THE FEDERATED MOUNTAIN CLUBS OF NEW ZEALAND INC v GRIFFIN CREEK HYDRO LTD [2023] NZHC 2917

THE FEDERATED MOUNTAIN CLUBS OF NEW ZEALAND INC v GRIFFIN CREEK HYDRO LTD [2023]NZHC 2917 [18 October 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-001251[2023] NZHC 2917UNDER the Declaratory Judgments Act 1908 andPart 18 of the High Court RulesBETWEEN THE FEDERATED MOUNTAIN CLUBSOF NEW ZEALAND INCORPORATEDPlaintiffAND GRIFFIN CREEK HYDRO LIMITEDFirst DefendantTHE MINISTER OF CONSERVATIONSecond DefendantTHE DEPARTMENT OF CONSERVATIONThird DefendantHearing: 18 September 2023Appearances: M Smith for the PlaintiffM Wright for the First DefendantR Elvin and R Fistonich for the Second and Third DefendantsJudgment: 18 October 2023Reissued: 1 November 2023REISSUED JUDGMENT OF GORDON JThis judgment was delivered by meon 18 October 2023 at 3 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors:Crown Law, WellingtonGilbert Walker, Solicitors, AucklandRout Milner Fitchett, Solicitors, NelsonIntroduction[1] The plaintiff, The Federated Mountain Clubs of New Zealand Inc (FMC), seeksa declaration under the Declaratory Judgments Act 1908 as to the interpretation of aconcession granted by the second defendant, the Minister of Conservation (theMinister), to the first defendant company, Griffin Creek Hydro Ltd (GCHL).[2] In 2011, the Minister, via her delegate, granted a concession under pt 3B of theConservation Act 1987 (the Act)1 in the form of an easement in gross (Concession) toGCHL. The Concession permits GCHL to construct and operate a small, run-of-river,hydroelectric power scheme2 on conservation land3 in the Griffin Creek valley locatedon the West Coast of the South Island approximately 40 kilometres east of Hokitika.The scheme is not yet in operation. GCHL has constructed an access track but has notyet constructed the hydroelectric plant.[3] FMC seeks a declaration that the Concession limits the volume of water GCHLmay extract from Griffin Creek to 1.2 cubic metres per second (cumecs). A seconddeclaration was originally sought but is no longer pursued as there is now no livedispute.4[4] The three defendants oppose the declaration.The parties[5] FMC was founded in 1931 and advocates both for recreation broadly and theassociated environment on behalf of approximately 22,000 members and 100 clubs.FMC says it has a particular interest in Griffin Creek as its members include the1 At the time the concession was granted the Conservation Act 1987 as at 7 July 2010 applied. Themost recent version is as at 24 August 2023. There is no material difference between the twoversions for present purposes. Unless otherwise specified, any reference to the Act is a referenceto the Act as at 7 July 2010.2 With a "run-of-river" scheme there is no dam.3 Conservation land is land held under the Conservation Act 1987 for conservation purposes.4 In its statement of claim FMC sought a second declaration that: "Condition 9 of the Concessionrequires GCHL's extraction of water to cease whenever the flow recorded by the flow-monitoringdevice above the outlet site (below the powerhouse) specified in Condition 8 falls below 0.8 cubicmetres per second (or such other amount in the future determined as the mean annual low flowusing the process specified in Condition 9)". In their statements of defence each defendantadmitted that the Concession regulates the residual flow in that manner.canyoning community, who (since the Concession was granted) have discovered andnow use Griffin Creek as a canyoning site.[6] GCHL has an interest as the Concession holder.[7] The Minister is the decision-maker who granted the Concession (via adelegate). The third defendant, the Department of Conservation (Department), is thelandholder and the administrator of the Concession.BackgroundApplication for and grant of the Concession[8] On 8 January 2009, Richard Morgan, the sole director and shareholder ofGCHL, made an application on behalf of GCHL to the Department pursuant to ss 17Rand 17S of the Act5 (the Application). The Application sought a concession in theform of an easement to construct and operate a hydroelectric power scheme (Scheme)based on Griffin Creek. Parts of the Scheme (headworks, penstock and an accesstrack) would be undertaken on public conservation land managed by the Department.Other parts of the Scheme are on neighbouring land not managed by the Department.[9] The Application includes a general description of the activity under the heading"E. Description of Service/Activity", under which the activity is referred to as "Theconstruction and operation of a hydroelectric power scheme based on Griffin Creekwhich is a tributary of the Taramakau River."[10] In the section headed "G. Details of Proposed Activity", GCHL states that theproposed scheme will generate a maximum output of 1.3 megawatts (MW). There arethen details under the sub-heading "Headworks" regarding the: intake; settling tank;monitoring equipment; penstock; and track/boardwalk. There is also reference to thepower station, which is to be on adjoining Crown land rather than conservation land,5 The Application was made under the Act as at 1 November 2008. There is no material differencebetween ss 17R and 17S in that version and the Act as at 7 July 2010 under which the Concessionwas granted.and a river gauge which is to be installed in the creek bed just below the intake tomonitor water flow.[11] Also in section G there is the following:Residual Flow of Griffin CreekThe average Annual Flow is calculated 2.5 cubic metres per second (cumecs).The Annual Mean Low Flow is calculated at .8 cumecs. These flow rates havebeen calculated by transposing flow rates from the Taipo River. There is aNIWA river gauge at the Taipo River Bridge 2 kilometres northeast of GriffinCreek. Once the scheme has been fully developed there would be a 'take' of1.2 cumecs.When in times of low rainfall the flow at the river gauge (below the intake)falls below .6 cumecs (600 litres per second) the automatic control equipmentat the power station will be set to shut the turbine down.[12] It is the last sentence of the first paragraph in the extract above in theApplication that FMC relies on as part of its argument that the Concession limits thevolume of water GCHL may extract from Griffin Creek to 1.2 cumecs.[13] Department officials considered the Application and prepared a FirstDetermination Report to the Community Relations Manager West Coast Tai PoutiniConservancy6 dated 26 August 2010 (First Determination Report).[14] The First Determination Report analyses the Application against the statutoryrequirements and recommends the delegate, in principle, grant the Concession. Thereport also contains the following:FreshwaterThe applicant estimates that the mean annual flow and the median annual flowfor Griffin Creek is 3.5m3/s (3,500 litres per second) and 2.3m3/s, respectively,and the mean annual low flow is 0.8m3/s (800 litres per second). [Informationsupplied by email April 6th 2009, which is different from the mean annual flowof 2.5m3/s stated in the application submitted in January 2009.]6 The Minister's delegate.[15] There is also a section on water take as follows:Water takeOnce the scheme has been fully developed, the applicant proposes to divert1.2m3/s from the stream to the hydropower scheme (48% of the mean annualflow).The 300kW turbine would require a flow of at least 0.3m3/s and the 1000kWturbine would require 0.9m3/s. The two turbines can be shut downindependently as the flow in the creek falls.To determine the actual flow rates on Griffin Creek, a NIWA approved flowgauge would be installed just below the intake site (but above the settling takeoutlet/weir outlet) once the hydropower scheme is operational. However, untilthe actual flow rates are known for Griffin Creek, the applicant proposes toturn off the larger turbine when the residual flow drops below 0.9m3/s and theflow below the intake would increase to just under 1.8m3/s. The smallerturbine would continue to operate. If the flow continued to decrease, thesmaller turbine would shut down when the residual flow would be 0.6m3/s.[16] Under a further heading "Freshwater" in a different section it is stated:FreshwaterThe amount of water proposed to be taken from the creek at the intake pointwhen both turbines would be operating (1.2m3/s) represents 52% of themedian annual flow and when the smaller turbine would be operating(0.3m3/s) represents 13% of the median annual flow. The water take of0.3m3/s to operate the smaller turbine would occur most of the time (as thecut off point is around the mean annual low flow). The water take for bothturbines of 1.2m3/s would occur at least 50% of the time, as the cut off pointfor the take above the intake is 2.1m3/s (the median annual flow being2.3m3/s).[17] The First Determination Report concludes that the proposed Scheme isconsistent with the purpose for which the land is held and there is no reason why theeasement could not be granted subject to the applicant's acceptance of the proposedspecial conditions and the outcome of the public notification process. On15 September 2010 the Minister's delegate approved the report.