TE RANGATIRATANGA O NGATI RANGITIHI INCORPORATED V BAY OF PLENTY REGIONAL COUNCIL HC TAU CIV-2010-470-000936

TE RANGATIRATANGA O NGATI RANGITIHI INCORPORATED V BAY OF PLENTY REGIONAL COUNCIL HC TAU CIV-2010-470-000936 16 December 2010IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY CIV-2010-470-000936IN THE MATTER of the Resource Management Act 1991 AND IN THE MATTER of an appeal under s 299 of the Act against Decision Number ENV-2009-AKI-00462 BETWEEN TE RANGATIRATANGA O NGATI RANGITIHI INCORPORATED Appellant AND BAY OF PLENTY REGIONAL COUNCIL Respondent AND NORSKE SKOG TASMAN LIMITED CARTER HOLT HARVEY PULP & PAPER LIMITED WATER AND WASTE SERVICES Applicants Hearing: 9 December 2010 Appearances: D J Fletcher, M S King and B L Bailey for the Applicant P H Cooney for the Respondent P F Majurey and T L Hovell for the Applicants Judgment: 16 December 2010 at 2.00 pmJUDGMENT OF WYLIE JThis judgment was delivered by Justice Wylie on 9 December 2010 at 2.00 pm Pursuant to r 11.5 of the High Court Rules Registrar/Deputy RegistrarDate[1] The appellant Society appeals under s 299 of the Resource Management Act 1991 (the "Act") against a decision given by the Environment Court dismissing an appeal from hearings commissioners appointed by the respondent, the Bay of Plenty Regional Council, and the Whakatane District Council. [2] The decision relates to two of the resource consents required to enable the Tasman Mill to operate. They were sought by Norske Skog Tasman Limited, Carter Holt Harvey Pulp & Paper Limited, and Water and Waste Services (jointly "the applicants"). [3] The Environment Court issued an interim decision on 29 September 20101 . The Court confirmed the hearings commissioners' decision in relation to an air discharge consent (number 65725) and a "water consent" (number 65722)2 , and invited the parties to submit their views to the Court on the wording of two conditions which the Court wished to impose on the grant of the water consent. Views were expressed by the applicants and the respondent Council, and the Court then issued a final decision on 27 October 2010. This decision finalised a full set of conditions applicable to all consents, including water consent 65722.The Appellant[4] The appeal to the Environment Court against the joint decision of the hearings commissioners appointed by the respondent and the Whakatane District Council was brought by Messrs T and L Marr, and by Te Rangatiratanga O Ngati Rangitihi Incorporated (the "Society"). [5] The appeal from the Environment Court's decision to this Court was initially brought by a Mr R A Paterson. Mr Paterson claimed that he was a successor to the Society under s 2A of the Act because it had been proposed to wind up the Society and he claimed that he was entitled to take over the appeal.1 Marr v Bay of Plenty Regional Council [2010] NZEnvC 347.2 More particularly described at [15] below.[6] In the event the winding up of the Society has not been completed. The Society, through its secretary Mr David Potter, has filed an affidavit asserting that Mr Paterson was not its successor, and asserting that he had no standing to bring the appeal. The Society however still wishes to pursue the appeal, and to that end Mr Paterson applied for an order substituting the Society as the appellant in these proceedings. [7] There are difficulties with this approach: a) Mr Paterson was not the applicant, and had not made submissions on the initial resource consent applications. It follows that he had no right to appeal to the Environment Court, see s 120(1) of the Act. Nor did he have any right to appeal to this Court, because he was not a party to the proceedings before the Environment Court — s 299(1). b) The Society did not file a notice of appeal against the Environment Court's decision within the requisite 15 working day period required by s 300(1). [8] It follows that there was no valid appeal brought to this Court and the applicants could have sought to strike the appeal out. [9] Carter Holt Harvey Pulp & Paper Limited needs to replace a boiler, the certification for which expires on 21 March 2011. Without that boiler the Tasman Mill cannot operate. Replacing the boiler is a significant engineering undertaking, scheduled to start on 12 February 2011, and involving specialist tradesmen from Australia. Carter Holt Harvey needs to finalise its plans for the boiler replacement by the end of December 2010. If there is uncertainty over the outcome of the resource consents, then the boiler cannot be replaced. The Mill would be forced to shut down, with obvious adverse economic effects to Carter Holt Harvey, and to the wider Bay of Plenty region. With these deadlines in mind, the applicants had applied for an urgent fixture, and that request was granted by Priestley J in a minute issued on 25 November 2010.[10] The applicants as a result do not wish to knock the appeal out on a technicality, and then be exposed to the risk of the Society belatedly seeking leave to appeal out of time. They preferred that the Court should deal with the appeal on its merits at the earliest possible opportunity. [11] Accordingly, and by consent, I directed the Society to file a notice of appeal, together with an application for leave to appeal out of time under s 306 of the Act by 5.00 pm on Friday 10 December 2010. Mr Majurey for the applicants, and Mr Cooney for the respondent, indicated that their respective clients consented to the application for leave to appeal out of time being granted, so that the appeal could proceed on a substantive basis. [12] The notice of appeal and an application for leave to appeal out of time were filed within the time I had set. By consent, I grant leave to appeal out of time. I now turn to consider the substantive issues raised by the notice of appeal.Background Facts[13] The Tasman Mill at Kawerau operates from a site next to the Tarawera River. It comprises a kraft pulp mill which is now owned and operated by Carter Holt Harvey Pulp & Paper Limited and a paper mill which is owned and operated by Norske Skog Tasman Limited. Both companies are parties to an unincorporated joint venture known as Waste and Water Services which operates their combined waste operations from the Mill. [14] Historically, the Tasman Mill operated under its own Act, the Tasman Pulp and Paper Company Enabling Act 1954. As from 31 March 1995, its operations became subject to the provisions of the Resource Management Act. The initial resource management consents for the Tasman mill were sought in December 1994. They were eventually granted subject to conditions in 2003. The 2003 consents are due to expire on 31 December 2012. However, the applicants did not wish to wait for this term to expire, and opted to apply for new consents in 2009. This was largely due to the need to replace the boiler, which I have noted above. The total cost of replacing that boiler is some $60 million. The applicants consider that thiscapital investment can only be justified if they can obtain the necessary resource consents for a term which enables them to amortise their costs. [15] In April 2009, the applicants applied for a number of consents including consent to discharge up to 220,000 cubic metres per day of waste and storm water into the Tarawera River. In this respect they sought consent under s 13(1)(a) to place, use and maintain structures in the bed of the river; consents under s 13(1)(b) to disturb the bed of the river to maintain the intake and discharge structures; consent under s 14(1)(a) to take and use water from the river; consent under s 15(1)(a) to discharge treated waste