Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council
[2015] NZHC 2343
•25 September 2015
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
CIV-2015-425-000024 [2015] NZHC 2343
BETWEEN KAWARAU JET SERVICES HOLDINGS
LIMITED Appellant
AND
QUEENSTOWN LAKES DISTRICT COUNCIL
First Respondent
AND
QUEENSTOWN WATER TAXIS LIMITED
Second Respondent
Hearing: 24 August 2015 Appearances:
J D K Gardner-Hopkins, E J Hudspith & C R Gubb for the
Appellant
N M H Whittington and M R Walker for the First Respondent
P A Steven QC for the Second RespondentJudgment:
25 September 2015
JUDGMENT OF NATION J
Introduction
[1] Kawarau Jet Services Holdings Limited (K-Jet) had its origins in a business and company in which Mr Neville Kelly, his wife and his brother Mr Shaun Kelly were shareholders. In the late 1980s it was one of a number of jetboat operators offering jetboat excursions on Lake Wakatipu and nearby rivers. After the Resource Management Act 1991 (RMA) came into effect, such activities had to be authorised by resource consents.
[2] The business expanded through the acquisition of various other jetboating businesses, associated boats and consents.
KAWARAU JET SERVICES v QUEENSTOWN LAKES DISTRICT COUNCIL [2015] NZHC 2343 [25
September 2015]
[3] In 1997, the K-Jet business applied for consents to operate on the gorge section of the Shotover River. That application was opposed by the sole operator there, Shotover Jets Limited (Shotover Jets).
[4] An agreement was reached between Shotover Jets and the Kellys. Basically, the Kellys and their company agreed not to compete for business on the gorge section of the Shotover River. Shotover Jets agreed not to operate on the lower Shotover and Kawarau Rivers or on Lake Wakatipu. Through that agreement, the Kellys’ company began operating the jetboats previously used by Projet Limited and Helijet Limited, companies and businesses owned by Shotover Jets.
[5] In 1999, Mr Neville Kelly and his wife sold out of the business.
[6] In 2004, K-Jet took over the business of another operator, Twin Rivers Jet Ltd. As a result, it acquired resource consents relating to that company’s jetboat activities on Lake Wakatipu and the lower reaches of the Kawarau and Shotover Rivers.
[7] In 2007, K-Jet acquired from Shotover Jets the business and associated jetboating assets of Projet Limited and Helijet Limited which it had been operating in the years previous. It also obtained consents for the operating of jetboats on Lake Wakatipu and lower reaches of the Kawarau and Shotover Rivers.
[8] In 2008, Mr Neville Kelly and his wife purchased Queenstown Water Taxis Limited (QWT). That company had consent to operate charters and taxis on Lake Wakatipu. It had also applied for a consent for jetboating activities on the Kawarau River.
[9] The application was:
(a) to operate one commercial jetboat on the Kawarau River from River Bridge approximately 14 kilometres downstream to near the Arrow River confluence;
(b)to operate up to three boats (approximately 10 trips per day) on Lake Wakatipu and the Kawarau River to approximately 14 kilometres downstream to near the Arrow River confluence; and
(c) both applications involving pick-up and drop-off of passengers at an established berth at a jetty in Queenstown Bay or at Frankton Marina.
[10] QWT’s application had originally been granted on a non-notified basis. This was quashed by the High Court in judicial review proceedings brought by K-Jet in March 2009.1
[11] The application was the subject of a lengthy hearing in the Environment Court in 2010. Consents were ultimately issued in accordance with the applications in an interim judgment of the Environment Court.2
[12] In 2013, QWT applied to the Queenstown Lakes District Council (QLDC) for a variation to each of two existing resource consents to increase the maximum number of passengers per boat on each consent and the grant of a land use consent (to allow for an optional run on the lower Shotover River). At that time, K-Jet was the sole incumbent commercial jetboat operator with consents to operate on the lower Shotover River.
[13] QWT’s 2013 applications were heard by commissioners in November 2013.
The variations and the land use consent were granted.
[14] K-Jet appealed this grant to the Environment Court. On 5 February 2015, the Environment Court confirmed the grant of a resource consent to QWT to operate four boats on the lower Shotover River in conjunction with the consents allowing it
to operate on the lower Kawarau River and Lake Wakatipu.3
1 Kawarau Jet Services Limited v Queenstown Lakes District Council HC Invercargill CIV-2008-
425-518, 9 March 2009.
2 Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council [2010] NZEnvC 419 [Interim Decision]; Kawarau Jet Services Ltd v Queenstown Lakes District Council [2011] NZEnvC 320 [Final Decision].
3 Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council [2013] NZEnvC 14, [2015] NZRMA 185 [2015 Decision].
[15] K-Jet’s opposition to the grant of the consent to QWT centred on safety issues. In considering those issues, the Environment Court had to consider QWT’s proposed use of the lower Shotover River, not just in terms of how it was being used by other people and businesses, including K-Jet, but also how it could potentially be used having regard to K-Jet’s existing consents.
[16] In granting the consent to QWT, the Environment Court determined that three resource consents, previously granted to K-Jet, had lapsed under s 125 of the RMA. The Court decided that these consents had lapsed on the basis that they had not been implemented within five years of their being granted.4
[17] K-Jet has appealed to the High Court on the grounds of errors of law in relation to that aspect of the Environment Court’s decision.
Legal context
[18] Counsel for all parties accepted and recognised that such appeals must be on points of law rather than on the facts or merits of the case. 5
[19] The questions for this Court are whether the Environment Court:6
(a) applied a wrong legal test; or
(b)came to a conclusion without evidence or one to which, on the evidence, it could not reasonably have come; or
(c) took into account matters which it should not have taken into account;
or
(d)failed to take into account matters which it should have taken into account.
4 At [88]-[90].
5 Resource Management Act 1991, s 299, Environmental Defence Society Inc v New Zealand King
Salmon Company Ltd [2013] NZHC 1992, [2013] NZRMA 371.
6 Countdown Properties (Northlands) Ltd v Dunedin City Council [1994] NZRMA 145 (HC) at
12.
[20] K-Jet also submitted that significant procedural errors and a failure to meet the requirements of natural justice can give rise to an error of law capable of consideration in a point of law appeal.7
The natural justice issue:
[21] K-Jet submits that there was an error of law in that the Environment Court breached the principles of natural justice in making the s 125 lapse finding without putting K-Jet on explicit notice that it faced the risk of the Court making such a finding.
The collateral challenge issue:
[22] K-Jet also argues that, through the Environment Court’s decision, K-Jet has lost consent RM040414(b) (“the Twin Rivers (b) consent”) because the QLDC acted unlawfully in requiring the previous holder of a resource consent to surrender the consent it held for one boat when it sold its business to K-Jet in 2004 and in requiring K-Jet to then apply for and be granted a new resource consent, albeit on virtually identical terms.
[23] K-Jet makes a collateral challenge around this allegedly unlawful policy of the QLDC. K-Jet argues that the Twin Rivers (b) consent had been utilised and was thus an effective consent when transferred to K-Jet in 2004. K-Jet argues, but for the unlawful QLDC policy, the consent could not have lapsed through any subsequent non-use.
Unavailable findings:
[24] There are two distinct aspects of this. K-Jet says that the Environment Court made an error of law in concluding that K-Jet’s practice of allocating the use of a boat on a particular day to a particular resource consent on a rotational basis (“the
rotational policy”) was not a valid way of giving effect to the consents. In the
7 Chorus Ltd v Commerce Commission [2014] NZHC 690, referring to E v Secretary of State for the Home Department [2004] EWCA Civ 49 [2014] 2 WLR 1351; Plain Sense (Taieri Plains Environmental Protection Society) Inc v Dunedin City Council HC Dunedin CIV-2006-412-903,
15 May 2007 at [18].
alternative, if the rotational policy was not seen as a valid way of giving effect to the consents, K-Jet submits that the other evidence as to the way the consents were used was such that the Environment Court’s decision was not one reasonably open to it.
Application for leave to adduce further evidence
[25] On 15 April 2015, K-Jet filed an application for leave to adduce the affidavit evidence of Shaun Kelly. QWT opposed the application. Consistent with its stance of only wishing to assist the Court in relation to the collateral challenge issue, QLDC neither opposed nor consented to the application.
[26] Rule 20.16 of the High Court Rules states (as relevant):
(2) … a party to an appeal may adduce further evidence only with the leave
of the court.
(3) The court may grant leave only if there are special reasons for hearing the evidence. An example of a special reason is that the evidence relates to matters that have arisen after the date of the decision appealed against and that are or may be relevant to the determination of the appeal.