[18] The intention to grant the Concession was publicly notified. Threesubmissions were received in response, none of which raised any concerns relating tolimits on water take or the recreational use of the river. The submissions aresummarised in a final report which also addresses outstanding issues such as theappropriate amounts of activity fees and the bond.[19] The Minister's delegate, Michael Slater, then Conservator, West Coast TaiPoutini Conservancy, approved the granting of the Concession on 7 February 2011.[20] On the same day Mr Slater and Mr Morgan signed a "Concession Document(Easement)". The Concession grants GCHL "an EASEMENT to carry out theConcession Activity on the Easement Land subject to the terms and conditionscontained in this Concession and its Schedules".[21] The Concession Activity is set out in Schedule 1 as follows:Concession ActivityThis easement covers the construction phase and the ongoing operation,maintenance and repair of the hydro-electric power scheme at Griffin Creek,and authorises the activities listed below:(i) Taking of water from Griffin Creek.(ii) Construction, use and maintenance of an intake structure, settlingtank, surveillance equipment, solar panels and shed.(iii) Construction, use and maintenance of an access track, pipelinestructure to convey water and data cable.(iv) Vegetation clearance associated with the construction of the intakestructure, pipeline and access track, and subsequent vegetationtrimming required to maintain access to them.[22] It is to be noted that item (i) above does not place a limit on the water take.The absence of a limit in the description of the Concession Activity is relied on in thesubmissions of all the defendants in opposition to the declaration.[23] Schedule 2 contains standard conditions. Schedule 3 contains specialconditions, the following of which are relevant:71. The Concessionaire must not undertake the Concession Activityunless or until the final Construction and Operational Plan is approvedin writing by the Hokitika Area Manager. In considering theConstruction and Operation Plan, the Grantor would check that it doesnot differ substantially in regard to location, scale or level of effect tothe application lodged by the Concessionaire and to the ConcessionActivity as described in the Department's First Determination Report.The Concessionaire must ensure that the Construction andOperational Plan is prepared by a suitably qualified person. The7 Special condition 1 was varied in 2021. Refer [31]–[33] below.Grantor may require the plan to be audited by a suitably qualifiedperson.2. Once audited and approved by the Grantor, the Construction andOperational Plan including a timeline must form part of theConcession, and the Concessionaire must not deviate from this planwithout the prior written approval of the Hokitika Area Manager.8. The Concessionaire must install a continuous flow monitoring deviceabove the outlet site (which is located below the powerhouse). Flowmust be recorded to an accuracy of ± 10%, and at no less than15 minute time intervals. An electronic copy of these records must beprovided to the Grantor annually.9. Extraction of water must cease whenever the flow recorded at theflow-monitoring site specified in Condition 8 falls below the meanannual low flow, which is agreed to be 0.8m3/s. Once two years ofdata under Condition 8 has been obtained, a new minimum residualflow based on a revised mean annual low flow may be used followingagreement by the Grantor and the Concessionaire.[24] I note, without discussion at this point, conditions 8 and 9, which are relied onby all defendants to support their submission that there is no limit on water take andthat water flow is addressed and controlled by these conditions regarding residual flow.[25] In August 2012 GCHL submitted a Construction and Operational Plan (2012COP) as required by special condition 1 of the Concession referred to in [23] above.On 13 September 2012 the Department's Hokitika Area Manager approved the 2012COP. In doing so he agreed to a minor variation relating to the access track width(wider than what had been provided for in the Concession) and construction.[26] The 2012 COP did not address water take or minimum flow. Under specialcondition 2 of the Concession (refer [23] above) the 2012 COP became part of theConcession when it was approved.[27] I mention here as part of the chronology, as far as the Department is aware (asstated by Timothy Shaw, Senior Ranger Supervisor in the Department's HokitikaDistrict Office) the first known canyoning use of Griffin Creek was on 6 March 2013,more than two years after the Concession was granted. That use was byNeil Silverwood, a member of the Executive of FMC, and another canyoner.Mr Silverwood states in his affidavit that Griffin Creek is now of significantrecreational value to canyoners. He describes it as one of the premier canyoning sitesin New Zealand.[28] It appears that GCHL cut an access track in around 2013. In a letter dated6 August 2013 from the Community Relations Programme Manager in theDepartment to Mr Morgan, there is reference to a telephone conversation between theManager and Mr Morgan during which, as recorded in the letter, Mr Morgan is said tohave acknowledged that he was aware of a number of breaches of what was agreed toin the 2012 COP. As a result, remedial work was agreed to.[29] In February 2018 GCHL applied to the Department to vary the Concession.This application followed a variation to resource consents granted by the West CoastRegional Council in October 2017 (see [34] to [38] below). The proposed changesrecorded in a document headed Griffin Creek Hydro Summary of Changes includedthe following:2. Residual flow lowered from 800L/s to 456 L/s to be in line withWCRC resource consent (Existing DOC Concession, specialcondition 9). Maximum water abstraction rate to change from1200L/s to 2500L/s.[30] GCHL withdrew the application to vary the conditions on 13 March 2019, priorto it being determined by the Department. That withdrawal was preceded by a letterfrom GCHL's solicitors dated 20 November 2018 recording GCHL's position that theConcession does not limit water take.[31] In February 2020 GCHL again applied to vary the Concession. The delegateddecision-maker approved that variation on 24 May 2021. The variations to theConcession require consequential changes to the 2012 COP because they introducenew criteria relating to measures to manage potential adverse effects of the ConcessionActivity. A construction and operational plan (COP) must meet these criteria before itcan be approved. None of the criteria relate to the imposition of a specified limit onwater take or minimum flow.[32] GCHL has not yet submitted an updated COP for approval. Mr Morgan saysonce FMC lodged its application for the declaration, (26 July 2022) GCHL'sapplication for funding for the Scheme had to be put on hold and the Scheme couldnot be progressed until the present application for a declaration is determined.[33] The deed of variation provides that the COP must "not differ substantially inregard to location, scale or level of effect to the Application (and subsequent approvedvariation application/s) lodged by the Concessionaire and to the Concession Activityas described in the Department's First Determination Report (and subsequentapproved reports to the Decision-Maker)".Resource consents[34] The Concession requires GCHL to ensure that appropriate resource consentsare obtained prior to the commencement of the Concession Activity and that GCHLcomplies with the conditions of those consents throughout the term of the Concession.The Concession further provides that if any conditions attached to any resourceconsent are, in the opinion of the Minister, incompatible with the Concession, theGrantor may review the provisions of the Concession and, at the Minister's discretion,the Concession may be varied accordingly.[35] In 2017 GCHL applied for and was granted variations to its resource consentsfrom West Coast Regional Council. The resource consent recording the variation isdated 6 October 2017 and refers to the three types of resource consents as follows:Resourceconsent no.Type ofresourceconsentPurposeRC10269/1 Land UseConsentTo disturb the bed of GriffinCreek for the construction ofstructures associated withhydro electricity generation,Wainihinihi.RC10269/2 WaterPermitTo take and use surface waterfrom Griffin Creek for hydroelectricity generation,Wainihinihi.RC10269/3 WaterPermitTo divert water from GriffinCreek for hydro electricitygeneration, Wainihinihi.[36] One of the three conditions changed was condition 13, which was varied toincrease the maximum rate of water abstraction from 1,200 litres per second (1.2cumecs) (as previously granted) to 2,500 litres per second (2.5 cumecs).