CLEARWATER MUSSELS LIMITED v THE MARLBOROUGH DISTRICT COUNCIL [2019] NZHC 961

CLEARWATER MUSSELS LIMITED v THE MARLBOROUGH DISTRICT COUNCIL [2019] NZHC 961 [3May 2019]IN THE HIGH COURT OF NEW ZEALANDBLENHEIM REGISTRYI TE KŌTI MATUA O AOTEAROATE WAIHARAKEKE ROHECIV-2018-406-21[2019] NZHC 961IN THE MATTERANDof the Resource Management Act 1991IN THE MATTER of an appeal under section 299 of the ActBETWEEN CLEARWATER MUSSELS LIMITEDAppellantAND THE MARLBOROUGH DISTRICTCOUNCILRespondentHearing: 15 and 16 October 2018Appearances: Q Davies and A L Hills for AppellantM J Radich for RespondentJ Ironside and M Wright for Friends of Nelson Haven andTasman Bay and Environmental Defence SocietyC Marchant in PersonM Marchant for the Marchant Family and othersJudgment: 3 May 2019JUDGMENT OF GRICE J(Appeal from Environment Court on refusal to grant consent to marine farms)ContentsPara No.Background [1]The Environment Court decision [11]Consideration 1: King Shag and ecological impacts [18]Consideration 2: Natural character and landscape values [32]Consideration 3: Clearwater's investment and benefits of the proposals [42]Conclusion [44]Standard of appeal [45]Grounds of appeal [52]Relevant planning framework [54]Outstanding natural character [59]Indigenous Flora and Fauna [63]Coastal Marine Area [65]Coastal marine zones [69]Ground 1: the King Shag [72]Reasonableness and failure to give reasons [75]Error of law [92]Ground 2: natural justice [102]Ground 3: natural character [114]The evidence on natural character [119]Reasonableness [131]Failure to give reasons [134]Ground 4: Landscape values [137]Ground 5: Economic factors [139]Conclusion [145]Costs [146]Acronyms and AbbreviationsEDS .................................................................. Environmental Defence Society IncCoastal Policy Statement .................. New Zealand Coastal Policy Statement 2010ONC.............................................................................................. Natural CharacterONFL............................................... Outstanding Natural Features and LandscapesCM .................................................................................................... Coastal MarineMEP ............................................... Marlborough Environmental Management PlanRPS .......................................................... Marlborough Regional Policy StatementThe Act ..................................................................Resource Management Act 1991The Sounds Plan ........................ Marlborough Sounds Resource Management PlanONL ........................................................................ Outstanding Natural LandscapeCMZ1 ................................................................................... Coastal Marine Zone 1IBA ........................................................................................... Important Bird AreaDOC............................................................................. Department of ConservationBackground[1] This is an appeal from an Environment Court decision declining an appeal fromthe Marlborough District Council's (the Council) refusal to grant consent toClearwater Mussels Ltd (Clearwater) for the operation of mussel farms at Pig Bay,Te Anamāhanga, in the outer Marlborough Sounds. The issues on appeal are: theeffect of the farms on the King Shag, the natural character and landscape of the area;and the consideration of economic factors.1 The farms continue in operation pursuant1 Clearwater Mussels Ltd v Marlborough District Council [2018] NZEnvC 88.to the provisions of the Resource Management Act 1991 (the Act) pending the finaloutcome of these proceedings.[2] Te Anamāhanga, also known as Port Gore, is 55 kilometres from centralWellington. It is one of New Zealand's more remote locations. By road it is morethan three hours from Blenheim, the last section of which is on a private road. Smallboats may be launched off a beach but there are no wharves or jetties there. Vesselsaccessing Te Anamāhanga do so by rounding either Cape Lambert from the west orCape Jackson from the east. Both of these capes project into the northern entrance ofCook Strait. There is a scattering of houses with few permanent residents. Sheepfarming, tourism, tramping, fishing, diving, nature conservation and marine farmingare the predominant activities in the area.[3] Pig Bay is a small embayment in the outer western waters of Te Anamāhanga.It is largely free of manmade structures. Pig Bay and wider Te Anamāhanga are hometo one of New Zealand's rarest and most threatened indigenous sea birds, the KingShag. This bird has a satellite colony and a roosting site at either end of Pig Bay, aswell as two core colonies within foraging range.[4] Outer Te Anamāhanga has a strong current, high food turnover, relative shelterand deep water. It is well suited to mussel farming.[5] Clearwater operates the two marine farms at Pig Bay. Combined the farmscover approximately six hectares. The smaller two-hectare farm grows green shellmussels, blue shell mussels and dredge oysters (site 8165/northern site). The largerfour-hectare farm grows green shell and blue shell mussels (site 8166/southern site).[6] Clearwater took over operation of these farms in 2014 and acquired them in2016. The existing resource consents expired in 2014.[7] Existing mussel farming, as opposed to new farming, is a 'discretionaryactivity' under the operative Marlborough Sounds Resource Management Plan (theSounds Plan).2 Clearwater applied for new discretionary activity resource consentsfrom the Council for the farms that would last a further 20 years (the Proposals).3Those applications were made in 2014.[8] The Council hearings committee turned down the applications in June 2016.The Council declined the consent primarily on the basis that there would be undueadverse effects on the visual amenity values, the natural character of the coastalenvironment and landscape values. It was the Council's conclusion that granting theconsents would be incompatible with the relevant objectives and policies of the NewZealand Coastal Policy Statement 2010 (Coastal Policy Statement).[9] Clearwater appealed to the Environment Court.4 The Environment Courtconsidered the issues on appeal afresh on the evidence. It noted, however, it must haveregard to the Council's decision.5 The Environment Court declined the appeal but didso on different grounds than those of the Council.6[10] Appearing at the appeal hearing, and at the earlier hearings, wereMr C Marchant and interested parties represented by Ms M Marchant. She appearedon behalf of the Marchant family interests as well as 30 other long-term residents ofthe area.7 The Friends of Nelson Haven and Tasman Bay Incorporated (the Friends)and Environmental Defence Society Incorporated (EDS) also appeared and madesubmissions.8 The Council and these other parties oppose the appeal.The Environment Court decision[11] The Environment Court noted that as the appeal was under s 290 of the Act, ithad the same powers, duties and discretions in determining the appeal as the Councilhad in determining the original application.2 Marlborough District Council Marlborough Sounds Resource Management Plan (District Plan),r 35.4.3 Clearwater varied its application to a smaller coverage area for the farms in the court at the hearingbefore the Environment Court.4 Clearwater Mussels Ltd v Marlborough District Council, above n 1.5 Resource Management Act 1991, ss 290 and 290A.6 Clearwater Mussels Ltd v Marlborough District Council, above n 1, at [16].7 Resource Management Act, s 274.8 Section 274.[12] As Clearwater's Proposals were for discretionary activities, the EnvironmentCourt had to consider them with reference to the matters in s 104(1) and s 104(2A) ofthe Act. The matters outlined in these sections included: any adverse actual/potentialenvironmental effect caused by the activity;9 the relevant provisions of the applicableplans;10 any other relevant and reasonably necessary matters; and the value of theinvestment of the existing consent holder in operating the marine farms.[13] The Court began by assessing the weight to be given to the relevant provisionsor plans. Section 104(1) of the Act requires that regard be given to the relevant plansand provisions but does not ascribe weight to them. The Environment Courtconcluded that considerable weight should be given to the Coastal Policy Statementon the basis of both its statutory purpose,11 and to the objectives/policies directlyrelated to the issues relevant to these proceedings such as the King Shag colonies,natural character, landscape, amenity values and appropriate marine farm use of thecoastal marine area.[14] The Court further noted that significant weight should be given to the variousprovisions of the Sounds Plan. This was because it had no relevant incompatibilitieswith the Coastal Policy Statement and the provisions were material to the mattersbefore the Court.12[15] The Court noted that ch 35 of the Sounds Plan set out the rules for the threeCoastal Marine (CM) zones labelled CM1, CM2 and CM3. The Proposals fell withinthe bounds of CM1. In CM1, the establishment of new marine farms is a prohibitedactivity.13 Existing farms, like those now belonging to Clearwater, were not prohibitedbut were governed by "spot zoning" in CM1. This resulted in already existing marinefarms being classified as controlled or discretionary activities.149 Subject to the Courts discretion to disregard an adverse effect if the Plan permits an activity withthat effect.10 In this case: the Marlborough Regional Policy Statement; Environmental Management Plan; NewZealand Coastal Policy Statement 2010; and Marlborough Sounds Resource Management Plan.11 Which, pursuant to s 56 of the Act, is to state the objectives and policies in order to achieve thepurpose of the Act in relation to the coastal environment of New Zealand.12 Resource Management Act, ss 75 and 76.13 Marlborough District Council Marlborough Sounds Resource Management Plan (District Plan),r 35.6.14 Rule 35.[16] The Court identified the relevant objectives and policies in the Coastal Policyand the Sounds Plan.15 Provisions of particular relevance it identified were theEnvironmental Management Plan mapping relating to identified areas of OutstandingNatural Character (ONC) and Outstanding Natural Features and Landscapes (ONFL).