(4) Further evidence under this rule must be given by affidavit, unless the court otherwise directs.
[27] Rule 20.16 (and its predecessor r 718) reflects the principles adopted by the Court of Appeal in Schier v Removal Review Authority.8 There the Court of Appeal had stated the rule reflected an inherent jurisdiction to consider the admission of new evidence in appeals on points of law, albeit only in “very special circumstances”.9
[28] Ms Steven referred to a statement from Culverden Retirement Village Ltd v
McLuckie:10
The discretion is sparingly exercised and the presumption is that appeals will be heard on the record as it exists. In order to satisfy the test the evidence must be cogent and likely to be material and could not reasonably have been produced at first instance.
8 Schier v Removal Review Authority [1999] 1 NZLR 703 (CA).
9 At [706].
10 Culverden Retirement Village Ltd v McLuckie HC Auckland CIV-2007-404-750, 18 September
2007 at [16].
[29] Given the r 20.16 discretion, the availability of the evidence at the time of the first instance decision is not an absolute bar to its admission at the appeal stage. Nevertheless, the example referred to in r 20.16(3) emphasises that it will usually be necessary for the evidence to be new and for it not to have been reasonably available at the time of the first instance hearing for it to be admitted.
[30] The importance of this element in exercising the discretion was emphasised and explained by the Court of Appeal in White v Spence.11 There, an appellant, unrepresented at trial, had sought to adduce in the Court of Appeal a large volume of bank statements to show the extent to which another party had benefited from a trust. The judgment records Ms White’s submission “that if this additional material had been placed before Priestley J, it would have had a material influence on the outcome”.12
[31] French J noted that the bank statements were business records and inherently reliable, in contrast to an analysis of those statements by Ms White which she also wished to put in evidence. French J went on to say:
[17] More importantly, the evidence is not fresh. The financial records were all in existence and were discoverable at the time of the trial. Mr Spence’s bank statements had been discovered in the Family Court for the purposes of relationship property litigation between Ms White and Mr Spence. As for the Trust’s bank statements, these were in the control of Ms White and Ms Freeman.
[32] And later:
[19] All litigants, whether self-represented or not, are under an obligation to put their best case at trial and must live with the litigation strategy they choose to adopt. On appeal, parties are not entitled to recast their case by adducing new evidence, which is what the appellants in this proceeding are effectively attempting to do.
[33] In CH & DL Properties Ltd v Christchurch District Licensing Agency, Fogarty J acknowledged the discretion which is available to the Court but also emphasised that very special reasons have to be advanced as to why the evidence
should be admitted.13 He also observed that the High Court Rules “are a form of
11 White v Spence [2014] NZCA 298.
12 At [14].
13 CH & DL Properties Ltd v Christchurch District Licensing Agency (2010) 20 PRNZ 680 (HC) at
subordinate legislation, inferior to a statutory provision” so that an appeal limited to a question of law “cannot be used to achieve a merit review of the decision under appeal”.14 The risk of that occurring must increase if the Court permits further evidence to be given on an issue relating to the merits of the appeal. I agree.
[34] There have been occasions when new evidence has been admitted, not to challenge the earlier decision on its merits but to provide the Court with contextual background which it needed to better understand the issue it was dealing with.15
Was the evidence available earlier?
[35] In his affidavit, Mr Shaun Kelly seeks to explain why he did not consider there was a risk the Environment Court might decide consents had lapsed and thus why he did not provide evidence to the Environment Court as to the entire history of the consents which were at issue. The affidavit also seeks to inform the Court as to the evidence which he now says he would have given to the Environment Court as to K-Jet’s acquisition and exercise of consents. Much of the evidence thus goes to the merits of a significant issue which had to be considered by the Environment Court, namely, whether consents had lapsed pursuant to s 125.
[36] In his submissions, Mr Gardner-Hopkins properly acknowledged that Mr Shaun Kelly’s evidence cannot be considered as new evidence in the sense of being evidence that could not have been put before the Environment Court. He acknowledges that it is evidence which “was available” at the time of that hearing. He submitted that there are, nevertheless, special reasons for permitting it to be admitted on this appeal, reasons tied up with the alleged breach of natural justice. He submitted that the evidence is relevant to the appeal in explaining both why K-Jet did not perceive its consents were at risk and the materiality of the claimed natural
justice error.
[34] and [42].
14 At [32].
15 Legal Services Agency v McDonald-Wright HC Wellington CIV-2009-404-6356, 16 February
2010; Terrace Tower (New Zealand) Pty Ltd v Queenstown Lakes District Council [2001] 2
NZLR 388 (HC).
Is the evidence cogent and material?
[37] For evidence to be admitted, it must be “cogent and material”.16 I accept the submission made by Ms Steven for QWT that whether or not there has been a breach of natural justice should be considered against the record of what actually occurred. Because that record is detailed and comprehensive, I do not consider the further evidence Mr Shaun Kelly seeks to now give, is either cogent or material. The proposed evidence was available and could have been given at the Environment Court hearing. K-Jet did adduce evidence as to how it claimed to have given effect to consents through application of the rotation policy. It was thus aware of the need to address that issue and chose to deal with it through the evidence adduced at the hearing. K-Jet was under an obligation to put its best case forward, particularly so in the context of all the litigation which has occurred between these parties over resource consents. As French J warned in White v Spence, the litigants must abide
their litigation strategy and its consequences.17
Would the evidence have had an effect on the 2015 Decision?
[38] Having heard submissions and considered all the other information properly before the Environment Court, I can say that admission of the evidence would not have affected the judgment I come to on this appeal. I am also satisfied that it would not have led to a different result, had the evidence been before the Environment Court.
[39] In the context of all the issues and evidence which I have considered in relation to this appeal, I am not granting leave to K-Jet to adduce the further affidavit of Mr Shaun Kelly.
The natural justice issue
[40] QWT accepted that the Environment Court was required to observe principles of natural justice in reaching its decision and, if it did not do so, that would be an
error of law.
16 Culverden Retirement Village Ltd v McLuckie, above n 10, at [16].
17 White v Spence, above n 11, at [19].
[41] Despite this concession, I note there is authority to the contrary.
[42] In McFarlane v Chief Executive of the Department of Work and Income (where the relevant statute conferred rights of appeal on questions of law), Harrison J held that a procedural error such as failure to observe natural justice does not constitute an error of law.18 His Honour held that breach of natural justice “goes solely to the separate question of whether or not [the appellant] was granted a fair hearing”.19 If the decision-making authority had denied a fair hearing, s 27(2) of the New Zealand Bill of Rights Act 1990 (NZBORA) confirms the common law position that the appropriate remedy is an application for judicial review. However, a breach, if proven, would not render the public authority’s decision erroneous in point of law.
[43] Other Courts have similarly concluded that the “process” or “procedural”
failing of a denial of fair hearing does not trigger a right of appeal.20
[44] In his seminal text, Philip Joseph condemns this analysis, commenting that:21
This reasoning engages an insupportable distinction. The principles of procedural fairness are too indispensable, and too comprehensive in their reach, to constitute error of law for some purposes (judicial review) but not others (statutory rights of appeal). Lack of a fair hearing is a fundamental denial of justice that causes the entire decision-making to misfire. Even the superior court will set aside their own decisions for lack of a fair hearing.
[45] For my part, I find the reasoning of Mr Joseph persuasive. If a conclusion which is unsupportable on the evidence can constitute an error of law, it is difficult to see why a failure to observe the principles of natural justice, as required by s 27, could not also constitute an error of law. There would normally be considerable advantage in having such an issue dealt with as part of an appeal rather than through
separate proceedings.
18 McFarlane v Chief Executive of the Department of Work and Income HC Auckland AP17-PL02,
22 July 2002.
19 At [25].
20 Bleakley v Environmental Risk Management Authority [2001] 3 NZLR 213 (HC); Taylor v
Department of Corrections HC Wellington CRI-2005-485-158, 3 March 2006 at [7]. Contrast Works Civil Construction Ltd v Accident Rehabilitation and Compensation Insurance Corp [2001] 1 NZLR 721 (HC) at [41]; Accident Compensation Corp v Wellington District Court [2001] NZAR 265 (HC).
21 Philip A Joseph Constitutional and Administrative Law in New Zealand (4th ed, Thomson
Reuters, Wellington, 2014) at [23.4.1] (citation omitted).
[46] In any event, as the issue has been raised before me and the parties have made comprehensive submissions on the issue, I do deal with it.