water, storm water and landfill leachate to the river; consent under 15(1)(b) to discharge storm water onto or into land; and consent under s 15(1)(d) to discharge storm water from industrial premises onto or into land. The application for these various consents was allocated number 65722. They have been referred to jointly as the "water consent", and I adopt that expression. [16] A number of other consents were sought at the same time. [17] The Society had made submissions in respect of all resource consent applications. [18] The applicants required consents both from the respondent, Environment Bay of Plenty, and from the Whakatane District Council. Those bodies appointed hearings commissioners, who held a joint hearing. The joint decision was issued on 15 October 2009. The consents sought were granted for a period of 25 years. A number of conditions were imposed. [19] Three appeals were lodged. The Society initially challenged the grant of all of the consents by the Regional Council. At the Environment Court hearing it maintained its appeal only in relation to water consent 65722 and air discharge consent 65725. Messrs Marr appealed only against the grant of water consent 65722. [20] The appeals to the Environment Court were heard at Tauranga over 19 to 21 May 2010, and 24 to 28 May 2010.Environment Court Decision[21] Unusually, the Court comprised not only an Environment Court Judge, Judge Harland, but also the Deputy Chief Māori Land Court Judge, Judge Fox. Judge Fox was appointed as an Alternate Environment Court Judge given concerns raised in relation to Māori cultural values arising from the discharge application. There were also two Environment Court Commissioners, Commissioners Kernohan and Fletcher. [22] The Court issued its interim decision on 29 September 2010 and the matters raised by the Society can be found in that decision. [23] The discharge of waste and storm water into the Tarawera River is a non- complying activity. As a result, the application was required to be considered under s 104D of the Act. Further, it was required to be considered under s 107 because the discharge causes a conspicuous change in the colour and visual clarity of the river after reasonable mixing. The Court could only grant the water consent sought if it was satisfied that "exceptional circumstances" justified it in doing so — s 107(2)(a). [24] The Court started by identifying the issues. It then considered background matters, in relation to the river and its catchment, the people who reside in the catchment area, and the history of the Tasman Mill. It then outlined the legal and planning framework and identified the relevant plans it was required to consider. [25] The Court then looked at the social and economic factors relevant to the applications, and noted that there was little dispute that the Tasman Mill generates considerable positive economic and social benefits. It also noted that closure of the Mill would have a major dislocating effect on Kawerau and on the wider Bay of Plenty in both the short and medium term. [26] The Court then turned specifically to consider the water consent. It asked itself, first, whether or not the consent could satisfy one or other of the gateway or threshold tests set out in s 104D(1) of the Act. It noted that because the discharge causes a conspicuous change in the colour and visual clarity of the river afterreasonable mixing, the adverse effects of the activity on the environment could not be said to be minor under s 104D(1)(a). It therefore asked itself whether or not the activity was contrary to the objectives and policies of the relevant plans pursuant to s 104D(1)(b). It concluded that the proposal was not opposed to the general direction of the policies and objectives of the relevant planning instruments, and that any concerns were able to be met by the imposition of the appropriate conditions. It then went on to evaluate the proposal by reference to the provisions of ss 104(1) and 107. It looked at cultural values, treaty issues, and recreational values, as well as river ecology, and effects on aquatic plants, macroinvertebrates and fish life. It then looked at colour, clarity and odour issues. It undertook an evaluation under s 107. It concluded that there were exceptional circumstances in terms of s 107(2)(a), such that the granting of the consent was justified. It evaluated the proposal under s 104. It then considered s 105(1) and concluded that the proposed discharge to water was "the best that [could] be done for now". [27] The Court then went on to deal with the air discharge permit. This permit is not relevant for present purposes because the Society does not appeal the Court's decision in this regard. Therefore, I do not consider it further. [28] As required by the Act, the Court then considered the value of the applicants' investment in the Tasman Mill pursuant to s 104(2A). It accepted that the applicants' investment in the Tasman Mill was in the order of at least $500 million to $1 billion. [29] The Court next considered Part 2 issues, focussing its attention on s 6(e). It noted that the proposal concerned the relationship of Māori and their culture and traditions with the river, and accepted that river water is taonga. It had particular regard to kaitiakitanga in terms of s 7 of the Act, and it took into account the principles of the Treaty of Waitangi under s 8. It assessed the evidence in relation to each of these various matters, and noted that the effects asserted by the appellants could not be used as a basis to invoke ss 6, 7 and 8 so as to accord a priority for their interests, or so as to veto other relevant considerations pertinent to achieving the purpose of the Act under s 5.[30] The Court then went on to consider the purpose of the Act. It concluded that the purpose of the Act would be met by granting the consents subject to stringent conditions and a limited term. It acknowledged that the effect of the discharge on the colour and clarity of the river is an adverse affect, but considered that it could not be avoided without closing the Tasman Mill. Further, it expressed the view that the effect could be mitigated by conditions. [31] The Court then considered the appropriate term, and what conditions to impose. It noted that the applicants had sought a 35-year term, but that the hearings commissioners had imposed a term of 25 years on all consents. It considered the applicable law, and then reviewed the evidence. It concluded that a 25-year term which allowed for a wholesale review of the adverse effects was appropriate. It indicated that the water consent would be conditional on there being a long-term and significant commitment by the applicants to a research programme into reducing the discharge of colour, and a further commitment to the investment required to reduce the discharge of colour to inconspicuous levels over the life of the consent. It indicated that it wished to impose mandatory conditions in this regard, and invited the parties to comment on the same. [32] In the event the applicants and the respondent filed memoranda within the time period specified by the Court. No submissions were lodged by the Society, or by Mr Paterson. [33] The Court issued its final decision on 27 October 2010 putting in place detailed conditions for, inter alia, water consent number 65722.Notice of Appeal[34] The notice of appeal initially raised by Mr Paterson alleged seven errors of law. The errors of law related only to water consent number 65722. In the initial submissions lodged in support of the appeal, counsel confirmed that Mr Paterson did not intend to pursue his appeal in regard to air discharge consent number 65725.