SANFORD LIMITED V THE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES AND ANOR HC WN CIV-2009-485-379

SANFORD LIMITED V THE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES AND ANOR HC WN CIV-2009-485-379 12 October 2009IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2009-485-379UNDER Part I of the Judicature Amendment Act 1972 IN THE MATTER OF an application for review BETWEEN SANFORD LIMITED Applicant AND THE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES First Respondent AND EASTERN SEA FARMS LIMITED Second Respondent Hearing: 14-15 September 2009 Appearances: B Scott for the applicant P McCarthy and G Gardner for the first respondent F Cooke QC and K M Barry-Piceno for the second respondent Judgment: 12 October 2009JUDGMENT OF CLIFFORD J Introduction[1] In these judicial review proceedings, the applicant, Sanford Limited ("Sanford") challenges decisions of the first respondent, the Chief Executive of the Ministry of Fisheries ("the Chief Executive") to issue marine farming and spat catching permits to the second respondent, Eastern Sea Farms Limited ("Eastern Sea Farms").Background[2] Eastern Sea Farms wishes to establish a very large mussel farm in the sea off Opotiki on the East Coast of the North Island. Eastern Sea Farms first applied as long ago now as April 2001 for the necessary permits to do so. Eastern Sea Farms required approval under both the Resource Management Act 1991 ("the RMA") and the Fisheries Act 1983. [3] Eastern Sea Farms' proposed mussel farm was some 4,750 hectares in area, comprising an inshore (southern) block of 950 hectares (located approximately 6 kilometres from the coast) and an offshore (northern) block of 3,800 hectares (located approximately 8.5 kilometres from the coast). The farm was to be developed in four stages, with each stage of development being dependent on satisfactory monitoring reports. The first stage was to comprise eight blocks of, and a maximum number of 256, longlines, the second 16 blocks and 672 longlines, the third 912 longlines and the fourth 1,312 longlines. It was intended that each stage would commence three years after "completion" of the earlier stage (meaning at least 75% of the lines in the earlier stage were in place). The longlines were to be spaced 50 metres apart and the blocks of longlines were to be separated by 500 metre wide navigation channels. All longlines were to be 200 metres in length. Twelve of the longline blocks were to be within the northern block and four within the southern block. [4] Under the RMA Eastern Sea Farms required a number of resource consents, known as coastal permits (s 87), to build and occupy its proposed mussel farm. Those permits comprised consents to: a) occupy land of the Crown in the coastal marine area (s 12(2)(a)); b) erect structures over the seabed (s 12(1)(a)); c) disturb the seabed (s 12(1)(b)); d) deposit material on the seabed (s 12(1)(c)); and e) discharge contaminants into the sea (s 15(1)(a)).[5] Most of those coastal permits were able to be issued by the relevant local authority, the Bay of Plenty Regional Council ("the Regional Council"). However, because of the size of the proposed farm, the permit to occupy land in the coastal marine area could only be issued by the Minister of Conservation on the basis of a recommendation of the Regional Council or, if that recommendation was appealed, a report from the Environment Court (s 119 of the RMA). [6] Eastern Sea Farms also required, in terms of the Fisheries Act 1983, a marine farming permit (s 67J) and a spat catching permit (s 67Q), both of which permits were to be issued by the Chief Executive. Sections 67J(1) and 67Q(1) of the Fisheries Act 1983 respectively prohibit marine farming and spat catching without such permits. Marine farming (and spat catching) permits are required to specify the area in which the permit may be exercised and the fish, aquatic life, or seaweed that may be farmed, and may be granted on conditions: s 67J(9) and (10) and s 67Q(4) . [7] Under the RMA, decisions on applications for coastal permits involved consideration of a wide range of factors in terms of the actual and potential effect on the environment of allowing an activity. Under the Fisheries Act 1983, decisions on marine farming permits and/or spat catching permits involved a much more focused inquiry: the Chief Executive could not issue such permits unless he or she was "satisfied that the activities contemplated by the application would not have an undue adverse effect on fishing or the sustainability of any fisheries resource" (ss 67J(8) and 67Q(4)). [8] Before me the parties acknowledged that the first element of that test, the "undue adverse effect on fishing", concentrated on the effect of removing the area covered by a marine farm from being able to be used for fishing activities. The fishing activities to be considered include commercial, recreational and customary fishing activities. In this case the issue is as regards the Chief Executive's decision on the question of the effect on commercial fishing activities. There is no challenge to the Chief Executive's decision as regards recreational or customary fishing activities. In fact, as the design of the marine farm provides for the mussel lines to be anchored on the seabed so they are positioned some metres underwater, recreational and customary fishing activity will still be possible in the area of themarine farm. The same is not true for commercial activities, which will effectively be precluded from the marine farm site and a certain distance beyond its boundaries. [9] The second element, the "undue adverse effect on the sustainability of any fisheries resource", was a broader question. As indicated, it assessed the impact of the marine farm and, in particular, matters such as the "rubbish" that the marine farming activity would deposit on the seabed and the displacement of species which the marine farm might cause, on the sustainability of fisheries resources more generally. Whilst it was accepted that adverse impacts on the sustainability of fisheries resources could, over time, also impact directly on fishing, nevertheless the focus of the Ministry's inquiry as regards the first limb of the test was principally on the direct impact the establishment of the marine farm would have (in terms of the reserving of the area), here, on commercial fishing. [10] Section 67J(4) and (5) of the Fisheries Act 1983 provided that an application for a marine farming permit was to be accompanied by the application for the corresponding coastal permits, or the permits themselves, and that the marine farming permit was not to be issued until the coastal permits had been granted. Section 67Q(3) and (4) provided similarly for spat catching permits. Marine farming and spat catching permits could only be issued to persons who held coastal permits for the areas applied for (ss 67J(2) and 67Q(2)). [11] Accordingly, Eastern Sea Farms applied first under the RMA for the necessary coastal permits. It did so on 14 May 2001. Those applications were considered by the Regional Council in a four day hearing from 25 to 28 February 2002. The Regional Council reserved its decision. [12] Before the Regional Council released its decision, and therefore before those coastal permits had been granted or any recommendation made to the Minister, the Resource Management (Aquaculture Moratorium) Amendment Act 2002 came into force on 25 March 2002. That Act imposed a moratorium (subsequently extended in 2004) on the processing or determination by consenting authorities of applications for coastal permits under the RMA. The moratorium was expressed to come into effect (retrospectively) on 28 November 2001. The moratorium did not, however,prevent the further consideration, or grant, of an application (as relevant) made before 28 November 2001 which required notification and which had been notified. [13] Eastern Sea Farms' applications did require notification, and had in fact been notified by the Regional Council prior to the effective date of the moratorium. Therefore, the Regional Council was able to complete its consideration of those applications. It (or rather, Special Commissioners appointed by the Regional Council) did so. In May 2002 the Special Commissioners resolved to grant the relevant coastal permits that fell within the Regional Council's authority, and further to recommend to the Minister of Conservation that coastal permits be granted to Eastern Sea Farms to give it the right to occupy the relevant coastal marine areas. [14] A number of parties who had opposed the grant of those coastal permits appealed the Regional Council's decisions to the Environment Court. Sanford appealed on 22 May 2002, on the ground, amongst others, that the Regional Council had failed to have proper regard to the adverse effects the proposed marine farm would have on commercial fishing activities. Sanford noted that the question of the extent to which fisheries issues were relevant for the purposes of the RMA was, at that time, subject to a reserved High Court decision. [15] On 24 June 2002, and no doubt on the basis of the Special Commissioners' decision, Eastern Sea Farms applied to the Chief Executive for the necessary marine farming and spat catching permits. [16] As noted by Sanford in its appeal to the Environment Court, at the time there was considerable confusion and difficulty in dealing with marine farm applications because of the overlapping jurisdictions under the RMA and the Fisheries Act 1983. When Eastern Sea Farms sought a priority fixture from the Environment Court for the hearing of Sanford's appeal in September 2002, Sanford referred to those issues again, and noted that at that time the High Court had issued a decision on those issues, which decision was to be appealed. In declining Eastern Sea