[17] I now turn to the considerations that the Environment Court focused on.Consideration 1: King Shag and ecological impacts[18] To deal with the ecological effects of the Proposals on the King Shag, its preyand habitat, the Court began by identifying the relevant policy and plan provisions,16and assessing the ecology evidence.[19] The Court recognised the difficulties attendant here as there was no reliablescientific baseline for determining how the Proposals would impact on the King Shag.[20] The Court noted that the relevant sites were in Pig Bay which was within the'Sounds Important Bird Area', as designated in maps published by the Royal Forestand Bird Protection Society of New Zealand Inc. This 'Important Bird Area'designation indicated a seabird area of global significance. The Court noted thatsignificant numbers of King Shag fed within the Sounds but its marine habitat waslargely unprotected.[21] The Court found that the 'Important Bird Area' mapping was of significantweight. It signalled areas of importance for the survival of the bird species in light ofthe protection priorities set out under s 6 of the Act and the Coastal Policy Statementand the Sounds Plan.17 The relevant provisions of s 6 at issue are:6 Matters of national importance15 New Zealand Coastal Policy Statement 2010, objectives 1, 2, 4, and 6 and policies 6, 8, 11, 13, 14and 15; Marlborough District Council Marlborough Sounds Resource Management Plan (DistrictPlan), ch 2, 4, 5, 8, 9, and 19.16 New Zealand Coastal Policy Statement 2010, objective 1 and policy 3.1 and 11; MarlboroughDistrict Council Marlborough Sounds Resource Management Plan (District Plan), ch 4, 9.4 and9.2, objectives 4.3.1, 9.2.1.1 and policies 4.3.1.2, 9.2.1.1.14–17, 9.2.1.1.1, 9.4.1.1, 9.4.1.1.1,9.2.1.1.1 and 9.2.1.1.1.9.17 Resource Management Act, s 6.In achieving the purpose of this Act, all persons exercising functions andpowers under it, in relation to managing the use, development, and protectionof natural and physical resources, shall recognise and provide for thefollowing matters of national importance:(a) the preservation of the natural character of the coastal environment(including the coastal marine area), wetlands, and lakes and rivers andtheir margins, and the protection of them from inappropriatesubdivision, use, and development:(b) the protection of outstanding natural features and landscapes frominappropriate subdivision, use, and development:(c) the protection of areas of significant indigenous vegetation andsignificant habitats of indigenous fauna:...[22] Dr McClellan, an orthinological expert called by Clearwater, was of theopinion that the King Shag population had been stable for about 50 years. However,the Court noted Dr Fisher, an orthinological expert called by the Council and interestedparties, did not agree. Dr Fisher said there were limitations the data gathered as thebasis for Dr McClellan's opinion.[23] The Court concluded that the population remained vulnerable to a significantrisk of decline.[24] The Court said three points of dispute arose among the experts on the KingShag issue: first, the risks and benefits that marine farms may present for King Shagprey; secondly, the risks or benefits to the King Shag if the marine farms were removedand dredging or trawling increased in place of the farms in Pig Bay; and thirdly, theenvironmental compensation or enhancement that would arise from Clearwater'sproposal to help reduce pests in the area.[25] The Court noted that much of the evidence before it on the feeding habits ofthe King Shag was in the form of contested hypotheses which were incapable of beingverified without further scientific study. It did, however, make the followingevidentiary findings:(a) the King Shag's foraging typically occurs in water depths of around 20to 40 metres, which is the same depth normally occupied by marinefarms (as in this case). There is, however, insufficient scientificevidence to indicate if this is a good or bad thing for the birds;(b) the benthos (sea bottom) of soft silt and clay substratum was conduciveto the presence of flatfish which is a prey of the birds. The benthosbeneath the proposed sites was dominated by this kind of substratum.This was true of most of Te Anamāhanga.[26] The Court was unable to reach any conclusions as to the benthic (deep water)or general feeding habits of the birds, their preferred form of prey, and the impact thata marine farm may have on the prey and the bird's hunting ability.[27] The Court then turned to the risk of the birds being disturbed by visitingvessels. It concluded that the continuation of marine farming at the sites would posea degree of disturbance to the King Shag through human activity. The Court viewedthis as significant. Specifically, it said regular maintenance, seeding and harvestingactivities posed a risk of disturbing a colony of the birds around two and a halfkilometres away.18 The Court was careful to say it did not overstate this risk due tothe other regular activities that were ongoing in nearby areas. It gave little weight tothe submission of Clearwater that if the farms remained they would act as a deterrentto commercial fishing or dredging activities in the same locality. This was primarilydue to the rare occurrence of those activities in the locality, and the proximity of thefarms to the foreshore and reef.[28] Finally, the Court addressed Clearwater's proposed predator and pestprogramme offered by way of mitigation. This plan consisted primarily of fixing apredator-free fence installed in the area in 1992. Clearwater argued it would helprestore indigenous habitats and ecosystems, offer a net improvement in both thenatural character and landscapes in the area and provide significant benefits for theKing Shag. The Court indicated it found Clearwater's programme did not significantlyweigh in favour of the Proposals. This was largely due to the lack of certainty. TheCourt considered them to be more conceptual than practical in design.18 The satellite breeding colony of King Shags at Hunia Rock was two and a half kilometres awayfrom the farms. The roosting site at Taratara was one kilometre from the farms.[29] The Court evaluated the Proposals against the backdrop of the relevant CoastalPolicy Statement and Sounds Plan provisions. Given the potential negative impactsthat the farm would have on the King Shag, the Court found that both the Sounds Planand Coastal Policy Statement provisions counted against the Proposals to someextent.19[30] Generally, the Court was concerned about the potential adverse impact that theProposals would have on the King Shag; the ecological and biodiversity values; andthe lack of effective ecological mitigation offered by Clearwater. The Proposals weresupported by neither the Coastal Policy Statement nor the Sounds Plan.[31] The Court said declining the Proposals would likely mean a net positivepotential ecological effect generally, and that granting the Proposals would notrecognise and provide for the matters in s 6(c) of the Act.Consideration 2: Natural character and landscape values[32] The Court began by noting that its findings in relation to the King Shag andecological/biodiversity values would inform its conclusions on issues of naturalcharacter and landscape values. The Court, as well as commenting on the drivingforce of the provisions in the Sounds Plan and Coastal Policy Statement, identified thematters of national importance recognised in ss 6(a) and (b) of the Act as guiding itsassessment of natural charter and landscape values. The relevant parts of s 6 read:6 Matters of national importance(a) the preservation of the natural character of the coastal environment(including the coastal marine area), wetlands, and lakes and rivers andtheir margins, and the protection of them from inappropriatesubdivision, use, and development:(b) the protection of outstanding natural features and landscapes frominappropriate subdivision, use, and development:...19 New Zealand Coastal Policy Statement 2010, objective 1 and policy 11; Marlborough DistrictCouncil Marlborough Sounds Resource Management Plan (District Plan), objective 4.3.1, 9.2.1.1,9.4.1.1 and 9.4.1.1.1.[33] In assessing natural character, the Court had the benefit of extensive expertevidence. It noted natural character was a separate issue to that of landscape. It quotedMr Bentley, a landscape architect called as an expert by the Council, as follows:... natural character is the level of actual (abiotic and biotic) and perceived(perceptual and experiential) 'naturalness' within a geographical area and ispart of landscape. It is a measure of the degree of human modification of alandscape/seascape or ecosystem expressed in terms of:i. Ecological naturalness (Indigenous nature); andii. Landscape naturalness (perception of nature).[34] The Court tackled the evaluation of the Proposals against the backdrop of therelevant Coastal Policy Statement and Sounds Plan provisions. It identified therelevant provisions of the Coastal Policy Statement and Sounds Plan.20 It evaluatedthe existing natural character of Te Anamāhanga as a whole and found it was of highernatural character.[35] Turning to the effects that the Proposals would have on this existing naturalcharacter, the Court found that they would:(a) fail to keep intact the relevant natural character of the areas in terms ofthe Sounds Plan. The mitigation offered by Clearwater (the reductionof the area of the farms) failed to effectively manage the developmentto avoid degradation of natural character. This concern was partlylinked back to the risk that human activity associated with the operationof the marine farms posed to the King Shag; and(b) cause localised degradation to natural character arising from theperception of the uniform grid of lines and buoys, and the night timenavigation lighting. These physical changes in the environment woulddisrupt the relationship between landform and seascape at Pig Bay andcreate a perception of scenic character being tamed for commercial20 Specifically, New Zealand Coastal Policy Statement 2010, objective 2 and policy 13, 14;Marlborough District Council Marlborough Sounds Resource Management Plan (District Plan),ch 2, 5 and 9, Appendix 1 and 2, and objective 2.2.1, and policies 2.2.1.1, 2.2.1.2, 2.2.1.6, 2.2.1.7and 2.2.1.8usage. A reduction of the number of lines could not mitigate thisadverse effect sufficiently.[36] The Court found that the Proposals would offend against the natural characterprovisions of both the Coastal Policy Statement and the Sounds Plan, failed torecognise and provide for the matters in s 6(a) of the Act,21 and would have asignificant adverse effect on the natural character of Pig Bay in Te Anamāhanga.