Stop and think – RJ Davidson and the risks of taking higher court decisions out of context

Since the Supreme Court’s 2014 decision in King Salmon,[1] there has been considerable confusion around the application of Part 2 (which sets out the purpose and principles of the Resource Management Act 1991 (RMA)), when making decisions under the RMA.

The recent decision of the Court of Appeal in RJ Davidson[2]confirms that King Salmon should not be interpreted as prohibiting the consideration of Part 2 by a consent authority when deciding an application for resource consent.

The Court of Appeal stresses that King Salmon decision was firmly based in the particular context before the Supreme Court.  That is, where proposed regional plan provisions would have allowed marine farms in an area of ‘outstanding natural character and landscape value’ contrary to specific prescriptive provisions of the New Zealand Coastal Policy Statement (NZCPS).  In those circumstances it was inappropriate for a decision-maker to rely on Part 2 to enable it to make an overall broad judgement that was inconsistent with the NZCPS provisions.

This decision leaves open the possibility that there might be situations where direct consideration of Part 2 RMA is appropriate in the context of a plan change (beyond the specific carve-outs noted in the King Salmon decision itself).

The decision in RJ Davidson highlights the danger of extracting statements from higher court judgments and giving them widespread application independent of the factual background of the case they originated from (as has happened with the discussion of what constitutes the ‘environment’ in Hawthorn Estate[3]).

Part 2 can be taken into account when considering applications for resource consents

On appeal, the Court of Appeal in RJ Davidson found that the High Court had erred in deciding that King Salmon prevents a decision-maker from considering the purpose and principles of the RMA, in Part 2, when deciding an application for resource consent.

The Court of Appeal stated that:

resource consents fall to be addressed under section 104(1) and, as we have demonstrated, the statutory language plainly contemplates direct consideration of Part 2 matters.

The Court of Appeal declared that King Salmon was never intended to have an impact on how consent authorities considered applications for resource consent.  The Supreme Court made no reference to section 104 of the RMA nor the words “subject to Part 2” in that section.  In particular, the Court of Appeal explained:

If what it said was intended to be of general application across the board, affecting not only plan provisions under part 4 of the Act, but also resource consents under part 6, we think it inevitable that the Court would have said so. 

In making this finding, the Court of Appeal emphasised that its finding does not mean that it would be appropriate for regional or district plans properly prepared in accordance with Part 2 to be “rendered ineffective” by general recourse to Part 2.  For example proper consideration of a relevant planning instrument that is consistent with Part 2 may make it obvious what the outcome of an application should be.   In those circumstances an ‘overall broad judgment’ under Part 2 should not be used to effectively bypass the intent of the plan provisions.

Direct consideration of Part 2 might be appropriate in relation to proposed plan changes beyond the specific carve-outs set out in King Salmon

Comments made by the Court of Appeal in RJ Davidson leave open the possibility that there might be situations where direct consideration of Part 2 RMA is appropriate in the context of a plan change (beyond the specific carve-outs noted in the King Salmon decision itself).

In King Salmon the Supreme Court commented that it might have been appropriate to undertake an assessment under Part 2 in relation to a proposed plan change affecting the coastal environment, if (1) there was an allegation as to the lawfulness of the relevant parts of the NZCPS; (2) the NZCPS did not “cover the field”, i.e. did not address the matter to which the plan change related; or (3) there was uncertainty around the meaning of a particular NZCPS policy.

Comments made by the Court of Appeal in RJ Davidson stress that King Salmon should be seen in the context that the Supreme Court was considering proposed regional plan provisions which would allow a type of development that was contrary to specific prescriptive provisions of the NZCPS.  It described the Supreme Court’s decision as a “contextual rejection” of the principle of applying an overall broad judgment under Part 2.

This leaves open the possibility that where an application for a plan change is not directly contrary to specific directive provisions of a higher order planning document, direct reference to Part 2 RMA might be appropriate.  For example, if there were general provisions in the higher order planning document which a proposed plan change was potentially consistent with and general provisions of that higher planning document that the change was potentially inconsistent with.  In those circumstances an overall broad judgement under Part 2 might be required to determine what outcome was appropriate.

The Court of Appeal’s decision in RJ Davidson highlights the danger of taking statements in higher court of documents out of context

RJ Davidson highlights the danger of extracting statements from higher court judgments and giving them widespread application independent of the factual background of the case they originated from.

The same thing has happened with other cases.  One of the most notable being subsequent application of the comments made by the Court of Appeal in Hawthorn Estate about what constituted the environment an application for resource consent should be assessed against in that case.

In Hawthorn Estate the Court was considering whether it was an error of law for a decision-maker to have taken into account the fact that, while land uses surrounding a proposed development site were currently rural, resource consents had been granted to change the use of much of the surrounding land.  In finding that no error of law had occurred in those circumstances the Court of Appeal made the following statement:

In our view, the word ‘environment’ embraces the future state of the environment as it might be modified by the utilisation of rights to carry out permitted activity under a district plan.  It also includes the environment as it might be modified by the implementation of resource consents which have been granted at the time a particular application is considered, where it appears likely that those resource consents will be implemented.  We think Fogarty J erred when he suggested that the effects of resource consents that might in future be made should be brought into account in considering the likely future stated of the environment.  We think the legitimate considerations should be limited to those that we have just expressed.

In the context of the decision the Court of Appeal was making this is, unsurprisingly, all eminently sensible.  In that context existing resource consents that were likely to be implemented were a legitimate consideration, future consent applications that might be made were not.

However, practitioners have taken the quoted statement from HawthornEstates and sought to argue that it is a code which applies to all resource consent applications – so that activities that could lawfully be undertaken on land surrounding a proposed development under RMA mechanisms other than permitted activity rules or unimplemented resource consents should be disregarded solely because those other legal mechanisms are not specifically referred to in Hawthorn Estates.   There is nothing in Hawthorn Estates to indicate that that was the Court of Appeal’s intention.

The key take out from RJ Davidson?  Read higher court statements in the context that they are made and always apply common sense.

Footnotes

[1]Environmental Defence Society Inc v The New Zealand King Salmon Co Ltd [2014] NZSC 38.

[2]RJ Davidson Family Trust v Marlborough District Council [2018] NZCA 316.

[3]Queenstown Lakes District Council v Hawthorn Estate Ltd [2006] NZRMA 424 (Court of Appeal).

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