PORT OTAGO LIMITED v ENVIRONMENTAL DEFENCE SOCIETY INCORPORATED [2021] NZCA 638

PORT OTAGO LIMITED v ENVIRONMENTAL DEFENCE SOCIETY INCORPORATED [2021] NZCA 638[2 December 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA240/2020[2021] NZCA 638BETWEEN PORT OTAGO LIMITEDAppellantAND ENVIRONMENTAL DEFENCE SOCIETYINCORPORATEDFirst RespondentOTAGO REGIONAL COUNCILSecond RespondentROYAL FOREST AND BIRDPROTECTION SOCIETY OFNEW ZEALAND INCORPORATEDThird RespondentMARLBOROUGH DISTRICT COUNCILFourth RespondentHearing: 6 July 2021Court: Kós P, Miller and Gilbert JJCounsel: L A Andersen QC for AppellantD A Allan and M C Wright for First RespondentA J Logan and T M Sefton for Second RespondentP D Anderson and S T Shaw for Third RespondentJ W Maassen and B D Mead for Fourth RespondentJudgment: 2 December 2021 at 3 pmJUDGMENT OF THE COURTA The appeal is dismissed.B The appellant must pay the first, second and third respondents costs fora standard appeal on a band A basis plus usual disbursements.____________________________________________________________________REASONSKós P and Gilbert J [1]Miller J [94]KÓS P AND GILBERT J(Given by Kós P)Table of ContentsPara NoBackgroundThe PRPS and its consequencesStatutory and regulatory frameworkThe RMA: policy statements and regional plansThe NZCPSResource consentsThe King Salmon decisionMajority judgmentDissenting judgmentIssues arising from King SalmonEnvironment Court interim decisionHigh Court decisionApproved question of law for appealDid the High Court misapply King Salmon?DiscussionConclusionTwo immaterial errors belowResult[1][11][16][16][21][30][35][38][50][53][62][66][71][73][78][87][88][92][1] The New Zealand Coastal Policy Statement 20101 requires adverse effects inareas of outstanding natural character be "avoided". The essential question in thisappeal is whether a proposed regional policy statement gives effect to that requirementby providing adverse effects in such areas be "avoided, remedied or mitigated"?Background[2] The Otago Harbour, or Ōtākou, is the only significant natural port locatedbetween Timaru and Bluff. Ngāi Tahu sold the Otago block to the New Zealand1 Herein, the NZCPS.Company in 1844, and Dunedin was founded four years later. Harbour dredging toPort Chalmers began in 1865, and on to Dunedin in 1881.[3] The harbour is a long, hill-girt waterway running southwest from its entranceat Taiaroa Head. That entrance is not without difficulty: a narrow, dredged channellying between the dramatic, steepling Taiaroa Head to the southeast and a longlow-lying man-made mole, over a kilometre in length, to the southwest at Aramoana.The mole, constructed in the 1880s, prevents littoral drift of sediment southward alongSpit Beach. Without the Aramoana mole, a sand bar would form and block the harbourentrance.[4] The navigation channel, dredged at this point to a depth of 13.5 metres, takesa serpentine course to Port Chalmers: past Harington Point to port and, to starboard,a long sandy feature off the Aramoana banks known as The Spit. A course adjustmentto starboard is required soon after to continue down the channel: a vessel entering theharbour will now be heading due west past Taylor, Pulling and Acheron Points until,just before Rocky Point, a course shift to south is required to make Port Chalmers.[5] Port Chalmers is now one of New Zealand's two deepest container ports, andthe country's third largest port by product value. It employs over 300 staff. Substantialadditional dredging was undertaken between 1975 and 1977, shifting 3.9 million m3of sediment from the harbour and enabling Port Chalmers to cope with container shipswith an 11-metre draft at any state of tide.[6] Smaller vessels may continue past Port Chalmers, along the Victoria Channel,to Dunedin wharves in the upper harbour, but there the channel is dredged only to7.5 metres.[7] Beyond the dredged channels, water depths are mostly less than 2 metres. Atlow spring tide, about one-third of the harbour surface is exposed sediment. At highspring tide the harbour has a mean surface area of 46 km2.[8] Sea grass beds cover about 32 hectares in the lower harbour area, providingnursery grounds for inter-tidal invertebrates and fish, as well as feeding areas for fishand birds. The salt marsh at Aramoana, adjacent to The Spit, is a coastal protectionarea in the Otago Regional Plan and area of significant conservation value in theDunedin City District Plan. There are important rocky shore habitats, cockle beds andshell banks. The latter were described in the Environment Court decision as "uniquewithin Otago Harbour and very rare locally, nationally and internationally with birdsusing the banks in the harbour for roosting".2[9] The proposed regional policy statement3 does not itself identify naturallandscapes of high or outstanding natural character within the harbour. Suchclassifications are for derivative plans, yet to be brought forth. Two areas wereidentified in evidence by the appellant, Port Otago, as likely areas of high oroutstanding natural character or features. Whether the regional plan ultimatelysustains that suggestion remains to be seen. The two areas identified by Port Otagowere part of the stretch of coastline between the Aramoana mole and Heyward Point(natural feature — high and outstanding), and the salt marsh at Aramoana, adjacent toThe Spit (natural feature — high and outstanding), reaching out into the dredgedshipping channel itself (natural character — high). It may be noted that the currentregional coastal plan is slightly different: it records the former area as an outstandingnatural feature and landscape, but not the latter, and separately identifies Goat andQuarantine Islands, just upstream of Port Chalmers, as a second outstanding naturalfeature and landscape.[10] There are also nationally significant surf breaks at Aramoana andWhareakeake, the latter outside the harbour to the west of Heyward Point.The Environment Court noted that these two surf breaks are maintained in part bymanaged disposal of dredged sediment from the main harbour channel.4The PRPS and its consequences[11] The PRPS was publicly notified in May 2015. A decision on the statement wasreleased by the Otago Regional Council in October 2016, following submissions. That2 Port Otago Ltd v Otago Regional Council [2018] NZEnvC 183 at [11(f)] [Environment Courtinterim decision].3 Herein, the PRPS.4 Environment Court interim decision, above n 2, at [14].version did not contain any express provision for port activities at Port Chalmers orPort Dunedin.[12] Concerned by the lack of a specific ports policy, Port Otago appealed. Theparties to the appeal agreed a specific ports policy is appropriate but could not agreeon its content. Port Otago proposed the following policy, policy 4.3.7:Policy 4.3.7 Recognising port activities at Port Chalmers and DunedinRecognise the functional needs of port activities at Port Chalmers andDunedin and manage their effects by:(a) ensuring that other activities in the coastal environment do notadversely affect port activities;(b) providing for the efficient and safe operation of these ports andeffective connections with other transport modes;(c) providing for the development of those ports' capacity for nationaland international shipping in and adjacent to existing port activities;(d) providing for those ports by:(i) recognising their existing nature when identifyingoutstanding or significant areas in the coastal environment;(ii) having regard to the potential adverse effects onthe environment when providing for maintenance of shippingchannels and renewal/replacement of structures as part ofongoing maintenance;(iii) considering the use of adaptive management as a tool to avoidadverse effects;(e) where the efficient and safe operation of port activities cannot beprovided for while achieving the policies under objective 3.1 and 3.2avoid, remedy or mitigate adverse effects as necessary to protectthe outstanding or significant nature of the area; and(f) otherwise managing effects by applying policy 4.3.4.[13] Port Otago was concerned about the port otherwise having to shut down in theabsence of such wording. It was particularly concerned about relocation of navigationbeacons along the shipping channel when widened pursuant to existing consents, thedisposal of dredging spoil and the effects of activities on surf breaks. Those concernswere also pursued before us on appeal, but the exact problems faced by Port Otagowere amorphous and difficult to assess. Its evidence shed very little light on them.5[14] After an attempted mediation in 2017, the appeal was heard in February 2018.In September 2018 the Environment Court issued an interim decision, recommendinga different wording for policy 4.3.7. It proposed (and required consultation on) thefollowing:6 we suggest a wording of policy 4.3.7 (after 4.3.7(a) to (c)) along these lines:(d) if any of the policies under objective 3.2 cannot beimplemented while providing for the safe and efficientoperation of Port Otago activities then apply policy 4.3.4which relates to naturally and regionally significantinfrastructure and prevails (in certain circumstances) overobjective 3.2;(e) if in turn (d) cannot be achieved because the operation ordevelopment of Port Otago may cause adverse effects onthe values that contribute to the significant or outstandingcharacter identified in policy 4.3.4(1)(a)(i) to (iii) then,through a resource consent process, require consideration ofthose effects and whether they are caused by safetyconsiderations which are paramount or by transport efficiencyconsiderations and avoiding, remedying or mitigatingthe effects (through adaptive management or otherwise)accordingly;(f) in respect of naturally significant surf breaks to avoid, remedyor mitigate the adverse effects of port activities.[15] An appeal was then mounted to the High Court by the Environmental DefenceSociety Inc.7 It was heard in June 2019. In September of that year Gendall J allowedEDS's appeal.8 He held, inter alia, that the Environment Court erred in recommendingwording that did not give effect to the prescriptive avoidance policies of the NZCPS,contrary to s 62(3) of the Resource Management Act 1991.95 See further discussion on the reality of Port Otago's concerns at [84]–[86] below.6 Environment Court interim decision, above n 2, at [135].7 Herein, the EDS.8 Environmental Defence Society Inc v Otago Regional Council [2019] NZHC 2278 [High Courtjudgment].9 Herein, the RMA.Statutory and regulatory frameworkThe RMA: policy statements and regional plans[16] New Zealand coastal policy statements state objectives and policies in order toachieve the purpose of the RMA in relation to the coastal environment ofNew Zealand.10 The Minister of Conservation prepares a New Zealand coastal policystatement.11 A New Zealand coastal policy statement contains national objectives andpolicies.12[17] Regional policy statements provide an overview of the resource managementissues of the region and policies and methods to achieve integrated management of thenatural and physical resources of the whole region.13 Section 62(1) sets out thecontents of a regional policy statement — including, regional objectives, policies andthe methods (but not rules) used to implement those policies. Importantly, s 62(3)provides a regional policy statement must "give effect to" a New Zealand coastalpolicy statement.