[35] In the notice of appeal filed on behalf of the Society on 10 December 2010, the only aspects of the Environment Court's decision that have been challenged relate to the water consent (number 65722). Further, four of the alleged errors of law initially raised by Mr Paterson were no longer pursued. [36] The matters put in issue were as follows: a) Did the Environment Court err in law in not adequately considering the affects of the discharge from the Norske Skog paper mill in isolation from the discharge from the kraft pulp mill owned and operated by Carter Holt Harvey? b) Did the Environment Court err in law in finding that "exceptional circumstances" existed so as to justify the grant of consent under s 107(2)(a) of the Act? c) Did the Environment Court err in law in finding that a 25-year term of consent was appropriate despite its finding that there were "no technological solutions for colour reduction on the horizon"? [37] Various other questions of law were also raised. I refer in particular to paragraph 23 (b), (e) and (f) in the notice of appeal dated 10 December 2010. None of these questions of law were advanced by the Society at the hearing, and they are not founded in the grounds of appeal set out in the body of the notice of appeal. I therefore do not give these alleged errors any further consideration.Nature of Appeal[38] The appeal is brought pursuant to s 299 of the Act. Relevantly, it provides as follows:299 Appeal to High Court on question of law(1) A party to a proceeding before the Environment Court under this Act or any other enactment may appeal on a question of law to the HighCourt against any decision, report, or recommendation of the Environment Court made in the proceeding. [39] To succeed, an appellant must identify a question of law arising out of the Environment Court's decision, and then demonstrate that that question of law has been erroneously decided by the Environment Court.3[40] The limits on the right of appeal were discussed by a full High Court as follows: 4this Court will interfere with decisions of the Tribunal only if it considers that the Tribunal:• applied a wrong legal test; or• came to a conclusion without evidence or one to which, on evidence, it could not reasonably have come; or• took into account matters which it should not have taken into account; or• failed to take into account matters which it should have taken into account. Moreover, the Tribunal should be given some latitude in reaching findings of fact within its areas of expertise Any error of law must materially affect the result of the Tribunal's decision before this Court should grant relief (citations omitted)[41] It is trite law that this Court will not concern itself with the merits of the case under the guise of a question of law, and that the weight to be given to the assessment of relevant considerations is for the Environment Court alone, and not for reconsideration by the High Court as a point of law. 5 The Court will be vigilant in resisting attempts by litigants disappointed before the Environment Court to use3 Smith and Rennie v Takapuna City Council (1998) 13 NZTPA 156 (HC) at 159.4 Countdown Properties (Northlands) Ltd v Dunedin City Council [1994] NZRMA 145 (HC) at 153.5 Nicholls v District Council of Papakura [1998] NZRMA 233 at 235; Friends of Pakiri Beach v Auckland Regional Council [2009] NZRMA 285 (HC) at [19].appeals to the High Court as an occasion for revisiting resource management merits under the guise of questions of law. 6[42] I now turn to consider the matters raised in the notice of appeal with these limitations in mind.Was it incumbent on the Environment Court to consider the discharge from the Norske Skog paper mill separately from the discharge from the Carter Holt Harvey pulp mill?Submissions[43] The Society alleged that the Environment Court erred in law by taking into account irrelevant factors in assessing the social and economic effects of the Norske Skog mill and the Carter Holt Harvey mill together. [44] Mr King for the Society submitted: a) that the Environment Court in its decision at [1] treated the Tasman Mill as comprising both the pulp mill owned by Carter Holt Harvey, and the paper mill owned by Norske Skog; b) that the Environment Court referred to both mills together elsewhere in the decision; c) that the combined discharge from the two mills is on average 23 tonnes per day; d) that three to five tonnes per day is estimated to come from the Norske Skog mill, and that the balance is attributable to the Carter Holt Harvey mill;6 Power v Whakatane District Council HC Tauranga CIV-2008-470-456, 30 October 2009 at [14].e) that the Carter Holt Harvey mill is therefore responsible for between 79 to 87 per cent of the total discharge; f) that the Environment Court considered, and the Society accepted, that a colour discharge of 10 tonnes per day was inconspicuous; g) that on its own the discharge from the Norske Skog mill would not produce discolouration after a reasonable mixing; and h) that the Carter Holt Harvey mill employs only 209 people, while the Norske Skog mill employs 379 people. [45] It was then argued that the Carter Holt Harvey mill "causes up to 87 per cent of the problem", and "in terms of s 107 all of the problem", but provides only 35 per cent of the benefit. It was submitted that there was "enough information" before the Environment Court to put it on notice that it should have assessed each mill separately when considering the consent application. Indeed, Mr King put it to me that it was incumbent on the Environment Court to do so once it saw that the majority of the adverse effects came from one mill only. It was submitted that the Environment Court took into account irrelevant factors, namely the social and economic effects of the Norske Skog mill, when considering that part of the discharge application which related only to the Carter Holt Harvey mill. [46] Mr Majurey for the applicants asserted that the Environment Court made findings on the merits in relation to the social and economic benefits of the Tasman mill, comprising both the Carter Holt Harvey pulp mill and the Norske Skog paper mill. He also noted that the Environment Court considered the social and economic evidence on an individual mill basis, and that the Court received direct evidence in relation to each mill. It was also noted that the activity applied for was a single river discharge consent made by the joint venture entity, Water and Waste Services. [47] Mr Cooney for the respondent submitted that the short answer to the argument was that the Court did consider the effects of closure of one or other of the two mills, as well as the Tasman Mill itself. He also noted that the Court was notasked to consider the two mills separately, and that the applicants had not sought separate approvals for separate discharges. He noted that the waste water streams from both mills are integrated, that they are treated as combined waste water that goes into shared treatment facilities, and that they are ultimately discharged to the Tarawera River under the same consent.Analysis[48] The alleged error of law is not particularly clear. As noted in [36](a) above, the question of law posed queries whether the Environment Court "adequately" considered the discharge from the two mills separately. This implies that some consideration was given to the issue. If that is the case, then the Society is doing no more than asking this Court to revisit the merits of the Environment Court's conclusion, which is something the Court will