Farms' application, the Environment Court referred to that pending appeal. [17] On 25 September 2003 the Court of Appeal released its decision, The Chief Executive v New Zealand Marine Farming Association Inc [2004] 1 NZLR 449.That decision clarified the relationship between the RMA and the Fisheries Act 1983. Amongst other things, the Court of Appeal held that coastal permits issued under the RMA did not allow marine farm structures to be built until the Chief Executive had also issued a marine farming permit. [18] By this time, a process of legislative reform was underway aimed at clarifying the relationship between the RMA and Fisheries Act 1983 processes for the approval of marine farms. [19] In August 2004 legislation ("the 2004 Reform Legislation") was introduced into Parliament, and passed on 21 December 2004, to provide for a new aquaculture regime to come into force on 1 January 2005, on which date the moratorium would expire. [20] As of that date, the marine farming provisions of the Fisheries Act 1983 would be repealed. The two principal components of the new regime would be (and are now) set out in the Resource Management Amendment Act (No. 2) 2004 and the Fisheries Amendment Act (No. 3) 2004 ("the New Regime"). In essence, the New Regime did away with the parallel RMA and Fisheries Act permitting processes, and substituted a single planning process controlled by the Regional Council but constrained to zoned areas previously approved by the Chief Executive. [21] The Aquaculture Reform (Repeals and Transitional Provisions) Act 2004 ("the Transitional Legislation"), which also came into force on 1 January 2005, provided a transitional regime. Section 50 of the Transitional Legislation provided for those applications made before the commencement of, and not subject to, the moratorium (such as Eastern Sea Farms' applications) to continue to be considered under the RMA and the Fisheries Act 1983, notwithstanding the repeal of those provisions, "as if the [2004 Reform Legislation] had not been passed". If granted by the Chief Executive, s 20 and following of the Transitional Legislation applied the New Regime to those marine farming and spat catching permits. [22] By August 2004, therefore, the Court of Appeal's decision in New Zealand Marine Farming Association had clarified the relationship between the RMA and the Fisheries Act 1983. Furthermore, the 2004 Reform Legislation had been introduced,clarifying the way in which Eastern Sea Farms' application could be finally determined. [23] Against that background, in November 2004 the Chief Executive, at Eastern Sea Farms' request, began actively to consider the marine farming and spat catching permit applications Eastern Sea Farms had filed in 2002. He could not, of course, issue those permits until the required coastal permits were issued (ss 67J(5) and 67Q(4) Fisheries Act 1983). [24] By June 2005 Eastern Sea Farms had settled most of the RMA appeals. The appeals by the commercial fishing parties, including Sanford, remained on hold. At that time, the remaining parties to the appeals again asked the Environment Court to defer consideration. By then the parties were looking to the Chief Executive's decisions to settle the "fisheries" issues. The parties advised the Environment Court that, once those matters had been determined, they could then determine whether the appeals would be withdrawn, settled by consent or if an Environment Court hearing would be required. [25] On 21 December 2006, the Chief Executive produced a decision declining Eastern Sea Farms' application for its 4,750 hectare farm but approving, in principle, a marine farming permit and spat catching permit for the northern 3,800 hectare block of that farm, subject to conditions requiring the farm to be developed in stages ("the December 2006 Decision"). The permit conditions, to be imposed in reliance on s 67J(10) of the Fisheries Act 1983, would initially only allow the first stage of development to occur, comprising 256 longlines. At the same time the Chief Executive noted that, as the resource consents were still under appeal at the Environment Court, any marine farming or spat catching permit could only be issued after that appeal had been determined. The status of the December 2006 Decision is a matter at issue in these proceedings. [26] At this point, the various parties re-engaged in the proceedings before the Environment Court. By 11 April 2008, the remaining parties to those appeals, including Sanford, Eastern Sea Farms and the Regional Council, were in a position to file a memorandum seeking consent orders.[27] In the memorandum filed in the Environment Court, the parties noted:Since the Appeals were filed the Applicant [Eastern Sea Farms] has obtained a marine farming permit from the Ministry of Fisheries which has reduced the total farm size down to 3800ha and includes staging, with the first stage not to exceed 950ha. As a result, development of the mussel farm in two parts is no longer necessary "[28] On that basis, the parties to the Environment Court appeals provided revised versions of the various consents for which they sought Environment Court approval, and of the terms of the consent to occupy. Key changes to the consents included a requirement for a sanitary survey, certain independent monitoring and an opportunity to review conditions of consents affected by Treaty of Waitangi settlements. At the same time, Consent 61600, which is the consent to erect and maintain mussel farm structures, included a revised "staging" condition. This condition now read:Development of the permit area shall be in five stages, up to the maximum densities as set out in the application, shown in BOPRC Plan numbers RC 61600/2, RC 61600/3, RC 61600/4, RC 61600/5, RC 61600/6 and summarised belowStage Number of blocks Maximum number of lines1A 1 5 1 8 256 2 16 504 2 [sic] 16 704 4 16 984 Note: the number of blocks above includes those to be used for spat catching[29] I note that the reference to 16 blocks in stages 2 to 4 is recognised to be an error, the correct reference being to 12 blocks. [30] It is this condition which would appear to most closely reflect the parties' understanding of the marine farming permit which, the parties advised the Environment Court, Eastern Sea Farms had by then "obtained" from the Chief Executive. [31] The consents provided for the erection of the marine farm structures in the five stages (at [28] above), with development of each successive stage (after stage 1) being subject to monitoring and reporting requirements being met to the satisfaction of the Regional Council or delegate. The effect was to require at least three years'monitoring and reports confirming the lack of significant adverse effects on water column characteristics, the benthic environment and marine mammals. [32] On 15 September 2008 the Environment Court made the consent orders sought. On 8 October the Minister of Conservation accepted the Environment Court's recommendation, and issued a coastal permit to Eastern Sea Farms to occupy the 3,800 hectares. As Sanford had consented to those decisions, this proceeding does not and cannot challenge them. [33] On 15 October the Chief Executive issued Eastern Sea Farms with marine farming and spat catching permits in line with the December 2006 Decision. [34] Eastern Sea Farms' applications for its marine farming and spat catching permits were, quite properly, dealt with by the Chief Executive under Part 4A of the Fisheries Act 1983. It is that legislation which is of principal relevance in these proceedings. At the same time, as one aspect of Sanford's challenge to the Chief Executive's decision is that he unlawfully had regard to certain aspects of the New Regime, it is necessary to have an understanding of those provisions as well. [35] Subpart 1 of Part 7A of the RMA provides for the establishment of aquaculture management areas ("AMAs") – in which aquacultural activities may be undertaken – by regional councils including them in regional coastal plans or proposed regional coastal plans in accordance with s 165C. Once an AMA is established, the regional council may by public notice offer (usually by public tender) "authorisations" for available space in the AMA for aquaculture activities for which the area may be occupied: s 165E of the RMA. Authorisations are granted under s 165T. [36] A person granted an authorisation does not require a permit or other approval from the Chief Executive to undertake the authorised aquaculture activities. Instead the Chief Executive's consent is obtained at an earlier stage, in relation to the proposed AMA as a whole, rather than individual uses of the AMA. Section 64 of the RMA requires that regional coastal plans are developed in the manner set out in Schedule 1A of the RMA. Under clause 2(1) of that Schedule, a regional council must not notify a proposed regional coastal plan or a proposed change to a regionalcoastal plan until the Chief Executive has made an aquaculture decision under s 186E of the Fisheries Act 1996 in relation to any area described in the plan as an AMA. [37] Under s 186E of the Fisheries Act 1996, the Chief Executive can make a "determination" (a decision that he or she is satisfied that the AMA "will not have an undue adverse effect on fishing") or a "reservation" (a decision that he or she is not so satisfied) about the area, or different parts of the area, proposed to be an AMA. [38] Any area in respect of which a reservation is made on the basis of an undue adverse effect on commercial fishing must be noted on the plan (clause 3, Schedule 1A of the RMA), and no "authorisation" can be offered to any person to enable them to use the AMA unless the person has entered into an "aquaculture agreement" with the commercial fishers affected (ss 186ZD to 186ZL Fisheries Act 1996). Aquaculture agreements are intended to provide for the consensual resolution of attempts by marine farmers to establish farms in areas subject to reservation. [39] The Transitional Legislation provides a regime whereby marine farming and spat catching permits, granted by the Chief Executive under the old regime as it survived the moratorium, are incorporated into the New Regime. [40] Under ss 20 and 50(6), a marine farming permit which has been granted under s 67J is, from the date the application is granted, deemed to be a coastal permit granted under the RMA for the species (of fish, aquatic life, or seaweed) and area referred to in the permit, and on the same conditions. [41] The Regional Council may, within 12 months of that date, commence a review of the conditions of a deemed coastal permit and, if it considers it necessary to do so, vary, add, or delete conditions for the purpose of making the conditions consistent with the RMA (s 20(3)). The Regional Council must not, however, amend the species or area covered by the coastal permit (s 20(4)(b)). In exercising these powers, the Regional Council is required, under s 30(2) of the RMA, to take into account the effect on fisheries resources, but not on fishing controlled by the fisheries legislation.