[37] The Court moved on to evaluate the landscape impact of the Proposals. TheCourt accepted that Policy 15 of the Coastal Policy Statement applied to Pig Bay as itwas included in the outer Sounds Outstanding Natural Landscapes. Pig Bay was alsoan Outstanding Natural Feature. Policy 15(a) of the Coastal Policy Statement reads:To protect the natural features and natural landscapes (including seascapes) ofthe coastal environment from inappropriate subdivision, use, anddevelopment:a. avoid adverse effects of activities on outstanding natural features andoutstanding natural landscapes in the coastal environment.[38] The Court found that the Proposals would degrade several of the key values ofthe Outstanding Natural Landscape and features at Pig Bay. Specifically, thebiophysical value through the degradation of the natural character of Cape Lambertand interconnecting waters. The natural character would be made less exceptional,and a largely unmodified coast would be rendered less remote and wild.[39] The Court was not satisfied the proposals would keep intact the relevant naturalcharacter areas under the Sounds Plan. Clearwater's mitigation proposals would noteffectively manage this impact. It would be more consistent with Policy 15(a) of theCoastal Policy Statement to reject the Proposals. The Proposals were also unsupportedby and inconsistent with the relevant provisions of the Sounds Plan.22[40] In looking at the amenity values and public access associated with the area, theCourt found that the proposal would degrade the amenity values protected in the21 Which refer to the preservation of the coastal environment.22 Marlborough District Council Marlborough Sounds Resource Management Plan (District Plan),objectives 9.2.1.1 and 9.4.1.1, and Policies 2.2.1.8, 9.2.1.1.1, 9.2.1.1.2, 9.1.1.1.14 and 9.4.1.1.1.relevant planning provisions. It rejected the submission that the Proposals wouldmaintain and enhance the amenity values. The Court said a rejection of the Proposalswould better respond to the Coastal Policy Statement and Sounds Plan.[41] The Court concluded on this issue:23[210] For those reasons, we find that the Proposals would:(a) offend the natural character objectives and policies of the Sounds Planand the [Coastal Policy Statement];(b) fail to recognise and provide for the matters in s6(a) [of the Act]; and(c) therefore, would have a significant adverse effect on the naturalcharacter of Pig Bay and Port Gore.Consideration 3: Clearwater's investment and benefits of the proposals[42] The Court recognised that it must have regard to the value of Clearwater'sinvestment as a consent holder.24 It noted although Clearwater's investment in thefarms was relatively modest, it would be wrong to be dismissive of the investment orloss of revenue from a rejection of the applications. Nevertheless, there was nothingin the Act, Coastal Policy Statement or Sounds Plan that directed the Court to protectagainst a loss of investment that might be suffered by Clearwater. The Court notedthis was in contrast to the effects of the ecology, natural character and landscapeprotection values. If the economic impact was larger, on a regional or national scale,it said, it might have been different.[43] The Court indicated that due to the economic impact of the decision, it wouldbe important to provide reasonable decommissioning arrangements. Its decision wasinterim to allow for that.23 Clearwater Mussels Ltd v Marlborough District Council, above n 1, at [210].24 Resource Management Act, s 104(2A).Conclusion[44] The appeal was dismissed. Directions were given as to the decommissioning.Orders were made to protect commercially sensitive information and costs werereserved.25Standard of appeal[45] Section 299 of the Act allows a party to a proceeding before the EnvironmentCourt to appeal to the High Court on a question of law on any decision, report, orrecommendation of the Environment Court. Appellate intervention is, therefore,confined to a point of law and only justified if the Environment Court can be shownto have:26(a) applied a wrong legal test; or(b) come to a conclusion without evidence or one to which on the evidenceit could not reasonably have come; or(c) taken into account matters which it should not have taken into account;or(d) failed to take into account matters which it should have taken intoaccount.[46] How much weight the Environment Court chooses to give relevant policy orevidence is a matter solely for the Environment Court. This cannot be reconsideredas a question of law.27 Similarly, the merits of the case dressed up as an error of lawwill not be considered.28 Planning and resource management policy are, for obviousreasons, matters that will not be considered by this Court.2925 Sections 42 and 277.26 Ayrburn Farm Estates Ltd v Queenstown Lakes District Council [2012] NZHC 735 at [34] citingCountdown Properties (Northlands) Ltd v Dunedin City Council [1994] NZRMA 145 (HC).27 Stark v Waitakare City Council [1994] 3 NZLR 614 (HC); Moriarty v North Shore City Council[1994] NZRMA 433 (HC).28 Young v Queenstown Lakes District Council [2014] NZHC 414, (2014) 18 ELRNZ 1 at [19] citingSean Investments Pty Ltd v MacKeller (1981) 38 ALR 363 (FCA).29 Russell v Manukau City Council [1996] NZRMA 35 (HC).[47] In Countdown Properties (Northland) Ltd the High Court said:30The Court warned against interfering with findings of fact and identifyingerrors of law:"Moreover, the Tribunal should be given some latitude in reaching findings offact within its areas of expertise: see Environmental Defence Society Inc vMongonui County Council (1987) 12 NZTPA 349 at 353.Any error of law must materially affect the result of the Tribunal's decisionbefore this Court should grant relief: see Royal Forest and Bird ProtectionSociety Inc v W A Habgood Ltd (1987) 12 NZTPA 76 at 81-82."[48] It is insufficient for an error of law simply to be identified, the error must be amaterial one, impacting the final result reached by the Environment Court.31[49] In Guardians of Paku Bay Association Inc v Waikato Regional Council, theHigh Court recognised the deference to be shown to the Environment Court as anexpert tribunal when determining planning questions:32[33] The High Court has been ready to acknowledge the expertise of theEnvironment Court. It has accepted that the Environment Court's decisionswill often depend on planning, logic and experience, and not necessarilyevidence. As a result this Court will be slow to determine what are reallyplanning questions, involving the application of planning principles to thefactual circumstances of the case. No question of law arises from theexpression by the Environment Court of its view on a matter of opinion withinits specialist expertise, and the weight to be attached to a particular planningpolicy will generally be for the Environment Court.[50] This Court must also be vigilant in resisting attempts by litigants to use anappeal to the High Court as a mechanism to re-litigate factual findings made by theEnvironment Court.33 Nevertheless, it is possible for findings of fact to amount to anerror of law. As noted recently in Lau v Auckland Council there are two primaryhurdles that need to be jumped when an appeal is founded almost entirely on criticismsof factual findings:3430 Countdown Properties (Northlands) Ltd v Dunedin City Council, above n 26, at 153.31 Countdown Properties (Northlands) Ltd v Dunedin City Council, above n 26.32 Guardians of Paku Bay Association Inc v Waikato Regional Council [2012] 1 NZLR 271 (HC).33 At [32]; New Zealand Suncern Construction Ltd v Auckland City Council [1997] NZRMA 419(HC) at 426.34 Lau v Auckland Council [2017] NZHC 1010 at [6(d)] (footnotes omitted).(i) First, the appellant will need to show a seriously arguable case that factualfindings by the Environment Court are actually incorrect. An appeal court willnot interfere where there is an available evidential basis for the Court's finding.(ii) Second, the applicant will need to show that the factual errors are, incombination and in the context of the whole decision, so grave as to constitutean error of law. That is, it is seriously arguable that: (1) the Court has made afinding of fact which is based on no evidence, based on evidence inconsistentwith or contradictory of another finding of fact, or contradictory of the onlyreasonable conclusion of fact available on the evidence; and (2) the errors offact are so significant and extensive that the Environment Court, had itproperly directed itself, may well have reached a different decision overall onthe matter before it.[51] It must generally be the want of evidence, rather than the weight of theevidence, that forms the basis of an argument that factual errors are so severe theyconstitute an error of law.35Grounds of appeal[52] The appeal grounds initially raised by Clearwater in its notice of appeal wererefined before and during the hearing. The grounds can be summarised as follows:(a) The Environment Court made an error of law by misinterpreting andmisapplying relevant policy and could not have reasonably reached theconclusion it did on evidence before it regarding the ecological impacton the King Shag;(b) The Environment Court denied Clearwater a fair hearing as no partyput to Dr McClellan, Clearwater's ornithologist, that the farms wouldadversely affect the King Shag due to the proximity of the colony,roosting site, or disturbance of the feeding shags by boats;35 Moriarty v North Shore City Council, above n 27, at 437; Hunt v Auckland City Council [1996]NZRMA 49 (HC) at 4–5; Skinner v Tauranga District Council HC Auckland AP98/02, 5 March2003 at [13]; Guardians of Paku Bay Association Inc v Waikato Regional Council, above n 32, at[31].(c) The Environment Court did not adequately identify its reasons andcould not have reasonably reached the conclusion it did on the evidencebefore it in terms of its natural character findings;36(d) The Environment Court did not adequately identify its reasons andcould not have reasonably reached the conclusion it did on the evidencebefore it regarding its landscape analysis;37 and(e) The Environment Court made an error of law, failed to have regard tomaterial considerations, did not adequately identify its reasons andcould not have reasonably reached the conclusion it did on the evidencebefore it regarding economic factors.