[47] However, Ms Steven submitted that on an appeal limited to error of law the breach of natural justice must be apparent from the record of the proceedings itself, without the need to resort to affidavit evidence. For this submission, she referred to the judgment of the High Court in McFarlane v Chief Executive of the Department of Work and Income.22
[48] For my part, I would doubt that there is such a limitation which can be stated in absolute terms. There may be situations where the breach of natural justice principles can be shown only through putting further evidence before the Court, for example, where a party is seeking to show that a decision maker reached his decision not on the basis of evidence that had been put before him but as a result of some inducement or coercion to which there is no reference on the record but of which a party learns independently. Similarly, appeals based on the actual or perceived bias of a decision maker may well rely on evidence presented independently of the record.
[49] Such situations do not arise with this appeal. The particular natural justice challenges are such that the validity should be measured against the record of what occurred during the proceedings. The formal written submissions are part of the record of the proceedings.
[50] K-Jet referred to various cases where the Courts have recognised the fundamental importance of those exercising judicial power observing principles of natural justice.23
[51] Relevant natural justice principles of importance in this case are:
22 McFarlane v Chief Executive of the Department of Work and Income, above n 18.
23 Board of Education v Rice [1911] AC 179 (HC) at 182; O’Regan v Lousich; Proprietors of Mawhera v Maori Land Court [1995] 2 NZLR 620 (HC) at 627; Re Erebus Royal Commission; Air New Zealand Ltd v Mahon [1983] NZLR 662 (PC) at 671; Treaty Tribes Coalition, Te Runanga o Ngati Porou and Tainui Maori Trust Board v Urban Maori Authorities [1997] 1
NZLR 513 (PC).
(1) Decisions must be based on evidence of probative value.24
(2)The decision maker must listen fairly to evidence and a rational argument based on the evidence in relation to a finding that it is contemplating making.25
(3)A Court should not depart from the issues that had been placed before it and should not depart from those issues and rule on another issue which was of importance to the parties without giving them the opportunity to be properly heard on this further issue which the Court was deciding.26
(4)The more serious the consequence or the more serious the decision, the greater the procedure protection and standards of disclosure in fair treatment that will be required.
(5)The principles of natural justice are flexible in practice and dependent on the particular situation, the circumstances of the case, the nature of the inquiry, the rules under which the Tribunal is acting, the subject matter that is being dealt with, and so forth.27
[52] Against those principles, it was submitted for K-Jet:
(a) The Environment Court should have put K-Jet on explicit notice that K- Jet’s resource consents were at risk of being set aside when QWT’s application for consent was being determined.
(b)The Court failed to enquire into the ways in which the consents were acquired and then used in the critical period following acquisition.
Consequently, the Court’s decision as to the lapse of consents could not
24 Re Erebus Royal Commission; Air New Zealand Ltd v Mahon, above n 23, at 671.
25 At 671.
26 Treaty Tribes Coalition, Te Runanga o Ngati Porou and Tainui Maori Trust Board v Urban
Maori Authorities, above n 23.
27 Philip A Joseph Constitutional and Administrative Law in New Zealand (2nd ed, Brookers, Wellington, 2001) at 848, as quoted with approval by the High Court in Hampton v District Court at Christchurch [2014] NZHC 1750, [2014] NZAR 953 at [17].
have been based on evidence which was both relevant and necessary to that determination.
(c) Because it had not been given the necessary notice that its consents could be at risk, K-Jet did not have the opportunity to present evidence that would have enabled it to resist the Court’s determination over lapse.
(d)It was unnecessary for the Court to make the legal finding as to lapse that it did. The Court had only to consider how the consents might have been used in assessing QWT’s application against the existing environment. It could have done that without determining that certain consents had lapsed.
(e) The Court’s failings were material in that, if K-Jet had been given better notice, it would have been able to produce evidence as to how the consents were acquired and implemented so as to avoid the Court making the determination it did.
(f) Important rights were at stake. The resource consents were of economic value. They had been acquired for valuable consideration. In determining that consents had lapsed, the Court took away valuable rights.
[53] Mr Gardner-Hopkins acknowledged that K-Jet did know the issue of whether consents had lapsed was going to be debated between the parties during the hearing. He also acknowledged that whether or not K-Jet had been given sufficient notice as to the potential for the Court to determine consents had lapsed was to be considered with regard to the substance of what happened rather than mere form. In that sense, he acknowledged that it was not essential for QWT to have sought a declaration that certain of K-Jet’s consents had lapsed.
[54] For QWT, it was submitted:
(a) The Environment Court did not have to put K-Jet on explicit notice that its resource consents were at risk of being set aside through a finding the Court might make, given all parties knew QWT was asking the Court to make such a finding.
(b)Given the way K-Jet’s case had been pleaded before the Environment Court, close scrutiny of K-Jet’s consents was inevitable. The Court had to consider whether K-Jet’s consents would all be implemented. This, in turn, necessarily required the Court to make factual findings on scope and on lapse.
(c) In the context of all proceedings in which the parties had been engaged and by reference to the Court record, it could be demonstrated that K- Jet was on notice and the Court could make the finding it did as to lapse. K-Jet had the opportunity to make submissions on this issue and to adduce evidence to deal with the issue.
[55] I have carefully considered the careful, detailed and thorough submissions from counsel for both K-Jet and QWT. I have also considered the record of all the proceedings and other relevant material in the three bundles of documents made available to me by the parties. I do not consider that there was a breach of natural justice in the Environment Court determining that particular resource consents held by K-Jet had lapsed.
[56] Counsel for both K-Jet and QWT agreed that the Environment Court had to consider the extent to which K-Jet’s resource consents were likely to be used in the future. On its appeals to the Environment Court, K-Jet was opposing the grant of consent on grounds that safety on the Shotover River would be in peril. When considering whether to grant consent, the Environment Court was required to assess the actual and potential effects of QWT’s proposal “on the environment”, in the context of s 104(1)(a).
[57] The planners called by QWT and K-Jet had agreed that there were two primary issues to be resolved:
(1)the nature of the environment in respect of which the application is to be assessed (i.e. the number of boats that K-Jet holds resource consents to operate on the lower Shotover River) and the number of those consents that form part of the existing environment; and
(2)the magnitude of the adverse safety and amenity effects that will be produced by that proposed activity.
[58] Counsel agreed that the Environment Court had to make its evaluation of future environmental impacts of the grant of consent to QWT with regard to how K- Jet’s consents were likely to be exercised in the future. Both agreed this evaluation was required applying the principles from the Court of Appeal judgment in Queenstown Lakes District Council v Hawthorn.28 In Hawthorn, the Court of Appeal considered that the “environment” referred to in s 104(1)(a) embraces the future state of the environment as it might be modified by the implementation of resource consents where it appears that those resource consents will be implemented.29
[59] K-Jet’s appeal and opposition to the grant of consents was not based on the impact consents for QWT would have on the environment, taking into account only K-Jet’s current operations pursuant to its consents. K-Jet was asking the Environment Court to make its assessment against the way it could potentially use its consents in the future, on the basis of the additional activities that would be permitted pursuant to all consents it held. It was thus inevitable that the Environment Court would have to consider the extent to which those consents would permit K-Jet to operate more boats on the river. Applying Hawthorn principles, there was a risk the Environment Court could make a determination that certain consents had lapsed.
[60] In the context of this case, the Court was almost inevitably going to be asked to decide whether certain consents had lapsed. Such a request became a certainty
when QWT told the Court and K-Jet that it was seeking such a determination. The
28 Queenstown Lakes District Council v Hawthorn Estate Limited [2006] NZRMA 424 (CA).
29 At [84].
parties should have been aware of this. I also find that they were in fact aware there was such a risk.
[61] In its Interim Decision of 2010, the Environment Court referred to the way “existing environment” had to take into account resource consents granted in and around a relevant locality so as to ascertain how the future environment would be altered by the implementation of those consents.30 This was expressly with reference to Hawthorn.
[62] The Court then referred to counsel’s closing submissions for K-Jet:31
… counselled against entertaining any de facto reduction of what was lawfully granted in earlier consents for the purpose of assessing the effect of a subsequent grant on an existing consent holder.
[63] The Court referred then to detailed expert evidence it had received as to the way potential use of existing consents might be influenced by a growth in the tourism market and increased visitor numbers. The Court then considered it was appropriate:32
… to analyse the numbers of boats already consented to, add in the numbers the subject of the present applications, and assume maximum usage of those boats at peak periods … and test the resulting respective numbers of boats movements against the advice provided to us by witnesses knowledgeable in the operation of jet boats and the safety considerations that surround them.
[64] The Court then said they accepted counsel for QLDC’s analysis of numbers
based on existing consents and stated:33
… that is, we accepted his analysis of what the existing consents entailed in terms of boat numbers, and generally the consequential potential trip numbers. But we completely discounted a more speculative aspect of his approach where he invited us to consider altered scenarios in the event that certain of the appellants consents might lapse in 2012 if not taken up to the requested legal extent by the acquisition and utilisation of boats.