[42] Sections 21 and 50(7) of the Transitional Legislation provide similarly for spat catching permits. [43] Under s 45 of the Transitional Legislation, the area to which a deemed coastal permit applies is, with certain qualifications, deemed to be an AMA, and as such is subject to the provisions of the regional coastal plan or proposed regional coastal plan that applies to the area. [44] Deemed coastal permits, being resource consents, are subject to review and amendment as provided in the RMA. [45] Section 127 of the RMA provides that the holder of the deemed coastal permit may apply to the Regional Council for a change or cancellation of a condition of the permit (other than the duration of the permit). The procedures for making a resource consent application apply as if the application were an application for a consent for a discretionary activity (s 127(3); see ss 88 to 121). Where, however, the variation would result in a fundamentally different activity or one having materially different adverse effects, a new application may be required. In addition, under s 128 the Regional Council may serve notice on a consent holder of its intention to review the conditions of a resource consent at any time(s) specified for that purpose in the consent. Such a review may be held to deal with any adverse effect on the environment which may arise from the exercise of the consent and which it is appropriate to deal with at a later stage, for any other purpose specified in the consent, or where the information made available at the time the permit was granted contained inaccuracies which materially influenced the decision made and the effects of the exercise of the consent are such that it is necessary to apply more appropriate conditions. Reviews are to be conducted in accordance with ss 129 to 133 (which provide for notification, hearing and process requirements as well as mandatory considerations). Amongst other things, the reviewing authority must have regard to any actual and potential effects on the environment of allowing the activity (ss 131(1)(a) and 104(1)(a)). As above, the Regional Council may perform these functions to avoid, remedy, or mitigate the effects on fisheries resources (s 30(2)).Overview of issues[46] Sanford says that the Chief Executive, in issuing the marine farming and spat catching permits to Eastern Sea Farms, acted unreasonably and made errors of law in deciding that a marine farm of 3,800 hectares would not have an undue adverse effect on fishing, and that a marine farm of 3,800 hectares developed to the extent of 256 longlines would not have an undue adverse effect on the sustainability of any fisheries resource. Sanford seeks orders setting aside the Chief Executive's decisions, and the permits issued. Alternatively, Sanford says the Court should find that, if valid, those permits allow a smaller marine farm than would now be possible. [47] The Chief Executive and Eastern Sea Farms deny Sanford's contentions. [48] Eastern Sea Farms says further that even if the Chief Executive did err as alleged by Sanford the Court should, in its discretion, decline Sanford relief because of the delays involved in it bringing these proceedings, and for other reasons. [49] Finally, Eastern Sea Farms says that if the Court upholds Sanford's claims, and grants it relief, the decision to grant marine farming and spat catching permits should be remitted to the Chief Executive, with directions from the Court requiring the reconsideration of those decisions on a revised basis.DiscussionUnlawful decision: no undue adverse effect on fishing[50] Sanford argues that the Chief Executive's decision that the issue of challenged permits for a 3,800 hectare marine farm would not have an undue adverse effect on fishing was unreasonable. It was made without sufficient evidence, or a rational basis, and not in reliance on the best available information as required under s 10 of the Fisheries Act 1996. It was therefore unlawful. [51] The factual context for this argument essentially comprises the record of the Chief Executive's decision-making. Those matters were largely traversed in anaffidavit provided by Mr Daniel Lees of the Ministry of Fisheries. Mr Lees was, at the time, the Aquaculture Manager with the Ministry of Fisheries and held delegated authority to make decisions on behalf of the Chief Executive regarding marine farming permits and spat catching permits. There was no challenge to that delegation. [52] Mr Lees explained that the Ministry ran a two-stage decision-making process for marine farming and spat catching decisions. On receipt of an application the Ministry would consult and then the Chief Executive's delegate would make a preliminary decision based on the available information. That preliminary decision would be communicated to affected parties, with an opportunity for them to comment and provide additional information. The delegate would then make a final decision whether or not to issue a permit. That final decision would normally be made after the consenting authority had issued the relevant resource consents. [53] In the case of Eastern Sea Farms' applications, Mr Lees proceeded to make a final decision, which he referred to as a "decision in principle", before the relevant resource consents had been issued. He did so, he deposed, in order to facilitate the parties' appeal to the Environment Court on the resource consent applications. Given the way in which the parties had themselves updated the Environment Court from time to time, and had explained why Environment Court consideration of the appeal should be deferred pending the Chief Executive's consideration of Eastern Sea Farms' applications under the Fisheries Act 1983, that would indeed appear to have been the case. [54] At the same time I accept that Mr Lees was clear that no marine farming or spat catching permits could be issued until the relevant resource consents were issued. I do not think, therefore, that there was anything improper or incorrect – as Sanford suggested at various points – in the way the Ministry considered Eastern Sea Farms' application notwithstanding the fact that the Environment Court appeal had not been determined nor coastal permits issued. [55] On 9 March 2006 a Ms Jansen of the Ministry produced a preliminary evaluation report on Eastern Sea Farms' applications. That March 2006 preliminary report recommended to Mr Lees that, as the Chief Executive's delegate, he approveEastern Sea Farms' applications for the northern 3,800 hectare block and 984 longlines. The essential reasoning of the March 2006 preliminary report was that, in terms of Eastern Sea Farms' application, the Ministry could not be satisfied that the originally proposed 1,312 longlines over 4,750 hectares would not have undue adverse effects on fishing or the sustainability of fisheries resources. However, it was so satisfied as regards 3,800 hectares of the farm and 948 longlines. As regards commercial fishing, whilst there would be some adverse effects, the Ministry did not consider they would be undue. In particular: a) approval of the northern site only would restrict the loss of fishable area for commercial fishers by compacting the marine farm structures instead of spreading them over two areas; b) the farm would equate to only a small proportion of the total relevant fishing area; c) changes in fishers' behaviours would not put undue pressure on the sustainability of fish stocks being harvested; and d) whilst fishers would face additional costs, the Ministry did not consider those costs to be prohibitive and much of the Eastern Bay of Plenty trawl grounds would still be accessible, even if less efficiently used. [56] Mr Lees accepted the Ministry's recommendation, and made his preliminary decision accordingly. In describing in his affidavit the key elements of that decision, as regards adverse effects on fishing, Mr Lees referred in particular to impacts on fish catches:[I a]greed with the report that I could be satisfied that development of the northern 3800 ha block only would not have an undue adverse effect on fishing. I was satisfied that the potential average annual catch losses due to the 3,800 ha northern block alone would be less than 5% for the fisheries affected. Although my assessment whether a proposed marine farm would have undue adverse effects depended on the circumstances of each case, an average annual catch loss of about 5% is the point at about which I would consider adverse effects on commercial fishing might become undue [57] Following consultation and comment, on 15 December 2006 Ms Jansen forwarded a final evaluation report and recommendation to Mr Lees. That report recommended Mr Lees make a decision in principle to decline Eastern Sea Farms' application in its entirety. Ms Jansen explained the changed recommendation by reference to additional information that the Ministry had received. As regards the impact on fishing activities, and particularly those of commercial fishers, the report noted that new information relating to commercial fishing activity in the area of the application site "suggests adverse effects on fishing may be more significant than originally anticipated in the preliminary decision". Commercial fishers had provided more detailed information, the Ministry itself had updated catch effort information, and new computer software had allowed a more thorough and detailed analysis of that catch effort information. [58] In light of that new information, the December 2006 final report now concluded that:Consequently, due to the large amount of uncertainty regarding effects of the application site on commercial fishstocks, and the level of commercial fishing taking place in the area of the application site, this report recommends you cannot be satisfied the activities contemplated by the application site, in its entirety, would not have an undue adverse effect on commercial fishing.