not do on an appeal limited to points of law. Perhaps recognising this, the Society seeks to undermine the Environment Court's evaluation under s 104(1) by asserting that the Court was required to consider the two mills separately. If the Society is correct in this regard, it would follow that the Environment Court had applied a wrong legal test and this would be point of law in respect of which this Court could intervene. This, however, was not how the issue was argued. Rather, the Society submitted that the Environment Court erred in law by taking into account irrelevant factors. It argued that the social and economic benefits associated with the Norske Skog paper mill were irrelevant to any consideration of the discharge from the Carter Holt Harvey pulp mill. Implicit in this argument is an assertion that the Environment Court was required to consider the two mills separately, and indeed Mr King made submissions to this end. [49] I start by considering the relevant provisions in the Act. Section 88(1) provides that a person may apply to the relevant consent authority for a resource consent. Section 88(2) details what must be provided for in an application. It is the application made by the applicant (together with any permissible amendments to thatapplication) 7 which defines the scope of the consent authority's jurisdiction, and thus the jurisdiction of the Environment Court. [50] Once an application is made, the Act's processes are engaged. For example, if further information is required, the same can be sought by the consent authority — s 92. If additional consents will also be required, the consent authority may defer the notification or hearing of the application — s 91. The consent authority can invite the applicant and some or all of those who have made submissions to a pre-hearing meeting — s 99. With the consent of those involved, it may refer an application to a mediation — s 99A. Otherwise, the consent authority must deal with the application as made within the timeframes set down by the Act. If it considers that a hearing is necessary, or if the applicant or a "submitter" requires a hearing, then it must hold one — s 100. The consent authority is obliged to consider an application under s 104(1). It has jurisdiction to grant or refuse the application, and if the application is granted, to impose conditions — s 104B. There can be an appeal to the Environment Court — s 120. The Court must have regard to the decision the subject of the appeal — s 290A. Otherwise the Court has the same power, duty and discretion in respect of a decision appealed against as the person against whose decision the appeal is brought — s 290(1). [51] Throughout the process, it is "the application" made in terms of s 88 (together with any permissible amendments to that application) which falls for consideration. [52] Here the application to discharge into the Tarawera River was a single application made in the names of Norske Skog Tasman Limited and Carter Holt Harvey Pulp & Paper Limited operating as Water and Waste Services, an unincorporated joint venture. The application recorded: a) that the two companies operated within the same industrial site, sharing some facilities;7 Darroch v Whangarei District Planning Tribunal, A18/93, 1 March 1993; Wakatipu Environmental Society Inc v Queenstown Lakes District Council ENC Christchurch C135/02, 14 February 2007; Shell New Zealand Ltd v Porirua City Council CA57/05, 19 May 2005.b) that Water and Waste Services was an unincorporated joint venture that had been established by the two companies, and that it was responsible for operating and maintaining many of the joint activities associated with the Tasman Mill operations; c) that those activities related primarily to water extraction, processing waste water, storm water discharge and solid waste disposal; d) that storm water was collected, treated, and then pumped into the waste water treatment system for further treatment and discharge along with the processed waste water; and e) that processed waste water from the Norske Skog and Carter Holt Harvey operations was combined and treated prior to discharge in a biological waste water treatment system. [53] In my judgment, it is this application which frames how the matter must proceed and there is nothing in the Act to suggest that it was incumbent on the Environment Court to split the application into parts, and deal with them separately. [54] The Society relied upon two decisions of the Environment Court in support of its argument. I refer to each in turn. a) In Motorimu Wind Farm Ltd v Palmerston North City Council, 8 the applicant applied for consent for a 127-turbine wind farm. Commissioners appointed by the consent authorities granted consent to 75 turbines. The applicant then appealed seeking that consent be granted to all 127 turbines. By the time the matter came before the Environment Court, Motorimu had refined and amended its proposal, so that its appeal related to only 38 of the 52 turbines for which consent had been declined by the Commissioners. One of the matters in issue concerned the effect on the landscape of the proposed8 Motorimu Wind Farm Ltd v Palmerston North City Council EnvC Wellington W067/08, 26 September 2008.turbines. Landscape witnesses considered the effects of different groups of turbines in various areas where the additional turbines were proposed. The Court focussed its consideration on the landscape groupings described by the landscape experts. Ultimately, the Court declined the appeal in respect of some of the additional turbines, and allowed it in respect of others. b) In Meridian Energy Ltd v Wellington City Council,9 the applicant sought consent to establish a 70-turbine wind farm. Again, one of the primary issues was visual amenity and natural character. The Environment Court conducted its assessment by reference to particular landscape areas identified by the experts. It granted consent for some turbines in some areas, and declined consent for some turbines in other areas. [55] There is nothing in either decision suggesting that it is incumbent on the Environment Court to break an application into its component parts. In both cases, the Court chose to consider discrete landscape areas as a matter of convenience and because a different evaluation was required for each area. Although it is not clear from the decisions, it seems that the applicants must have consented to this approach. Moreover, there was only one applicant in both decisions. [56] Here, Norske Skog and Carter Holt Harvey elected to make a joint application. In terms of the Act, the Environment Court was required to deal with that application on its terms. It chose to dismiss the appeal, but to amend the consent conditions. That course was clearly open to it. It was also open to it to allow the appeal, and decline the application. It could, in the process of declining the application, have indicated, obiter, that an application by one of the applicants only might be more likely to gain consent. But unless Norske Skog and Carter Holt Harvey agreed, they were entitled to a decision on the application as made by them. [57] Further, and in any event, the Environment Court did address the mills on an individual basis. For example, it looked at the individual employment levels for9 Meridian Energy Ltd v Wellington City Council EnvC Wellington W031/07, 14 May 2007.each mill.10 It referred to a 2006 economic study on the Norske Skog mill alone.11 It observed that the closure of one or both of the mills would have a major dislocating affect on Kawerau, and on the wider Bay of Plenty in both the short and medium terms.12 It is clear that the Environment Court had evidence before it in relation to each mill — for example, from a Mr Landman, Chief Executive of Carter Holt Harvey's New Zealand pulp & paper business, and from a Mr Hacker, General Manager of the Norske Skog Tasman paper mill. [58] I cannot see that the Environment Court erred in law, or that it took into account an irrelevant consideration when it considered the application in its terms. The answer to the first question posed in the notice of appeal is "No". The appeal in this respect is dismissed.Section 107(2)(a): Exceptional CircumstancesSubmissions[59] The Society submitted that, when the Environment Court assessed under s 107(2) whether or not exceptional circumstances existed justifying the grant of consent, it: a) came to a conclusion, which, on the evidence it could not reasonably have come to; and b) took into account matters which it should not have taken into account. [60] It noted that the Environment Court held that there were no individual factors that were out of the ordinary or exceptional. 