30 Interim Decision, above n 2, at [222].
31 At [223].
32 At [242].
33 At [244].
[65] There was no dispute that the Environment Court was there referring to the possibility of consents that had been granted in 2007 lapsing in 2012 if not used within five years, as required by s 125.
[66] K-Jet must thus have been aware, as a result of the 2010 hearing, that there was the potential for another party to assert and for the Environment Court to be asked to find that certain consents had lapsed if they were not used within five years.
[67] The evidence produced in the Environment Court for 2014 and referred to on this appeal also confirms K-Jet was aware of these risks. It was after the Interim and Final Decisions of the 2010 hearing that K-Jet adopted its rotational policy as a means of attempting to establish that such consents were being used so as to avoid their lapsing.
[68] QWT produced a statement of evidence from its planner, Mr Graham Taylor, on 4 April 2014. It referred to a key area of disagreement between the parties as to the exact number of boats and trips for which K-Jet “holds current consents for the lower Shotover River”. Mr Taylor referred to the fact that, in the previous proceedings, he had provided evidence on these matters involving investigation of historical resource consent applications and decisions, tracking their subsequent evolution to the present day. It was his evidence, as notified to K-Jet:
That evidence was accepted by the Court, except for opinion as to potential lapsing of some consents, which was regarded as being speculative, due to the lapsing date for some approvals not being met. That time has now passed, therefore I consider that a more definite conclusion can be met on that matter.
[69] Mr Taylor said that he considered K-Jet had “live” resource consents for up to nine boats on the lower Shotover River. Further, he considered that four resource consents granted to K-Jet in June 2004, August and September 2007, would now have lapsed. His reasons for coming to that conclusion were set out in the later paragraphs of his evidence, along with a tabulation of live and lapsed consents.
[70] Mr Taylor and K-Jet’s planner, Mr Jeffrey Brown, produced a joint witness
statement in which they agreed:
29. We acknowledge that there is dispute between parties as to the exact number of boats and trips presently authorised under the Kawarau Jet resource consents. Evidence was submitted to the Environment Court in respect of the hearing of Env-2009-CHC-170/171, however that appeal concerned different parts of the Kawarau River, and not all existing consents overlap with the lower Shotover River. It is therefore necessary to reassess the consents insofar as they relate to operation on the Shotover River. We also acknowledge that there is disagreement between parties as to possible implementation / lapsing of some consents.
30. We therefore agree that the existing consented Kawarau Jet trips form part of the existing environment under which the application is required to be considered.
31. The extent of these consents is a matter which requires resolution.
[71] Mr Brown subsequently produced an independent statement of evidence, having been engaged to review and respond to the evidence of Mr Taylor in relation to the status of the resource consents held by K-Jet. He referred to Mr Taylor’s view that some of K-Jet’s consents had lapsed under s 125 of the Act. Mr Brown said that how those consents were used was a matter more appropriately described by Mr Shaun Kelly, from whom he understood that K-Jet exercised all its consents using the existing fleet.
[72] In his evidence, Mr Shaun Kelly referred to the expansion of K-Jet’s business, its acquisition of other jetboat companies and the way shareholder interests within K-Jet had changed. He referred to the number and type of boats K-Jet operated and where they operated. Mr Kelly referred to K-Jet holding consents to operate 18 jetboats and how a number for each of the 18 consents “has been allocated to each of our 8 boats”. This evidence related to the rotational policy which K-Jet adopted. This was the evidence which Mr Kelly chose to put before the Court on the issue of potential lapse.
[73] Ms Steven, for QWT, argues that the issue as to whether consents had lapsed and whether the Environment Court should make a determination as to this was squarely raised in opening submissions for QWT when the hearing began.
[74] Having read those submissions, I accept Ms Steven is correct. At no stage,
after Ms Steven’s opening or at any later point in the proceedings, did K-Jet request
an adjournment or an opportunity for it to present further evidence on the lapse issue. That has some significance. K-Jet, both before the hearing and at its outset, wished to argue that the Environment Court should not proceed to hear the case because it was challenging whether the Council’s appointment of the Commissioner to consider the initial application was valid. When the hearing began, Mr Todd advised the Court that he was seeking an adjournment of the hearing so K-Jet could pursue a judicial review over the Commissioner’s appointment. He did not suggest any delay or adjournment was necessary for K-Jet to deal with the lapse issue.
[75] In discussing the application of Hawthorn, Ms Steven referred to the need for the Court to determine the scope of existing consents. She then referred to the prospect of certain of K-Jet’s consents lapsing, the Environment Court’s 2010
Interim Decision and the Courts refusal to enter the realm of speculation as to whether the 2007 consents would lapse. She suggested this was no longer a matter of speculation and said “for important reasons of policy, it is highly desirable that there be a resolution on this issue”.
[76] Ms Steven referred to there having been no increase in the size of K-Jet’s fleet. She submitted that they were in the same position as in 2010 with regard to the unused capacity under their suite of consents.
[77] Ms Steven stated:
The appellant’s case at this hearing is that two consents for the Shotover River will now have lapsed and it will be open to the Court to now make that finding.
[78] She summarised the basis for that submission and then said “[the] applicant also submits that two of the 2007 consents subsequently granted to the appellant will also have lapsed”.
[79] Under the heading “Mischief behind s 125”, Ms Steven referred to the policy
reasons why a consent should not subsist for a lengthy period without being given
effect to, with reference to the discussion of the High Court in Biodiversity Defence
Society Inc v Solid Energy NZ Ltd.34
[80] I find that, through the evidence presented in advance of the hearing and through counsel’s submissions, QWT had put K-Jet on plain notice that the Court was being invited to determine that, in reaching its decision, certain of K-Jet’s consents had lapsed through the application of s 125.
[81] Both the Environment Court and K-Jet’s counsel appreciated the Court was being asked to make this finding. Indeed, after Ms Steven’s opening submissions, counsel and the Court proceeded on the basis that the Court was being asked to make a determination on this issue. Hence, the exchange on lapse when K-Jet’s counsel, Mr Todd, was cross-examining QWT’s planner, Mr Taylor.
Q. Now could I ask you to look at the summary, and this is relevant to your issue I believe of your issue of lapsing?
A. Mhm.
Q. So you believe that the Court has sufficient information before it to consider or make findings as to whether or not certain consents have lapsed?
A. Yes.
Q. You do. And is it the applicant’s case that it is asking for those findings
to be made in the context of this application?
A. Well that’s a matter for legal submissions whether that’s been asked for, I’m not –
Q. Okay.
THE COURT: JUDGE NEWHOOK
I think that was Ms Steven’s position in opening.
[82] Mr Todd then cross-examined Mr Taylor over the nature of the Twin Rivers consent, how it was for an existing activity and how those consents came to be
transferred in 1997. He also cross-examined Mr Taylor as to Mr Taylor’s rationale
34 Biodiversity Defence Society Inc v Solid Energy NZ Ltd [2013] NZHC 3283, (2013) 17 ELRNZ
337.
for concluding that some of the consents had not been given effect to and whether that rationale was correct.
[83] In opening submissions for K-Jet, Mr Todd referred to the evidence Mr Shaun Kelly would be giving as to K-Jet’s rotational policy, the method used to allocate its consents to each boat. He noted Mr Taylor’s evidence that four resource consents had lapsed under s 125 of the Act. He then submitted that the present hearing was not the correct forum for the Court to consider the possible lapsing of K- Jet’s consent and that the Court had insufficient evidence before it to make an accurate determination on the issue of lapse. He submitted that QWT should have sought a declaration on the matter prior to the commencement of the hearing to ensure there was sufficient evidence provided to the Court on the issue. He noted the same matter had been discussed in length by witnesses and counsel in the earlier Environment Court hearing and thus said QWT must have been conscious from the outset that this issue would again be part of its argument supporting its application.
[84] Mr Todd then advanced arguments as to why, in the particular circumstances of these consents, the Environment Court could not find that they had lapsed, referring to the history and the evidence before the Court, in respect of each of the consents.
[85] Mr Todd thus acknowledged lapse was an issue which the Court was being asked to consider. He was willing and able to make submissions on the issue in the context of the evidence which both parties had put before the Court. While he suggested the issue should have been the subject of an application for a declaration, he did not suggest the Court had no jurisdiction to reach a determination on the issue in the absence of such an application. As noted above, he did not seek an adjournment of the proceedings to adduce further evidence on the issue. I note also Mr Gardner-Hopkins’ acknowledgement that the filing of an application for a declaration was not necessary to put the matter in issue.