[59] In other words, as regards the site in its entirety, the Ministry reached the same conclusion as it had in the preliminary reports. When it came to consider the possibility of options to avoid remedy or mitigate adverse effects, the Ministry concluded as follows:[The Ministry] acknowledges adverse effects on both commercial fishing and the sustainability of fisheries resources would be reduced by reduction of the size of the application site. However, new information received since the preliminary design suggests adverse effects on fisheries resources may be more significant and of higher consequence than originally anticipated in the preliminary decision. Similarly, adverse effects on fishing may be more significant as well. Considering the increased uncertainty in the information and stronger evidence of severe adverse effects, this report recommends that without conclusive information to precisely determine what levels of mitigation would be appropriate or required for the application site, you take considerable caution in considering operations to avoid, mitigate or remedy adverse effects on fishing and the sustainability of any fisheries resource.[60] On that basis Ms Jansen communicated the recommendation to Mr Lees that he decline Eastern Sea Farms' applications. As is clear, Mr Lees did not accept that recommendation. Rather, he reached a preliminary decision to issue the permits. [61] Mr Lees, in explaining his decision as regards adverse effects on commercial fishing in his affidavit provided to this Court, said he had:33.2 Agreed with the final recommendation that I could not be satisfied the activities contemplated by the whole 4,750 ha site would not have an undue adverse effect on fishing. But, contrary to the recommendation, I was satisfied that approval of the northern 3,800 ha block alone would not have an undue adverse effect on fishing. 33.3 Considered that, although approval of the northern block alone would result in some catch losses for commercial fishers, those catch losses would be less than 5% of the average total annual finfish catch in FMA 1 and less than 5% of the average total annual catch of the individual fisheries affected in FMA1, including John Dory, Gurnard, Snapper, Tarakihi and Trevally. In making my decision I took into account: 33.3.1 The estimated catch losses of John Dory, Gurnard, Snapper, Tarakihi and Trevally contained in Tables 7, 8 and 9 of the final evaluation report and the discussion of estimated catch losses contained in para 222 to 294;33.3.2 The availability of alternative fishing sites and economic costs to fishers of using those alternative sites;33.3.3 The potential spatial changes to commercial fishing pressure;33.3.4 The cumulative effects of previous farm approvals in FMA1;33.3.5 The biology and mobility of the finfish pelagic species caught at the site.[62] Mr Lees explained that the information available to him did not, in effect, allow him to separately identify the extent of the adverse effects for each of the two blocks. He then went on to comment:37. When making my final decision on what area of the application I was satisfied to approve, I was very conscious of deficiencies in the catch effort data and exercised appropriate caution. I recognised that I had to be satisfied given the uncertainty in the available information that the area approved, being the 3,800 ha northern block, would not have an undue adverse effect on fishing. 38. I note that fishing interests, including Sanford, had provided little information to help me differentiate between the adverse effects of the two blocks (or areas within the two blocks) on commercial fishing. I therefore had to use the information available and exercise my judgement.[63] On that basis he concluded:39. Consequently after considering the available information, I decided that approval of the northern 3,800 ha block would result in the best overall outcome (in respect to fishing, and aquaculture) while ensuring that I could be satisfied that the activities contemplated would not be undue on fishing.[64] Sanford pointed, in particular, to the fact that the final evaluation report in its assessment of effects referred generally to "the application site". It made no separate analysis of the northern block and the southern block in terms of undue adverse effects on fishing. Mr Lees, therefore, had no rational basis to conclude, on the one hand, that an undue adverse effect would be caused by approving the 4,750 hectare area but that, on the other hand, no such undue adverse effect would be caused by approving the 3,800 hectare area. [65] A decision will be unlawful due to an absence of rationality or unreasonableness where, as articulated in Associated Provincial Picture Houses Ltd v Wednesbury [1948] 1 KB 223; [1947] 2 All ER 680, the decision reached is effectively one which no reasonable decision-maker could, on the information available to them, have reached. [66] Here, and as emphasised by Mr McCarthy for the Chief Executive, Mr Lees made a decision based on the extensive information provided to him and the Ministry throughout the consultation period and as set out in the two evaluation reports. In making his decision, he relied on his own individual expertise andexperience. In his affidavit, Mr Lees noted that, in terms of the information available to the Ministry, his decision effectively reflected his expert assessment of the scale of the effects of the original 4,750 hectare two block farm applied for, and the scale of the effects of the smaller 3,800 hectare block. In particular, and as regards the effects on fishing, Mr McCarthy emphasised Mr Lees' assessment that catch losses as a result of the approval of the northern 3,800 hectare block would be less than 5% of the average total fish catches in the larger fish management area. As he had noted when explaining his preliminary decision ([56] above) it was Mr Lees' view that an average annual catch loss of about 5% was the point at which he would consider adverse effects on commercial fishing might become undue. Given that it was not possible to distinguish in any meaningful way between the impact on fishing as between the two blocks, Mr Lees' decision was essentially one based on scale, and his assessment – on the information available to him – of the scale of the adverse effect caused by the northern block alone, as opposed to that which could be caused by approval of both blocks. [67] Essentially, therefore, having concluded that the catch losses would be less than 5% of the average total annual finfish catch in FMA1, and less than 5% of the average total annual catch of the individual fisheries affected, Mr Lees was able to conclude that approval of the northern block would not have an undue adverse effect on fishing. In my view, that was the key judgment Mr Lees made. [68] There was some attention paid by Mr McCarthy and Mr Scott to the relevant part of Mr Lees' affidavit. Mr Scott criticised the affidavit as not disclosing, as I understood him, how that conclusion had been reached. Mr McCarthy endeavoured to explain how it had been reached by pointing to a separate assessment in the final report that the Ministry could "estimate about 6.5% of the bottom trawl catch in FMA1 would be excluded by development of the application site". He said that, by reference to the proportion of the total application area comprised by each of the northern and southern blocks, it was clear that less than 5% of the bottom trawl catch would be affected once the southern block was excluded. Mr Scott's reply was that was supposition on Mr McCarthy's part, as Mr Lees had not so explained his conclusion.