[18] Regional plans assist a regional council carry out its functions in order toachieve the purpose of the RMA.14 But s 63(2) provides regional coastal plans are toassist a regional council, in conjunction with the Minister of Conservation, to achievethe purpose of the RMA in relation to the coastal marine area of that region. Regionalcoastal plans differ from other regional plans in that they require approval from theMinister of Conservation as well as the regional council.15 Section 67 sets out therequisite contents of a regional plan (coastal or otherwise). A regional plan must statethe objectives for the region, as well as policies and rules to implement thoseobjectives.16 Section 67(3)(b) and (c) provides a regional plan must, again, "giveeffect to" a New Zealand coastal policy statement and a regional policy statement.And s 293 permits Environment Court approval of departures from a New Zealand10 RMA 1991, s 56.11 Section 57.12 Section 58(1).13 Section 59.14 Section 63(1).15 Section 64 and sch 1, cl 18–19.16 Section 67(1).coastal policy statement (in the context of a proposed policy statement or plan) onlywhere that departure is of "minor significance".[19] This creates a hierarchical system of policy statements and plans. A localregional policy statement must give effect to a New Zealand coastal policy statement.A regional plan sits one rung lower in the hierarchy again and must give effect to allthe policy statements above it — the relevant regional policy statement as well as aNew Zealand coastal policy statement.17[20] The function of each instrument changes according to its place in the hierarchy.Objectives and policies are set at the top and flow down through all documents,particularised to a local region. Methods to achieve those policies are introduced inregional policy statements. Rules to achieve those objectives and policies are thenlocated in regional plans.The NZCPS[21] We turn now to the detailed drafting of the current NZCPS. It was gazetted in2010 and is the second such statement to have been promulgated.[22] Policy 6 concerns activities in the coastal environment generally. Relevantlyit states:Policy 6 Activities in the coastal environment(1) In relation to the coastal environment:(a) recognise that the provision of infrastructure, thesupply and transport of energy including thegeneration and transmission of electricity, and theextraction of minerals are activities important to thesocial, economic and cultural well-being of peopleand communities;(b) consider the rate at which built development and theassociated public infrastructure should be enabled toprovide for the reasonably foreseeable needs of17 See Environmental Defence Society Inc v The New Zealand King Salmon Co Ltd [2014] NZSC38, [2014] 1 NZLR 593 at [10]–[11] [King Salmon].population growth without compromising the othervalues of the coastal environment;(2) Additionally, in relation to the coastal marine area:(a) recognise potential contributions to the social,economic and cultural wellbeing of people andcommunities from use and development of thecoastal marine area, including the potential forrenewable marine energy to contribute to meeting theenergy needs of future generations:(c) recognise that there are activities that have afunctional need to be located in the coastal marinearea, and provide for those activities in appropriateplaces;[23] Policy 7 concerns "Strategic planning". It mandates, when preparing regionalpolicy statements:(a) consideration of where, how and when to provide for development andother activities in the coastal environment at a regional and districtlevel;18 and(b) identification of areas of the coastal environment where particularactivities, use and development are inappropriate or may beinappropriate without some form of resource consent process.19[24] Because it is germane to the King Salmon decision, which we discuss in greaterdetail below, we also set out policy 8, which concerns aquaculture:18 NZCPS, policy 7(1)(a).19 Policy 7(1)(b).Policy 8 AquacultureRecognise the significant existing and potential contributionof aquaculture to the social, economic and cultural well-beingof people and communities by:(a) including in regional policy statements and regionalcoastal plans provision for aquaculture activities inappropriate places in the coastal environment,recognising that relevant considerations may include:(i) the need for high water quality foraquaculture activities; and(ii) the need for land-based facilities associatedwith marine farming;(b) taking account of the social and economic benefits ofaquaculture, including any available assessments ofnational and regional economic benefits; and(c) ensuring that development in the coastalenvironment does not make water quality unfit foraquaculture activities in areas approved for thatpurpose.[25] Policy 9 relates to ports. We set it out in full also:Policy 9 PortsRecognise that a sustainable national transport systemrequires an efficient national network of safe ports, servicingnational and international shipping, with efficient connectionswith other transport modes, including by:(a) ensuring that development in the coastal environmentdoes not adversely affect the efficient and safeoperation of these ports, or their connections withother transport modes; and(b) considering where, how and when to provide inregional policy statements and in plans forthe efficient and safe operation of these ports,the development of their capacity for shipping, andtheir connections with other transport modes.We will return later in this judgment to the meaning and significance of this provision.Differing views on those matters lie at the heart of the different reasons given forallowing the present appeal.[26] We turn now to the relevant avoidance policies, namely policies 11, 13, 15 and16. Policy 11 concerns "Indigenous biological diversity". To protect areas ofindigenous biodiversity in the coastal environment, policy 11(a) requiresdecision-makers "avoid" adverse effects of activities on areas with certain biodiversitycharacteristics. But the policy contains a hierarchy based on classification of bothenvironment and environmental effect: policy 11(b) requires decision-makers "avoid"significant adverse effects on certain environments with specified biodiversitycharacteristics (for example, areas of predominantly indigenous vegetation in thecoastal environment) and "avoid, remedy or mitigate" other (lesser) adverse effects ofactivities in areas with other specified biodiversity characteristics.[27] Policy 13 is concerned with preservation of natural character. Relevantly itreads:Policy 13 Preservation of natural character(1) To preserve the natural character of the coastalenvironment and to protect it from inappropriatesubdivision, use, and development:(a) avoid adverse effects of activities on naturalcharacter in areas of the coastal environmentwith outstanding natural character; and(b) avoid significant adverse effects and avoid,remedy or mitigate other adverse effects ofactivities on natural character in all otherareas of the coastal environment;Again, there is a hierarchy: avoidance of adverse effects in areas with outstandingnatural character; in other areas it is significant adverse effects that must be avoided,and other adverse effects may be avoided, remedied or mitigated.[28] Policy 15 follows the same hierarchical structure as policies 11 and 13. Itprovides that to protect natural features and landscapes in coastal environments frominappropriate use and development, decision-makers should "avoid" adverse effectsof activities on outstanding natural features and landscapes and avoid significantadverse effects, while avoiding, remedying or mitigating other adverse effects, ofactivities on other natural features and landscapes in the coastal environment.[29] Policy 16 relates to "Surf breaks of national significance":Policy 16 Surf breaks of national significanceProtect the surf breaks of national significance for surfinglisted in Schedule 1, by:(a) ensuring that activities in the coastal environment donot adversely affect the surf breaks; and(b) avoiding adverse effects of other activities on accessto, and use and enjoyment of the surf breaks.(Footnote omitted.)Resource consents[30] Resource consents are governed by pt 6 of the RMA. Section 87A sets outclasses of activities that do or do not require a resource consent. Two classes ofactivity are relevant for present purposes: discretionary activities and non-complyingactivities.[31] If an activity is described in a plan or a proposed plan as a discretionaryactivity, a resource consent is required. The consent authority may decline or grantthe consent with or without conditions. If granted, the activity must comply with therequirements, conditions, and permissions, if any, specified in the plan, or proposedplan.20[32] If an activity is described as a non-complying activity, a resource consent isrequired for the activity also. The consent authority may decline or grant the consent,with or without conditions, but only if satisfied the requirements of s 104D are met,and the activity must comply with the requirements, conditions, and permissions, ifany, specified in the plan or proposed plan.2120 RMA, s 87A(4).21 Section 87A(5).[33] When granting a resource consent, section 104(1) provides a consentingauthority must consider relevant provisions of a New Zealand coastal policy statement,as well as regional policy statements and plans. But the decision in King Salmon, towhich we next turn, does not prevent consideration of pt 2 of the RMA — the generalpurposes and principles part — when considering a resource consent application.22Section 104D(1) provides a consent authority may only grant a resource consent for anon-complying activity if satisfied that either the adverse effects of the activity on theenvironment will be minor or the application is for an activity not contrary to theobjectives and policies of the relevant plan or proposed plan.