[86] The lapse issue was squarely before the Environment Court when K-Jet called its witnesses. K-Jet’s planner, Mr Brown, was cross-examined by Ms Steven in a general way as to the manner in which K-Jet had obtained resource consents.
She referred him specifically to Mr Taylor’s summary and his table as to “lapsed consents on the Shotover”. Her cross examination related very much to the number of boats K-Jet owned and operated at particular times and whether, in relation to the number of boats in operation, it obtained certain consents which were surplus to its requirements. He was also asked questions as to whether there could be a resource management purpose for K-Jet’s rotation policy.
[87] Mr Brown was not re-examined in any way to elicit information from him as to whether it would have been necessary for the Court to know what boats had been used on what routes, what those markings of the boats had been, where they had started from, stopped or finished up, or the routes they had taken in determining whether particular consents had been used. Had that been considered important in dealing with the lapse issue at the time, there would have been an opportunity to bring those matters to the attention of the Court in Mr Taylor’s evidence-in-chief or on re-examination. K-Jet chose not to avail itself of that opportunity.
[88] Counsel for both K-Jet and QWT dealt with the issue of lapse in their closing submissions.
Conclusion
[89] Natural justice principles did not require the Environment Court to put K-Jet on notice that it was considering making a determination that consents had lapsed. The Erebus case is authority for the proposition that, in the context of a commission of inquiry, a Commissioner may have to give notice that he is going to make a finding significantly affecting the property or reputation of an individual and to give that individual or organisation an opportunity to respond in a situation where the finding could not reasonably have been foreseen or anticipated. This was not the situation with the determination which QWT asked the Environment Court to make. K-Jet knew that there was a risk such a determination would be made. Natural justice did not require the Environment Court to issue some sort of tentative or preliminary judgment with the parties having the opportunity to then present further submissions or evidence in relation to a tentative judgment.
[90] Nor can the Environment Court be criticised for recording its determination that consents had lapsed when it was satisfied the evidence had established that this was the legal consequence of consents not having been put into effect within five years. The determination was relevant and material to the assessment it had to make as to how consents held by K-Jet might be utilised in the future and the extent to which this might result in increased boat traffic on the Shotover River. The issue of lapse was before the Environment Court, firstly through K-Jet’s appeal and secondly through the evidence and submissions presented for QWT. Consequently, it was in the interests of the parties to these proceedings and consistent with the policies and principles of RMA that the status of these consents be clarified by the Environment Court.
[91] The Environment Court in its decision and both K-Jet and QWT stated that the judgment of the High Court in Christchurch City Council v Aidanfield Holdings Ltd was of some relevance.35 There the Environment Court had considered it appropriate to decide that certain buildings never had the protection afforded by a heritage listing in the operative district plan and thus no resource consent was required for their demolition. That conclusion was reached at the commencement of
a hearing where none of the parties had sought such a determination.
[92] K-Jet say it was significant the Environment Court put the parties on notice, that it considered there was an issue as to the heritage listing which it considered was fundamental to what it was being asked to determine at the hearing and gave the parties an opportunity to seek an adjournment to make further submissions on the point.
[93] Several parties appealed the Environment Court’s decision to the High Court on the grounds it was a breach of natural justice for the Court to deal with the particular issue on its own initiative in this way.
[94] In the High Court, Panckhurst J stated:36
35 Christchurch City Council v Aidanfield Holdings Ltd [2010] NZRMA 92 (HC), cited in 2015
Decision, above n 3, at [71].
36 At [22].
It is not uncommon for Judges to raise concerns about matters which have not necessarily been raised in the arguments of counsel. Where the concern, as here, relates to a fundamental point, it seems to me that a judge is bound to point out the difficulty.
[95] Having regard to what was involved with the appeal and the reason why the granting of a resource consent (the subject of the appeal) would have been necessary, Panckhurst J considered:37
… there can be no concern that the Environment Court was not properly seized of the matter, including in my view the issue as to the adequacy of the heritage listing itself.
[96] In that case, the appellants were arguing that there was a breach of natural justice in the way the Court had raised the particular issue and indicated the conclusion that it might come to. Ironically, in the present case, K-Jet is saying there was a breach of justice because the Environment Court did not put the parties on notice that it considered four of K-Jet’s consents were at risk and it was going to make a determination about that.
[97] The fact that the Environment Court in Aidanfield had put the parties on notice of the particular issue it was going to consider does not suggest that in the present case it was necessary for the Environment Court to give K-Jet explicit notice of what it might do in relation to the consents which were at issue. In the Aidanfield case, all the parties were taken by surprise over this particular issue. None of them had come to the Environment Court asking it to rule that there was no heritage listing and that demolition thus did not require a resource consent. In contrast, in this instance, all parties were on notice that QWT was seeking such a determination from the Court.
Collateral challenge
[98] K-Jet makes a particular challenge in relation to the Environment Court’s
determination that the Twin Rivers (b) consent had lapsed. K-Jet says it could never have lapsed if the QLDC had acted lawfully and transferred it to K-Jet in 2004.
37 At [25].
[99] This consent arose out of K-Jet’s purchase of the business of Twin Rivers Jet Ltd (Twin Rivers) in 2004. Twin Rivers had a consent to operate one 1710 Hamilton Jet from Queenstown Bay across Lake Wakatipu to the Kawarau River and on the Kawarau River to the Shotover River confluence, and on the Shotover River and lower reaches of the Shotover River to Taka Beach. The hours were limited to 08:00 to 20:00. The consent was granted only for those operations that were within the scope of previous consents granted to Twin Rivers in 1997.
[100] The consent had its origins in a consent issued to Lets Jet Limited on 25
March 1992 to regularise existing commercial activity. The operation undertaken pursuant to that consent was transferred to Alpine Jet Limited in October 1996 and then to Twin Rivers in 1997. With each change, the resource consent granted to the previous holder was surrendered. A new resource consent was then issued to the operator who had taken over the relevant business.
[101] The parties put before the Court an agreed statement of facts based on documents which were before the Environment Court. The agreed statement of facts informed the Court:
Following K-Jet’s acquisition of Twin Rivers Jet Ltd’s business in 2004, Twin Rivers (b) provided K-Jet with consent to continue the jet boat activities previously undertaken by Twin Rivers under [an earlier consent].
[102] At that time, QLDC advised Twin Rivers and K-Jet that it had a legal opinion that surface of water activities, such as the commercial jet boating activities, could not be transferred from one operator to another, pursuant to ss 134 to 137. QLDC required the earlier consent to be surrendered and a fresh consent to be issued to the new holder, pursuant to s 88.
[103] In 1996, s 2A was introduced by amendment of the RMA. It provides as follows:
2A Successors
(1) In this Act, unless the context otherwise requires, any reference to a person, however described or referred to (including applicant and consent holder), includes the successor of that person.
(2) For the purposes of this Act, where the person is a body of persons which is unincorporate, the successor shall include a body of persons which is corporate and composed of substantially the same members.
[104] As of 2 December 2008, QLDC began acting on a legal opinion it had received on 18 May 2007. That opinion was to the effect that the previous gap in the RMA (which had not provided for the transfer of surface water consents) had been addressed so that a purchaser of a previous consent holder’s business could notify the consent authority that they were the successor to a consent by virtue of the operation of s 2A. QLDC then dealt with the transfer of such a consent by requiring a letter from the transferor confirming the transfer and a letter from the transferee acknowledging that they would comply with the conditions of the resource consent.
[105] It was submitted for K-Jet that, with the 1996 amendment and the introduction of s 2A, QLDC acted unlawfully in requiring the previous consent holder to surrender its lease and the new business owner to be granted a new consent. The consent held by Twin Rivers had been given effect to by Twin Rivers at the time K-Jet acquired the Twin Rivers business. In accordance with the policy it came to implement in 2007, QLDC should simply have recognised that K-Jet had acquired that consent as a successor. It would then have been a consent which had been given effect to and thus could not have lapsed through non-use. (Mr Gardner- Hopkins acknowledged that, if not used for five years after becoming effective, it would have been possible for QLDC to cancel the lease. This would have to be done on notice with K-Jet having the right to appeal the cancellation to the Environment Court.)
[106] Alternatively, K-Jet argued that the Twin Rivers (b) consent was one which attached to the land which K-Jet was entitled to enjoy as an owner and occupier of the land for the time being, pursuant to s 134(1).
[107] On either basis, K-Jet argued it should have been treated by QLDC and by the Environment Court as having acquired a consent which had already been given effect to and which thus could not have lapsed through non-use.