[69] I do not think Mr McCarthy's submission took the matter very far. A pro- rata division, on the basis of area, of the bottom trawl catch loss between the northern and the southern blocks does result in the conclusion that the exclusion of commercial fishing from the northern block alone would cause a loss of less than 5% of the bottom trawl catch. At the same time, however, it is clear that Mr Lees was assessing more than bottom trawl catch effects. It is his general conclusion that has been challenged. In this context, it is of some significance that Mr Wilkinson, who provided affidavit evidence on behalf of Sanford, did not in his reply affidavit in any way challenge Mr Lees' factual conclusions. Therefore, while Mr Lees may not have explained the calculation process he went through, he has clearly stated both the basis of his decision and the conclusions he reached, based on the evidence before him. The factual validity of that conclusion has not, as a matter of evidence, been challenged before me so as to support a claim of irrationality.. [70] As to the overall significance of that less than 5% total annual finfish catch loss, there was no evidence that commercial fishers would not be able to catch that 5% elsewhere, although there was evidence that replacing the farmed area with other areas could involve increased costs. [71] By reference to Mr Lee's central conclusion, I am satisfied therefore that, in the Wednesbury sense, the Chief Executive's decision that approval of the 3,800 hectare area marine farm would not have an undue adverse effect on fishing is a decision that was open to him. The Chief Executive, through Mr Lees, was in possession of extensive information. A preliminary report had reached that conclusion. A second report, prepared by Ms Jansen, reached an alternative view but in doing so noted that it was a "finely balanced decision" and that Mr Lees could arrive at a different decision than she had reached. At the end of the day, Mr Lees applied his judgment to the information before him and, on the basis he explained in his affidavit, reached the view that he did. Whilst I acknowledge that the final evaluation report did not separately identify fisheries adverse effect considerations for the northern and southern blocks, I do not think that precluded Mr Lees reaching, in a rational and reasoned way, the decision that he did.[72] Lastly under this head, s 10 of the Fisheries Act 1996 provides that all persons exercising or performing functions, duties, or powers under that Act, in relation to the utilisation of fisheries resources or ensuring sustainability, shall take into account information principles including that decisions should be based on the best available information. In my view, and notwithstanding that s 10 does not apply as the decision here was not made under the 1996 Act, the Minister did in fact act on the best information available to him.Decision: no undue adverse effect on the sustainability of any fisheries resources[73] The Chief Executive's decision that the issue of the challenged permits would not have an undue adverse effect on the sustainability of any fisheries resource was challenged by Sanford as being unlawful for a variety of reasons. The Chief Executive had made that decision by reference to the adverse effects of the first stage of Eastern Sea Farms' proposed development, namely the establishment of a marine farm comprising 256 longlines. In Sanford's submission, that was an unlawful approach to adopt because, in doing so, the Chief Executive: a) failed to undertake the assessment required under s 67J(8) of the Fisheries Act 1983 in respect of sustainability issues as regards the activities contemplated by the permit application in the 3,800 hectare area; b) effectively, through the imposition of conditions which were unlawful, sub-delegated to the Regional Council future decision- making on the question as to whether the later stages of Eastern Sea Farms' proposed marine farm development would comply with s 67J(8) as regards sustainability of fisheries resources issues; and c) took into account an irrelevant and impermissible consideration, namely the effect of ss 20 and 21 of the Transitional Legislation. [74] Sanford's challenge here had a central theme. Within the fishing industry, the New Regime, and the Transitional Legislation, reflected the outcome of a closely fought battle. Under the old regime, fishers enjoyed the benefit of the undue adverseeffect test that the Chief Executive was required to perform both as regards the effect of a marine farming proposal on fishing, and the effect of such a proposal on the sustainability of fisheries resources. Under the New Regime, while the Chief Executive was required to perform that test as regards an AMA area and its effects on fishing, the question of the sustainability of fisheries resources as impacted by aquaculture proposals would be assessed under the RMA by regional councils. [75] Importantly, however, under the Transitional Legislation the Chief Executive was still required to make both of those assessments as regards areas in respect of which marine farming permits might be issued, and which would become AMAs. Sanford submits that the effect of Mr Lees' decision was that the Chief Executive had limited his assessment of the undue adverse effects of marine farming on the sustainability of any fisheries resource within (what would become) the relevant AMA (the 3,800 hectare area) to the effects of the initially approved 256 longlines. [76] Given the nature of Eastern Sea Farms' applications under the RMA, Sanford submits that the Chief Executive should have made his decision with reference to the possible adverse effects of the completed four-stage proposal. Otherwise, those effects would, except for stage 1, now only be assessed under the RMA. Sanford had, in effect, lost the benefit of the protections which the Transitional Legislation had been intended to give it. [77] When he issued his decision, the Chief Executive did so in the following terms:Eastern Sea Farms Limited (hereinafter called "the permit holder/s") is/are hereby permitted to undertake the activity of marine farming (as defined under the Fisheries Act 1983) of the species listed in the attached Schedule A (referred to in this permit as "stock"). The marine farming is only to take place within the area described in the attached Schedule B (the permitted area) and located as shown on the site map annexed to Schedule B, subject to the following conditions:Duration of Permit1 This permit commences on the date of signature and expires on 17 October 2028, being the expiry date of resource consent BOPRC 61600.Staged development2 Development of the area defined in Schedule B shall occur in stages. 3 This permit authorises development of the defined area to stage one only (maximum of 256 lines) of the five stages summarised below, and as shown in Schedule C:Stage Number of blocks Maximum number of lines1A 1 5 1 8 256 2 16 504 3 16 704 4 16 984 (As noted above, the references to 16 blocks should be to 12 blocks)[78] In the reasons for his decision (as articulated on 21 December 2006), Mr Lees, on behalf of the Chief Executive, had expressed himself thus:Taking into account the available information I agree with the recommendation in the final evaluation report. I find that I cannot be satisfied that the activities contemplated by the 4,750 ha farm would not have an undue adverse effect on fishing or the sustainability of any fisheries resource. However, I am satisfied that approval of the Northern block (3800 ha) alone would not have an undue adverse effect on fishing. I am also satisfied that approval of the northern block alone would not have an undue adverse effect on the sustainability of any fisheries resource providing appropriate staged development of the site occurs. My decision is, therefore, to approve a marine farming permit and spat catching permit for the northern 3,800 ha block, but to condition the permit under section 67J(10c) of the Fisheries Act 1983 to require the farm be developed in stages. The permit conditions will initially only allow the first stage of development to occur, being 8 blocks and 256 longlines. These conditions, however, can be reviewed and further development of the site can occur providing the applicant can satisfy the administering authority at that time that the next stage of development (both for spat catching and marine farming) would not result in undue adverse effect on the sustainability of any fisheries resource. This decision to allow further development of the site will depend on the level of adverse effects the first stage of development has on the sustainability of any fisheries resource and whether additional adverse effects would be undue.[79] Therefore, central to Sanford's challenge to the Chief Executive's decision on the issue of adverse effects on the sustainability of any fisheries resource, were the limitation of that decision to, in effect, an assessment of the effect of 256 longlines, and the acknowledgement that subsequent stages would be assessed by the Regional Council in accordance with the New Regime. Furthermore, the Chief Executive haderred in recording an understanding that further stages of development would only occur if the administering authority was satisfied that they would not "result in undue adverse effect on the sustainability of any fisheries resource". Whilst that was the test to be applied by the Chief Executive himself under the old regime and the Transitional Legislation, that was not the test that the Regional Council would apply in the future. [80] Sanford also submits that it was not correct to argue, as the Chief Executive did, that the decision to approve the marine farming permit in "stages" could have been made under the Fisheries Act 1983, without the assistance or benefit of the Transitional Legislation. The Chief Executive had never approved permits in that way in the past. Moreover, both the March 2006 preliminary report and the December 2006 final report so advised Mr Lees. In those reports Ms Jansen for the Ministry noted that, under s 57J of the Fisheries Act 1983, the Chief Executive had to be satisfied that the activities contemplated by the application would not have an undue adverse effect on fishing or fisheries resources "at any time". She therefore expressed the view that the Chief Executive could not re-evaluate the application for each stage of the development. As such, her report assessed the potential impacts of a full development of the farm. It was an important part of Sanford's challenge that Mr Lees did not adopt that approach. [81] Sanford was not saying that the Chief Executive could only adopt an "all or nothing" approach to a marine farming application (as the Chief Executive characterised Sanford's submission). Rather, the Transitional Legislation required the Chief Executive to make the undue adverse effects determination by reference to the whole of the area that would become an AMA. Here he had not done so. He could, on Sanford's submission, have approved the application by: a) Either confining the area approved to that occupied by the eight blocks in which the 256 longlines of the first stage would be placed; or b) By imposing a condition that required the s 67J undue adverse effect test to be applied to any expansion of the approved activity. He had, however, done neither.