[37] The general conditions applying to all resource consents include the following:1. Works and activities shall be carried out in general accordance withthe details contained in the consent application, the change ofconditions application (received 11 May 2017) and additionalinformation submitted to the Consent Authority.[38] As an affected person, the then Operations Manager of the Hokitika DistrictOffice of the Department had given his approval to GCHL's application to vary theresource consents in a letter dated 17 July 2017. The letter notes that the Department'sapproval is specific to the application for change of resource consent conditions andis for the purposes of s 95 of the Resource Management Act 19918 (RMA) only. Theletter further states that the approval is not indicative of any associated concession (ieunder the Act) or other statutory approval which might be required from theDepartment.Issues[39] FMC does not challenge the decision-making in relation to the Concession. Inother words, there is no challenge to: the public notification or consultation regardingthe Application; the Department's assessment of the Application in relation toconservation values (including recreational values); or the approval of the 2012 COP.[40] The claim is limited simply to the interpretation of the Concession.Preliminary admissibility issue[41] FMC relies on a primary affidavit and reply affidavit of Neil Silverwood.GCHL objects to specific statements of opinion in Mr Silverwood's primary affidavitand the entire reply affidavit.8 Section 95 addresses public notification and limited notification.[42] Ms Wright, counsel for GCHL, submits that although Mr Silverwood is not anexpert witness and has not sought to qualify himself as one, he purports to give a rangeof opinions as evidence about the effects of abstracting 2.5 cumecs of water fromGriffin Creek. The specific statements of opinion GCHL takes issue with are:(a) The importance of the environmental values of Griffin Creek and thesurrounding catchment, and the effects of the Scheme on GriffinCreek's environmental values.(b) The importance of the natural character values of Griffin Creek andeffects of the Scheme on natural character, including an artist'simpression showing possible dewatering of Griffin Creek.(c) The significance of Griffin Creek's canyoning values and the effects ofthe Scheme on Griffin Greek's canyoning values.(d) The opinion that those effects will increase the more water is taken fromGriffin Creek and the smaller the amount of residual flow remaining.(e) A specific statement of opinion regarding the effect on the naturalamenity and recreational values of Griffin Creek of the Scheme takingup to 2.5 cumecs of water.[43] Ms Wright further submits that all of Mr Silverwood's reply affidavit is opinionevidence regarding effects on natural character and environmental and recreationalvalues and is therefore inadmissible.[44] In the alternative, if the Court determines that Mr Silverwood's opinions areadmissible, Ms Wright submits that no weight should be placed on them and the expertevidence provided by GCHL's expert hydrologist, Monique Harvey, should bepreferred.[45] Mr Smith, counsel for FMC, says the evidence was filed for the purpose ofestablishing FMC's standing and is also relevant when the Court comes to considerthe exercise of its discretion as to whether or not to make a declaration. Mr Smithacknowledges that Mr Silverwood is not an expert in hydrology. He says, however,the purpose of the evidence is to provide context for FMC's concerns. Mr Smithsubmits that whether a water take in excess of the level referred to in the Applicationwould have the effect Mr Silverwood expresses is not an issue for the Court. Heacknowledged in oral submissions, for that reason the evidence is not relevant.[46] Leading on from that submission Mr Smith submits that the evidence ofMs Harvey about the effect of different levels of water abstraction is similarly notrelevant. Mr Smith makes the same submission in relation to the evidence ofMary Mitchell, an electricity sector regulatory analyst and adviser, who also swore anaffidavit as an expert witness on behalf of GCHL.[47] In reply, Ms Wright submits the evidence of Ms Harvey and Ms Mitchell isrelevant and admissible in relation to the criteria the Court considers when determiningwhether a term limiting water take can be implied.[48] I first address the issues relating to Mr Silverwood's evidence.[49] The Evidence Act 2006 provides for the admissibility of expert opinionevidence as follows.23 Opinion ruleA statement of an opinion is not admissible in a proceeding, except as providedby section 24 or 25.9[50] Section 25 governs the admissibility of expert opinion evidence and s 4 definesan expert as a person who has specialised knowledge or skill based on training, study,or experience. Expert evidence is defined in s 4 as the "evidence of an expert basedon the specialised knowledge or skill of that expert and includes evidence given in theform of an opinion".[51] Statements about the significance or importance of an environmental featureand predictions about how an activity will impact that feature are opinions.9 Section 24 is not relevant here.[52] Mr Silverwood has served on the FMC Executive for five years. He says he ispersonally familiar with Griffin Creek. He was involved in the first canyoningexploration of Griffin Creek in March 2013 and he has been there a number of timessince then. He says he has been involved in FMC's advocacy to protect Griffin Creek.[53] Mr Silverwood may have expertise in recreation and canyoning based on hisexperience and I would accept that he can describe the canyoning experience in GriffinCreek. The caveat that I would apply to that evidence, however, is that his evidenceis that of an advocate rather than an independent expert. But as to making predictionsabout how any particular level of water take will impact Griffin Creek, that is notevidence that Mr Silverwood can give. He is not an ecologist, landscape architect orhydrologist.[54] Accordingly, the statements of opinion by Mr Silverwood in his first affidavitas to: the effects of the Scheme on Griffin Creek's environmental values; the effectson the natural character of the area; the effects on canyoning values; that the effectswill increase the more water is taken from Griffin Creek; his specific statement ofopinion regarding the effect of taking up to 2.5 cumecs of water; and any photographsillustrating those purported opinions in Mr Silverwood's primary affidavit, are allinadmissible.[55] All of Mr Silverwood's reply affidavit is opinion evidence on the above issuesfrom a non-expert and is therefore inadmissible.[56] As to the affidavits of the two experts, Ms Harvey and Ms Mitchell, I do notaccept Mr Smith's submission that their opinions are irrelevant to the issues the Courtneeds to decide. As will be apparent from a later section of this judgment, theirevidence is able to be taken into account when the Court considers whether a termlimiting water take can be read into the Concession as an implied term.Overview of parties' submissionsPlaintiff's submissions[57] Mr Smith submits that the natural and ordinary meaning of the Concession isthat the Concession Activity authorised is the taking of up to 1.2 cumecs of water fromGriffin Creek and that figure operates as a limit on GCHL. FMC's position is that theproposed water take is a key aspect of the description of the Scheme and was materialto the Department's consideration of the Scheme.[58] Mr Smith submits that contrary to GCHL's argument, the volume of waterproposed to be taken cannot be described as mere contextual information in relationto an application to take water, where the volume of water take is the key subjectmatter of the consent. Mr Smith refers to the part of the Application referred to in [11]above and submits it contains two restrictions: maximum water take and a requirementthat all take is to cease if the residual flow drops below a specified level. He makesthe point that these two items were not contained in some secondary part of theApplication but in the description of the activity.[59] Mr Smith submits in any event, special condition 1 of the Concession expresslyrequires that GCHL's COP does not differ substantially in regard to location, scale orlevel. He says that this expressly "locks in" the scale of the activity, including thewater take set out in the Application and described by the Department in granting theConcession.[60] Mr Smith relies on the well-established principle in the RMA context that thescope of the consented activity is confined by the terms of the application and thatregard can and must be had to the application in interpreting a resource consent.Adopting the summary of the legal principle in Millar v Ashburton District Council,10Mr Smith says that: first, the scope of the Concession Activity is confined by theApplication; second, the detailed description of the proposed activity in theApplication includes specifying the volume of the water take; third, the description ofthe water take is adopted in the First Determination Report; and fourth, by imposing10 Millar v Ashburton District Council [2016] NZHC 3015 at [71].special condition 1, the Minister required that the consent activity not differ in regardto location, scale or level of effect to the Application and to the Concession Activity.