[108] Counsel argued that K-Jet had been substantially prejudiced by the unlawful administrative action of QLDC in the way it had required K-Jet to obtain a new consent in 2004. As a result, counsel submitted that the Court should correct what happened on a retrospective basis with the consequence that the Environment Court would have lacked jurisdiction to determine that the Twin Rivers (b) consent had lapsed.
[109] By way of collateral challenge, K-Jet sought a declaration that QLDC acted unlawfully in requiring the Twin Rivers (b) consent to be surrendered in order to transfer it. They sought further orders:
(a) reinstating the consent held by Twin Rivers – RM 970575; (b) requiring the council to transfer that consent to K-Jet; and
(c) requiring the Environment Court to reconsider its decision on the two
QWT applications on that basis.
[110] Counsel for K-Jet acknowledged that this collateral challenge relates only to the Environment Court’s determination that the Twin Rivers (b) consent had lapsed. (The same argument could not be mounted in respect of consents obtained in 2007 because the consents held by Helijet and Projet, from which those consents were derived, had expired.)
[111] Mr Gardner-Hopkins submitted that the reality was that K-Jet would have understood in 2004 that it was having the bundle of rights associated with K-Jet’s Twin Rivers (b) consent transferred to it and would not have known that those rights were vulnerable to being lost through the consent not being implemented.
[112] Mr Gardner-Hopkins submitted that, if the error in respect of the Twin Rivers (b) consent was to be corrected in this way, the Environment Court would need to reconsider all matters. With the Twin Rivers (b) consent still in place, potentially K- Jet would have been able to operate one more boat on the lower Shotover River. The Environment Court might well need to reconsider the conclusions it reached with
regard to safety issues in light of the potential for the number of boats on the river to increase through the use of this consent. He submitted that, if the Court considered it unlikely K-Jet’s ability to operate an additional boat would materially affect the decision the Environment Court came to in permitting QWT to extend its operations to the lower Shotover River, in recognition of the error that had been made, the Court should nevertheless reinstate this consent and the rights associated with it for the benefit of K-Jet.
[113] Counsel for QLDC, Mr Whittington, told the Court that QLDC wished to engage in the appeal only to oppose the relief sought relating to the attack on the council’s former practice. The submission for QLDC was:
(a) there was and remains a gap in the RMA in that there is no transfer mechanism for surface-of-water consents;
(b)QLDC’s practice of seeking a surrender of the consent held by the vendor of a business and the grant of a new consent to the purchaser was a lawful use of the process under s 88;
(c) while QLDC encouraged to parties to deal with consents in this way, it did not require them to do so;
(d)K-Jet voluntarily accepted the way in which the consents had been dealt with;
(e) QLDC had done nothing to prevent K-Jet from exercising the Twin
Rivers (b) consent. If it lapsed, that was because of the operation of s
125. The link between QLDC’s practice and the lapsing of consents
was thus indirect and remote;
(f) if QLDC had acted unlawfully, in the exercise of its discretion, the
Court should decline the relief sought on the collateral challenge; and
(g) the gap remained after the s 2A amendment in 1996, but that
amendment did not make QLDC’s continued use of its previous
practice unlawful. That amendment permitted QLDC to treat a purchaser as having acquired a consent as a successor. That means only that the previous practice adopted by QLDC was unnecessary.
[114] For QWT, Ms Steven agreed with the submissions for QLDC as to the way Mr Whittington suggested s 135(1) should be interpreted and as to the gap in the RMA regarding transferral of surface-of-water consents. The only area in which she disagreed with Mr Whittington was in relation to his submission that QLDC could treat the purchaser of a business as having acquired a resource consent as a successor. She submitted that the term “successor” should be construed more narrowly and that it should not be taken to include a purchaser of a business in contrast to someone who acquires the property of a former owner through stepping into that person’s shoes as their successor by law. (Mr Whittington was anxious the Court not make a final ruling on this point given the way QLDC may have dealt with similar situations.)
[115] Ms Steven submitted that the reality before the Environment Court was that the original consents held by the previous owners, including the forerunner to the Twin Rivers (b) consent, had been surrendered. At law, they ceased to exist. She submitted that the Environment Court had no jurisdiction to treat the grant of the new consent as unlawful. Accordingly, she submitted the Environment Court could not be said to have been involved in any error of law in dealing with the Twin Rivers (b) consent on the basis it was a fresh consent.
[116] Mr Whittington submitted that the issue should not be dealt with on the basis QLDC had required Twin Rivers to surrender its consent with a new consent being issued to K-Jet. This submission was made despite counsel having signed the agreed statement of facts which referred to QLDC, after receiving its 1995 opinion, adopting:
… the practice of requiring the existing surface water land use consent to be surrendered by the previous owner and for the intended new owner to apply for a fresh consent under s 88 of the RMA.
[117] The agreed statement of facts also referred to the fact that, after receiving its
2007 opinion, QLDC “no longer followed its prior practice of requiring the surrender
of an existing consent and a subsequent application for a fresh consent”.
[118] I do not accept Mr Whittington’s submission that QLDC had not made a decision as to how resource consents were to be dealt with in this situation or that they were simply advising affected parties of the opinion they received, leaving it to interested parties to obtain their own legal advice and then proceed in whatever way they wished. Although it was not pursuant to a policy adopted by council, QLDC did deal with the situation as if there was no option but for the parties to deal with it through the surrender of a consent and the grant of a new one. That was made clear in QLDC’s decision of 1 June 2004 by which K-Jet was granted the rights formerly associated with a resource consent held by Twin Rivers. In the reasons for its decision, the QLDC stated:
The transfer of resource consents is normally governed under Section 134 of the Resource Management Act. However, in this case Council’s legal advice states that there is an anomaly under Section 134, which means that applications for the transfer of resource consents that involved activities on the surface of the water can not [be] processed as per Section 134. Consequently, the proposal can only be processed under Section 88 on [sic] the Resource Management Act.
[119] I consider the advice which QLDC received in 1995 was correct. There was no provision in the RMA which provided for the transfer of surface-of-water resource consents where there needed to be a change in the resource consent holder through the sale of a business.
[120] The commercial operation of boats on rivers and lakes is subject to the “land use” regime. “Land” is defined in the Act as including “land covered by water”. The operation of boats on rivers and lakes is subject to the “land use consent” regime. When the 1995 Advice was given to the Council, “land” was defined in the Act as including “land covered by water” and s 9 of the Act provided:
9. Restrictions on use of land
(1) No person may use any land in a manner that contravenes a rule in a district plan or proposed district plan unless the activity is-
(a) Expressly allowed by a resource consent granted by the territorial authority responsible for the plan; or
(b) An existing use allowed by section 10 or section 10A.
…
(5) In subsection (1), land includes the surface of water in any lake or river.
[121] The 2009 amendments to the RMA effectively relocated s 9(5) into the definition of land found in s 2 retaining equivalent limitations on the circumstances in which land includes the surface of water in lakes and rivers.
land-
(a) includes land covered by water and the airspace above land; and
...
(c) in a national environment standard dealing with a territorial authority function under section 31 or a district rule, includes the surface of water in a lake or river.
[122] I agree with the submission for QLDC that, under the current RMA, land only includes the surface of water in a lake or river in the two contexts just referred to in (c). Where a reference to “land” is otherwise intended to include the surface of water in lakes or rivers, the RMA specifically provides for this.38
[123] The transfer of different types of resource consents is dealt with in ss 134-
137.
[124] Pursuant to s 134(1), except as regards the use of the beds of rivers and streams, a land use consent and a subdivision consent attaches to the land to which each relates. The consent “may be enjoyed by the owners and occupiers of the land for the time being, unless the consent expressly provides otherwise”. Pursuant to s
134(3), the holder of such a land use consent may transfer the whole or any part of the holder’s interest in the consent to any other person unless the consent expressly provides otherwise. Pursuant to s 134(4), the transfer has no effect until the
authority that granted the consent receives notice of it.
38 See, for example, s 31(1)(e), which gives territorial authorities the function of controlling the actual or potential effects of the use of land including the “control of any actual or potential effects of activities in relation to the surface of water in rivers and lakes”.
[125] In expressly excluding the application of s 134(1) to the use of beds of rivers and streams Parliament indicated that rights to use the beds of rivers or lakes would not be rights attached to the underlying land.
[126] Section 134(1) also describes the land use consents which attach to the land as being uses which “may be enjoyed by the owners and occupiers of the land for the time being”. The use of a lake or river through travelling over it would not ordinarily be associated with either ownership or occupation of that water.
[127] I do not accept the submission made for K-Jet that the surface-of-water use could be considered a land use consent which is available to the consent holder as an “occupier” of the water. In s 2, “occupier” is defined as “the inhabitant occupier of any property”.