13 It then submitted that there had to be at least one circumstance that is exceptional on its own merits to allow the decision-maker to consider whether that circumstance alone, or in combination with10 At [42] pn 55.11 At [48].12 At [50].13 At [219].other circumstances, justifies the granting of consent. It was argued that there was nothing in the Environment Court's decision to say what it was that made the combination of circumstances itemised by the Court exceptional. It was submitted that the Environment Court did not identify any particular exceptional circumstance or circumstances, and that because none of the factors listed were exceptional in themselves, that it was not open to the Environment Court to conclude that exceptional circumstances existed overall. It was submitted that a list of unexceptional circumstances cannot be elevated to the exceptional merely because they are aggregated. [61] Further, Mr Fletcher for the Society went through each of the factors itemised by the Environment Court. He submitted that the Environment Court's reference to the Tasman Pulp and Paper Company Enabling Act was irrelevant to the issue of whether or not exceptional circumstances existed. He also argued that the Court's reference to the fact that s 107 was specifically enacted with the Tasman Mill and the pulp and paper industry in mind cannot be considered to be a relevant circumstance. Other circumstances mentioned by the Environment Court were dismissed as being non-exceptional, or neutral. Mr Fletcher did, however, accept that one matter mentioned by the Court — namely that in terms of actual effects on aquatic life, the effect of colour and visual clarity was minor, is relatively unusual. [62] Mr Fletcher submitted that these errors materially affected the Environment Court's conclusion, and he noted that the Court recorded that its decision was finely balanced, 14 and that its end conclusion under s 107(2)(a) was reached by a very narrow margin. 15[63] Mr Majurey for the applicants submitted that whether or not exceptional circumstances applied, depends on the facts of each case and the judgment of an expert Court. He submitted that here there were a number of factors that aggregated to qualify as exceptional circumstances, and that the Society's argument that exceptional circumstances require at least one exceptional circumstance does not bear close scrutiny. He submitted that each of the matters itemised by the Court was14 At [128].15 At [219].relevant to an overall assessment of the application under s 107, and that the references to the history of the mill, the background to s 107 and past performance all informed the issue of whether or not exceptional circumstances existed. He argued that no error of law had been made. [64] Mr Cooney for the respondent submitted that the Society's submissions were no more than an attempt by the Society to litigate factual issues. He submitted that what constitutes exceptional circumstances involves a factual assessment of the evidence and the weighing of competing arguments, all of which are matters for assessment by the Environment Court, and not for reconsideration by this Court on appeal under the guise of a question of law.Analysis[65] Relevantly, s 107(2) Provides:107 Restriction on grant of certain discharge permits(2) A consent authority may grant a discharge permit or a coastal permit to do something that would otherwise contravene section 15 or section 15A that may allow any of the effects described in subsection (1) if it is satisfied— (a) that exceptional circumstances justify the granting of the permit; or and that it is consistent with the purpose of this Act to do so.[66] There has been relatively little case law in relation to s 107. [67] In Rotokawa Joint Venture Ltd and Mighty River Power v Taupo District Council,16 Contact Energy Limited had applied for consent to enable the continued operation of the Wairaki and Poihipi Power Stations. The Court noted as follows:16 Rotokawa Joint Venture Ltd and Mighty River Power v Taupo District Council EnvC Auckland A041/07, 18 May 2007.[413] We find that there are exceptional circumstances in the case of these consents namely: • The Wairakei/Tauhara Geothermal System has been acknowledged as a unique circumstance where pressure drawdown over 50 years has led to a stable and sustainable electricity supply. The evidence before us is that outfield injection is necessary to ensure the continued production of the Wairakei Power Station and discharge of more fluid to the Waikato River than already permitted by these consents would be undesirable. • The deep aquifers which are the receiving environment are so deep that it is most unlikely that it would be necessary to source water from these aquifers for consumption by domestic animals. While it may be that deep aquifers in the region are used at a future date for other agricultural industrial purposes, there is abundant water available for stock drinking purposes.[68] In Paokahu Trust & Ors v Gisborne District Council,17 the council had applied for three coastal permits to enable the continued use of its existing waste water outfall. The Court was satisfied that the discharge, after reasonable mixing, was likely to give rise to the effects set out in ss 107(c) and (d) and in the receiving waters. It applied the dictionary meaning of "exceptional", and considered that "exceptional circumstances connotes something out of the ordinary". 18[69] The Environment Court in the present case considered both of these decisions, and adopted the meaning of exceptional as outlined in Rotokawa andPaokahu Trust as the common sense and proper interpretation to be applied. 