[34] The NZCPS, and lower-order planning documents that give effect to it, aretherefore highly relevant to resource consent applications. Particularly, where aproposed activity conflicts with an NZCPS policy, recourse to pt 2 of the RMA islikely unnecessary.23 For a non-complying activity resource consent application, onlythe regional plan (or proposed plan) is directly determinative of whether a consent willor will not be granted. But given the hierarchical structure of these planninginstruments, the NZCPS and relevant regional policy statement will significantlyinfluence the regional plan and whether a consent is granted.The King Salmon decision[35] Environmental Defence Society Inc v The New Zealand King Salmon Co Ltd(King Salmon) concerned conjoint applications for a regional plan change andresource consents.24 The former would change salmon farming from a prohibitedactivity to a discretionary activity in specific locations. One of the locations thesubject of the applications was called Papatua. It was an area of outstanding naturalcharacter and an outstanding natural landscape.[36] The applications were referred to a Board of Inquiry. The Board accepted thata salmon farm at Papatua would have significant adverse effects on natural characterand landscape. The Board found policies 13(1)(a) and 15(a) of the NZCPS would not22 R J Davidson Family Trust v Marlborough District Council [2018] NZCA 316, [2018] 3 NZLR283 at [70]–[72].23 At [71].24 King Salmon, above n 17.be met if the plan change was granted. But it took the view they were in conflict withpolicy 8, concerning aquaculture. It was, it said, therefore required to balance therequirements of those policies and reach an overall judgment in light of the NZCPSand the principles contained in pt 2 of the RMA. The plan change and consents weregranted for four sites, including Papatua.[37] An appeal by the EDS to the High Court failed and a direct appeal to theSupreme Court ensued. Two judgments were delivered. The first, a majority judgmentof Elias CJ and McGrath, Glazebrook and Arnold JJ delivered by the latter Judge.William Young J dissented. We now look at each judgment.Majority judgment[38] We focus here on the most important conclusions reached in the majorityjudgment, assessed in the context of the present appeal. Ten points may be noted.[39] First, after noting the hierarchy in planning instruments effected by the RMA,the majority noted early divergence in caselaw concerning s 5 — the purpose section.Early Planning Tribunal decisions took an "environmental bottom line" approach, inwhich s 5(2) set out cumulative safeguards, all of which needed to be met for thepurpose of sustainable management of the environment to be achieved.25 In contrast,beginning with the 1993 High Court decision in New Zealand Rail Ltd v MarlboroughDistrict Council, a series of cases required an overall judgment to be made: thepreservation of natural character was subordinate to s 5's overall purpose of promotingsustainable management.26 The fundamental issue in the King Salmon appeal waswhether the later approach was consistent with the legislative framework generally,and the NZCPS in particular.2725 At [38], citing Shell Oil New Zealand Ltd v Auckland City Council PT Wellington W8/94,2 February 1994; Foxley Engineering Ltd v Wellington City Council PT Wellington W12/94,16 March 1994; Plastic and Leathergoods Co Ltd v The Horowhenua District Council PTWellington W26/94, 19 April 1994; and Campbell v Southland District Council PT WellingtonW114/94, 14 December 1994.26 At [39]–[42], citing in particular New Zealand Rail Ltd v Marlborough District Council [1994]NZRMA 70 (HC). That decision drew upon jurisprudence under the Town and Country PlanningAct 1977, and had distinguished the decision of this Court in Environmental Defence Society Incv Mangonui County Council [1989] 3 NZLR 257 (CA), which held s 3 under that Actconsiderations (matters of national importance) were to be given greater weight in a plan changethan s 4 matters (general purposes of district schemes).27 At [43].[40] Secondly, King Salmon confirms that the requirement in s 67(3), to "give effectto" a New Zealand coastal policy statement, was intended to constraindecision-makers. Until August 2003, s 67 had provided that a regional plan "shall notbe inconsistent with" a New Zealand coastal policy statement. Thereafter the words"give effect to" were enacted. The majority observed that that change in language hadresulted in a strengthening of a regional council's obligation.28 It quoted, withapparent approval, an Environment Court decision observing that the phrase "giveeffect to" is a "strong direction".29[41] Thirdly, the majority criticised the approach taken by the Board in determiningthe applications not simply by reference to the NZCPS but also by reference to pt 2 ofthe RMA. It observed that, in principle, by giving effect to the NZCPS, a regionalcouncil is necessarily acting "in accordance with" pt 2, and there is no separate needto refer back to that part when determining a plan change.30 Caveats identified by themajority (relating to lawfulness, coverage or uncertainty of meaning of a New Zealandcoastal policy statement provision)31 did not apply in that appeal (or this), andgenerally will be rare. The majority continued:32For these reasons, it is difficult to see that resort to Part 2 is either necessaryor helpful in order to interpret the policies, or the NZCPS more generally,absent any allegation of invalidity, incomplete coverage or uncertainty ofmeaning.[42] Fourthly, the majority contrasted the word "avoid" — used in policies 13 and15 of the NZCPS — with that other term of art in resource management law, "avoid,remedy or mitigate".33 It noted a decision of the Environment Court in Wairoa RiverCanal Partnership v Auckland Regional Council to the effect that the use of the word"avoid" sets a presumption (or a direction to an outcome) that developments in thoseareas will be inappropriate.34 The majority expressed no view on the merits of that28 At [76] and [91].29 At [77], quoting Clevedon Cares Inc v Manukau City Council [2010] NZEnvC 211 at [51].30 At [85].31 At [88].32 At [90].33 At [93].34 At [95], citing Wairoa River Canal Partnership v Auckland Regional Council (2010) 16 ELRNZ152 (EnvC) at [16].analysis but went on to say that it considered that "avoid" had its ordinary meaning ins 5(2)(c) and the NZCPS of "not allow" or "prevent the occurrence of":35In the sequence "avoiding, remedying, or mitigating any adverse effects ofactivities on the environment" in s 5(2)(c), for example, it is difficult to seethat "avoid" could sensibly bear any other meaning.The juxtaposition of "avoid" with these other two terms of art was a distinctive featureof the legislation and the NZCPS.[43] Fifthly, focusing then on provisions of pt 2 and the NZCPS that in commonrefer to the preservation or protection of the natural character of the coastalenvironment from "inappropriate" use and development, the majority noted that theframers of both the RMA and the NZCPS recognised there might yet be appropriatedevelopment within such areas.36 Objective 6 (providing that protection of coastalenvironment values "does not preclude use and development in appropriate places andforms, and within appropriate limits") and policy 6 of the NZCPS (set out at [22]above) expressly recognise that.37 Context was critical. "Inappropriateness" neededto be assessed by reference to what it is that is sought to be protected.38 It observed:39To illustrate, the effect of policy 13(1)(a) is that there is a policy to preservethe natural character of the coastal environment and to protect it frominappropriate subdivision, use, and development by avoiding the adverseeffects on natural character in areas of the coastal environment withoutstanding natural character. The italicised words indicate the meaning tobe given to "inappropriate" in the context of policy 13.[44] Sixthly, the majority observed that although a policy in a New Zealand coastalpolicy statement cannot be a "rule" within the special definition of that expression inthe RMA, it "may nevertheless have the effect of what in ordinary speech would be arule".40 The majority instanced policy 29 in the NZCPS as "an obvious example".Policy 29(2) directs local authorities to amend documents as necessary "to give effectto this policy as soon as practicable" in two particular respects, effectively limiting theactivity classification of restricted coastal activity.35 At [96].36 At [98].37 At [99].38 At [101].39 At [102].40 At [116].[45] Seventhly, noting that "avoid" is a stronger direction than "take account of",the majority accepted that there may be instances where particular policies in theNZCPS "pull in different directions".41 But it said this was likely to occur infrequentlygiven the drafting of the NZCPS and that an apparent conflict between particularpolicies may dissolve if close attention is paid to expression.42 The majority wenton:43Only if the conflict remains after this analysis has been undertaken is thereany justification for reaching a determination which has one policy prevailingover another. The area of conflict should be kept as narrow as possible.The necessary analysis should be undertaken on the basis of the NZCPS, albeitinformed by s 5. As we have said, s 5 should not be treated as the primaryoperative decision-making provision.The majority continued:44A danger of the "overall judgment" approach [which it did not support] is thatdecision-makers may conclude too readily that there is a conflict betweenparticular policies and prefer one over another, rather than makinga thoroughgoing attempt to find a way to reconcile them.[46] Eighthly, the majority concluded that policies 13(1)(a) and (b) and 15(a) and(b) do provide "something in the nature of a bottom line".45 Section 5(2) of the RMAcontemplates protection as well as use and development. The RMA contemplates thatdistrict plans may prohibit particular activities. That being so, the majority said therewas no obvious reason why a planning document which is higher in the hierarchyshould not contain policies which contemplate the prohibition of particular activitiesin certain localities.46[47] Ninthly, the majority considered it plain that the NZCPS contains policies thatare intended to, and do, have binding effect. It again instanced policy 29.47 But itwent on:4841 At [129].42 At [129].43 At [130].44 At [131].45 At [132].46 At [132].47 At [146]. See [44] above.48 At [146].Policies 13(1)(a) and 15(a) are clear in their terms: they seek to protect areasof the coastal environment with outstanding natural features from the adverseeffects of development. As we see it, that falls squarely within the concept ofsustainable management and there is no justification for reading down orotherwise undermining the clear terms in which those two policies have beenexpressed.[48] Finally, the majority observed that the Board should not have granted the planchange. The proposed plan change in relation to Papatua would have significantadverse effects on an area of outstanding natural character and landscape, meaning thedirections in policies 13(1)(a) and 15(a) of the NZCPS would not be given effect to ifthe plan change were granted. The majority continued:49These are strongly worded directives in policies that have been carefullycrafted and which have undergone an intensive process of evaluation andpublic consultation. The NZCPS requires a "whole of region" approach andrecognises that, because the proportion of the coastal marine area under formalprotection is small, management under the RMA is an important means bywhich the natural resources of the coastal marine area can be protected.The policies give effect to the protective element of sustainable management.