[53] Clearwater says the landscape and natural character analyses are intertwinedand therefore if there is an error of law in relation to natural character findings of theEnvironment Court the appeal should be allowed in respect of the landscape findings.Relevant planning framework[54] The Proposals by Clearwater required consent as discretionary activities underthe Act.38 Therefore they needed to be evaluated under the statutory imperativescontained in s 104 of the Act. Section 104 provides that when considering anapplication for resource consent, the consent authority must have regard to (amongother things) any "actual or potential effects" on the environment of allowing theactivity, as well as the provisions of the relevant planning documents.[55] Consent authorities must therefore recognise and provide for, as matters ofnational importance:36 In its written submissions, Clearwater noted it no longer pursued its ground of appeal that the scalethat the Court used to assess natural character was inconsistent.37 In its written submissions, Clearwater indicated it no longer pursued a ground of appeal initiallyadvanced that the scale which the Court used to assess landscape was inconsistent.38 Marlborough District Council Marlborough Sounds Resource Management Plan (District Plan),r 35.4.(a) The protection of outstanding natural features and landscapes frominappropriate subdivision, use and development; and(b) The protection of areas of significant habitat of indigenous fauna.[56] In this case the relevant planning documents were:(a) The Coastal Policy Statement;(b) Marlborough Regional Policy Statement (RPS);(c) The Sounds Plan;(d) The Proposed Marlborough Environment Plan (the MEP).39[57] These documents were developed to achieve the purposes of the Act. Ofparticular relevance here is that the purposes included the protection of OutstandingNatural Landscapes and areas of significant habitat for indigenous fauna. Eachdocument provides subsidiary policies and rules to achieve the level of protectionrequired by the Act.[58] The Coastal Policy Statement sets the national objectives and policies. TheRegional Coastal Policy Statement must be consistent with the natural objectives andpolicies. The Regional Coastal Policy Statement is the Sounds Plan. In this case, thedecision maker must also consider both the proposed MEP and the RPS.Outstanding natural character[59] The Coastal Policy Statement requires that adverse effects on areas of thecoastal environment with outstanding natural character or landscape values beavoided.40 The requirement to avoid adverse effects means to not allow or to prevent39 The MEP, it is not yet operational and is subject to the submission process at present. Counselindicated it would likely be sometime before it was operative.40 New Zealand Coastal Policy Statement 2010, Policy 11, 13(1)(a) and 15(1)(a).the occurrence of such effects.41 Similar directives appear in the Sounds Plan, the MEPand the RPS.[60] The Sounds Plan contains the Objectives and Policies which relate to thenatural landscape.42 It requires decisions made in relation to development within areasof outstanding natural features and landscapes to:43Avoid, remedy and mitigate adverse effects of subdivision, use anddevelopment, including activities and structures, on the visual quality ofoutstanding natural features and landscapes identified according to the criteriain Appendix 1.[61] As the proposals related to an area of Outstanding Natural Landscape (ONL)in the Sounds Plan, the tolerance for adverse effects from or related to the Proposalswas low. The adverse effects must be avoided, remedied or mitigated.[62] The Sounds Plan and the MEP both require adverse effects of development tobe avoided where the environment is predominantly in its natural state.44 Theapplication of the relevant objectives and policies of the Sounds Plan is intended tolead to the preservation of areas of uncompromised natural character in the coastalenvironment.45 Similarly, the application of the MEP objectives, policies, methods andof rules as they relate to natural character should ensure:The intactness of the individual coastal marine and coastal terrestrial areas ofthe Marlborough Sounds is retained in order to preserve the natural characterof the Sounds.Indigenous Flora and Fauna[63] Chapter 4 of the Sounds Plan identifies the primary resource management issuerelating to the ecological values within the Marlborough Sounds as being to protectindigenous flora and fauna. Chapter 4 addresses the degradation of the habitat of41 Environmental Defence Society Incorporated v The New Zealand King Salmon Company [2014]NZSC 38, [2014] 1 NZLR 593 at [62] and [92]–[97].42 Marlborough District Council Marlborough Sounds Resource Management Plan (District Plan),ch 5.43 Policy 1.1.44 Chapter 2, Policy 1.1; Proposed Marlborough Environmental Plan, ch 6.45 Marlborough District Council Marlborough Sounds Resource Management Plan (District Plan),r 2.4.indigenous fauna. The first objective of Chapter 4 is to protect significant indigenousflora and fauna and their habitats from the adverse effects of use and development.[64] All parties agreed that the area where the marine farms were proposed formedpart of the Marlborough Sounds Important Bird Area, which is recognised for itsglobal significance to sea birds.Coastal Marine Area[65] Policy 1.2 of Chapter 9 of the Sounds Plan requires adverse effects fromdevelopment in the coastal environment as far as practicable to be avoided. Ananticipated environmental result of the application of these objectives and policies(and the rules) is that:The adverse effects of occupation of coastal space [will] be avoided, remediedor mitigated to the fullest extent practicable.[66] Volume 2 of the Sounds Plan contains the rules. These sit under the policies.In addition to the activity status rule for the present Proposals (Rule 35.5) the Rulesidentify specific assessment criteria. The relevant provisions are:GENERAL ASSESSMENT CRITERIARule 35.4.1.1.5.3The likely effects of the proposal on any significant environmental features andin the particular that the proposal does not:(a) Adversely affect any habitat of any indigenous species or anyecological value identified in Appendix B;(b) Compromise the integrity of any terrestrial or marine ecosystem;(c) Diminish the natural character of the locality, having regard to thenatural character areas identified in Appendix Two, Volume One.Rule 35.4.2.7Occupation of the Coastal Marine Area(a) The effect on other users of the coastal environment.(b) The effect on cultural and landscape values.(c) Any effects on the ecology, fauna and flora of the surroundingenvironment.[67] These policy directives are mandatory components of the evaluative anddiscretionary exercise that the Environment Court (and earlier the Council) undertookwhen considering the Proposals.[68] In summary, assessing the effects of these proposals requires appropriateapplication of the relevant objectives, policies and rules. This should result in anoutcome which avoids the effects of a proposal as far as practicable or ensures thatany such effects are remedied or mitigated to the fullest extent practicable.Coastal marine zones[69] Under the Sounds Plan the proposed marine farms are located in coastal marinezone 1 (CMZ1).[70] Marine farming in CMZ1 is, subject to limited exceptions, a prohibited activity.This prohibition on marine farming in CMZ1 recognises that: "these areas areidentified as being where marine farming will have a significant adverse effect onnavigational safety, recreational activities, natural character, ecological systems orcultural, residential or amenity values".46 The zoning of the farms that are the subjectof the Proposals came about as the result of negotiations with the then operators tofinalise the provisions of the plan in 1999. As a result of a consent order made then,the existing marine farms retained their original activity status until they expired inSeptember 2014. They then became discretionary activities.[71] To assist in considering the actual and potential effects of the Proposals againstthe legislative framework the Environment Court heard evidence from a number ofexperts and planners. Mr C Marchant and Ms M Marchant also appeared as interestedparties and provided first hand evidence of their observations. They have resided inthe area for many years and in fact had discovered the King Shag colony at HuniaRock.4746 Marlborough District Council Marlborough Sounds Resource Management Plan (District Plan),ch 9.47 They said the colony had been established for some time by the time they were able to identifybirds as King Shags in 2012.Ground 1: the King Shag[72] There is no dispute that the King Shag is endangered, vulnerable, threatenedand at risk of extinction. It is common ground that it is an indigenous species ofsignificant ecological value. Nor is there any dispute about the application of thestatutory instruments in relation to the protection of the King Shag in the area ofthe Proposals.[73] The contest here is as to the effects of the Proposals on the King Shag andwhether the Environment Court was correct in its view that the small risk to the speciesamounted to an adverse effect. Clearwater says the adverse effect which the Courtfound did exist was not supported by the evidence. It further says the matters it raiseson appeal are not just factual, but rather errors of law, because:(a) There was no evidence to support the Court's findings of the adverseeffects on the King Shag.(b) If there were adverse effects they were so minor as to be insignificantand therefore should not have been taken into account.[74] Clearwater submits these amount to errors of law and the Court failed toidentify adequate reasons for its finding, misinterpreted relevant policies and reachedan unreasonable conclusion. I will tackle each of those issues.Reasonableness and failure to give reasons[75] This ground of appeal alleges the Court was in error because there wasinsufficient evidence available for it to come to its conclusion concerning the adverseeffects on the King Shag by boat disturbances. In other words, the Court's finding wasunreasonable or inadequate reasons were given for it.[76] Clearwater points specifically to the following Environment Courtconclusions:48Overall findings concerning King Shag and ecological effects48 Clearwater Mussels Ltd v Marlborough District Council, above n 1.