[128] In Anderson v Auckland Council, Asher J stated:39
While the words “inhabit” and “occupy” are treated as synonyms, they impart the concept of actual habitation. The combination and juxtaposition of the two words in my view indicates that a inhabitant occupier of a property is a person who while not necessarily living there all the time, can be seen as the person exercising actual dominion and control over the property at the relevant time.
[129] The permission which a council grants under the RMA that allows an operator to sail or drive a boat over a lake or river does not bestow on the operator any of the property rights which the owner or legal occupier of land would normally have. An operator with such permission would not be able to exclude others from using the area. They would not have any of the obligations of occupation which often accompany occupation of the land in a conventional sense.
[130] It is possible that the gap in the RMA with regard to the transfer of use of water consents is the result of an oversight. I was told that it is rare for commercial boating activities on lakes and rivers to be controlled by district plans. There is other
legislation regulating water-based commercial passenger activity.
39 Anderson v Auckland Council [2014] NZHC 1480 at [23] (citations omitted).
[131] If the gap existed as a result of an oversight it cannot be assumed that Parliament thereby intended that surface of water uses should be capable of transfer from one holder to another merely as a result of purchase and notification to the consenting authority. Parliament did deal expressly with the use of the beds of rivers and lakes. Through s 134(2) it ensured that a consent for such a use would not attach to land and pass with ownership and occupation of the land. It would have been consistent with that limitation if Parliament had dealt with surface-of-water uses in the same way. I see force in Ms Steven’s submission that, with regard to this sort of operation, safety would often be a paramount consideration. Parliament may well have intended that a local authority should have the opportunity of assessing the credentials of a proposed transferee before agreeing to the transfer of such a consent, just as it has with a consent granted to someone who is using the bed of a river or lake.
[132] Accordingly, I find it was lawful of QLDC, at least before 1996, to require the previous holder of a resource consent who was selling its business, to surrender the consent they had and for the purchaser to be granted a fresh consent.
[133] Regardless of what QLDC required before 1996, K-Jet submits QLDC was acting unlawfully in requiring the surrender of the previous consent and the grant of a new consent after the reference to successors with the 1996 amendment. Hence, it says QLDC acted unlawfully in 2004 when it required Twin Rivers to surrender its former consent and issued the Twin Rivers (b) consent to K-Jet.
[134] Some dictionary definitions indicate a “successor” will include a corporation that, through merger, buy out or other means, acquires the rights of another corporation.40
[135] On the other hand, comments made by the then Minister for the Environment in introducing the Resource Management Amendment Bill 196 (No. 3) to Parliament
and the Select Committee’s report on the Bill suggest that the amendment was
40 Jowitt’s Dictionary of English Law (2nd ed, Sweet and Maxwell, London, 2010) vol II at 2187 and 2189; Webster’s New World Law Dictionary (Wiley Publishing, Hoboken, NJ 2006) at 247.
intended to ensure that successors in title could continue with statutory processes, rather than facilitate the transfer of existing consents.
[136] Interpreting “successors” to include those who purchase certain rights or assets from the previous holder of a consent and applying it so as to permit such purchasers to take over all rights and obligations attached to that consent, would effectively render the detailed provisions of ss 134-137 redundant and/or ineffective. That may not have been Parliament’s intention.
[137] The term “successor”, as used in the RMA, was considered by the Environment Court in Re Manukau City Council.41 However, this discussion was limited to the issue of whether an incorporated body could be the successor to individuals.
[138] The High Court and the Environment Court have held the amendment does allow a broad interpretation of s 2A so that through transfer a new person could take over rights associated with an application for a consent or a submission in relation to an application for consent.42
[139] It is possible the 1996 amendment with its reference to “successors” may not have permitted QLDC to deal with the surface of water consents in the way it decided would be possible with the 2007 opinion it received. However, I do not whether the reference to “successor” in the 1996 Amendment enabled any purchaser of a business which included a resource consent to take over from the vendor all existing rights in respect of that resource consent.
[140] There is a line of authority from the United Kingdom which supports the proposition that it is open to defendants to criminal proceedings to collaterally attack
41 Re Manukau City Council [2002] NZRMA 170.
42 Sun Pacific Villas Timeshare Resort Body Corporate S45940 v Bay of Plenty Regional Council [2002] NZRMA 561 (HC); Buckingham Asset Management Ltd v Auckland City Council EnvC Auckland A027/09, 9 April 2009 at [23]; Te Mauri O Te Wai Inc v Northland Regional Council [2011] NZEnvC 65 at [21]; Arthurs Point Protection Society Inc v Queenstown Lakes District Council (2009) 15 ELRNZ 245 (EnvC).
their convictions on the ground that the statute, regulation or by-law creating the offence was itself unlawful or was void by some other error of law.43
[141] In Attorney-General v PF Sugrue Ltd, Blanchard J for the Court of Appeal stated:44
The validity of certain administrative actions can be challenged indirectly in civil proceedings for the purpose of determining private law rights.
[142] Previous judgments suggest that the Court should be cautious in permitting collateral challenge to be a challenge to a judicial decision. Hence, in Attorney- General v PF Sugrue Limited, Blanchard J noted an English case, Cooper v Wordsworth Board of Works, as an example of the collateral challenge being permitted to determine private law acts. His Honour pointed out that Cooper had been decided when “collateral challenge was a primary means of impugning judicial
and administrative action”.45
[143] In Siemer v Solicitor-General, McGrath and William Young JJ for the
Supreme Court stated:46
We observe that the greater accessibility and particular importance of judicial review in New Zealand leaves scope for argument that the Boddington approach to collateral challenges to administrative decisions would not have general application in New Zealand. The approach, to date, of the New Zealand courts to collateral challenge to administrative action is discussed in Dean Knight “Ameliorating the Collateral Damage Caused by Collateral Attack in Administrative Law” (2006) 4 NZJPIL 117. We are not required to decide the question in this appeal.
[144] Mr Gardner-Hopkins submitted that the clearest guidance, as to when a collateral challenge would be available as part of a wider appeal, was perhaps to be found in Brady v Northland Regional Council.47 In that case, Elias J held that:48
When collateral challenge will be permitted is … probably incapable of determination by hard and fast rules: “in some situations it will be suitable
43 Boddington v British Transport Police [1999] 2 AC 143 (HL), [1998] 2 All ER 203.
44 Attorney-General v PF Sugrue Limited [2004] 1 NZLR 207 (CA), (2003) 7 HRNZ 137.
45 At [47], citing Cooper v Wordsworth Board of Works (1863) 14 CBNS 180, [1861-1873] All ER Reg Ext 1554.
46 Siemer v Solicitor-General [2013] NZSC 68, [2013] 3 NZLR 441 at [206], n 255.
47 Brady v Northland Regional Council [2008] NZAR 505 (HC) (decided in 1996).
48 At 516.
and in others it will be unsuitable, and no classification of the cases is likely to prove exhaustive.” The only reliable pointers will be the seriousness of the error in all the circumstances of the case and whether the challenge is central to the case actually before the court. If assessment of validity of delegated legislation is central to a defence in civil or criminal proceedings in the District Court then collateral challenge must be available.
[145] Consistent with the guidance referred to by Elias J in Brady, I consider whether collateral challenge can be permitted as a basis for this Court setting aside the decision of the Environment Court, having regard to “the seriousness of the error” which is alleged in all the circumstances of the case “and whether the
challenge is central to the case actually before the Court”.49
Seriousness of the alleged error
[146] As far as the seriousness of the potential error is concerned, it remains in doubt as to whether QLDC did in fact act unlawfully. It was open and transparent as to what it required and the reasons for that requirement. In advising that its requirement was based on legal advice, it was making it clear to the interested parties, including K-Jet, that its requirement was not based on a straightforward application of a specific statutory provision but what it considered was necessary because of a gap in the RMA. While QLDC could not reasonably have anticipated that the parties would necessarily incur the expense of obtaining their own legal advice in relation to their requirement, it nevertheless gave the parties the opportunity to do so. K-Jet was thus free to seek advice and to challenge QLDC’s requirement if it were concerned as to the consequences of its having obtained a new resource consent rather than a simple transfer of the consent previously held by Twin Rivers.
[147] There is no suggestion that QLDC was acting in bad faith, actuated by malice or fraudulent or dishonest intent, or that it was exercising its powers for an improper purpose. It is also relevant that in 2004, QLDC was exercising its powers consistent with the policy it had adopted in dealing with earlier situations where companies had acquired the business of other jetboat operators and needed corresponding resource
consents.