[49] It followed the plan change in relation to Papatua did not comply withs 67(3)(b) of the RMA in that it did not give effect to the NZCPS.50Dissenting judgment[50] We touch now on the dissenting judgment given by William Young J. Theessence of the dissent lies in the Judge's observation that the majority interpretedpolicies 13 and 15 as requiring regional and territorial authorities to prevent, byspecifying as prohibited, any activities which will have adverse effects on areas ofoutstanding natural character.51 Yet policy 7 requires regional councils preparingregional policy statements and plans to identify areas of coastal environment whereparticular activities are or may be inappropriate. That analysis, William Young Jconsidered, was pre-empted by the approach taken by the majority — that is, requiring"all activities with adverse effects on areas of outstanding natural character must beprevented".5249 At [153].50 At [154].51 At [178].52 At [189].[51] On the approach taken by William Young J the approval of the salmon farmwould turn on whether it was appropriate (or not inappropriate) having regard topolicies 8, 13 and 15 of the NZCPS, bearing in mind ss 5 and 6(a) and (b) of the RMAas material to the interpretation and application of those policies.53 William Young Jwent on:54I accept that this approach requires policies 13 and 15 to be construed byreading into the first two bullets points of each policy the word "such" to makeit clear that the policies are directed to the adverse effects of "inappropriate use, and development". By way of illustration, I consider that policy 13should be construed as if it provided:13 Preservation of natural character(1) To preserve the natural character of the coastal environmentand to protect it from inappropriate use, and development:(a) avoid adverse effects of such activities on naturalcharacter in areas of the coastal environment withoutstanding natural character; and(b) avoid significant adverse effects and avoid, remedy ormitigate other adverse effects of such activities onnatural character in all other areas of the coastalenvironment; [52] Relevantly for our purposes, William Young J expressed the view that themajority's approach pre-empted decisions which the NZCPS vested in regionalcouncils.55 He noted too that the majority approach was not entirely literal.56 Heconsidered that a corollary of the approach taken by the majority was that regionalcouncils would be required to promulgate rules which specify as prohibited "anyactivities having any perceptible adverse effect, even temporary, on areas ofoutstanding natural character".57 The Judge suggested this would preclude somenavigation aids, and would impose severe restrictions on privately owned land in areasof outstanding natural character. Potentially, that would be entirely disproportionatein its operation as any perceptible adverse effects would be controlling irrespective ofwhatever benefits, public or private, might accrue if an activity were permitted.5853 At [194].54 At [195] (emphasis in original).55 At [189].56 At [197].57 At [201].58 At [201].Issues arising from King Salmon[53] A number of issues, in some instances, difficulties, arise with the King Salmondecision. They are worth noting, although in a sense they are irrelevant to our task.Whatever else might be said, it is plain that the decision binds this Court on this appeal,concerning as it does an appeal on a proposed regional policy statement and whetherits terms "give effect to" the NZCPS in terms of s 62(3) of the RMA. The ratiodecidendi in King Salmon concerned that issue, albeit in the context of a plan changerather than a proposed regional policy statement (and s 67(3)(b) rather than s 62(3)).The distinction is not material for present purposes.[54] We make seven points.[55] First, it is evident that King Salmon's reinforcement of an "environmentalbottom line", rather than overall balancing, approach is more consistent withParliament's original intent when enacting the RMA.59 For instance, the Hon SimonUpton, then-Minister for the Environment, observed in the third reading debate:60The Bill provides us with a framework to establish objectives by a physicalbottom line that must not be compromised. Provided that those objectives aremet, what people get up to is their affair.That environmental bottom line approach was the initial stance of thePlanning Tribunal, the forerunner of the Environment Court. In a series of decisionsreviewed by the majority in King Salmon, the Tribunal held s 5(2) set out cumulativesafeguards, all of which needed to be met for the purpose of sustainable managementof the environment to be achieved, and that pt 2 was not about achieving a balancebetween benefits and adverse effects.61 But almost immediately the High Courtheaded off in a different direction in the New Zealand Rail decision, mandating whatbecame described as the overall broad judgment approach.62 That approach, at leastat planning stages superior to resource consent applications, is overruled by59 Geoffrey Palmer "Ruminations on the problems with the Resource Management Act 1991" [2016]NZLJ 2 at 5. See King Salmon, above n 17, at [107].60 (4 July 1991) 516 NZPD 3019. See also (28 August 1990) 510 NZPD 3950 for comments ofthe Rt Hon Geoffrey Palmer, also the then-Minister of the Environment, in the second reading tothe same effect.61 King Salmon, above n 17, at [38]. See [39], n 25 above.62 New Zealand Rail Ltd v Marlborough District Council, above n 26. See [39] above.King Salmon.63 In his judgment, Miller J makes the observation that theSupreme Court's decision adopts the "bottom line" approach with qualifiers, and thatthe outcome is not absolute.64 We accept that is so. However, the "overall broadjudgment" approach is clearly repudiated by the decision in King Salmon, and theterms of s 62(3) are clear: a regional policy statement must give effect to the NZCPSin the way described at [40]–[41] above.[56] Secondly, the major difficulty inherent in this redirection is that Parliament,although relevantly strengthening the RMA in 2003 in the manner noted at [40] above,did not directly modify the approach taken in New Zealand Rail, or suggest suchmodification was needed. That decision became the established approach to policystatement and plan revisions throughout New Zealand from 1993, until overruled byKing Salmon in 2014. Specifically, the NZCPS — which dates from 2010 — wasitself drafted against the background of the New Zealand Rail decision. That is, in2010 the expectation of those who drafted the NZCPS was that it would be construedand applied on the basis that an overall broad judgment would be taken to ss 62(3) and67(3), along with additional reference as required to pt 2. Had the NZCPS beendrafted in light of King Salmon rather than New Zealand Rail, its content likely wouldhave been quite different. For instance, it might be expected to have drawn less starkenvironmental bottom lines and provided for more nuance in balancing competingpolicy interests in the absence of a New Zealand Rail-based decision-makingframework.[57] Thirdly, nor did the Minister of Conservation respond to King Salmon byrevisiting the form of the NZCPS. The preparation of that instrument is theresponsibility of that Minister under s 57 of the RMA. A direct consequence of thatregulatory mismatch identified in the preceding paragraph is that the NZCPS,construed in light of King Salmon, now has the practical effect of setting quasi-rules,both in that instrument and a subsidiary regional policy statement. It does so despitethe function of those instruments being to set out objectives and policies (and, in thelatter case, implementation methods) about matters specified in the RMA.65 Rules63 See [34] above.64 See [100]–[101] below.65 RMA, ss 58(1) and 62(1).belong by definition in regional and district plans, not in documents higher in thehierarchy which set objectives, policies (and to a degree legal methods).66 Themajority were certainly alive to this consequence: as we noted at [44] above, theyobserved that the NZCPS policies may be worded in such a way as to "have the effectof what in ordinary speech would be a rule".67 The effect of King Salmon then is thata policy has been created that can have determinative effect as a rule, when theMinister may not have intended that effect, or the resultant extent of that effect,because of the then-prevailing New Zealand Rail decision-making framework. Thatmore determinative effect is reinforced by the general preclusion on recourse to pt 2of the RMA in construing and giving effect to the NZCPS.68 The contextual,regulatory mismatch we have pointed to is not explicitly identified in King Salmon.But in a real sense it seems to underlie William Young J's concerns about the effect ofthe majority approach.[58] Fourthly, there are a number of other consequences of this mismatch. One isthat the overall broad judgment approach has been clung to by means of mitigation,because the NZCPS does not really work, in the post-King Salmon world, exactly inthe way intended at the time it was gazetted in 2010. As a result, the approach in NewZealand Rail rolled on for some time in the Environment Court post-King Salmon, ascourts and practitioners pondered the impact of that decision. The Environment Courtdecision in the present appeal is a case in point. So, too, the decision of that Court inRoyal Forest and Bird Protection Society of NZ Inc v Bay of Plenty Regional Council.69There, as here, the High Court criticised the lower court's failure to implement therevised approach required by King Salmon.70 A second fundamental consequence hasbeen that the courts, and particularly those on appeal, are being asked to set policy inmitigation of the rigour of King Salmon's enforcement of NZCPS policies asquasi-rules. Again, the present case is one in point: that is exactly what Port Otagoand the Marlborough District Council are asking this Court to do. But it is a task the66 Section 43AA.67 King Salmon above n 17, at [116]. See also at [152].68 Derek Nolan and others "EDS v New Zealand King Salmon — the implications" (2014) 3 RMJ 1at 4.69 Royal Forest and Bird Protection Society of NZ Inc v Bay of Plenty Regional Council [2017]NZEnvC 45.70 Royal Forest and Bird Protection Society of New Zealand Inc v Bay of Plenty Regional Council[2017] NZHC 3080, [2019] NZRMA 1 at [103] and [106].courts are ill-fitted to undertake on appeals ad hoc. And it is not an undertakingauthorised by the reasoning in King Salmon. We think the effect of King Salmon isvery clear; it may not be exactly what was understood when the NZCPS was gazetted,but the decision does not permit diffuse construction of that instrument by way ofremedy. William Young J attempted that exercise in his dissenting judgment, drawingconnection with "inappropriateness" of activities.71 It did not find favour with themajority.