[61] Mr Smith further submits, again applying RMA principles, that even wherethere is no ambiguity on the face of the consent and the consent does not refer back tothe application or supporting documentation, in ascertaining the scope of the consent,the Court is entitled to have regard to the purposes of the application as specified inthe application and supporting material.11First defendant's submissions[62] Ms Wright submits that FMC's submissions are based on an incorrectinterpretation of the Concession because the Concession is an easement. Ms Wrightemphasises the distinction between approaches to interpretation under the RMA andunder the Act. She submits the Concession is to be interpreted in accordance with thelaw of easements.[63] Ms Wright submits the plain meaning of the easement is that it does not limitthe volumetric flow rate of water that may be abstracted by GCHL. She points to theminimum flow requirement in special condition 9 of the Concession as being themeasure implemented to manage the hydrological effects of abstracting water.GCHL's position is that relevantly, the Concession does not contain a requirement tomonitor the total volumetric flow abstracted by GCHL, nor a limit on the volumetricflow that may be taken by GCHL. Ms Wright submits the former would be a necessaryrequirement for there to be any limit on the take of water.[64] Ms Wright submits that neither special condition 1 nor the 2012 COP changethe plain meaning. She says that special condition 1 does not require the COP toaddress the volumetric flow of water to be extracted from Griffin Creek, and even if itdid address abstraction volume, whether that differs substantially is a matter for theGrantor to determine in accordance with special condition 1. Further, it would stillnot equate to a specific volumetric flow limit.11 Aotearoa Water Action Inc v Canterbury Regional Council [2018] NZHC 3240 at [129] and [145].[65] Ms Wright also submits that there is no ambiguity in the Concession such thatrecourse to extrinsic evidence assists in its interpretation. She says rather thanattempting to resolve an ambiguity, FMC is seeking to infer an entirely new term,which does not meet the requirements for an implied term.12[66] Ms Wright further submits that if the parties had intended there to be a limit onthe volumetric flow of water able to be abstracted, it can be expected that a conditionto that effect would have been included.[67] Ms Wright makes the argument that even if RMA principles do apply, not everystatement in an application for a resource consent operates as a constraint on the scopeof the application or the consent. She therefore says a contextual reference to the levelof water take in the Application does not translate to a constraint on the activityauthorised by the Concession.[68] Finally, in the event the Court determines that FMC's interpretation is correct,GCHL says the Court, in exercising its discretion to issue a declaration, shouldconsider the minimal effect on Griffin Creek of an abstraction limit compared with thesignificant adverse effect on the Scheme's contribution to renewable electricitygeneration and security of supply for the West Coast of the South Island.Second and third defendants' submissions[69] Ms Elvin, counsel for the Minister and the Department, advances seven broadreasons as to why the Concession does not limit GCHL's water take to 1.2 cumecs.[70] First, the principles relied on by FMC relevant to the interpretation of resourceconsents granted under the RMA are not directly applicable to the interpretation of theConcession which exists under a different statutory context. The Act is the appropriatestatutory starting point for the interpretation of the Concession.[71] Second, the Concession is an easement in gross and therefore the lawconcerning the interpretation of easements applies. Where possible, an easement12 BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire ofHastings (1977) 180 CLR 266 (PC) [BP Refinery].should be interpreted to give effect to the intention of the parties to create a valideasement.13[72] Third, easements are typically interpreted using principles of contractualinterpretation. A plain reading is to be preferred with reference to extrinsic materialsin particular circumstances.14[73] Fourth, on a plain reading of the Concession it does not impose an upper limiton the take of water. An implied limit based on supporting material would requirereading in a term that is not apparent on the face of the document. The courts have seta high bar for the implication of terms into a contract.15 This high threshold is not metin the present case. If the Court does find it appropriate to consider extrinsic materialas an aid to interpretation, then the Application, First Determination Report, and the2012 COP do not support the meaning put forward by FMC.[74] Fifth, the decision-maker had a broad power to impose an upper limit on watertake but chose not to, instead only imposing a condition for a minimum flow rate.Ms Elvin submits this was the primary means chosen to protect the relevantconservation values.[75] Sixth, if the decision-maker intended to impose an upper limit on the take, it isexpected they would have done so explicitly.16[76] Seventh, water take is a matter for the RMA. The Act and the Concession itselfrequire the Concessionaire to obtain relevant consents or water permits under the RMAin addition to the Concession.1713 Schmuck v Opua Coastal Preservation Society Inc [2019] NZSC 118, [2019] 1 NZLR 750 perO'Regan J at [63]–[66], adopting the approach in Regency Villas Title Ltd v Diamond Resorts(Europe) Ltd [2018] UKSC 57, [2019] AC 553.14 Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147, [2015] 1 NZLR 432 at [60]–[63].15 Bathurst Resources Ltd v L & M Coal Holdings Ltd [2021] NZSC 85, [2021] 1 NZLR 696.16 Attorney-General v Holland HC Hamilton CIV-2006-419-1650, 16 May 2007 at [61].17 Conservation Act, s 17P.Conservation Act – statutory framework[77] It is necessary to set out the statutory framework of the Act in some detail soas to provide context for the defendants' various submissions in opposition. Thisincludes the argument that the scheme of the Act is such that the RMA approach,namely that the scope of the consented activity is confined by the terms of theapplication, is not the correct approach under the Act.Functions of the Department[78] The long title of the Act provides it is:An Act to promote the conservation of New Zealand's natural and historicresources, and for that purpose to establish a Department of Conservation.[79] Section 6 of the Act sets out the functions of the Department which include ats 6(a):(a) to manage for conservation purposes, all land, and all other naturaland historic resources, for the time being held under this Act, and allother land and natural and historic resources whose owner agrees withthe Minister that they should be managed by the Department;[80] Conservation is defined in s 2 as follows:conservation means the preservation and protection of natural and historicresources for the purpose of maintaining their intrinsic values, providing fortheir appreciation and recreational enjoyment by the public, and safeguardingthe options of future generations[81] "Preservation" is defined as meaning in relation to a resource, the maintenanceof its intrinsic values so far as is practicable. "Protection" is defined in s 2 as meaning,in relation to a resource, its maintenance so far as is practicable in its current state, butincludes its restoration to some former state and its augmentation, enhancement orexpansion.[82] "Conservation area" is also defined and includes any land or an interest in landheld under the Act for conservation purposes.[83] "Stewardship area" (applicable here) includes a conservation area that does notfall within specified categories.[84] Section 25 of the Act provides that every stewardship area shall be so managedthat its natural and historic resources are protected.[85] Natural resources are defined in s 2 as follows:natural resources means—(a) plants and animals of all kinds; and(b) the air, water, and soil in or on which any plant or animal lives or maylive; and(c) landscape and landform; and(d) geological features; and(e) systems of interacting living organisms, and their environment;—and includes any interest in a natural resource[86] As can be seen, water is linked to plant or animal habitat in the abovedefinition.[87] "Recreational" is not defined.Part 3B of the Act – concessions[88] Part 3B of the Act governs the granting of concessions. It applies to everyconservation area.18[89] This includes the land in the present case in relation to which the Concessionhas been granted. As already noted, that land is within a "stewardship area".