[82] In my judgment, the essential question here is whether the Transitional Legislation allowed the Chief Executive to approve, as I think in effect he did, the "first stage" of the application for which consent was being sought under the Fisheries Act 1983 and the RMA, and in doing so acknowledge that the further stages for which conditional approval under the RMA had been given, would – in terms of the assessment of their adverse effect on the sustainability of any fisheries resource – fall to be approved by the Regional Council. Very particularly, Sanford argued that in taking that approach the Chief Executive had not observed the requirement in s 50(5) that decisions under the Transitional Legislation by the Chief Executive had to be determined under the Fisheries Act 1983 "as if this Act had not been passed". [83] The starting point is therefore whether, separate from the Transitional Legislation, the Fisheries Act 1983 provided for staged approvals. [84] Section 67J(10)(c) of the Fisheries Act 1983 allowed the Chief Executive to issue marine farming permits on conditions that he or she "considered necessary or desirable to avoid, remedy or mitigate adverse effects on fishing or the sustainability of any fisheries resource" (and s 67Q(4) provides similarly for spat catching permits). Section 67J(8) required the Chief Executive not to issue a marine farming permit unless he or she was satisfied that the activities contemplated by the application would not have an undue adverse effect on fishing or the sustainability of any fisheries resource. In referring to the "activities contemplated by the application", and given the very simple form of marine farming permits (which are required to specify only the area in which the permit may be exercised and the fish, aquatic life or seaweed that may be farmed (s 67J(9)), it is my view that the Chief Executive inevitably had to, and did, have regard to the extent of the activities contemplated by the parallel applications for coastal permits under the RMA. [85] I accept, further, as Sanford indeed acknowledged (above [81]), that the Chief Executive was not required to take an "all or nothing" approach to such an application. Approval could be given for any part of the "activities contemplated" for which the s 67J(8) test was satisfied. Therefore it is my conclusion that, where an application sought approval for the whole of a marine farm to be developed instages in accordance with accompanying RMA applications, the Chief Executive could, under s 67J(10)(c), impose a condition which, in effect, limited the marine fishing permit granted to part only of such an application. [86] I reach that conclusion on the basis that any subsequent expansion of the extent of the marine farm (allowing further development in compliance with the RMA conditions) would require that condition to be changed or otherwise reviewed under s 67K of the Fisheries Act 1983. Section 67K entitles the holder of a marine farming permit to apply to the Chief Executive to change or cancel any of the conditions of the permit. Section 67K(4) requires the Chief Executive to apply again the undue adverse effects test if such an application would change the species of fish, aquatic life or seaweed or area to be farmed under the marine farming permit. [87] Here the condition was to limit the marine farming permit to the 256 longlines in the eight blocks of the first stage of the proposed farm. On its face, therefore, s 67K(4) would not require the Chief Executive to reconsider the sustainability of the fisheries resources question where the amendment relates to a condition specifying the number of longlines (as opposed to the area or species to be farmed). I do not think, however, that the scheme of the Fisheries Act 1983 would allow the Chief Executive, having imposed a condition that reflected a sustainability assessment based on a maximum number of longlines, not in fact to reconsider that assessment if that number of longlines was to be increased. That, I accept, would run counter to the scheme of that legislation. Furthermore, I do not think it would be necessary to add an express condition to that effect to require the Chief Executive to apply that test. [88] I therefore conclude that under the Fisheries Act 1983, unamended by the Transitional Legislation, the Chief Executive could issue a marine farming permit in similar terms to similar effect as that which he issued to Eastern Sea Farms as regards the "staging" conditions. This is notwithstanding the views expressed by Ms Jansen in her preliminary and final reports, and also – if this is the case – the practice of the Chief Executive previously. Substantively, the Chief Executive's decision was to grant Eastern Sea Farms a marine farming permit for part only of the activities it had originally applied for. If Eastern Sea Farms wished to extend thefarm's activity beyond the 256 longlines, they would in effect have to apply to vary that condition and the Chief Executive would be required to consider that application on its terms. In doing so, he would have to assess the sustainability effects of the proposed extension. [89] Therefore, the Chief Executive issuing Eastern Sea Farms' permits on the condition that only the first stage and 256 longlines could proceed did not breach the requirement in s 50(5) that decisions under the Transitional Legislation had to be determined under the Fisheries Act 1983 "as if this Act had not been passed". [90] However, in issuing Eastern Sea Farms its permit, I think it is also fair to say that the Chief Executive, through Mr Lees, did have regard to the fact that, in the future and when the underlying conditions of the RMA permits allowed (above [31]), Eastern Sea Farms' application to vary the marine farming permit condition as to the number of longlines would fall to be decided by the Regional Council. Moreover, Mr Lees would appear to have had it mind that the Regional Council would do so by reference to the old s 67J(8) test, and not the provisions of the RMA as would apply at the relevant time. [91] I do not consider that, however, to be an error that renders the Chief Executive's decision unlawful. I think it would have been unrealistic for Mr Lees not to have been aware that, although approved under the Transitional Legislation, Eastern Sea Farms' permits would be managed on an ongoing basis under the New Regime. [92] The requirement under s 50(5) to determine the application as if the Transitional Legislation had not been passed in my view required Mr Lees to consider that application in terms of s 67J, and in particular s 67J(8), as if the Transitional Legislation had not been passed. To the extent that he approved the application, that is what Mr Lees did. Beyond that Mr Lees was simply, in his own mind, acknowledging the procedure whereby under the RMA Eastern Sea Farms, both in terms of its original resource consents and in terms of the deemed coastal permit (and therefore resource consent) that the marine farming permit would become, would have to satisfy the Regional Council on sustainability issues as regards any future expansion of its marine farming activities.[93] I also accept that he would appear to have had the wrong legal test in mind. Perhaps, given the complexities of the various pieces of legislation, as acknowledged by all the parties to these proceedings, it is little surprise that he did. However, I do not think that affects the lawfulness of his central decision which, as I have said, I consider to be that of granting a marine farming permit for a 3,800 hectare area limited to 256 longlines. [94] I therefore find that the Chief Executive's decision that the permits, as issued, would not have an undue adverse effect on the sustainability of any fisheries resource was not unlawful. It was open for the Chief Executive, applying the Fisheries Act 1983 as if the Transitional Legislation had not been passed, to approve only the first stage of the development (i.e. 256 longlines within the 3,800 hectares). The Chief Executive (through Mr Lees) was satisfied on the s 67J(8) test as regards the activities contemplated by that part of the application. Beyond that, and as a consequence of the Transitional Legislation, any subsequent variation of the conditions on which the permits were granted was to be determined by the Regional Council. Recognising that reality was neither an unlawful sub-delegation nor the Chief Executive taking into account an irrelevant or impermissible consideration. [95] In my judgment, taking this approach to the interpretation of the Fisheries Act 1983 and the requirements of the Transitional Legislation, is to adopt a similar approach to fisheries legislation as taken by the Court of Appeal in New Zealand Marine Farming Association (above), and endorsed by the Privy Council on appeal in Marlborough Aquaculture Ltd v Chief Executive Ministry of Fisheries (2005) 12 ELRNZ 1; [2005] UKPC 29. That is, to consider the legislative context in its entirety – both RMA and fisheries legislation – and to interpret