[59] Fifthly, this Court has since clarified that King Salmon does not preventrecourse to pt 2 when considering a resource consent application, because of theexpress wording — "subject to Part 2" — in s 104(1) of the RMA which concerns theconsideration of such applications, rather than formulation of higher-order planninginstruments.72[60] Sixthly, in his dissenting judgment William Young J made two observationswith which respectfully we do not agree. The first was that the effect of the majoritydecision is that all activities with adverse effects on areas of outstanding naturalcharacter must be prevented.73 The second was that:74 a corollary of the approach of the majority is that regional councils mustpromulgate rules which specify as prohibited any activities having anyperceptible adverse effect, even temporary, on areas of outstanding naturalcharacter.It followed that this would "preclude some navigation aids" and would impose severerestrictions on privately-owned land in areas of outstanding character.75 It is thisanalysis that presumably contributed to the observation by Gendall J in the judgmentunder appeal that implementation of the avoidance policies in the NZCPS wouldinevitably result in rules creating prohibited activities that cannot obtain a resourceconsent (unless the NZCPS itself allows less than absolute compliance).76 We will71 See [50]–[51] above.72 R J Davidson Family Trust v Marlborough District Council, above n 22, at [70]–[72]. See [33]above.73 King Salmon, above n 17, at [189].74 At [201].75 At [201].76 See [70] below.return subsequently to why the majority ruling is not as absolute as William Youngand Gendall JJ suggest.77[61] Finally and relatedly, the core issue in applying King Salmon's approach to theNZCPS in the drafting of a regional policy statement, such as in the present case, willbe what the implementation of avoidance policies to preserve (or protect) the coastalenvironment from "inappropriate" use and development actually requires or prohibits.That ultimately depends on the cascade of objectives, policies and ultimately rules inthe hierarchy of planning instruments. As we discuss in due course, it by no meansfollows from the judgment of the majority in King Salmon that new activities in acoastal environment, even in an area with high natural character, are precluded. Issuesof existing modification to that environment, the appropriateness of development(assessed in the manner indicated by the majority),78 the extent and duration of effectsof the activity and the availability of methods to avoid those effects (such as adaptivemanagement) all potentially mitigate the apparent rigour of the majority ruling.Environment Court interim decision[62] The Environment Court correctly recognised that the decision in King Salmonbound it. It noted that the avoidance policies in 13(1)(a) and (b) and 15(a) and (b)were held by the Supreme Court to provide "something in the nature of a bottom line"because of the manner of their expression.79 It went on to say that the primary legalissue for a decision in this case was whether policy 9 (Ports) was "less deferential" tothe avoidance policies than policy 8 (Aquaculture) with which King Salmon had beenconcerned or policy 6 (broadly speaking, Infrastructure) which was addressed by theHigh Court in Royal Forest and Bird Protection Society of New Zealand Inc v Bay ofPlenty Regional Council.80[63] The Environment Court considered however that submissions to it had largelyoverlooked the relevance of policy 7, dealing with strategic planning. It saw this asoffering a formula for identifying areas where development is appropriate and others77 See [84]–[86] below.78 See [43] above.79 Environment Court interim decision, above n 2, at [69].80 At [73], referring to Royal Forest and Bird Protection Society of New Zealand Inc v Bay of PlentyRegional Council, above n 70.where it is not.81 In particular, it noted that some effects of port operations may betransitory and that the Supreme Court had clearly recognised that rules would notnormally prohibit port activities if effects are "minor or transitory", although thatwould have to be read in light of the adverse cumulative effects provided for inpolicy 7(2) of the NZCPS.82[64] In terms of the overall approach to be taken, the Environment Court held thatif NZCPS policies for avoidance of adverse effects on natural character andoutstanding natural landscape are "(incorrectly) considered only with policy 9", thenthere would appear to be a conflict inasmuch as policy 9 did not have the "deferentialqualification" that the infrastructure policy (policy 6(1)(b)) has.83 However, the Courtconsidered the NZCPS was "more nuanced" than that.84 It went on to say:85First, there is no suggestion that the avoidance policies automatically requireactivities which may cause adverse effects to be prohibited. Second, policy 7(strategic planning) recognises that some activities which have the potentialto cause adverse effects – and are therefore inappropriate at first sight – mayneed to be considered on a case by case basis so that the potential adverseeffects can be considered in the context of a specific factual and predictivesituation. Policy 7 suggests a procedural resolution for a substantive conflict.It suggests that the methods for resolving the conflict include methods ina subordinate plan requiring a resource consent be applied for and determinedhaving regard to purposively framed objectives and policies.The Environment Court therefore held that reference to policy 7(1)(b)(ii) "may be usedto resolve any conflict between the directory provisions of policy 9 (Ports) andthe even more directory avoidance policies of the NZCPS".86[65] Later in its decision the Environment Court considered alternative optionsunder s 32(1)(b)(i) of the RMA, and whether "the proposed policy 4.3.7 [should]provide an exception to the avoidance policies in the NZCPS?"87 To that question itgave a conditional answer. It concluded that "to improve the coherence andcoordination" of the PRPS, it should be made clear that the proposed ports policy was81 At [84].82 At [90], citing King Salmon, above n 17, at [145].83 At [91].84 At [91].85 At [91].86 At [92].87 At [122].related to the bottom lines in the policies implementing objective 3.2 of the PRPS.88Secondly, that it is a "backup" to policy 4.3.4 which expressly exempts someinfrastructure from having to comply with objective 3.2's policies.89 In light of thoseconsiderations the Court proposed modified wording for PRPS policy 4.3.7(d) to (f).That wording is set out above.90High Court decision[66] We turn now in more detail to the judgment of Gendall J.[67] First, the Judge noted King Salmon confirmed that "avoid" in the context ofpolicies 11, 13 and 15 means "not allow" or "prevent the occurrence of" and is"specific and directive".91 Policies 13 and 15 state adverse effects of "inappropriate"development must be avoided and what is inappropriate must be assessed against theenvironment those policies protect.92 The words used in policy 16 are different buthad the same effect: "ensure" is direct and in context also meant avoid adverseeffects.93 The avoidance policies would give way to policy 9 if the latter was morespecific and directive.94 Policy 9(a) was specific and direct, in that decision-makers"must make certain" other development does not affect the safe and efficient operationof ports. But sub-para (a) did not address the interaction with protection under theavoidance policies distinct from development. The requirement to avoid adverseeffects was not displaced.95 Policy 9(b) directs decision-makers consider "where, howand when" to provide for safe and efficient operation of ports. The direction was broadand constraints on the where, how and when are found in the NZCPS policies.96 TheEnvironment Court had erred in distinguishing policy 6 from policy 9 on the basis ofthe inclusion of the words "without comprising the other values of the coastalenvironment" in the former but not the latter. Policy 8, at issue in King Salmon, also88 At [125].89 At [125].90 At [14] above.91 High Court judgment, above n 8, at [79].92 At [80].93 At [81]–[82].94 At [83].95 At [90].96 At [92]–[94].did not use that phrase but did not conflict with the avoidance policies. Nothing inpolicy 9 directed the avoidance policies were not to apply.97[68] Secondly, the Judge held the Environment Court erred in reconciling perceivedconflict between port and avoidance policies through policy 7.98 Policy 7(1)(b)requires decision-makers to identify where development is inappropriate. Theavoidance policies inform this decision and policy 7 is not a means to circumventthem.99 Had the Supreme Court seen policy 7 as a means of circumventing theavoidance policies it would have reached a different decision in King Salmon.100[69] Thirdly, and accordingly, the Environment Court failed to give effect to theNZCPS. The avoidance policies are prescriptive whereas policy 9 is not. The PRPSmust require port activities to avoid adverse effects on outstanding coastal sites.101The Environment Court wrongly adopted an overall judgment approach.102 Thesuggestion that perceived conflict could be resolved by reference back to pt 2 of theRMA on a case-by-case basis was wrong. King Salmon held the NZCPS gives effectto pt 2 of the RMA and reference back to that part is only necessary in the case ofinvalidity, uncertainty or lack of coverage.103 Similarly, the Environment Court erredin undertaking a s 32 cost-benefit analysis to determine an effects managementframework. The requirement to give effect to NZCPS limits the options available todecision-makers.104[70] Fourthly, in the course of his reasoning above Gendall J observed thatimplementation of the avoidance policies in the NZCPS would inevitably result inrules creating prohibited activities that cannot obtain a resource consent unless theNZCPS itself allows less than absolute compliance with the policies because of someconflict with another policy in the NZCPS.105 Further, that the effect of suchprohibition would preclude the use of adaptive management to monitor at risk97 At [95]–[96].98 At [97].99 At [99].100 At [102].101 At [104].102 At [107]–[108].103 At [109].104 At [110]–[111].105 At [52] and [55].activities.106 It is common ground between all parties to this appeal that theseobservations of the Judge are not correct. We return to them later in this judgment.107Approved question of law for appeal[71] An appeal lies to the Court of Appeal, by leave, on a question of law only.108The approved question of law for which leave was granted was: Did the High Courtmisapply the Supreme Court's decision in King Salmon?109[72] Although counsel offered an array of sub-questions to tempt this Court'sinterest, that effort has not succeeded. We think the approved question sufficientlyprecise to resolve this appeal.Did the High Court misapply King Salmon?