[90] Any activity in a conservation area must be authorised by way of a concessionunless certain exceptions are met.19 A concession is not required for an individual orgroup undertaking any recreational activity (not for specific gain or reward).18 Section 17O(1).19 Section 17O(2).[91] "Concession" or "concession document" are defined in s 2 in the same termsto mean a lease, licence, permit or an easement granted under pt 3B of the Act andincludes "any activity authorised by the concession document". "Concessionaire" isdefined in s 2 to include a person who is the grantee of an easement under pt 3B of theAct.[92] Section 17P of the Act provides that pt 3B of the Act "does not relieve anyperson from any obligation to obtain a resource consent under the ResourceManagement Act 1991".20 Relevantly, that includes any necessary water permit foractivities relating to water.21[93] Section 17Q of the Act gives the Minister the power to grant concessions in theform of a lease, licence, permit or easement in respect of any activity (in practice thispower is, in most cases, exercised by a Department official under delegation from theMinister, as was the case here).[94] Section 17S specifies the required contents of an application for a concession.At the time of the Application and the grant of the Concession, s 17S(1) and (2)required information including a description of the proposed activity, a description ofits potential effects and any action that the applicant proposed to take to avoid, remedyor mitigate any adverse effects of the proposed activity.[95] The circumstances in which the Minister's intention to grant a concession is tobe publicly notified, were specified in s 17T(4) and (5) of the Act.[96] The matters to which the Minister is required to have regard in considering anyapplication for a concession are set out in s 17U. At the time the Concession wasapplied for and granted those matters included:22(a) the nature of the activity and the type of structure or facility (if any)proposed to be constructed:(b) the effects of the activity, structure or facility:20 This provision is subject to limited exceptions that are not relevant in this case.21 Resource Management Act 1991, s 87(d).22 Section 17U(1).(c) any measures that can reasonably and practicably be undertaken toavoid, remedy, or mitigate any adverse effects of the activity:(f) any relevant oral or written submissions received as a result of anyrelevant public notice issued under section 49 of this Act:[97] "Effect" is defined in s 2 of the Act as having the same meaning as it has in theResource Management Act 1991.23[98] When granting a concession the Minister is given wide-ranging powers unders 17X of the Act to impose such conditions as the Minister considers appropriate forthe activity, structure, or facility, including conditions relating to or providing for theactivity itself, the carrying out of the activity, and the places where it may be carriedout.24[99] The Minister has a broad discretion under s 17ZC, on request or on their ownmotion, to vary any conditions in a concession where:25(a) the variation is the result of a review provided for in the concessiondocument; or(b) the variation is necessary to deal with significant adverse effects ofthe activity that were not reasonably foreseeable at the time theconcession was granted; or(c) the variation is necessary because the information made available tothe Minister by the concessionaire for the purposes of theconcessionaire's application contained inaccuracies that materiallyinfluenced the decision to grant a concession and the effects of theactivity permitted by the concession require more appropriateconditions;—[100] A concessionaire is bound by every such variation.2623 The Resource Management Act provides the meaning of effect as including: any positive oradverse effect; any temporary or permanent effect; any past, present, or future effect; and anycumulative effect which arises over time or in combination with other effects — regardless of thescale, intensity, duration, or frequency of the effect, and also includes any potential effect of highprobability and any potential effect of low probability which has a high potential impact.24 Section 17X(a).25 Section 17ZC(3).26 Section 17ZC(3).[101] Where a variation is of a minor and technical nature and does not materiallyincrease the adverse effects or will result in a reduction of the adverse effects or theduration of the activity, then by agreement the Minister and the concessionaire mayvary any conditions in the concession document without public notification.27Alternatively, the concessionaire may at any time apply to the Minister for a variationor extension to the concession. Such an application is to be treated as if it were anapplication for a concession.28[102] As is apparent from the above provisions, the Act provides a broader scope tovary concession conditions than is available under the RMA for variation to resourceconsent conditions.29[103] Concessions that are in the form of easements may be registered under theLand Transfer Act 2017. (In the present case the Concession provided that theeasement would not be registered). For the purpose of granting any easement overany conservation area, the Minister is deemed to be the registered owner of theconservation area.30[104] Where a concession document includes a right to transfer, sublease, assign,mortgage or otherwise dispose of the concessionaire's interest, the concessionaire maynot do so without the consent of the Minister.31[105] Finally, if an applicant for a concession who has been granted a concessionfails to sign the concession document within one month after being required by writtennotice to do so, the Minister may cancel the grant of the concession.32Approach to interpretation of concessions[106] There is limited case law to assist as regards the approach for interpreting aconcession under the Act. Ms Elvin refers the Court to Franz Josef Glacier Guides27 Section 17ZC(1).28 Section 17ZC(2).29 Resource Management Act, ss 127 and 128.30 Section 17ZA(1).31 Section 17ZE(1).32 Section 17ZD(1).Ltd v Minister of Conservation where the High Court interpreted a concession in theform of a licence, rather than an easement.33 The Court adopted a plain reading of thewords "tracks in the Park" to avoid an approach that "would rob [the clause] of anypractical effect".34 However, there is no other discussion in that case regarding theapproach to be taken.Nature of a concession[107] The Concession states it is an easement in gross. In general terms an easementin gross: may be registered under the Land Transfer Act against the title of theburdened land;35 binds the covenantor's successors in title;36 and the benefit of theeasement in gross may be assigned.37 This general position is modified under the Actwhereby the consent of the Minister is required for any transfer, sublease, assignment,mortgage or other disposition of the concessionaire's interest.38[108] Herein lies the primary difference between a concession and a resourceconsent. The latter is neither real nor personal property.39 By contrast, a concessionmay be granted not only in the form of an easement but by other instruments that alsocreate an interest in land, for example leases and some licences.[109] It is apparent not only on the face of the Concession that it is an easement butit is also reinforced by its terms. There is provision for disputes to be resolved betweenthe parties such as through negotiation and mediation. This reflects the contractualnature of a concession. Resource consents do not provide for dispute resolution asbetween the consent authority and the holder of the consent.33 Franz Josef Glacier Guides Ltd v Minister of Conservation HC Greymouth CP14/98, 13 October1999.34 At [48].35 Land Transfer Act 2017, s 108; Conservation Act, s 17ZA. Although in this case, as noted in [103]the Concession provided that the easement would not be registered.36 Property Law Act 2007, s 291(3)(b).37 Section 291(4).38 Conservation Act, s 17ZE(1).39 Resource Management Act, s 122.Case law on interpretation of easements[110] In New Zealand the interpretation of easements and covenants affecting landhas been undertaken with the same objective, purposive approach used for othercommercial contracts.40 The principles are well known. The proper approach tointerpretation is an objective one, including background knowledge which wouldreasonably have been available to the parties in the situation in which they were at thetime of the contract.41 Contractual language must be interpreted within its overallcontext. Purposive or contextual interpretation is not dependent on there being anambiguity in the contractual language.42 The fact that parties are aware their contractmight be relied upon by a third party may justify a more restrictive approach to theuse of background in some instances.43[111] Finally, the text is centrally important. "If the language at issue, construed inthe context of the contract as a whole, has an ordinary and natural meaning, that willbe a powerful, albeit not conclusive, indicator of what the parties meant."44[112] There is a high bar for the implication of terms into a contract.45[113] In Schmuck v Opua Coastal Preservation Society Inc where the Supreme Courtwas considering the validity of easements under the Reserves Act 1977, the Court heldthat where possible, an easement should be interpreted to give effect to the intentionof the parties to create a valid easement.46 The Court further held that documentsreferred to in the easement instrument are admissible in interpreting the easement.4740 Body Corporate 341188 v District Court at Auckland [2015] NZCA 393, (2015) 16 NZCPR 667at [18] citing Ohinetahi Ridge Ltd v Witte (2004) 5 NZConvC 193,938 (CA) and Big RiverParadise Ltd v Congreve [2008] NZCA 78, [2008] 2 NZLR 402 where leave to appeal to theSupreme Court was refused in 2008: Big River Paradise Ltd v Congreve [2008] NZSC 51, [2008]2 NZLR 589.41 Firm PI 1 Ltd v Zurich Australian Insurance Ltd, above n 14, at [60].42 At [61].43 At [62].44 At [63].45 Bathurst Resources Ltd v L & M Coal Holdings Ltd, above n 15; BP Refinery, above n 12.46 Schmuck v Opua Coastal Preservation Society Inc, above n 13, at [66] accepting the submissionsof counsel at [63]–[64].47 At [59].