[117] Therefore, we find on the evidence as follows:(a) the Proposals would, in net terms, give rise to an adversepotential effect to King Shag and, hence, to ecological andbiodiversity values (particularly in view of King Shag'sThreatened status). The effect is one of disturbance fromhuman activity associated with the maintenance and operationof the farms. While there may be a relatively small risk ofsuch an effect, it is not an insignificant one;(e) a decision to decline the coastal permits for the Proposalswould likely mean a net positive potential ecological effect,including on King Shag. That is in the sense that it wouldincrease potential for undisturbed foraging and roostingopportunities for King Shag within its identified IBA (and ina relatively remote part of the Outer Sounds) [77] Clearwater argues that the Court's conclusion that the King Shag was at riskdue to disturbance from visiting vessels was unreasonable because the Court relied onselected portions of the joint witness statement of the experts to the exclusion of otherevidence. Specifically, Clearwater points to the Court citing the following assupporting the risks posed by boat disturbance:[91] In particular, the Ecology [Joint Witness Statement] records thefollowing points of agreement between the experts:73. Coastal and open water aquaculture activities (shell and finfishfarms) may cause disturbance of birds (foraging and at colonies) byvessel movements, and may affect habitat availability and preyabundance and distribution.77. The species is readily disturbed/flighty, which can result In adultsprematurely departing nests when boats pass colonies. In thesesituations, eggs can be damaged or lost to the sea. The nervousbehaviour of birds makes them difficult to approach at colonies tocapture for tagging/detailed studies.Clearwater submits that these are generic statements that must be assessed in thecontext of all of the evidence, and it was incorrect of the Court to conclude that it wasthe consensus position of the experts that the farming operations "would present anactual disturbance risk".49 This evidence, it says, should have been viewed in light ofthe other evidence given, particularly by Dr McClellan.[78] To further this argument, Clearwater pointed to the evidence that was availableto the Court that supported its position that there was no material disturbance riskposed to the King Shag. Specifically, Clearwater noted it was unchallenged that:(a) the farms involved are only visited up to 21 days a year50 by marinefarm servicing vessels;(b) the farms are two and a half kilometres from the nearest breedingcolony (Hunia Rock Satellite Colony) and one kilometre from thenearest roosting site (Taratara);(c) the most conservative recommendations for excluding vessels aroundthe breeding and roosting colonies are 1,000 metres and 300 metresrespectively; and(d) King Shag can be approached relatively closely while resting withoutbeing disturbed.[79] Clearwater's managing director gave evidence about the number of visits tothe farms and said there could be up to a 20 per cent variation the number of visits byvessels. He also gave evidence as to the length of stay of the vessels. Applying a 20%variation, at the upper end of the range the vessels could in fact visit up to 25 times ayear and stay for up to 15 hours a day.51[80] Clearwater noted that the Court had concluded there was insufficient scientificknowledge about the King Shag in relation to its feeding and the impact of the farms49 At [116].50 With a 20 per cent margin of error.51 The experts also agreed that the King Shag forages within a circumference of some 25 kilometres.The marine farm activities and related activities including vessel movement were within thatforaging area. The marine farms were two and a half kilometres from the satellite breeding colonyHunia and only one kilometre from the first known shag roosting site in Port Gore at Taratara.Three other larger breeding colonies were also within the foraging range.on this.52 Clearwater submitted that this was untrue. It said as the effects of boatdisturbance on the King Shag was a topic referred in research by Dr Chris Lalas in2001.53 His research paper was referred to by both ornithological expert witnesses butwas not put into evidence. Clearwater did note, however, that Dr Fisher (one of theexperts) in his evidence in chief noted that "the effect of disturbance from boatsapproaching colonies during the breeding season and on foraging success of NZ kingshags at sea are an unknown but both potential adverse effects that need to beconsidered and quantified in an assessment of effects."[81] Clearwater also pointed to the recommendation from the Department ofConservation its action plan for sea bird conservation in New Zealand that no boatshould approach closer than 100 metres of the colonies during the breeding season(March to August). Clearwater said there was nothing in the evidence to suggest thatmarine farms would have an effect on the King Shag at a distance of two and a halfkilometres or anything approaching that distance. Therefore, Clearwater submits, thatin Dr McClellan's words "disturbance is likely to be of minimal concern, as no musselfarms were located in close proximity to colonies". She also said that the King Shagwas less likely to be affected than other species and could be approached relativelyclosely while resting.[82] Clearwater noted the Court made factual findings that vessels already travelthrough Port Gore to service other marine farms in Melville Cove and also forrecreation, commercial diving and trawling. Furthermore, there are other activitieswhich cause disturbance such as diving excursions to the Mikhail Lermontov wreckand aircraft movements to and from the Marchant property. It was also noted the farmwas established before the King Shag colony was discovered.54 Later in its judgment,the Court did expressly note that any additional disturbance from the Proposals wouldbe very small in the context of the ongoing disturbance in the important bird area.5552 Clearwater Mussels Ltd v Marlborough District Council, above n 1, at [85] and [87].53 The research related to the Otago area not the Marlborough Sounds.54 At [92]. The Marchants said the colony had been established for some time by the time they wereable to identify the birds as King Shag in 2012.55 At [114].[83] With reference to the important bird area, Clearwater argues that the logicalconclusion of the Environment Court's decision was that there should be no boatswithin the important bird area despite the fact that the important bird area covers themajority of the sounds.[84] In summary, Clearwater argues it was unreasonable for the Court to concludethat that the Proposals would have an adverse impact on the King Shag. It further saysthat any effect from passing boats could be dealt with as a condition on the consent.Clearwater suggests that the condition could have been that no vessel associated withthe farm could travel within one kilometre of the breeding colony or 300 meters of theroosting site. In its submission there could be no risk of an adverse impact on the KingShag with these parameters and for the Court to conclude otherwise was unreasonable.[85] The assessment of risk of future events is difficult generally. In this case theadverse effects are uncertain, but they may result in a significant loss to an endangeredspecies. The Environment Court is required to take the evidence, expert and otherwiseand reach a view on possible adverse effects and determine how best to deal with themwithin the requirements of the Act and planning documents.[86] Future hypothetical effects are not susceptible of proof in the same way thatpresent facts are able to be proven. In R J Davidson v Marlborough District Council,the High Court, when assessing the risks attendant on proposals for a marine farm inthe Sounds, said:56[118] the future may be predicted and the hypothetical may beconjectured. But questions as to the future or hypothetical effect of physicalinjury or degeneration are not commonly susceptible of scientificdemonstration or proof.[129] Determining actual effects on the environment is relativelystraightforward, because it concerns existing factual circumstances that can beproved on the balance of probabilities. However, the authority must also takeinto account potential effects on the environment. The word "potential"denotes something other than proof, and cannot be assessed on the balance ofprobabilities. Instead, it was appropriate to assess risks that carry less than a50 per cent chance of eventuating. In particular, the risk of species extinction56 R J Davidson v Marlborough District Council [2017] NZHC 52 at [118] citing Malec v J C HuttonProprietary Ltd (1990) 169 CLR 638 at 642–643.is much less than 50 per cent and it cannot be proved that extinction is morelikely than not to occur. Instead, it is appropriate to assess existing facts onthe balance of probabilities, and consider whether any particular evidence isproved to that standard. The assessment of potential effects then depends onan evaluation of all of the evidence but does not depend on proving thatpotential effect will more likely than not occur.[132] In relation to future risk, the Court then considered the future risk onthe evidence that was available to it and in its assessment took into account asignificant relevant factor, namely the potential for the King Shag to be drivento extinction by the "accumulated and accumulative effects of mussel farmswhich are part of the environment in Beatrix Bay." Although that was a lowprobability event, in the Court's assessment, extinction was undoubtedly asignificantly adverse effect which would be exacerbated, to a small extent, bythe Trust's proposal. The Court predicted that the accumulative adverseeffects could be serious. I note that the Court did not assess the risk as deminimus or as a remote possibility.57 There is no basis for this Court tointerfere with the majority's decision.[87] The Court noted it relied largely, although not to the exclusion of otherevidence, on the Joint Statement. It noted: the extreme vulnerability of the King Shagin that it was an endangered species deserving of high protection; the farms werewithin the foraging range of six colonies or breeding sites (well within the foragingarea of a breeding site); that the birds were flighty and easily disturbed particularlywhen nesting which may have disastrous effects for any eggs in the nest. OnClearwater's own evidence was that the farms would likely attract vessels movementsto and from the farms for on up to 25 days a year and each could spend up to 15 hoursat the farm. They would be in the vicinity of the King Shag colonies and breedingarea in Pig Bay.58 These were additional movements to any existing activity in thebay.