[73] For Port Otago, Mr Andersen QC submits the Judge focussed too narrowly onthe words of the policies to establish a hierarchy with the effect that policy 9 wasrendered completely ineffective. The port and avoidance policies only conflict if theycannot be implemented together in a particular fact situation. This approach wasdirected by King Salmon where the Supreme Court not only considered the wordsused, but was also informed by s 5 of the RMA. Here, Port Otago submits "where" inpolicy 9 is not relevant as the ports are pre-existing, but the "how" and "when" aremandatory considerations. There is conflict between the port and avoidance policiesif the existing ports cannot operate safely and effectively and comply with theavoidance policies. That conflict is not reconciled by reading policy 9 subject to theavoidance policies, stripping policy 9 of its effect. Rather, conflict should be resolvedunder s 5 and pt 2 of the RMA.[74] For the Marlborough District Council, Mr Maassen makes three broad points.First, the King Salmon environmental bottom line approach requires substantive forcebe given to the precedence of policies in the text of the NZCPS and that they not besimply treated as relevant considerations. The text of the NZCPS is the starting point106 At [55].107 See [84]–[86] below.108 RMA, s 308.109 Port Otago Ltd v Environmental Defence Society Inc [2020] NZCA 246.and usually determinative. Though the avoidance policies may have precedence, theSupreme Court did not consider them to be rules — otherwise it would have said so.[75] Secondly, where different policies are pulling in different directions inimportant respects, reconciliation of those policies is necessary. King Salmon did notlimit reconciliation to where policies are equally directive. In the context ofenvironmental planning difficult trade-offs are expected when applying policies in aparticular area making evaluation necessary. Policy 7 and the requirement of"appropriateness" is a tool to reconcile tensions at a regional level — it is this sort ofevaluation that strategic planning is intended to entail.[76] Thirdly, in deciding whether policies pull in different directions and whenreconciling those policies, the decision-maker must consider the comparative strengthof the policies and the potential consequences of the policies when implemented on aregional scale. In other words, "[a] type of environmental cost-benefit analysis wherethe text is an important but not an overwhelming factor". Section 32 cost-benefitanalysis is therefore directly relevant and not procedural. So too is pt 2 of the RMA.[77] Finally, and specifically concerning the text of policy 9, Mr Maassen submitsthat text is distinguishable from policy 8. The verb "recognise" in policy 9 is strongerthan the qualification of "appropriate[ness]" in policy 8; recognise requires anattribution of value.Discussion[78] With respect we consider these submissions overcomplicate a simpler enquiry.As we noted at the outset of this judgment, the NZCPS requires adverse effects inareas of outstanding natural character to be "avoid[ed]". The essential question in thisappeal remains whether the PRPS gives effect to that requirement by providingadverse effects in such areas be "avoided, remedied or mitigated"? The answer to thatquestion might be thought obvious.[79] In agreement with the High Court Judge, we find that the alternative wordingfor policy 4.3.7 in the PRPS (whether or not modified in the manner suggested by theEnvironment Court) fails to give effect to the environmental bottom lines set by theNZCPS avoidance policies in the manner required by the decision of theSupreme Court in King Salmon. While we have identified difficulties in the way theNZCPS applies in the post-King Salmon world — what we called a regulatorymismatch — we do not think there is scope in this case for any more liberal readingof the obligation under s 62(3).110 The short point is this: a bottom line requiringadverse effects be "avoid[ed]" cannot be substituted with "avoid, remedy or mitigate".They are altogether distinct concepts, and the latter formulation fundamentally dilutesthe former. In effect the wording suggested by the Environment Court — set out at[14] above — invites a decision-maker instead to reach a broad judgment, potentiallypermitting (rather than avoiding — that is, preventing the occurrence of) adverseeffects of activities on natural character in areas of the coastal environment withoutstanding character (and significant adverse effects on natural character in otherareas of the coastal environment). The foregoing discussion focuses on policy 13, butthe same applies to policies 11, 15 and 16.[80] That is enough to dispose of the appeal, all members of the Court agreeing inthe result if not the reasons therefor. However, in deference to the arguments madebefore us we make four further points.[81] First, we do not accept the argument made by both counsel supporting theappeal (and accepted in part by Miller J)111 that policy 9 is sufficiently textually orcontextually different to policy 8 so as to enable a different outcome from King Salmonand enable the proposed policy 4.3.7 (original or modified) in the PRPS. In each casethe policy requires recognition of the importance of port and aquaculture activities (asthe case may be). In the case of ports, that recognition is of the requirement for anefficient national network of safe ports. "[R]ecognise" and "consider", as theSupreme Court noted in King Salmon (specifically referencing policy 9) givesdecision-makers "considerable flexibility and scope for choice".112 We do not acceptthat the operative verb in policy 9 is the word "requires". That word serves as anintensifier, as does "important" in policy 6(1)(a) and "needs" in policy 6(1)(d) andelsewhere in the NZCPS. It intensifies the condition referred to, which then requires110 See [56]–[58] above.111 See [111] below.112 King Salmon, above n 17, at [127].recognition; it does not give the provision greater imperative status with respect topolicy 13 (which does have imperative status because of the use of "preserve" and"avoid"). If it were otherwise, then it would be odd that ports get that recognitionwhen, say, the interests of tangata whenua in policy 2 do not. And the absence ofexplicit reference to ports in either the Preamble to the NZCPS — other thanrecognition that the coastal environment contains ports — or (more importantly) theObjectives is also telling. It does not suggest any higher prioritisation of port activitiesin policy 9. "[C]onsider", which anchors policies 7(1)(b) and 9(b), is essentiallydescriptive. It does not direct decision-makers regarding a specific outcome or action.In contrast, there is direction in policy 9(a), but it is the protection of ports from newdevelopment impinging on their activities. Policy 9(b) is distinctive in providing a farlower level of direction, and one broadly consistent with the provision for strategicplanning in policy 7.[82] Secondly, we do not see policies 7 and 9 as in conflict with the avoidancepolicies. Rather, the NZCPS contains its own directive hierarchy. The avoidancepolicies contain relatively clear environmental bottom lines; policies 7 and 9 containlower level degrees of direction as to development and other activities in the coastalenvironment. To describe these policies as equally directive would be incorrect.Reconciliation is not a complex task because the NZCPS contains a clearly discernibleprioritisation of values within its text. There is no fundamental ambiguity; contextdoes not require an artificial approach to be taken to construction. We therefore donot accept that dilution of the avoidance policies is required to reconcile them withother policies in the NZCPS. The ports policy (policy 9) is applicable, but withinbounds set by the more directive avoidance policies. The same is true of the strategicplanning policy (policy 7) which, as Mr Anderson submitted for Forest and Bird, isessentially process-driven. It directs in an entirely generalised sense the considerationof where, how and when to provide for future development, and to identify areas wheredevelopment is or may be inappropriate. We do not see it materially aiding Port Otagoor the Marlborough District Council's arguments.[83] Thirdly, if in the wake of King Salmon the NZCPS now poses unworkablestandards for essential infrastructure, the answer lies elsewhere. The regulatorymismatch means the NZCPS was likely drafted on the premise that a broad overalljudgment would be taken in its construction and application in subsidiary planninginstruments, and that recourse might be made to pt 2 in that process.113 The SupremeCourt has now however precluded the former, and permitted the latter only in a narrowrange of exceptional cases. It noted there was no challenge before it to the NZCPSitself, meaning the Supreme Court proceeded on the basis it was and remained valid.114[84] Fourthly, it is common ground that the Judge erred in inferring that theinevitable effect of King Salmon is that implementation of the avoidance policies inthe NZCPS would result inevitably in rules creating prohibited activities that cannotobtain a resource consent. That goes too far. Provided plans give effect to theavoidance policies, prohibited activity status is not inevitable and the matter shouldnot be prejudged at this stage when plans have not yet been formulated. Activity statuswill be set in regional and district plans, not the regional policy statement.115 Theywill be set after a s 32 evaluation report analysis of costs, benefits and alternatives toproposed rules.[85] The avoidance policies do not require activities to be avoided (or prohibited).Rather, the avoidance policies require adverse effects to be avoided in or on specificareas or values. This was a submission made by Mr Allan for EDS, particularly.Whether an activity has an adverse effect, whether that effect can be avoided, and howit can be avoided will depend on the facts of a specific proposal and its context. Wherefactual context is relevant in determining policy compliance, provisions enabling anapplication for resource consent can be appropriate. Whether in fact an adverse effect,on natural character, occurs in an area of the coastal environment with outstandingnatural character from a proposed port activity is a fact-specific enquiry and requiresdetailed evaluation of both activity and environment.