[114] This is not a case which requires a consideration of the boundaries for theadmission of extrinsic evidence in construing an unregistered concession.48 All partiesare agreed that the Court is not limited to a consideration of the Concession alone.They agree the Court may also consider the Application and the First DeterminationReport. That is because the deed of variation refers to both of those documents andall agree that those two documents are part of the factual matrix. Where the partiespart company is what the admission of the two documents means for the interpretationof the Concession.Plain meaning[115] The Concession authorises the "Concession Activity". That is, "theconstruction phase and the ongoing operation, maintenance and repair of the hydro-electric power scheme at Griffin Creek" and the authorisation of listed activitiesincluding the "taking of water from Griffin Creek". The Concession Activity does notspecify the volume of water that may be taken.[116] The authorisation is expressed to be "subject to the terms and conditionscontained in this Concession and its Schedules".49 The Act defines a "concession"and a "concession document" to mean the same thing and the two terms are usedinterchangeably in the Act. I accept Ms Wright's submission that this supports theinterpretation that it is the Concession document itself that determines what isauthorised by the Concession.[117] There are other parts of the Concession that support the defendants' positionthat the Concession Activity is subject only to the expressly stated terms andconditions in the Concession (and thus what is said in the Application about water takeis not to be read in as a limitation).48 See Green Growth No. 2 Ltd v Queen Elizabeth The Second National Trust (2018) NZSC 75,[2019] 1 NZLR 161 at [133] where there was similarly no need in relation to a registeredinstrument.49 Emphasis added.[118] For example, in the preamble or background section there are the followingtwo clauses:50F. The Concessionaire wishes to carry out the Concession Activity onthe Easement Land subject to the terms and conditions of thisConcession.H. The parties wish to record the terms and conditions of this Concessionand its Schedules.[119] In the following section "Operative Parts" it is stated:51I. In exercise of the Grantor's powers under the Conservation legislationthe Grantor GRANTS to the Concessionaire an EASEMENT to carryout the Concession Activity on the Easement Land subject to the termsand conditions contained in this Concession and its Schedules.[120] There is also the fact that, as is apparent from the above references, theConcession uses a schedule of special conditions to specify the conditions that applyto the Concession.[121] Schedule 2, which contains standard conditions, sets out the "complianceobligations" on the Concessionaire in clause 13.52 Those obligations includeobligations in external documents such as related legislation, a relevant conservationmanagement strategy or conservation management plan, or any statement of generalpolicy. The "compliance obligations" do not refer to the Application or the FirstDetermination Report.[122] There is an express requirement to cease taking water when the flow fallsbelow 0.8 cumecs in special condition 9 (at [23] above). There is an associatedrequirement to monitor flow above the outlet site in special condition 8 (at [23] above).[123] But the Concession does not contain a limit on the water take nor, what wouldnecessarily be a related condition, a requirement to monitor the total volumetric flowabstracted by GCHL.50 Emphasis added.51 Emphasis added in italics.52 Incorrectly headed as clause 5 in the Concession.[124] I accept Ms Wright's submission that on its plain wording the Concessionprovides for a hydroelectric power scheme, including the taking of water, without anylimit on the amount of water that may be taken. Further, on its plain wording, thehydrological effects of taking water are controlled by a requirement to cease taking ata specified minimum flow with an associated condition requiring the installation of acontinuous flow monitoring device.[125] I turn to consider whether special condition 1, requiring approval by theGrantor of a COP before the Concession Activity can be undertaken (set out in [23]above), changes what thus far is the plain meaning.[126] Special condition 1, as varied in 2021, sets out (non-exhaustively) measuresthe COP must address to manage potential adverse effects. The list includes suchmatters as vegetation and rock clearance, public safety, and effects on wildlifeincluding fish. There is no reference to abstraction of water. In other words, it is notnecessary for the COP to address the volume of water to be abstracted.[127] The discretion reserved to the Grantor under special condition 1 is a furtherindication that a limit on water take is not to be read into the Concession Activity. TheGrantor has the discretion to approve the COP where it "does not differ substantiallyin regard to location, scale or level of effect to the Application (and subsequentapproved variation application/s) lodged by the Concessionaire and to the ConcessionActivity as described in the Department's First Determination Report (and subsequentapproved reports to the Decision Maker)".[128] In the event the revised COP does address the volume of water to be taken andwith reference to the First Determination Report, the issue of whether the activity"differs substantially" is a matter for the Grantor to determine in their discretion. Thatwill be a question of fact or a mixed question of fact and law for the Grantor to considerat the time. It is not for this Court to step into the Grantor's shoes and exercise theirdiscretion to determine that a specific take level is required to satisfy specialcondition 1.[129] In summary, on a plain reading, I do not consider there is any ambiguity in theConcession as to whether the Concession imposes a limit on water take. It does not.Extrinsic evidence: the Application and First Determination Report[130] I now turn to consider whether the Application and First Determination Reportchange the plain meaning. The Application refers to the Scheme having a water takeof 1.2 cumecs when complete. The issue is whether that indicates an objectiveintention for the Concession to be subject to such a condition.[131] First, if the parties had intended there to be a limit on water take, it is to beexpected any limit would have been included by way of a condition. In his affidavit,Mr Morgan of GCHL refers to the Application and discussions with the Department.He says:8. In the application, I included the statement that "once the Scheme hasbeen fully developed there would be a "take" of 1.2 cumecs". Thatwas not expressed as a "take" limit. I do not recall any discussionwith DOC about a "take limit" of 1.2 cumecs or any other number.Instead, the focus was on the residual flow requirement, and DOCultimately granted the Concession with a higher (than the .6 cumecs Ihad applied for) residual of 0.8 cumecs. DOC's process involvestelling the applicant what its decision is likely to be, includingconditions, and seeking the applicant's feedback. A "take limit" wasjust not an issue that came up.[132] On the other side of the contractual arrangement is the Minister's delegate.[133] As is apparent from [98]–[100] above, the Minister (or their delegate) has widepowers to impose conditions. Michael Slater, formerly the Conservator for the WestCoast Tai Poutini Conservancy, as the delegate of the Minister, made the decision togrant the Concession. If Mr Slater considered that a limit on the volume of water thatcould be taken was required, then he could have imposed such a limit. Instead ofdoing so he imposed a condition relating to minimum flow.