19[70] The Society does not suggest the Environment Court applied the wrong legal test. Rather it criticises the Environment Court's application of the test. [71] The Environment Court applied the test at [128] of its decision. It stated as follows:17 Paokahu Trust v Gisborne District Council EnvC Auckland A162/2003, 19 September 2003.18 At [77].19 At [81]-[83].Evaluation under s 107[128] The decision on this issue is finely balanced. Having considered all of the evidence and the legal principles, by a narrow margin we are persuaded that the granting of the consent is justified in terms of s.107 (2) (a) as an exceptional circumstance. It is the combination of the following factors that has led us to this view: [a] Whilst the Tasman Mill may not be classified as being as significant as the production of electricity or the disposal of human waste as in Rotokawa and Paokahu, it is nevertheless a nationally and regionally significant physical resource that contributes significant positive and social economic effects. [b] The importance of the Tasman Mill is also illustrated by its history. The fact that it was subject to the Enabling Act suggests that the site and operation were considered unique and amounted to something out of the ordinary, but we acknowledge the fact that because the process by which the Tasman Mill was established was exceptional, does not necessarily mean that it continues to be so. [c] Section 107 was specifically enacted as it was with the Tasman Mill and the pulp and paper industry in mind. [d] The operation of the Tasman Mill is 100% reliant on the river for water and as a discharge medium. Without access to the river water the Tasman Mill would close. [e] Colour is an inherent by-product of pulp and paper production. We accept that there have been improvements to the treatment processes and technology has substantially reduced the discharge of colour to the river over the period of the 2003 consent. This has improved the visual clarity of the river. [f] We accept that the evidence establishes that in terms of actual effect on aquatic life, the effect of colour and visual clarity is minor. This aspect has been given considerable weight by us. [g] The technology to reduce the discolouration of the discharge to an inconspicuous point is not currently available. In fact, the reason for the increase in colour loading created by the wastewater treatment plant is still unknown. This however does not mean that the effects of the discolouration cannot be mitigated, by being steadily reduced. We are satisfied there is a commitment by the Tasman Mill owners to actively seek ways to reduce the colour discharge to the river.Further, and when it was considering what term to grant, the Court observed as follows :[219] We have decided by a very narrow margin that s 107(2)(a) of the RMA applies in this case. As we have said, each of the factors relied on by the applicants would not of themselves have been exceptional, it is the combination of them which has led us to that decision. We agree with the hearings commissioners that the protection of s 107(2)(a) cannot be permitted to run regardless.[72] It seems to me that whether exceptional circumstances exist is essentially an issue of fact requiring evaluation by the Environment Court. It has to weigh all of the material before it and make a factual finding as to whether or not there are exceptional circumstances on the evidence which it has heard. [73] Here the Environment Court set out a number of factors, and it considered that, in combination, those factors justified the grant of consent under s 107(2)(a) as an exceptional circumstance. There is nothing in the Act which precludes the Environment Court from taking this approach, and indeed in my judgment, it is an eminently sensible approach. Frequently a number of factors in combination can compel a conclusion which is not apparent if consideration is confined to one factor alone. There is no logical reason why such an approach should not be taken under s 107(2)(a). [74] The Environment Court considered that the itemised factors in combination were an exceptional circumstance. Section 107(2)(a) refers to exceptional circumstances. However, words in the plural include the singular. 20 There is nothing in the legislation to preclude the Environment Court from concluding that there is an exceptional circumstance, as a result of a combination of different factors, and that that exceptional circumstance justifies the grant of consent under s 107(2)(a). [75] Moreover, when each of the matters itemised by the Environment Court is considered, it can readily be seen that each is a relatively unusual circumstance: a) The Court concluded that the Tasman Mill is a nationally and regionally significant physical resource that contributes significant positive and social economic effects. Not every, or even most,20 Interpretation Act 1999, s 33.physical resources the subject of a resource consent application can justify that claim. b) The Tasman Mill initially operated under its own enabling Act. The process by which the mill was established was very unusual. Very few physical resources have had their own enabling Act. The fact that the mill had its own enabling act cannot be relied on forever as being an exceptional circumstance, and the Environment Court so held. The fact that there was an enabling Act however remains an unusual circumstance which informs the issue of whether or not there are exceptional circumstances. c) The fact that s 107 was enacted with the Tasman Mill and the pulp and paper industry in mind is also an unusual circumstance. Again it cannot be relied on in perpetuity as being an exceptional circumstance, but the Environment Court did not suggest otherwise. It is a statement of historical fact which informs the issue. d) The fact that the operation of the mill is 100 per cent reliant on the river both for water and as a discharge median is less unusual, but it is nevertheless relatively uncommon for an activity to be 100 per cent reliant on water from one source for its processes and to be 100 per cent reliant on water from the same source for discharge purposes. e) The fact that colour is an inherent by-product of pulp and paper production is a statement of fact, but again it informs the issue. So does the history of improvements in treatment processes and technology. f) The Court's finding that the effect of colour and visual clarity was minor, in terms of its actual effect on aquatic life, is highly unusual. Normally one would expect the opposite. It is noteworthy that the Court recorded that aspect was given considerable weight by it.g) It is also unusual that technology to reduce the discolouration of the discharge to an inconspicuous point is not currently available, but that there is a commitment by the Tasman Mill owners to actively seek ways to reduce the colour discharge to the river. [76] The Environment Court considered that none of these matters were, of themselves, exceptional. That is a finding it was entitled to make on the materials before it. It also considered that, in combination, they constituted an exceptional circumstance. In my judgment, that conclusion cannot be faulted. The Environment Court did not apply the wrong legal test. It did not come to a conclusion without evidence, or to one which on the evidence it could not reasonably have come. It did not take into account matters which it should not have taken into account, and did not fail to take into account matters which it should have taken into account. In my view each of the matters identified by the Environment Court at [128] of its decision was relevant to the s 107(2)(a) assessment. Some of them were historical, and as the Environment Court recognised, "the protection of s 107(2)(a) cannot be permitted to run regardless". 