[86] Furthermore, and as Mr Logan submitted for the Otago Regional Council,many of the activities Port Otago expressed concern about are ones that "are currentlyoccurring (or could occur) in an environment in which commercial port activities havebeen taking place for over 150 years".116 That environment has been shaped by the113 See [56]–[57] above.114 King Salmon, above n 17, at [33] and [88].115 RMA, s 87A.116 As to Port Otago's concerns, see [13] above.effects of those activities; the avoidance policies apply to the environment as it existsnow.117 Port activities are not presumptively inappropriate in that environment andmay not in fact, correctly analysed at the resource consent stage, adversely affectnatural character in that environment at all. Proposed activity effects in context maybe minor or transitory, or otherwise capable of being avoided. It is, for example,unlikely that renewed navigation lighting would adversely affect natural character inthe area we are concerned with when proper consideration is given to (1) existingeffects of port-related activities and (2) the counterfactual of not renewing navigationlighting. Further, whether enlarged dredging would adversely affect an area ofoutstanding natural character will depend first on the legitimate allocation of thatstatus to the environment affected, and only then on the manner in which it isconducted. We agree with Miller J that these are not matters that can or should beprejudged at this point.118Conclusion[87] At the end of the day, the short answer in this appeal is that a regional policystatement fails to give effect to an NZCPS policy requiring adverse effects in an areaof outstanding natural character to be avoided, by instead providing for adverse effectsin such areas to be avoided, remedied or mitigated. Correct application of theprinciples laid down in King Salmon compel that conclusion.Two immaterial errors below[88] As noted at [70] above, Gendall J observed that his understanding of theimplications of King Salmon was that implementation of the avoidance policies in theNZCPS would inevitably result in rules creating prohibited activities that cannotobtain a resource consent, and that the effect of such prohibition would preclude theuse of adaptive management to monitor at risk activities. It is common ground thatthese observations are incorrect.117 By way of example, see the decision of this Court in Man O'War Station Ltd v Auckland Council[2017] NZCA 24, [2017] NZRMA 121 at [66], noting that the environment in that case wasmodified and not pristine or remote.118 See [107] and [114]–[115] below.[89] As to the former point, the Supreme Court observed in King Salmon only thatthe avoidance policies contemplate the potential imposition of prohibited activitystatus.119 For reasons noted at [84]–[86] above, such status is not inevitable, andultimately it is for the resource consent process to resolve which port activities are orare not inappropriate in the coastal environment.[90] As to the latter point, adaptive management was not considered by theSupreme Court in King Salmon at all. But in a companion judgment to King Salmon,Sustain Our Sounds Inc v The New Zealand King Salmon Co Ltd it was addressed bythe Supreme Court. It was held that an adaptive management approach was consistentwith the planning instruments, and a proper precautionary approach.120[91] Neither of these errors was essential to the Judge's reasoning on thefundamental question before him: whether the approach taken in the interim decisionof the Environment Court to PRPS policy 4.3.7 was legitimate. Correctly, he reachedthe conclusion that it was not. That conclusion did not rest on these two errors. Theymay be treated as immaterial.Result[92] The appeal is dismissed.[93] The appellant must pay the first, second and third respondents costs for a standardappeal on a band A basis plus usual disbursements.MILLER J[94] The question for which leave was granted was whether the High Courtmisapplied King Salmon. I begin my answer by examining what that judgment standsfor.[95] Its narrow holding is that policies 13 and 15 of the NZCPS precluded salmonfarms in areas of outstanding natural character in the coastal marine area of the119 King Salmon, above n 17, at [132].120 Sustain Our Sounds Inc v The New Zealand King Salmon Co Ltd [2014] NZSC 40, [2014] 1 NZLR673 at [140].Marlborough Sounds. That finding rested on the undisputed factual premise that thefarms, a new use, would have significant adverse effects on the environment in theproposed locations.[96] The decision depended relevantly on several findings of law which should betaken to form part of the ratio. The first is that the NZCPS may establish rules whichmust be followed or incorporated in lower-level planning instruments and decisions.121The second is that policy 8 of the NZCPS, which establishes a policy of"[r]ecognis[ing]" the contribution of aquaculture to wellbeing by providing foraquaculture activities in "appropriate places" in the coastal environment, is subject topolicies 13(1)(a) and 15(1)(a), which establish policies of preserving and protectingoutstanding natural character, features and landscapes by "avoid[ing]" adverse effectsof activities in areas of the coastal environment that exhibit those characteristics.122The third finding is that "avoid" in the latter policies means "not allow".123[97] I intend to make these reasons as brief as possible. I am in partial dissent andsome of the submissions, especially those of the Marlborough District Council,address difficulties that, while brought into relief by this appeal, are respectfully betteraddressed by the Supreme Court. The judgment of Kós P and Gilbert J points to someof those difficulties.[98] However, it is necessary to say a little more about the three relevant findingsof law I have identified. With respect to the first finding, the Supreme Court held thathigher-level planning documents may contain policies which contemplate — and maycompel — the prohibition of particular activities in certain localities, though theprohibition will take effect in a district plan.124 That was the outcome in King Salmonitself, the Supreme Court ruling that it had been an error of law to permit a plan changeunder which the salmon farms would be authorised.121 This is what the Supreme Court meant by "rule" in King Salmon, above n 17, at [115]–[116] where,following Auckland Regional Council v North Shore City Council [1995] 3 NZLR 18 (CA) at 23,it distinguished rules "in the ordinary sense" from rules that under the RMA may be directlyenforced against members of the public.122 King Salmon, above n 17, at [131]–[132] and [152].123 At [62] and [96].124 At [132].[99] With respect to the second finding, the Supreme Court did not state expresslythat policy 8 was subject to the other two, doubtless because the NZCPS itself doesnot structure its objectives and policies in that way. However, that is the effect of itsdecision in law. I prefer to avoid the term "environmental bottom line". TheSupreme Court used it, but with qualifiers and quotation marks indicating it wasintended as a rhetorical device rather than a term of art. The term lends emphasis butis apt to mislead to the extent it suggests the "bottom line" can never be crossed. Theavoidance policies are undoubtedly prescriptive, if considered in isolation. Theyenvisage that "significant" adverse effects must be avoided in all areas exhibitingnatural character, features and landscapes, and only in such areas that are not"outstanding" may lesser adverse effects be remedied or mitigated. But they are notthe only policies in the NZCPS which can be called "environmental", and the SupremeCourt also held that they may yield to other NZCPS policies.125 In King Salmon itselfthey did not yield to policy 8, which did not mandate provision for aquaculture andspecified only that aquaculture facilities should be located in "appropriate" places.126[100] With respect to the third finding, the Court rejected the "overall judgement"approach, the availability of which it described as the fundamental issue in theappeal.127 By that the Court referred to the approach which had been followed in thecourts below and which it chose to trace to the judgment of Greig J in New ZealandRail Ltd v Marlborough District Council.128 Under that approach a proposal isassessed under pt 2 of the RMA, employing an overall broad judgement of whether itwould promote the sustainable management of natural and physical resources. TheCourt found the overall judgement approach wanting because it admitted no "bottomline", environmental or otherwise, and so reduced the NZCPS to a listing of potentiallyrelevant considerations of varying weight in different fact situations.129 Rather, the125 At [132]. The specific avoidance policies the majority referred to were policies 13(1)(a) and (b)and 15(1)(a) and (b).126 At [126].127 At [43].128 At [40]–[41], citing New Zealand Rail Ltd v Marlborough District Council, above n 26. The Courtmight have traced the overall judgement approach to Minister of Works and Development vWaimea County Council [1976] 1 NZLR 379 (SC), and that judgment's approach to the Full Courtdecision in Environmental Defence Society v Mangonui County Council, above n 26 at 279–284per Somers J, which had been distinguished in New Zealand Rail on the ground that none of thedecision-making criteria in the Resource Management Act was given primacy over the others: seeNew Zealand Rail Ltd v Marlborough District Council, above n 26, at 83.129 At [83].NZCPS established policies to give effect to the purpose of the RMA and territorialauthority plans must give effect to the NZCPS. It followed that regional and districtcouncils need not go beyond the NZCPS, and back to pt 2, when formulating orchanging a plan which must give effect to the NZCPS.[101] However, the Court acknowledged that this was "[i]n principle" reasoning, bywhich was meant that it need not always hold true.130 The Court accepted thatparticular policies in the NZCPS may "pull in different directions", though thatconclusion should be reached only after close analysis and a thorough attempt toreconcile the policies.131 Where policies do pull in different directions, or where theirmeaning is uncertain, reference to pt 2 may well be justified.132 Generally, the Courtaccepted that NZCPS policies vest the relevant decisions in regional and districtcouncils and allow them scope for choice, within limits.133[102] It must follow that in particular settings where policies do pull in differentdirections, or are uncertain, territorial authorities must exercise judgement and may,perhaps must, have regard to pt 2. In doing so, a council is not reverting to the overalljudgement approach so long as it is applying the NZCPS rather than treating it as amere relevant consideration. I make this point because, while I agree theEnvironment Court erred in this case, it is not in my view an accurate criticism of theCourt to say that it reverted to the overall judgement approach.