jurisdiction because no submitter sought that sucha change be made, nor was there scope within the ambit of issues fairly and reasonablyraised in submissions on Plan Change 5 to provide jurisdiction for such a change.Accordingly, the parties consider that the Council made an error of law.[36] In order to remedy the error of law, the parties consider that amendments toMethod s28.4 are required. The proposed amendments are set out in Appendix A tothe joint memorandum. These amendments would reinstate the exception fortravelling and sprayline irrigators on medium soils, having the effect of reinstating theirrigation proxy as notified.Jurisdiction to determine appeal[37] The Court has jurisdiction to determine this appeal under r 20.19 of the HighCourt Rules 2016. It provides:(1) After hearing an appeal, the court may do any 1 or more of thefollowing:(a) make any decision it thinks should have been made:(b) direct the decision-maker—(i) to rehear the proceedings concerned; or(ii) to consider or determine (whether for the first time oragain) any matters the court directs; or(iii) to enter judgment for any party to the proceedings thecourt directs:(c) make any order the court thinks just, including any order as tocosts.[38] I am satisfied that I have heard from the parties through the comprehensivejoint memorandum they have filed. It is open to me to amend Plan Change 5 inaccordance with the proposed changes set out at Appendix 1 to the memorandum.[39] I am also satisfied that approval of the amendments is appropriate in the presentcircumstances because:(a) the orders sought by consent address the issues raised in the appeals;(b) the proposal to settle the appeal by making the proposed amendmentsrepresents a just, speedy and inexpensive way to determine thisproceeding. In that regard, one of the fundamental purposes of the ECanAct is to enable Plan Change 5 to be made operative as soon as possible;(c) agreement has been reached on the resolution by all parties joined tothe appeal proceedings, with all parties accepting that there has been anerror of law;(d) the proposed amendment is consistent with the purpose and principlesof the Resource Management Act, particularly Part 2; and(e) given the scope of the relief jointly requested, it is not necessary for thematter to be remitted back to the Council for determination.[40] The parties recognise that there can be no expectation that, in every case,consent orders are suitable for approval through appeals to the Court. As Whata J saidin Meridian Energy Ltd v Canterbury Regional Council, "[t]his is a public law processand there must be due consideration given to the wider public interest in thepromulgation of planning instruments".1 Counsel acknowledge that statement appliesin this situation, and as such all submitters on Plan Change 5 were served with a copyof the appeal and had an opportunity to join the proceedings as an interested party. Iconsider that Whata J's concerns have been appropriately dealt with.Outcome[41] I am satisfied that it is appropriate to exercise the Court's power under r 20.19to amend the text of Plan Change 5, as proposed in the parties' joint memorandum.[42] Accordingly, I order that Plan Change 5 to the Canterbury Land and WaterRegional Plan be amended as set out in Appendix A to the joint memorandum ofcounsel recording settlement dated 9 July 2018.[43] The parties agree that there is no issue as to costs in respect of the resolutionof these appeals.Solicitors:Chapman Tripp, ChristchurchTavendale and Partners, ChristchurchHolland Beckett Law, TaurangaWynn Williams, ChristchurchSimpson Grierson, Wellington1 Meridian Energy Ltd v Canterbury Regional Council HC Christchurch CIV-2010-409-2604, 23May 2011 at [11].Copy To:P R Gardner, Combined Canterbury Provinces and Federated Farmers of NZ IncP Anderson, Forest and Bird Protection Society of New ZealandNeil Barton