21 This however does not mean that those historical factors are irrelevant. They can still inform the analysis. Some of the factors are no doubt more relevant than others, but it cannot be asserted that any of them were irrelevant. The matters raised by the Society seem to me to go to the weight that has been given to the conflicting considerations before the Environment Court and to the end conclusion that the Court recorded. This does not raise a point of law. [77] In my judgment, the Environment Court did not err in law when it held that there was an exceptional circumstance which justified the grant of the consent sought in terms of s 107(2)(a) of the Act. This aspect of the appeal is dismissed as well.21 At [204] and [219].Appropriateness of a 25-Year Term[78] The Society submitted that in assessing term, the Environment Court reached a conclusion to which, on the evidence, it could not have reasonably come. It argued that the Court made various findings of fact including the following: a) Technology currently available to reduce discolouration is too costly and uneconomic for a mill the age of the Tasman Mill. b) Given the mill's age, while improvements in production processes will assist, there are no further technological solutions on the horizon. c) That a target to reduce the colour discharge to 10 tonnes per day by the expiry of the consent was merely an aspiration. d) That given the significance of the colour discharge, the amount invested by the applicants into research aimed at reducing that discharge was not "at all impressive". [79] The Society submitted that given these findings, no reasonable Court could have concluded that a 25-year term was appropriate, and that the "only reasonable and true conclusion" the Court could have reached was that a shorter term was required. [80] Mr Majurey for the applicants argued that case law establishes that it is appropriate to utilise resource consent conditions, and in particular s 128 review conditions, rather than a reduced term to address potential adverse effects. He submitted that there was substantial evidence before the Environment Court to justify the grant of a 25-year consent, including the significant social and economic benefits associated with the Tasman Mill, the significant value of the applicants' investment, and the fact that but for the colour, the adverse effects of the discharge were no more than minor. He submitted that the Environment Court had considered and balanced the various factors and adopted the approach of setting a 25-year term coupled with stringent resource consent conditions to address its concerns. It wassubmitted that this outcome was available to the Environment Court, that the Society's challenge was essentially disagreeing with the outcome, and that it did not raise a point of law. [81] Mr Cooney for the respondent Council submitted that the consent conditions imposed by the Environment Court placed a mandatory obligation on the applicants to reduce colour to an inconspicuous level during the term of the consent, and that this was consistent with the concerns expressed by the Court. He argued that the Court upheld the 25-year term fixed by the hearings commissioners after carefully weighing up the reasons for having a shorter term as opposed to a longer term. He submitted that it was open to the Court to decide that a longer term was appropriate to provide security of investment for the applicants, subject to appropriate conditions requiring them to improve discharge quality over the term of the consent. He submitted that the Court was exercising a discretionary power, and that the Court had not erred in its approach.Analysis[82] The Environment Court started this part of its decision by referring to the decision of the hearings commissioners. It noted that the applicants had requested 35-year consents, but that the commissioners had instead imposed a term of 25 years on all consents. The Court considered that the reasons expressed by the commissioners for adopting a 25-year term were not particularly clear, and stated that for that reason, it had decided to consider "more analytically" the evidence in support of a 25-year term. The Court then referred to that evidence, and to the parties views on length of term. It noted that the applicants were seeking a longer term consent to enable the ongoing operation of the mill to provide a secure base for future investment. It noted that Carter Holt Harvey was intending to spend $60 million on a new boiler, and that it would be spending "something like $100 million" over the following 10 years on ongoing equipment replacement. It referred to evidence that normally, one looks at financial returns over a period of 25 years 22 .22 At [206].[83] The Court then went on to consider the relevant law. In particular it referred to the High Court decision in Genesis Power Ltd v The Manawatu-Wanganui Regional Council.23 In that case, the Environment Court granted consents for a 10-year term rather than impose a review condition. It considered that this approach better accommodated the differences between the parties and allowed them time to negotiate a "meeting of the minds". On appeal, Wild J rejected the "meeting of the minds" construct by the Environment Court. He held that the Environment Court had to decide the question of term, or consent conditions, on the evidence that the parties had placed before it, and that it should not abdicate its decision-making responsibilities. The High Court's decision was upheld on appeal by the Court of Appeal. 24 It held that a perceived lack of evidence does not provide a basis for making a decision to reduce the duration of a consent, in a manner which does not meet the Act's sustainable management purpose. [84] Here, the Society did not criticise the Environment Court's analysis of theGenesis decision; nor did it suggest that the Court applied the wrong legal test. Rather it submitted that the Court's application of the test has resulted in a term which is manifestly unreasonable. [85] The Court considered that the real issue for it was how long was "really needed" to achieve the necessary colour reduction as against the need for security of investment. The Court considered the evidence which had been put before it. It noted that technology to further reduce colour discharge is available, but that it has only been installed elsewhere in new mills. It recorded that the capital cost is significant, and that it is not economic for a mill the age of the Tasman Mill. It also noted that there would be significant ongoing operating costs. The Court considered that the evidence established that improvements in production processes would assist, but that apart from that, there were no further technological solutions on the horizon. [86] The Court then turned to consider the length of time needed for security of investment. It noted that the applicants' evidence in this regard was general. It23 Genesis Power v Manawatu-Wanganui Regional Council [2006] NZRMA 536 (HC).24 Ngati Rangi Trust v Genesis Power Ltd [2009] NZRMA 312 (CA).considered that there was clear evidence about the need for the replacement of the boiler, at a large capital cost, but that the evidence did not specify how long was actually needed for that investment to be recovered. It considered other evidence produced by the applicants. It noted that the Tasman Mill companies had spent very large sums acquiring the plants, and that they had spent "tens of millions of dollars" on upgrading the environmental systems. It noted that those monies were expended with no certainty that the discharge would be permitted after 2012, or that if it was permitted, what further colour reductions would be required, and over what term. It noted evidence which had been provided to it on a confidential basis that the spending of the Tasman Mill companies on other capital items was some two to three times the capital investments spent on environment systems. It noted that investments of these magnitudes, with no certainty beyond the 2012 timeframe, indicated something about the requirement for long-term certainty for investment. [87] While the Court considered that the amount invested by the applicants into research aimed at reducing the colour of the discharge was not impressive, it acknowledged that, at the same time, the companies had made considerable investment in addressing environmental defficiencies in other areas. [88] The Court, after considering all of this material, concluded that the value of the capital investment that had been regularly made by the applicants in the past, and the need for some security for this level of investment, indicated that a term significantly longer than the five to eight years submitted by the Society was appropriate. [89] Clearly, these findings are findings of fact and they do not raise points of law. [90] The Court was aware of the interface between term and conditions. It noted as follows:[223] An inconspicuous colour discharge by the end of the consent that is merely aspirational would suggest a shorter term. A condition that provided real incentives to ongoing reductions in colour discharge and a real working towards an inconspicuous discharge would suggest a longer term.