[134] Attorney-General v Holland supports the proposition that if Mr Slater hadintended to impose a limit on the amount of water that could be taken, then he couldhave been expected to have done so explicitly.53 In Holland the Court was consideringan easement for the taking of water from a stream on Department land. The easementdid not contain an explicit limit on take. In the High Court the Department's positionwas that the words "subject to the provisions of s 21 of the Water & Soil ConservationAct 1967" in the easement meant that water could only be taken under the easementfor the purposes of domestic needs, needs of animals and firefighting purposes (beingthe only purposes for which water could be taken without express permission underthe Water & Soil Conservation Act). Justice Potter did not accept that submission andsaid:54If there had been an intention to place a specific limit on the quantity of thetake, it could have been expected that in the terms of the grant there wouldhave been reference to a maximum take rate, a maximum volume per day andprotection of the minimum flow in the stream, or similar specific provisions.The Department would have had available to it information about the flow incubic metres from the spring.[135] Mr Slater has sworn an affidavit in opposition to the application for adeclaration. Mr Slater says that at a high level his key areas of focus in consideringthe Application (and any application generally) for a concession were aboutunderstanding: the relevant conservation purposes and values; the impact or effect theproposed Concession Activity would be likely to have on those purposes and values;and how any mitigations might minimise or reduce those impacts or adverse effects toan acceptable level, to allow the maintenance of the relevant values and the upholdingof conservation purposes.[136] Mr Slater also says the First Determination Report, in its assessment of theimpact of the proposed Concession Activity and measures to mitigate those impacts,does not identify the total volume of water to be taken from Griffin Creek as a factorthat would impact on the relevant conservation values. Instead, it identifies themaintenance of a set minimum flow as being important to protect the conservationvalues. I accept that Mr Slater correctly states the contents of the First DeterminationReport in that regard.53 Attorney-General v Holland, above n 16.54 At [61].[137] In the First Determination Report there is an analysis of the Application, theeffects of the proposed Concession Activity and measures to mitigate those effects.The proposed mitigation measures do not include a limit on take. Nor do the proposedspecial conditions, which are attached to the report, include any condition limitingtake.[138] It is apparent from the First Determination Report that it was considered thatthe relevant conservation values would be protected by the maintenance of a setminimum flow rather than there being a set upper limit on the volume of water thatmight be taken.[139] For example, although the First Determination Report mentions the proposedamount of water to be extracted in the section discussing the effect of the proposedactivity on fresh water and proposed mitigation measures, the only mitigation measurediscussed is the requirement for a cut off point to maintain a certain minimum flow.The report states:The applicant proposed a cut off in taking water when the residual flow is0.6m3/s, which is lower than the mean annual low flow rate (0.8m3/s). It isthe view of the Department that to protect the environmental values of GriffinCreek, the minimal residual flow should be above the mean annual low flowrate and thus the cut off point for the removal of water should be at least0.8m3/s of water below the point of the intake.[140] Alongside that proposed condition the First Determination Reportrecommends conditions requiring the flow rate to be monitored and reported. Thereis no recommended condition requiring the monitoring of the rate of water to beabstracted.[141] It seems clear that it was considered that the taking of water from Griffin Creekwas to be controlled by stating the amount of water that must remain in the Creek andrequiring water take to cease if it drops below that level. That is the mechanism forprotecting the environmental values of Griffin Creek.[142] I accept Ms Wright's submission that it is also relevant that the Concessionprovides through special condition 4 that there will be additional controls under theresource consents for the Scheme which must be obtained and complied with. Thatsuggests an objective intention for the volume of water take to be addressed throughthe mechanism of resource consents.[143] In conclusion, on an analysis of the Application and First Determination Reporttogether with the Concession itself, it is apparent that the objective intention was thatthe Concession would be subject to a cease-take clause with its associated monitoringrequirement and not to a limit on the amount of water that could be taken.Implication of a term[144] I next consider whether a term to that effect might nevertheless be implied. Inorder for a term (here a limit on water take) to be implied in a contract the followingprinciples as set out in Bathurst Resources Ltd v L & M Coal Holdings Ltd apply.55 Insummary:(a) The legal test for the implication of a term is a standard of strictnecessity, a high hurdle to overcome.(b) The starting point is the words of the contract. If a contract does notprovide for an eventuality, the usual inference is that no contractualprovision was made for it.(c) An unexpressed term can only be implied if the Court finds that theterm would spell out what the contract, read against the relevantbackground, must be understood to mean.(d) The inquiry is an objective one.(e) Implication of a term does not depend upon proof of the parties' actualintentions.(f) The conditions in BP Refinery (Westernport) Pty Ltd v President,Councillors and Ratepayers of the Shire of Hastings are a useful tool to55 Bathurst Resources Ltd v L & M Coal Holdings Ltd, above n 15, at [116].spell out what the contract must be understood to mean.56 Conditionsfour57 and five58 of BP Refinery must always be met before a term willbe implied. Conditions one to three59 can be viewed as analytical toolswhich overlap and are not cumulative.[145] I start the analysis with BP Refinery's conditions four and five which mustalways be met in order to imply a term in a contract. First, condition four requires thatthe term must be "capable of clear expression". On its face the term that FMC seeksto imply is capable of clear expression. But I accept Ms Wright's submission that thecondition by itself would have limited effect without an associated obligation tomonitor the volume of water abstracted. Consideration accordingly needs to be givento whether the implied term should also include an obligation to install a monitoringdevice and undertake ongoing flow monitoring. FMC has not established (or evenargued) that a monitoring term should be implied. There is therefore a question as towhether the limit that FMC seeks to apply is in fact capable of clear expression so asto be a practically achievable and enforceable term of the Concession.[146] Condition five of BP Refinery is that the term must not contradict any expressterm of the contract. In this case the limit on water take in the implied term wouldcontradict the discretion of the Grantor in special condition 1. Implying a specific takelimit is inconsistent with the provision in that condition for addressing the scale orlevel of effect and is inconsistent with the evaluative assessment by the Grantor whoapplies the "substantially differ" test.[147] As Ms Wright points out, the proposed implied term is also potentiallyinconsistent with special condition 9 (at [23] above) under which, after two years ofdata has been collected, a new minimum residual flow may be used by agreementbetween the Grantor and Concessionaire. If the mean annual low flow were to bevaried a different water take may become appropriate as a consequence. TheConcession does not provide a mechanism for adjusting a take limit if that were to56 BP Refinery, above n 12.57 The term must be capable of clear expression.58 The term must not contradict any express term of the contract.59 The implied term must be reasonable and equitable; the term must be necessary to give businessefficacy to the contract so that no term will be implied if the contract is effective without it; andthe term must be so obvious that "it goes without saying".become necessary following a change to the residual flow in the cease-take clause.This also counts against the implying of a condition imposing a hard limit on watertake.[148] I address together BP Refinery's conditions one to three: the implied term mustbe reasonable and equitable; the term must be necessary to give business efficacy tothe contract so that no term will be implied if the contract is effective without it; andthe term must be so obvious that it goes without saying.