[88] The Environment Court in this case had ample evidence before it to concludethat the proposals would give rise to potential adverse effects on the King Shag.[89] There was disagreement between the experts as to the distance boats need tokeep from the important bird sites and much of the guidance was based on anecdotalrather than scientific evidence. With this lack of clarity, and agreement between the57 At [106].58 Two and a half kilometres from the nearest breeding colony and one kilometre from the nearestroosting site.experts that activities and boat movements can adversely affect the birds, it was opento the Court to conclude there was a "relatively small risk".59 It was careful not tooverstate this conclusion.[90] A further point raised by Clearwater was that if the matter was of concern theCourt it could have imposed a condition that no vessel associated with the farm couldtravel within one kilometre of the breeding colony or within 300 metres of the restingsite. I do not consider the Environment Court made any error of law for failing tocome up with such a condition. In any event, a condition was unlikely to sufficientlymitigate the risk in relation to the King Shag given the extreme vulnerability of thebird and its endangered status. A small risk of annihilation of an endangered speciesrequires more rigorous protection.60[91] The Environment Court's findings on the likely adverse effects to theKing Shag were open based on the evidence it had before it. Clearwater is contestingthe weight the Court gave to the evidence. It is not a case of a complete lack ofevidence. The Court did not make any factual errors and certainly none so severe theyconstitute an error of law.61Error of law[92] Clearwater submits that the Environment Court made an error of law when itinterpreted Policy 11(a) of the Coastal Policy Statement as meaning that no risk,however infinitesimal, is tolerable in respect of a vulnerable or threatened species.[93] That policy provides:To protect indigenous biological diversity in the coastal environment:a. avoid adverse effects of activities on:59 Clearwater Mussels Ltd v Marlborough District Council, above n 1, at [117(a)].60 Sustain Our Sounds Inc v New Zealand King Salmon Company Limited [2014] NZSC 40, [2014]1 NZLR 673 at [66] made similar comments about managing risk by an adaptive managementapproach.61 Moriarty v North Shore City Council, above n 27, at 437; Hunt v Auckland City Council, above n35, at 4–5; Skinner v Tauranga District Council , above n 35, at [13]; Guardians of Paku BayAssociation Inc v Waikato Regional Council, above n 32, at [31].i. indigenous taxa that are listed as threatened or at risk in theNew Zealand Threat Classification System lists;ii. taxa that are listed by the International Union forConservation of Nature and Natural Resources as threatened;iii. indigenous ecosystems and vegetation types that arethreatened in the coastal environment, or are naturally rare;iv. habitats of indigenous species where the species are at thelimit of their natural range, or are naturally rare;v. areas containing nationally significant examples ofindigenous community types; andvi. areas set aside for full or partial protection of indigenousbiological diversity under other legislation; [94] Clearwater submits that the approach taken by the Environment Court isinconsistent with the Supreme Court's decision in New Zealand King Salmon.62Specifically, Clearwater pointed to William Young J's minority decision when he said:[201] I consider that a corollary of the approach of the majority is thatregional councils must promulgate rules which specify as prohibited anyactivities having any perceptible adverse effect, even temporary, on areas ofoutstanding natural character. I think that this would preclude some navigationaids and it would impose severe restrictions on privately-owned land in areasof outstanding natural character. It would also have the potential generally tobe entirely disproportionate in its operation as any perceptible adverse effectwould be controlling irrespective of whatever benefits, public or private, theremight be if an activity were permitted. I see these consequences as being sobroad as to render implausible the construction of policies 13 and 15 proposedby the majority.[95] Clearwater said the majority's response was contained in the following:[144] Third, it is suggested that this approach to policies 13(1)(a) and 15(a)will make their reach over-broad. The argument is that, because the word"effect" is widely defined in s 3 of the RMA and that definition carries overto the [Coastal Policy Statement], any activity which has an adverse effect, nomatter how minor or transitory, will have to be avoided in an outstanding areafalling within polices 13 and 15. This, it is said, would be unworkable. We donot accept this.[145] The definition of "effect" in s 3 s broad. It applies "unless the contextotherwise requires". So the question becomes, what is meant by the words"avoid adverse effects" in policies 13(1)(a) and 15(a)? This must be assessedagainst the opening words of each policy. Taking policy 13 by way of example,its opening words are: "To preserve the natural character of the coastal62 Environmental Defence Society Incorporated v The New Zealand King Salmon Co Limited, aboven 41, at [17].environment and to protect it from inappropriate subdivision, use, anddevelopment". Policy 13(1)(a) ("avoid adverse effects of activities on naturalcharacter in areas of the coastal environment with outstanding naturalcharacter") relates back to the overall policy stated in the opening words. It isimprobable that it would be necessary to prohibit an activity that has a minoror transitory adverse effect in order to preserve the natural character of thecoastal environment, even where that natural character is outstanding.Moreover, some uses or development may enhance the natural character of anarea.[96] Clearwater said these words were echoed in the Court of Appeal's decision inMan O'War Farm Ltd v Auckland Council:63[65] As the majority judgment indicates, however, much turns on what issought to be protected. And it must be remembered that the decision in KingSalmon took as its starting point the finding by the Board that the effects ofthe proposal on the outstanding natural character of the area would be high,and there would be a very high adverse visual effect on an ONL[97] In summary, Clearwater submitted that the combined effect of the SupremeCourt's decision in New Zealand King Salmon and the Court of Appeal's decision inMan O'War is to reject the notion that every activity, with a perceptible potentialadverse effect near a threatened species, must be prohibited. The corollary of this, inClearwater's submission, was that the risk caused by up to 25 boat movements peryear cannot be said to be a risk to be avoided in terms of the relevant policy provisions.[98] This argument cannot be sustained on the evidence. All the experts wereagreed on the significant vulnerability and risks facing the King Shag as a species inthe sounds. It was up to the Court to assess the risk on the evidence of the activitiesgenerated by the Proposals on the foraging, roosting and breeding of the King Shag.64The Environment Court concluded that the risks caused by boat movements wererelatively small but none the less in its assessment presented a risk.6563 Man O'War Farm Limited v Auckland Council [2017] NZCA 24, (2017) 19 ELRNZ 662.64 The relevant expert opinion diverged on the risk posed by the Proposals. It agreed on the extremevulnerability of the King Shag; the significance of the loss of even one bird on its survival as aspecies; its low population numbers, its flighty behaviour if disturbed and the likely particularvulnerability of colonies and nesting sites of the size of those affected by the proposal. The expertsagreed on the need for a high level of protection. This in the context of the uncertainty about manyaspects of its ecology and behaviour.65 Clearwater Mussels Ltd v Marlborough District Council, above n 1, at [117(a)].[99] Furthermore, s 3 of the Act defines "effect" widely to include "any potentialeffect of low probability which has a high potential impact". Under s 104(1)(a) of theAct, a consent authority must have regard to any actual and potential effects on theenvironment of allowing the activity. All effects must be considered.[100] Given the gravity of the consequences to the King Shag species if even onebird suffered adverse effects, the Environment Court was entitled to take the approachto protect an endangered species with a risk (albeit small) of annihilation of thespecies. A small risk of annihilation of an endangered species requires more rigorousprotection of the bird.66[101] This ground of appeal is not made out.Ground 2: natural justice[102] Mr Davies, for Clearwater, said that Clearwater was denied a fair hearingbecause the Environment Court's views on the risks of human activity to theKing Shag should have been specifically put to Dr McClellan, the orthinologicalexpert for Clearwater. Mr Davies says there was no discussion by the EnvironmentCourt members about the boats disturbing birds on the water, so Dr McClellan wasnot specifically alerted to the views of the Court on the evidence concerning the effectsof disturbance by boats on the King Shag.[103] Clearwater says that rather than relying on the generic statements in the JointStatement the Court should have put the relevant matters to its expert, Dr McClellan,so she could comment. In particular, Clearwater submits that the Environment Courtshould have put its concerns about the effects of boat movements to her.