[103] Before explaining why I reach that view as (following King Salmon) a matterof construction of the NZCPS, I make two observations. The first is that we areconcerned not with a proposed salmon farm and policy 8, but with an existing port andpolicy 9. It happens that the port relies on a dredged shipping channel which runsthrough environmentally significant areas.134 There are existing environmentaleffects. No one suggests that Otago should do without a deep-water port, or that it130 At [85].131 At [129].132 At [88] and [129].133 At [91].134 I express myself in that way because, while the channel cuts through an important conservationarea which is elegantly described in the majority judgment, the relevant classifications have notyet been confirmed by the Regional Council, whose decision it is.could be located elsewhere. These are important considerations. As I explain below,they distinguish King Salmon from this case.[104] The second is that the anodyne question of law posed for this Court is apt todisguise the real meaning of our decision. Potential for conflict between port activitiesand the avoidance policies 11, 13, 15 and 16 was identified as the critical issue by theplanning witnesses in their agreed statement before the Environment Court. Insubstance we are asked to resolve that conflict by affirming that policy 9 (ports) issubject to the avoidance policies. That is what Gendall J held. To declare that is tocreate a "rule", in the sense used by the Supreme Court. It is a rule which wouldrequire that the regional and district councils prohibit any port activities that haveadverse effects in areas of outstanding natural character.[105] Whoever imposes such a rule should understand its implications for theenvironment and the port. If they do not, it is difficult to see how they can have cometo an informed understanding of what the NZCPS, and any other relevant policyinstrument, requires in this particular setting. Unlike the Supreme Court inKing Salmon, we do not understand the implications of the rule we are asked to rejector confirm.[106] EDS, which took the burden of the argument in support of the judgment below,asserts that this need not concern us, because we are not really making a rule. Thatargument rests squarely on the proposition, rejected by the Supreme Court, that a"rule" is something stated in a lower level planning document. The entire point of thisappeal is that the outcome in the High Court strictly circumscribes what counseldescribed as the circle of choice for the Regional Council when formulating thoseplans. The question of law posed for our decision presumes that King Salmon mayleave us no choice in the matter either. What divides us is whether it does.[107] We are also told that the environment is already modified and the adverseeffects of port activities have not been determined. I accept this, but I reject theinvitation made in argument to assume that existing effects are not adverse, or that ifadverse they are minor or transitory, or that if adverse and neither minor nor transitorythey can be avoided by means of adaptive management.135 The Environment Courtdoubted Port Otago's claim that the ports might have to shut down, but it did acceptthat the avoidance policies could cause problems for their safe and efficientoperation.136 The evidence includes a table cataloguing the effects of dredging andblasting in the channel (existing port activities), swinging area and berths. It is a longlist which includes damage to reef systems, damage to benthic habitat in the harbourand at dump sites, damage to sensitive areas such as the Aramoana salt marsh, loss ofcustomary food gathering opportunities, and loss of other cultural values. I add thatin argument most counsel appeared to think that if the port policy is subject to theavoidance policies, choice for the Regional Council is likely to be so circumscribed asto prevent deepening or realignment of the channel to accommodate larger vessels.That seems to me a significant consequence in itself. It follows that, like theEnvironment Court, we cannot exclude the reasonable possibility that the ports policyand the avoidance policies do or will pull in different directions.[108] This conclusion matters because the majority in King Salmon held thatterritorial authorities should seek to reconcile NZCPS policies in a way that giveseffect to the avoidance policies before finding that policies are in conflict. Thatcontemplates a process which leaves the decision with territorial authorities — as thelegislature intended — and which ought to result in informed decision-making.[109] Seen in that light, the EDS appeal to the High Court pre-empted reconciliation,which is not a question of law but a process of fact-finding and analysis.137 If theargument before us confirmed anything, it is that we do not yet know whether adverseeffects can be avoided or managed without affecting Port Otago's safe and efficientoperations. The Environment Court cannot be said to have erred by establishing aframework that required the Regional Council to work out whether the policies do pullin opposite directions. There is a sense in which the appeal was premature.135 Counsel agreed before us that adaptive management could be used, but I do not understand theconcession to mean adverse effects might be tolerated; that would be inconsistent with the "bottomline" approach.136 Environment Court interim decision, above n 2, at [24].137 Such an inquiry was not necessary on the facts of King Salmon as noted at [95] above.[110] That said, it seems the Environment Court was put in this position because theRegional Council had chosen not to include a specific ports policy in the decisionsversion of its regional policy statement, instead relying on general infrastructurepolicies.138 And I accept that the legal pathway followed here is also available underthe majority judgment in King Salmon. EDS may argue that policy 9 is subject in lawto the avoidance policies however minor the adverse effects,139 and however major theimpact of a rule to that effect on the port. If that is correct, the Environment Courtwas wrong in law to admit the possibility that the avoidance policies might becompromised to any material degree.[111] That brings me to the question of construction. Policy 9 is set out at [25] above.I acknowledge the views of Kós P and Gilbert J. I differ respectfully because thefactual context leads me to think the main verb for purposes of this case is not"[r]ecognise" but "requires". For the Regional Council, provision for ports is notoptional. There already exists a port at Port Chalmers which is essential infrastructure,forming part of a national ports network and servicing national and internationalshipping.140 The NZCPS deems such infrastructure important to communitywellbeing.141 The Regional Council has no choice about deciding whether to providefor the port, and no choice about where to situate it. It follows that what policy 9requires of the Regional Council is that it consider how and when to provide in itsplans for the port's efficient and safe operation, the development of its capacity forshipping, and its connection with other transport modes. In my opinion theserequirements are imperative, which sufficiently distinguishes them from theaquaculture policy at issue in King Salmon.[112] For these reasons I do not agree that the ports policy is subject in this settingto the avoidance policies, as a matter of construction. Rather, as the138 Environment Court interim decision, above n 2, at [2]. Under s 61 of the RMA a regional policystatement must be prepared in accordance with the NZCPS.139 "Effect" is a defined term, as William Young J noted in dissent in King Salmon, above n 17, at[200]. The majority disagreed at [145], but in substance only to the extent that minor or transitoryadverse effects might be permitted in an area the outstanding natural character of which must bepreserved.140 It is not clear whether the port at Dunedin, which uses the same channel, can be described in thesame way.141 Policy 6(1)(a).Environment Court recognised, it is both lawful and prudent to provide for thepossibility that they cannot be fully reconciled.[113] I nonetheless agree that the Environment Court erred in its application of theNZCPS, though for reasons differing from those advanced by EDS and accepted bythe majority. The Court did so by deciding that the ports policy would ultimatelyprevail should it prove irreconcilable with the avoidance policies. The Courtcontemplated a resource consent process under which adverse effects would beidentified, their cause (safety or transport efficiency) would be established, andmeasures would be put in place to avoid, remedy or mitigate those effects. Thisapproach is consistent with the notion that priority among the NZCPS policies is asimple question of construction, decided in the abstract. In that sense it mirrors theargument advanced by EDS. But it too is subject to the criticism that it pre-empts theprocess of investigation and reconciliation contemplated by the majority inKing Salmon.[114] In my view it might be permissible to establish a policy of the kind proposedby the Environment Court so long as Port Otago is merely continuing its existingoperations, if the effects of those operations on areas of outstanding natural characterwere known to be limited. (The Court did not in fact make such findings, butpresumably it might do so.) The Court could to that extent prejudge the outcome ofinvestigation and reconciliation. That might allow, say, relocation of navigationbeacons.[115] But suppose Port Otago does wish in the future to realign and deepen thechannel to accommodate larger vessels, with potentially extensive effects on an areaof outstanding natural character. Under the Court's policy Port Otago would also bepermitted to do that, subject to an obligation to remedy or mitigate the effects.142 Onmy construction of the NZCPS it is possible that the ports policy would prevail in thatscenario, but it might not and for that reason it seems to me both inconsistent with theNZCPS and unnecessary to make the decision now. Rather, the possibility that the142 There is a hint in the Court's proposed policy that the decision whether the ports policy prevailscould be taken in the resource consent process, because it distinguished between safety needs,which were paramount, and transport efficiency needs, which presumably were not. But on myreading the policy would permit the port's needs to prevail in either case.avoidance policies will preclude any development of port facilities by Port Otagoshould remain open until Port Otago's needs and the existence, nature and extent ofany adverse effects are better known. In my view the Regional Council should returnto the drawing board.Solicitors:McMillan & Co, Dunedin for AppellantEllis Gould Lawyers, Auckland for First RespondentRoss Dowling Marquet Griffin, Dunedin for Second RespondentRoyal Forest and Bird Protection Society of New Zealand Inc, Christchurch for Third RespondentMarlborough District Council, Blenheim for Fourth Respondent