[149] GCHL's expert, Ms Harvey, gives the opinion that for a scheme that does notinvolve any storage of water (as is the case here where there is no dam) and wherethere is a reasonable number of "freshes and floods" so that a reasonable level of flowvariability is retained, changing the maximum take does not affect Griffin Creekprovided the cease-take condition is complied with.[150] Ms Harvey also says that the effect of taking more than 1.2 cumecs is that morewater is available for generation on some days when the flow in Griffin Creek ishigher, but the environmental effects would not change provided the cease-takecondition is complied with.[151] As against that, the evidence of GCHL's other expert, Ms Mitchell, is that thecontribution that the Scheme makes to electricity supply security, lower electricityprices and resilience of surrounding communities, varies substantially depending onwater flow and associated Scheme capacity. She says with a flow of 2.5 cumecs, theScheme's capacity would be 4.1 MW, generating an estimated average 20 gigawatthours (GWh) of electricity annually. If, however, the water flow is 1.2 cumecs, theinstalled capacity is 1.9 MW with annual electricity volumes of 11-12 GWh. Thedifference between the two, applying the higher take of 2.5 cumecs (authorised by theresource consent) can be quantified as the supply of power to over 1,000 households.[152] Given the lack of any measurable detriment without the implied term againstthe detriment if a take limit is implied, it is not reasonable or equitable to imply theterm.[153] I accept Ms Wright's characterisation of the "business efficacy" in the contextof this case. That is, it is concerned with whether the contract effectively manageseffects on conservation values while providing certainty to the Concessionaire as towhat is authorised. The cease-take clause is designed to manage effects and when thatis read together with the lack of any meaningful benefit to Griffin Creek from implyinga term that places a limit on water take, the term is not necessary to give businessefficacy to the easement. It is effective without it. Finally, the condition is not soobvious that "it goes without saying".[154] In conclusion, the high hurdle for the implication of a term is not met.Statutory schemes under the Act and the Resource Management Act[155] In the course of this judgment I have already addressed some differencesbetween the Act and the RMA. There are further differences which support my viewthat the principle in the RMA and environmental law context that the scope of anactivity is confined by the terms of an application and that a consent cannot grant morethan what was applied for, does not apply to concessions under the Act. There are thefollowing further differences.[156] Under the Act, what is authorised by the Concession is an "activity".60 In thiscase the activity is the construction and operation of a hydroelectric power scheme. Iaccept there are various aspects of the activity listed including the taking of water butthe activity itself is for a hydroelectric scheme.[157] By contrast, under the RMA, there is a direct focus on the taking of water. Thefunctions of regional councils include controlling the taking, use, damming, anddiversion of water, and the control of the quantity, level, and flow of water in any waterbody, including the setting of any maximum or minimal levels or flows of water andthe control of the range, or rate of change, of levels or flows of water.6160 "Activity" is defined in s 2 to include a trade, business or occupation.61 Resource Management Act, s 30(1)(e).[158] As well, a regional council may, if appropriate, establish rules in a regionalplan to allocate the taking or use of water,62 and make an order to avoid over-allocatingwater.63[159] As can be seen from the two water permits granted as resource consents by theWest Coast Regional Council in this case,64 what is authorised is not an overall activitybut rather the taking, using and diverting of water. Inherent in the statutory provisionsfor the taking (or other use) of water is that a specific volume or rate of take will beset by the regional council when granting the resource consent. That was the casehere.65[160] Given the functions of the regional council as regards the taking or use ofwater, it must be the case that a resource consent application would not be consideredto be complete if it did not specify the volume of water to be taken. Again, given aregional council's function, it is logical that any reference to an abstraction volume inan application for a resource consent would constrain the scope of both the applicationand the consent.[161] By contrast, the role of the Minister and the Department, where an activityoccurs in a conservation area, is the preservation and protection of natural and historicresources in accordance with the Act. It is accepted there may be overlap betweenfeatures such as water and values such as natural character that would also be relevantto a regional council's considerations. But the difference in the statutory schemes isthat the RMA is expressly and directly concerned with regulating the quantity, leveland flow of water in any water body. By contrast, the Act is more broadly concernedwith the preservation and protection of natural and historic resources. Water quantity,flows, levels, and allocations are not necessarily key considerations. That follows alsofrom the reference to water in the definition of natural resources in the Act where waterhas its meaning narrowed to water "on which any plant or animal lives or may live".6662 Section 30(1)(fa).63 See Policy 11 in Ministry for the Environment National Policy Statement for FreshwaterManagement 2020 (ME 1720, 23 February 2023) at 10.64 Refer [35] above.65 Refer [36] above.66 Conservation Act, s 2.[162] The evidence of Mr Slater is consistent with that difference between the twostatutes. He viewed the Application through the lens of conservation values. He said:In considering whether to grant approval to a concession application, my focuswould have been on protecting conservation values so as to be consistent withconservation purposes, as required by the Conservation Act. Level of takewould only have been relevant to the extent that it impacted on these purposesand values.[163] Further, the Act does not require an applicant to specify the volume of waterthat it proposes to take. So long as the application adequately describes the "activity"and its effects on conservation values, that is sufficient. By contrast, it is logical thatan application under the RMA to take water must specify the volume of water becausetaking (or other uses) of water is only allowed where it is expressly authorised by aresource consent or rule in a plan.67[164] These additional differences in the statutory context between the Act and theRMA indicate that what would be necessary information in an application for aresource consent to take water is not necessarily required in an application for aconcession which would involve using water. It follows then that simply because anapplicant makes reference in their application under the Act to the volume of waterproposed to be extracted, that does not operate as a constraint on the scope of theconsent as it would under the RMA.Details in Application – contextual or central[165] Counsel for all defendants make the alternative submission that if the Courtwere to accept FMC's position that RMA principles apply, not every statement in anapplication for a resource consent operates as a constraint on the scope of theapplication and, consequently, on the consent. In this case, the defendants' position isthat the reference to the proposed water take is contextual only and thus does notoperate as a constraint on the activity authorised by the Concession. Given mydecision that the principles regarding the interpretation of resource consents do notapply when interpreting a concession, it is not necessary to consider this alternativesubmission.67 Resource Management Act, s 14.Result[166] For all the above reasons, the Concession does not limit the volume of waterthat Griffin Creek Hydro Ltd may extract from Griffin Creek to 1.2 cumecs.[167] The application for a declaration is accordingly refused.Costs[168] Prima facie, the three defendants as the successful parties are entitled to costs.However, as I did not hear submissions on costs, costs are reserved.[169] If the parties are able to agree costs then a joint memorandum is to be filedwithin 20 working days of the date of this judgment. If there is no agreement as tocosts, the defendants are to file and serve their memoranda of submissions withinfive working days of the date for the joint memorandum. FMC is to file and serve itsmemorandum within five working days of the date of service of the last defendantmemorandum.[170] Submissions are not to exceed five pages (excluding any attachments). I willdetermine costs on the papers._____________________________Gordon J