[104] Clearwater cites Meridian Energy Limited v Central Otago District Council tosupport its proposition that the Court's failure to put to Dr McClellan that the King66 Sustain Our Sounds Inc v New Zealand King Salmon Company Limited, above n 60, at [66] madesimilar comments about managing risk by an adaptive management approach.Shag was at risk due to the disturbance by visiting vessels was an error of law becauseit denied Clearwater the right to a fair hearing.67[105] In Meridian the Environment Court had relied on another Environment Courtdecision that had not been referred to or relied on by the parties. The EnvironmentCourt applied an adaption of the approach set out in the earlier decision. If theapplicant had known the Court would use that approach it would have materiallyaffected the manner in which its case was presented. On appeal, the High Courtconcluded that the parties should have been warned by the Environment Court that itwould use an approach that was not properly foreshadowed.68[106] Mr Davies also noted that there was a general principle of fairness, as outlinedin Air New Zealand v Mahon, that a case should be put fully to a party who wascriticised in a decision.69 The Privy Council in that decision was concerned with thelack of opportunity to respond given to Air New Zealand staff who were severelycriticised in a report about their role in causing the Air New Zealand Erebus disasterand the manner in which they provided information to the Commission of Inquirypreparing the report. The Privy Council noted that the object of the rules of naturaljustice was to achieve fairness in the circumstances.[107] Dr McClellan was not criticised in the sense that Mahan was concerned with.The Court may not have accepted all her views, but it is common for a Court to preferthe evidence of one expert over that of another. A specialist court such as theEnvironment Court regularly considers expert evidence and is experienced inevaluating the evidence and assessing risks. It did so here. The general principle offairness has not been violated here.[108] The situation complained of by Clearwater also significantly differs from thatin Meridian. Meridian was concerned with a situation where the Court gave no noticethat it would apply a substantially different test than that contemplated by the parties.That is not the situation here either. The risk to the King Shag from activity likely to67 Meridian Energy Limited v Central Otago District Council [2010] NZRMA 477, [2011] 1 NZLR482 (HC).68 At [132]–[133].69 Air New Zealand v Mahon [1983] NZLR 662 (PC).result from the Proposals was an issue from the outset. Disturbance of the King Shagwas squarely before the Court, even if, as Clearwater says, that issue was notspecifically identified in the list of issues provided to the Court.[109] The present appeal is not concerned with a significant and unexpectedapproach to assessment undertaken by the Environment Court without notice.Clearwater could not have been surprised that the disturbance of the King Shag byhuman activity or vessel movements to and from the farms was going to be an issue.Clearwater was not taken by surprise. Not only did the Joint Statement refer to it butMs Marchant made submissions on it and Dr Fisher gave evidence on the issue.70There was no obligation on the Court to put to Dr McClellan its view on the weight itwould place on the evidence pertinent to the issue. All that was required was thatClearwater received a fair opportunity to put its case. It did.[110] It was up to the Environment Court to consider all the evidence, make suchinferences as it considered appropriate and reach its conclusion. It was entitled toconsider the behaviour of the birds when disturbed, whether when on the water or inthe colonies and reach a conclusion that the likely vessel movements and activitygenerated by the proposals was sufficient to amount to a risk in the circumstances.[111] Clearwater additionally submitted that if it had known that the issue of boatmovement and its effects on the King Shag was going to be of such importance to theCourt it would have considered calling Dr Lalas as his research was referred to by theexperts.[112] The effects of the marine farms on the King Shag was a key issue from theoutset. It was specifically dealt with by the orthinological experts. There was nothingto prevent Clearwater calling Dr Lalas as an expert or introducing his research in somemanner other than it did. It is not uncommon for experts to refer to literature andresearch without putting into evidence the full report or calling the expert. That iswhat Clearwater's expert, Dr McClellan, did.70 The evidence of the experts and the Joint Statement was filed and provided to all parties includingClearwater well in advance of the Environment Court hearing[113] There was no error of law under this ground of appeal. This ground of appealfails.Ground 3: natural character[114] Clearwater takes no issue with the approach identified by the Court to be takenin its assessment of natural character.71 The concern of Clearwater was with theCourt's failure to adhere to that approach. It says the Court failed to address thematerial evidence in respect of ecological naturalness.[115] Clearwater made two primary submissions under this head:(a) That the Environment Court reached a conclusion it could not havereasonably reached on the evidence before it; and(b) The Court failed to adequately identify reasons for its conclusion.[116] Clearwater says the Court did not follow the approach it identified in regardsto natural character. Clearwater submits that if the Court was taking a "factual andscience based" inquiry it ought to have used the evidence of Clearwater's witness,Mr Davidson, as a starting point on the biotic and abiotic elements of natural character.[117] Clearwater framed this issue as involving questions of law as follows:(a) Mr Davidson's evidence was not contested and yet was not properlytaken into account of;(b) Mr Davidson's evidence was relied upon by Clearwater's landscapeexpert, Mr Glasson, yet Mr Glasson's evidence was largely rejected;(c) As a consequence, Mr Davidson's evidence was indirectly rejected aswell;71 Clearwater Mussels Ltd v Marlborough District Council, above n 1, at [154].(d) No reasons were given for rejecting Mr Davidson's evidence on"ecological naturalness", when his evidence was unchallenged andaccepted by all the landscape architects. Clearwater submits this pointsto a conclusion the Court could not have reasonably reached its decisionon the evidence.[118] I deal with these matters below.The evidence on natural character[119] Clearwater accepted that the Court was correct in saying that:72[154] The determination of the natural character values of an area involvesa high degree of evaluative judgment. That is both as to the nature and degreeof the natural character values of the environment and how an activity affectsthose values. Natural character assessment properly commences withconsideration of the biophysical status of the area in question. As looks candeceive, this enquiry is an important first step in order to understand the degreeof naturalness of (or degree of human modification to) the relevant area. It isboth a factual and science-focussed enquiry. 'Character' is a perceived value.Hence, once the degree of naturalness in the receiving environment isaccurately gauged, the second step in a natural character assessment is toevaluate how people would sense and experience the naturalness of thatenvironment.[120] Therefore, Clearwater accepts that in determining the natural character valuesof an area the relevant factors are:(a) That it involves a high degree of evaluative judgment;(b) That the evaluation is both as to the degree of the natural charactervalues of the environment and how an activity affects those values;(c) It commences with a consideration of the biophysical status of the areain question;(d) An important first step is to understand the degree of naturalness (ordegree of human modification) in the relevant area;72 Clearwater Mussels Limited v Marlborough District Council, above n 1.(e) It is both a factual and science-based inquiry;(f) "Character" is a perceived value;(g) The second step in a natural character assessment is to "evaluate howpeople would sense and experience the naturalness of theenvironment".[121] Mr Davidson's evidence addressed the underwater elements of naturalcharacter and landscape. It focused on the marine environment and the effects of theproposals, primarily, on the benthos.73 Mr Davidson had had extensive experience asa diver in the Sounds.[122] Clearwater pointed to Mr Davidson's summary on natural character as follows:[55] Submitters have stated that Port Gore and the Pig Bay area have highnatural character. Biological attributes or values of any area, form part of theassessment of natural character. The benthic environment of Port Goresupports remnant patches that still support high biological values relative tomuch of the Marlborough Sounds, and for that matter New Zealand's inshorecoastal waters. In contrast, the soft sediment seafloor of most of Port Gore andthe nearshore water of New Zealand are presently in a modified state in myopinion, and cannot be given a high biological score. Any attempt to rankmodified habitats that no longer support biological attributes of importancewill act to undermine the status of the remaining remnant sites that do retainvalues. The assessment of offshore areas of Pig Bay by Cawthron (Ellis et al.2014) and my investigation of the seafloor under the mussel farmsdemonstrates these areas do not support biological features that would beconsidered significant.[123] Mr Davidson said the presence of the farms had caused a change which wasmild to mild/moderate on the sea floor. If it were removed a species composition shiftwould occur with an increasing abundance of organisms and the change may not beadverse.[124] In general terms Mr Davidson's evidence was accepted and not challenged inrelation to the biotic and abiotic components of the bethnic environment. The Courtaccepted his evidence confirming the shift in natural state of the sea bed.7473 Benthos: flora and fauna at the bottom of the sea.74 The Court referred to Mr Davidson's evidence on a number of occasions: Clearwater Mussels Ltdv Marlborough District Council, above n 1, [86].[125] However marine attributes of an area consist of more than benthic attributes.For instance, the drowned ridge, visiting and resident wildlife and physical surfacemodification were all matters considered by the Court as part of its evaluation. Itconcluded:[195] We accept the evidence of Mr Bentley as to the geomorphologicalsignificance of Cape Jackson as a drowned ridge crest. We also acceptMs Lucas' point that this significance, as a contributor to biophysical values,does not stop at the water line. Mr Bentley correctly acknowledged that thebenthos had been modified by the history of aquaculture in the vicinity of PigBay. As the ecology evidence explained, it is also degraded from siltationfrom decades of terrestrial farming (as is the case for much of the Sounds).On the other hand, we agree with Mr Lucas that visiting and resident wildlifeare a further important contributor to the natural character of the land andwaters of Port Gore. The ecology evidence focussed primarily on King Shag.Given its threatened status, we find that the existing, albeit small andvulnerable, satellite King Shag colony at Hunia is one such importantcontributor to Port Gore's natural character. We agree with Ms Lucas thatMr Glasson's assessment was deficient in not properly accounting for thebiophysical attributes of the waters of Port Gore and Pig Bay. On the matterof marine biophysical values, we generally find the evidence of Ms Lucas andMr Bentley reliable, but not that of Mr Glasson.