the provisions of those Acts in a workable manner and in a way which achieves Parliament's overall purpose. [96] I therefore conclude that the Chief Executive's decision that the issue of the challenged permits would not have an undue adverse effect on the sustainability of any fisheries resources was a lawful one.Decision: conditions imposed[97] Here Sanford submits that, if the Chief Executive was entitled to impose conditions for staged development (and did not need to determine whether the fully developed marine farm would have an undue adverse effect), the permits should have been subject to the conditions which Sanford says were indicated in the December 2006 Decision. That is, the Chief Executive should have imposed a legal requirement that any further staged development could only occur if the s 67J(8) criteria continued to be met as regards sustainability issues. There were two reasons for that proposition: a) That was the only way that the Chief Executive could ensure that those criteria would be applied to the whole development in that, on subsequently reviewing the conditions (under ss 20 and 21, or later under ss 127 and 128) the Regional Council does not apply the s 67J(8) test; and b) The only proper conclusion to draw from the words used in that (December 2006) decision was that such a condition would be imposed. [98] Although outlined as a separate ground of challenge, in many ways this aspect of Sanford's case can be seen as a refinement of its central challenge to the issue of the permits. It is my view that, given the conditions on which the permits were in fact issued, the Chief Executive was not required to impose the condition Sanford puts forward. In fact, and as Eastern Sea Farms submitted, such a condition would appear to be at odds with the legislative scheme going forwards. In particular, ss 20(3) and 21(3) of the Transitional Legislation give a consent authority the ability to review the conditions of deemed coastal permits within 12 months of the commencement of the Act (or in Eastern Sea Farms' case, from the issuing of the permits). On such a review the consent authority may, "if it considers it necessary to do so, vary, add, or delete conditions for the purpose of making the conditions consistent with" the RMA. If, therefore, the Chief Executive had imposed a condition which required the Regional Council to apply the Fisheries Act 1983 test, then the Regional Council would on the face of things have been entitled to vary ordelete that condition to the extent that it imposed a different review standard as regards sustainability issues than would have been required under the RMA. [99] More fundamentally, and as already indicated, I think the outcome of the Chief Executive's decision (absent the condition advanced by Sanford) is consistent with the Transitional Legislation. Here, an AMA of 3,800 hectares had been approved, albeit one which gave Eastern Sea Farms exclusivity as regards the whole area. Eastern Sea Farms' rights, however, as regards the impact that farming operations may have on sustainability of fisheries resources, were limited to 256 longlines. It was by reference to that amount of activity that the Chief Executive had concluded he was satisfied that approval of a marine farm would not have an undue adverse effect on the sustainability of any fisheries resource. As so approved, therefore, existing fishers had received the benefit of the Chief Executive's consideration of both tests. In the future, the expansion of those activities would depend on the Regional Council granting a variation to Eastern Sea Farms' deemed coastal permit under the RMA. In determining that issue the Regional Council would be guided by the general purpose of the RMA of promoting sustainable management (s 5) as well as the provisions of s 30(2), which provides that the Regional Council may exercise its functions to avoid, remedy or mitigate the effects on fisheries resources of aquaculture activities and of occupying a coastal marine area for the purpose of those activities. [100] In other words, at the relevant time the Regional Council would then impose the same test they would impose as regards sustainability issues if it was considering an application for a marine farm in an AMA. In my judgment, therefore, the legislation had worked, and would in the future work, as it was intended to do. [101] I therefore find that the Chief Executive did not err in not making the marine farming and spat catching permits subject to a condition that any further staged development could only occur if the s 67J(8) criteria continued to be met as regards the sustainability of fisheries resources.Declaration: area restricted to stage 1[102] In an alternative pleading, expressed to be relied on if Sanford was unsuccessful in its application for judicial review, Sanford seeks a declaration that the area of the permits does not, and cannot, extend beyond the area of stage 1. It submits that the area covered by the permits is the eight blocks only – that there is no clause in the permit providing that the stage 1 area limitation can be amended at some later point, and therefore the only area that can be used during the life of the permit is the first 8 blocks. At the hearing, Mr Scott acknowledged that, as pleaded, that application for a declaration did not have any obvious jurisdictional basis. In my judgment that pleading is best understood, as I think both the Chief Executive and Eastern Sea Farms through counsel acknowledged, as one that seeks an order that the permits, if they otherwise survive Sanford's challenges, are only valid as regards the area comprising the eight blocks. [103] I think this argument can be best be answered by reference to the terms of the permits themselves. The marine farming permit as issued referred to an area described in the attached Schedule B as the "permitted area". Schedule B referred to an area of 3,800 hectares situated approximately 8.5 kms (at its closest point) off Opotiki, Bay of Plenty, and as pictured on the attached maps. [104] Therefore, and broadly as the Chief Executive submitted, in my view the permits apply to the 3,800 hectare area, and not the smaller area notionally created by the division of the marine farm into twelve blocks, eight of which could be occupied during stage 1. The area of the farm is expressly defined in Schedule B, and its outer bounds are marked on the structures plan for the first stage. The Chief Executive's decision-making authority relates to the area of the farm, and not the placement of structures within it. That is a matter for the Regional Council. Provided that no more than 256 lines were established, the Chief Executive had no particular concern where, within any part of the 3,800 hectare area, they might be placed. [105] On that basis, I conclude that Sanford did not establish this part of its case either.Relief[106] In addition to opposing Sanford's substantive challenges, Eastern Sea Farms argued that, in the event Sanford succeeded in its substantive challenges, the Court should nevertheless decline to grant relief. Indeed, Eastern Sea Farms' oral submissions before me focused primarily on this aspect. It argued that relief should be denied principally on the basis that Sanford's action in bringing its challenges was inconsistent with agreements reached between the parties, and by reference to delay. In the alternative, Eastern Sea Farms submitted that any relief should be limited to a direction for a reconsideration of the grant of the permits, in terms of s 4(5) of the Judicature Amendment Act 1972. [107] For completeness, and because of the comprehensive submissions addressing this issue, I record that had I found in Sanford's favour as regards its challenges to the Chief Executive's decision, I would nevertheless have been minded to decline to grant relief. In saying this I recognise that the discretion not to grant relief is a narrow one and "there must be extremely strong reasons to decline to grant relief":Air Nelson Ltd v Minister of Transport [2008] NZCA 26 at [60]. [108] First, I am satisfied, contrary to Sanford's submissions, that the December 2006 Decision was a reviewable decision. [109] Although the Fisheries Act 1983 clearly stipulates that marine farming and spat catching permits may not be issued until after coastal permits are issued, it is clear from the December 2006 Decision and Mr Lees' evidence that that decision was a "final decision in principle", intended to "help expedite the Environment Court case". Sanford itself referred to that decision as an "initial decision" in an earlier pleading. It only amended that pleading when faced with Eastern Sea Farms' delay argument. [110] Sanford argued, however, that the conditions on which any permit would issue were an inextricable part of the decision and that the form and content of those conditions were not made clear until the 2008 decision – and, indeed, the final conditions were different from those suggested in the December 2006 Decision. Itcould not, therefore, have reviewed that decision. I am not persuaded by that submission. As noted above, in December 2006 Mr Lees stated as follows:My decision is, therefore, to approve a marine farming permit and spat catching permit for the northern 3,800 ha block, but to condition the permit under section 67(10)(c) of the Fisheries Act 1983 to require the farm to be developed in stages. The permit conditions will initially only allow the first stage of development to occur, being 8 blocks and 256 longlines. [111] Mr Lees further noted that approval of subsequent stages would be for the Regional Council. I find, therefore, that the material aspects of the permits that were to be issued – and particularly that approval was restricted to 3,800 hectares and, by condition, to the first stage and 256 longlines – were clear from that decision. [112] That the conditions as imposed were ultimately different to those proposed in December 2006 does not mean that the earlier decision was not open to review at the time it was made. The December 2006 Decision was sufficiently complete and definite to enable the parties to settle the outstanding RMA appeals. There is no indication (in the December 2006 Decision or evidence more generally) that the Chief Executive was going to substantively review that decision after the coastal permits had been obtained. Many of Sanford's points in its application for review – and particularly in terms of the reasonableness of the decision – were evident as from that date. It was, in my judgment, a final decision in principle as to how the Chief Executive (through Mr Lees) intended to exercise his statutory power and was reviewable by Sanford from that time. It was not "putting the cart before the horse" to expect Sanford to challenge that decision rather than wait for the permits to be granted. [113] In my view, therefore, the December 2006 Decision was a "proposed exercise by any person of a statutory power" in terms of s 4 of the Judicature Amendment Act 1972, and open to review. [114] Sanford brought these proceedings over two years after that decision. I am not persuaded by Sanford's submission that that delay was the result of Eastern Sea Farms' decision not to follow "the correct sequence" for decision making in respect of a marine farming application. As discussed above, the legislation allows forsimultaneous progression of applications for coastal permits and marine farming/spat catching permits, provided that the latter are not issued before the applicable coastal permits have been granted. [115] I therefore find that Sanford's delay in bringing these proceedings would have weighed against this Court exercising its discretion to provide relief, in light of the prejudice that would accrue both to Eastern Sea Farms and third parties (including the Opotiki District Council and Regional Council) who have acted in reliance on that decision. In this context, I note that Eastern Sea Farms provided an affidavit from the Mayor of Opotiki District Council, Mr John Forbes, setting out the way in which that Council had supported Eastern Sea Farms' application, the economic significance of that application for the district and the expenditure of the District Council in participating as a s 274 party in Eastern Sea Farms' RMA application, and associated matters – particularly since December 2006. [116] In addition, and in my view even more significantly, I find as an inescapable inference that Eastern Sea Farms relied on the December 2006 Decision, with Sanford's acquiescence (if not encouragement), in settling the appeals in relation to the coastal permits.. As noted above, in June 2005 the parties to the Environment Court appeals (including Sanford) obtained an adjournment of those proceedings in anticipation of the Chief Executive's decision. This was on the basis that that decision would allow the parties to decide whether the appeals could be withdrawn, settled by consent, or would need to proceed to hearing. After the December 2006 Decision Eastern Sea Farms amended its coastal permit applications in line with that decision – including restricting the area to which the applications related and altering the development staging. On that basis, the parties – including Sanford – sought consent orders from the Environment Court. Moreover, in proceeding in that manner, Sanford did not reserve its rights to challenge the December 2006 decision (in the context of other fishing company appellants doing so). In these circumstances, it is my view that Sanford's conduct militates further against a grant of relief. [117] Together, these considerations would have persuaded me that extremely strong reasons did exist to decline to grant relief to Sanford in these circumstances.Whether I would have done so would, in part, have depended upon the view I took as to the significance of the reasons for deciding that the permits were not valid. As that was a conclusion I did not reach, I do not consider it appropriate to express a further view on this aspect of these proceedings.Counterclaim[118] Lastly, Eastern Sea Farms raised a counterclaim, which it accepts is only relevant if Sanford succeeds, seeking a declaration that, in determining whether a marine farming or spat catching permit will have an "undue" adverse effect on fishing or the sustainability of fisheries resources under s 67J(8) of the Fisheries Act 1983, the Chief Executive is required to take into account the benefits to be gained from the proposed marine farm, including likely benefits for marine farmers and the public generally from aquaculture. [119] The Chief Executive opposed that counterclaim. [120] Given my findings above it is not necessary for me to determine this issue. Having said that, I record my provisional view that, under s 67J(8), the Chief Executive was not required to take into account likely benefits for marine farmers and the wider public arising from the aquaculture proposal. [121] In my view, the s 67J(8) test is in essence a threshold test. The Chief Executive may only issue a marine farming (or spat catching) permit if doing so would not result in undue adverse effects on fishing and the sustainability of fisheries resources. It in effect provides protection for the existing (property) rights of the existing commercial, recreational and customary fishers. It does not provide for a balancing process whereby the undue adverse effects on fishers or the sustainability of fisheries resources are to be weighed against the potential benefits to marine farmers or the public generally. [122] This interpretation receives support from a consideration of the test as it exists under the New Regime. As noted above, the Chief Executive is required to determine (under s 186E) whether he or she is satisfied that an AMA "will not havean undue adverse effect on fishing". Section 186G expressly stipulates the factors that the Chief Executive "must have regard only to" in making that decision, namely:(a) the location of the aquaculture management area in relation to areas in which fishing is carried out: (b) the effect of the aquaculture management area on fishing of any fishery, including the proportion of any fishery likely to become affected: (c) the degree to which aquaculture activities within the aquaculture management area will lead to the exclusion of fishing: (d) the extent to which fishing for a species in the aquaculture management area can be carried out in other areas: (e) the extent to which the aquaculture management area will increase the cost of fishing: (f) the cumulative effect on fishing of any previous aquaculture activities.[123] Reporting on the Aquaculture Reform Bill – in which s 186G was first introduced – the Primary Production Select Committee commented on the undue adverse effect test, and s 186G criteria, as follows (at 12):We recommend an amendment to clause 41, deleting subclause 186G(g), namely the phrase ''any other matter'' in order to provide more certainty as to the matters the chief executive of the Ministry of Fisheries can consider in considering the undue adverse effects test. Submitters felt this phrase negated the purpose of providing criteria for the administration of the undue adverse effects test. Submitters also differed about the kind of criteria that the undue adverse effects test requires. In particular several submissions called for the addition of criteria that would allow a comparison of value between fishing and farming use of coastal marine areas. That is a balancing test and not the purpose of the test in the bill. The test in the bill is a threshold test, which is an assessment of the degree to which a new use of coastal space, in this case marine farming, will affect the exercise of fishing rights that already exist in the area. If the effect is sufficiently adverse to amount to an undue adverse effect, it should not proceed, unless an aquaculture agreement can be reached with the affected fishers.[124] There is no indication in the Select Committee commentary, or in Hansard, that this amounted to a change as regards the considerations taken into account under the test in s 67J(8). [125] It is therefore my view that, as under the New Regime, the undue adverse effects test under s 67J(8) does not require the Chief Executive to balance the adverse effects on fishing and the sustainability of fisheries resources against thewider public benefits and benefits to the marine farmers to determine whether those effects are "undue". Rather, the test is a threshold test such that, where the adverse effects are sufficiently adverse to be undue adverse effects, the application for the permit must be refused. [126] As such, had I been required to do so, I would have found in favour of the Chief Executive on the counterclaim brought by Eastern Sea Farms.Result[127] I have found against Sanford on each of its grounds of review and in its application for a declaration. As such, I have not been required to finally determine the counterclaim brought by Eastern Sea Farms. [128] In my judgment there is no reason why costs should not be awarded against Sanford in the usual way. I therefore order costs against Sanford on a 2B basis. If the parties are unable to agree on costs, memoranda may be filed within 21 days."Clifford J"Solicitors: Chapman Tripp, P O Box 993, Wellington 6140 for the applicant (bruce.scott@chapmantripp.com; carolyn.elliott@chapmantripp.com). Crown Law Office, P O Box 2858, Wellington 6140 for the first respondent (peter.mccarthy@crownlaw.Government.nz). Duncan Cotterill, P O Box 10-376, Wellington 6143 for the second respondent. (counsel: francis.cooke@chambers.co.nz).