[91] With this in mind, the Court endeavoured to meld its conclusion that a longer term was necessary with appropriate conditions. It wanted to ensure that the conditions were imposed to try and secure water quality improvement. Indeed, the Court was only prepared to accept that a long-term consent was appropriate, if it was "intimately" linked to an on-going reduction in the colour discharge. It was not prepared to agree to a consent condition which was aspirational only. It therefore required that the consent was conditional on there being a long-term and significant commitment to a research programme aimed at reducing the discharge of colour, and a commitment to the investment required to reduce the discharge of colour to inconspicuous levels over the life of the consent. It required that the research programme should be peer reviewed, and put in place within one year of commencement of the consents, and that it should be reviewed regularly in light of the ongoing results of the research and the impact of the investments in colour reduction undertaken by the applicants. It considered that such a condition was reasonable given s 107, and that the objective of an inconspicuous discharge by 2014 when the consent expires should be mandatory. It also considered that there should be intermediate reductions in the allowable discharge tied to a periodic review of the conditions. To this end, the Court was keen to ensure that strong incentives were put in place, and that the onus was put on the applicants to make the changes and investments required, unless they could show that the required reduction of colour discharge was not achievable. It considered that there should be review conditions to allow for the intermediate and final discharge levels to be modified in light of the research it required, the options for further colour reductions in colour discharge and the timing of their implementation. [92] In its final decision, the Court put in place conditions to this effect. [93] In my view, the Court's analysis cannot be faulted. It applied the correct legal test. It put in place a term less than the maximum 35-year term permitted by s 123(d) of the Act, but a terms sufficient to provide the applicants with some security for their existing and future investment in the Tasman Mill. It put in place rigorous consent conditions which limit the 30-day moving average colour of discharge as from the date of grant of the consent. The conditions require a reduction in that 30-day moving average colour by 1 January 2018. Further, unless areview of the conditions is undertaken at any earlier time, as from 31 December 2034, the 30-day moving average colour of the discharge is not to exceed a "platinum cobalt" equivalent of 10 tonnes per day. It is accepted by all parties that a discharge at this level is inconspicuous. The consent conditions allow the Regional Council to review the conditions imposing these levels on receipt of a report from an independent peer review panel. The applicants are required, within 12 months from the date of commencement of the consent, to prepare a research plan report setting out the programme of research to be undertaken to identify ways in which the colour of the waste water discharge can be reduced. The research plan is to be reviewed after seven years, and every seven years thereafter. Each research plan is to be accompanied by a separate research plan review report that certifies that the research programme provides a technically robust programme of research for enabling progress to be made. The applicants are required to undertake the programme of research contained in the research plan in a timely manner, and to prepare and submit a research plan progress report to the Regional Council on a regular basis. The applicants are also required to prepare and submit a colour reduction report that, inter alia, identifies and quantifies all individual sources of colour generated by the consent holder, sets out the results of the research programme, sets out the options available for a reduction and for treatment of colour in the waste water discharge, details what options are being used or trialled elsewhere, and researches the practicability and affordability of those options. The colour reduction report is also to be peer reviewed. It is these peer reviewed documents which can trigger a review of the consent conditions. [94] While I had some initial reservations about the appropriateness of imposing a condition which requires a reduction in the colour of the discharge to inconspicuous levels as at the date of termination of the consent, I am satisfied that the Court has not erred in this regard. Rather it has put in place a rigorous suite of conditions, which should ensure that as much progress as is practically possible is made in reducing the level of colour in the discharge over time. [95] The suggestion by the Society that the only reasonable term is a shorter term is in my view unrealistic. The consequence could be that Carter Holt Harvey would not order the new boiler. The mill could close down, the workforce could be laidoff, and the substantial and significant contribution the Tasman Mill makes to the national and regional economy could be lost. That is not consistent with the purpose of the Act set out in s 5. [96] Moreover, in my judgment, the Society was simply challenging the way in which the Environment Court has exercised a discretion vested in it. It disagreed with the Environment Court's ultimate evaluation, but the matters it raised did not constitute an error of law. It follows that the answer to the third question in the notice of appeal is also "No", and that the appeal is dismissed in this regard also.Result[97] I have answered each of the questions posed in the notice of appeal in the negative. The appeal is dismissed. [98] The applicants and the respondent Council are entitled to their reasonable costs and disbursements. In that regard, the applicants and the respondent, if they seek costs, are to file memoranda in that regard within 10 working days of the date of receipt of this decision. The Society is to file its memorandum in response within a further 10 working day period. [99] I will then deal with the issue of costs on the papers unless I require the assistance of counsel. Wylie JSolicitors/Counsel: Matthew King, Sharp Tudhope Lawyers, 35 Grey Street, Tauranga (Tel: 07 578 2149) Paul F Majurey & T L Hovell, Atkins Holm, Joseph Majurey, Shortland St, Auckland (Tel: 09 304 0294) P H Cooney, Cooney Lees Morgan, 87 First Avenue, PO Box 143, Tauranga (Tel: 07 578 2009)