[126] Clearwater says that the evidence of Mr Davidson underpinned the evidenceof the landscape witnesses Mr Glasson (for Clearwater) and Ms Lucas (for Friends).[127] However, it was not because of Mr Glasson's reliance on Mr Davidson'sevidence that the Court rejected Mr Glasson's evidence and preferred that of MsLucas.[128] The Court reviewed the evidence of the landscape witnesses in respect ofecological naturalness and concluded that it agreed with the Council's landscapearchitect, Ms Lucas, that Mr Glasson's assessment was deficient because it failed toproperly account for the biophysical attributes of the water in the area.75[129] Ms Lucas in her evidence summarised what should be considered in evaluatingthe natural character and noted the issues Mr Glasson had omitted to consider. Shesaid:Natural character appropriately involves abiotic, biotic, and experimentalattributes of the terrestrial and marine lands and of the waters, here the75 At [195].marine waters. The drowned ridges complex, that links the South through tothe North Island, is an important geomorphic feature. It is outstanding not justfor what pokes out but also for what lies below; the drowned. This feature isprominent in and important to Port Gore's unique natural character. Themarine environment that occupies the valley entrance, the outer waters of TeAnamāhanga, and the transitions from there to the bay waters within and tothe Strait waters outside, are very important attributes of the natural characterof the Cape's environs. Associated with these abiotic environs are the bioticrelationships: migrating species, the visiting species, the resident species, theirnatural patterns and processes, their natural inter-connections, arrangementsand associations – with each other and with abiotic attributes. Such attributeshave been little recognised in the Appendix but are, in my assessment animportant part of the natural character of Cape Lambert. These attributes havealso not been adequately recognised or addressed by Mr Glasson.[130] The Court also found Mr Glasson's evidence was unreliable because of his"slicing and dicing" of the terrestrial landscape for the purposes of his assessment:76[229] As we find Mr Glasson's methodology was deficient in thoseterms, we do not accept his ultimate conclusions on this occasion.[230] Mr Glasson effectively derived two landscape units, subdivided at thestock-proof fence. On that basis, he applied the thirteen AOLV indicators toderive a 'moderate' landscape value for the Pig Bay site (being the majorityof Pig Bay from stock proof fence to Hunia) and ONF for Cape Lambert itself.He considered this was appropriately based on what is termed 'natural sciencefactors' (in terms of the modified Pigeon Bay factors). However, asMr Glasson himself acknowledged, a landscape should not be too finely slicedand diced in assessment terms. We find he has erred in that regard byartificially distinguishing Cape Lambert, as ONF, from the majority of PigBay. Pig Bay is an embayment of Cape Lambert. For the reasons given byMs Lucas, the landscape (including seascape) needs to be read as a singleunit, for context, in order to then consider Pig Bay as a part of that landscapeunit and, hence, reliably assess the effects of the Proposals on the identifiedlandscape values of that landscape unit.Reasonableness[131] In reaching these conclusions the Environment Court was required to considerthe evidence of a number of witnesses, not just Mr Davidson. The EnvironmentCourt's considerations were much wider than the matters covered by Mr Davidson.The Court took also into account the degradation of the visual impacts and people'sperceptions of naturalness, disruption of the biotic characteristics and values,including the submerged ridge and the effect on the flora and fauna, including theKing Shag.7776 At [229] and [230] (emphasis added).77 At [205].[132] The Court was entitled to prefer the evidence of Ms Lucas to that of MrGlasson. Ms Lucas' evidence took into account wider aspects of natural character thanjust the benthos. It is not correct to say the Court did not consider the evidence of MrDavidson nor that Ms Glasson's evidence was solely dependent on Mr Davidson'sevidence.[133] This ground of appeals fails.Failure to give reasons[134] Clearwater submits that the Environment Court failed to give reasons by notspecifically referring to Mr Davidson's evidence. As I have outlined above, the Courtdid consider Mr Davidson's evidence. His evidence about the natural character of theunderwater environment was accepted by the landscape witnesses and by theEnvironment Court. However, it was for the Environment Court to weigh the evidenceit received and consider all the elements that go into natural character. It is commonground that this determination of the natural character values of an area involves ahigh degree of evaluative judgment. This is for the Court.[135] The Court's reasons for its decision must be sufficiently detailed to enable theappellate court to see and determine whether there is some factual basis upon whichthe conclusion can be supported or whether the Court has misdirected itself as to thelaw.78 There is no obligation to record every finding on every point each witnessmakes.79 In this case the Court's reasoning and the basis for its conclusions is clear.[136] There is no error of law on this ground either.Ground 4: Landscape values[137] The appeal in relation to the Environment Court's findings on the landscapeassessment is based on the submission that Mr Glasson was entitled to rely onMr Davidson's assessment of the biophysical characteristics of the aquatic landscape78 Hutchinson Bros Ltd v Auckland City Council (1988) 13 NZTPA 39 (HC).79 Contact Energy Limited v Waikato Regional Council (2007) 14 ELRNZ 128 (HC) at [65].and of the ecological effects. These arguments do not differ materially from thosedealt with above under natural character.[138] For the same reasons, the appeal must fail in relation to this ground.Ground 5: Economic factors[139] At the hearing, Mr Davies conceded that even if Clearwater were successful inestablishing the "economic factors" ground as error of law it would not amount to amaterial error. It would not of itself (without other grounds on appeal succeeding)justify the matter being remitted to the Environment Court. This is because, in thiscase, the environmental and ecological effects and natural character and landscapeissues override the economic factors.[140] The Environment Court found in terms of economic and cultural wellbeing thefarms contributed in a relatively small way to Clearwater's business and to thewellbeing of people and communities.80 It commented it could readily be substitutedgiven the capacity of Clearwater to shift its investment elsewhere such as the Soundsor Golden Bay and Tasman Bay.[141] The Court then went on to note the difficulties of quantifying the economicefficiency in this case. However, it concluded that it was not important as "theevidence enables us to safely find that any loss of economic efficiency suffered bythrough declining the appeals would be very small and insignificant".81 It also found"that any such loss would be strongly outweighed by the benefit of better consistencywith the priorities set out by the NZSPS and Sounds plan in relation of the protectionof ecological, natural character and landscape values ".82[142] Clearwater submitted that as the Court had suggested alternative for siteswhich were outside the Marlborough District it therefore did what the High Court inMeridian said was not permitted to do. In Meridian the High Court said:8380 Clearwater Mussels Ltd v Marlborough District Council, above n 1, at [267].81 At [267].82 At [267].83 Meridian Energy Limited v Central Otago District Council, above n 67, at [93].[93] Given that the functions of territorial authorities listed in s 31 are "forthe purpose of giving effect to this Act in its district" (our emphasis) we donot think that Parliament intended that applicants could be called upon todescribe alternative sites beyond the relevant district. We should also add thatwhile we doubt that the [Environment Court] had in mind that alternativesthroughout the country would have to be considered, if that was in fact theintention there would be further problems. For a company like Meridianseeking a major wind farm site in the South Island (because the bulk of itscustomers are located in that island) a comparison of alternative sites in thenorth island would be largely meaningless.[143] The High Court in Meridian was dealing with the requirement by theEnvironment Court that a detailed analysis of alternative sites should have beenundertaken by the applicant. The Court in this case was not suggesting other sites beanalysed as alternatives to the Proposals. It was merely observing the optionsClearwater had open to it for investment given its existing interests in various areas.[144] This ground of appeal would have failed were it pursued.Conclusion[145] I am of the view that the Environment Court did not err in reaching itsconclusion that it "overwhelmingly" found that the appropriate outcome was todecline the appeals.84Costs[146] The parties indicated that the appropriate category for costs was 2B. Thereappears to be no reason why costs should not follow the event as is usual. If counselare unable to agree, submissions should be filed as follows:(a) Memoranda by the Council, Friends and other parties (preferably a jointmemorandum) on or before 14 working days from the date of deliveryof this judgment;(b) Memorandum by Clearwater on or before a further 14 working days;84 Clearwater Mussels Ltd v Marlborough District Council, above n 1at [274].(c) The Council, Friends and other parties are to file and serve any reply(preferably in a joint memorandum) on or before a further threeworking days._________________Grice JSolicitors:Gascoigne Wicks, Lawyers, BlenheimRadich Law, Solicitors, Blenheim