49 At 516.
[148] The only basis on which the lawfulness of QLDC’s process can be challenged is that it was adopted on an irrelevant ground or in disregard of relevant considerations. The challenge has to relate to the argument that QLDC, based on a legal opinion, adopted a process with the belief that the process was necessary to deal with the acquisition of a resource consent for a surface of water use, when that may have been unnecessary, having regard to the s 2A reference to successors.
[149] In assessing the seriousness of the alleged error, it is also relevant that the procedure that QLDC adopted, on the basis of there being a gap in the RMA, was a procedure permitted by the RMA. This is not a situation where a council is alleged to have required the parties to deal with a resource consent in a manner which was not permitted by the RMA.
[150] The seriousness of the alleged error also has to be assessed in all the circumstances of the case including the underlying scheme and policies of the RMA. In that regard, all parties and their advisors should have been aware that for resource consents to become and remain fully effective they have to be used. A resource consent is not, by itself, a property asset which the holder can simply bank for use at some indeterminate time in the future or as a means of limiting the ability of someone else to make use of the resource to which it relates.
[151] Relevant policy has been explained and referred to in a passage from the former Planning Tribunal decision in Katz v Auckland City Council:50
There are compelling reasons of policy why a planning consent should not subsist for a lengthy period of time without being put into effect. Both physical and social environments change. Knowledge progresses. District schemes are changed, reviewed and varied. People come and go. Planning consents are granted in the light of present and foreseeable circumstances as at a particular time. Once granted a consent represents an opportunity of which advantage may be taken. When a consent is put into effect it becomes a physical reality as well as a legal right. But if a consent is not put into effect within a reasonable time it cannot properly remain a fixed opportunity in an ever-changing scene. Likewise, changing circumstances may render conditions, restrictions and prohibitions in a consent inappropriate or unnecessary.
50 Katz v Auckland City Council (1987) 12 NZTPA 211, cited in Biodiversity Defence Society Inc v
Solid Energy New Zealand Ltd, above n 34, at [57].
[152] That dictum has been adopted and approved in subsequent judgments of the High Court, including the judgement in Biodiversity Defence Society v Solid Energy New Zealand. Fogarty J referred to this passage from Katz and stated: 51
Otherwise the dictum broadly addresses the importance of a consent being either used or lapsing, so that other applications for consents cannot be artificially constrained by uncertainties as to whether previous consents will be put into effect or not. Consents under the Town and Country Planning Acts and under the RMA have always been the result of a balancing of factors for and against, allowing change in place of the status quo, but subject to conditions. Such analysis would be severely compromised by considerable uncertainty, if there was doubt, whether or not consents previously granted would ever be put into effect.
[153] The need for the consent to be used, to be given effect or to continue to have effect is reflected in the provisions of s 125. That section provides for a consent to lapse if not given effect to within five years. The policy is also reflected in the provisions of s 126 which would have permitted a council to give notice that it was cancelling a resource consent because it had not been used for five years, in a situation where it had previously been given effect to but had not been used for five years.
[154] K-Jet could not also have reasonably thought that in 2004 it was simply continuing to hold the Twin Rivers (b) consent. The decision of 1 June 2004, advising that it had been granted consent, began by referring to K-Jet’s application for land use consent under s 88. The consent was complete and covered all matters which QLDC considered it had to address on the grant of the consent as for a new resource consent. In the reasons for the decision, it recognised, in terms of the number of boats, areas frequented for the loading and unloading of passengers and travel routes, the consent for an operation was the same as for the consent previously held by Twin Rivers. The consent included some specific conditions with regard to drivers having to be educated regarding wildlife habitats and recreational values through workshops with the New Zealand Fish and Game Council, and the need to appreciate and respect cultural matters relating to the Takata Whenua of the area.
Expressly, the decision granting the new consent advised K-Jet:
51 At [59].
Should you not be satisfied with the decision of the council or certain conditions, an objection may be lodged in writing to the council setting out the reasons for the objection under s 357 of the Resource Management Act
1991 not later than 15 working days from the date this decision is received.
…
This resource consent must be exercised within five years from the date of this decision subject to the provisions of s 125 of the Resource Management Act 1991.
[155] K-Jet was thus on notice from 1 June 2004 that its resource consent obtained as a result of its purchase of the Twin Rivers business had to be exercised within five years of the date of the decision, namely 1 June 2004.
[156] In Boddington v British Transport Police, Lord Irvine distinguished two earlier judgments where the Court had not permitted a collateral challenge to be made on the basis that an important feature of both cases was that they were concerned with administrative acts specifically directed at the defendants where there had been “clear and ample opportunity” provided by the scheme of the relevant legislation for those defendants to challenge the legality of those acts without being
charged with an offence.52
[157] K-Jet did not seek to challenge the way in which QLDC had dealt with the Twin Rivers consents at any time after they were granted. That was so despite QLDC advising K-Jet in 2007 that it now had legal advice that, as a result of the
1996 amendment and the reference in RMA to successors, existing resource consents could be transferred after sale simply with notification to the council of the change in ownership. There was no challenge after lapse of consents had been raised as a potential issue in the 2010 Environment Court hearings.
Centrality of the challenge to this case
[158] The central issue with regard to lapse was whether the Twin Rivers (b)
consent had been given effect to in the five years after K-Jet acquired that consent in
2004. There was no suggestion on the evidence that K-Jet had relied on the way
Twin Rivers had acquired the consent or the way other consent holders had used that consent or an earlier related consent. Thus, it cannot be said that the manner in
52 Above n 43.
which QLDC dealt with the consent in 2004 was central to the case actually before the Environment Court.
[159] Accordingly, I consider that any potential unlawfulness in the council’s process for dealing with resource consents was too remote from the issues which the Environment Court had to consider to allow K-Jet to allege an error of law in the Environment Court’s decision based on a collateral challenge with regard to that council process.
[160] Accordingly, I do not consider the Environment Court’s decision is vulnerable to attack by way of the collateral challenge which K-Jet seeks to advance. I find there was no error of law in the Environment Court dealing with the Twin Rivers (b) consent on the basis it was a fresh consent issued to K-Jet in 2004 which had to be given effect to within five years for it not to lapse.
Unavailable findings
[161] K-Jet argues that there was an error of law in the Environment Court deciding three resource consents had lapsed because there was no reasonable basis in the evidence for that conclusion.
[162] The Environment Court found that the Twin Rivers (b) consents lapsed under s 125 in 2009. This was one of the consents arising out of K-Jet’s purchase of the Twin Rivers business in 2004. At the same time, K-Jet obtained consent RM
040414(d). This approved the operation of three boats on Queenstown Bay from Frankton Marina and Jetty 251 across Lake Wakatipu to the Kawarau River, on the Kawarau River to Smiths Falls and on the Shotover River to Taka Beach.
[163] Resource consent RM 040414(c) was another consent obtained at the same time. It approved the operation of one boat on Queenstown Bay across Lake Wakatipu to the Kawarau River, on the Kawarau River to the Shotover River confluence and on the Shotover River to Taka Beach.
[164] The Environment Court found consents RM 990398 and RM 990399, granted in 2007, lapsed in 2012 under s 125. Both these consents were granted to K-Jet after
its purchase of the Helijet and Projet businesses from Shotover Jets in 2007. RM
990398 approved the operation of one boat on Queenstown Bay, to and from the Frankton Marina across Lake Wakatipu to the Kawarau River, on the Kawarau River to Smiths Falls and on the Shotover River to Taka Beach. Consent RM 990399 was in identical terms for two boats.
[165] The Environment Court reached its conclusion on the basis of the evidence of
QWT’s planner Mr Taylor. The Court summarised his evidence this way:53
Mr Taylor based this opinion on the uncontested fact that KJet had operated
6 boats from 1999 to 2004 under consents RM 920057, 990112 and 920113, when a further 2 boats were added following the purchase of Twin River Jet. These additional boats operated under consent RM 040414(d). No new boats have been added to the fleet since 2004, and no application has been made for an extension of consent lapse periods under s125 RMA. Relying on these facts, Mr Taylor considered that it was not possible for KJet to have exercised all of the consents granted in 2004 and 2007. These consents authorised up to 8 boats to operate on the Lower Shotover but only 2 boats were added to the fleet. In Mr Taylor’s opinion, these 2 boats were covered by consent RM 040414(d). Consents RM 040414(b), 040414(c), 990398 and 990399 were effectively surplus to the operational requirements of the company. They were unable to be implemented and therefore lapsed on the
5th anniversary of their issue in his opinion.
[166] The Court weighed against Mr Taylor’s evidence the evidence of Mr Shaun Kelly that since March 2011 K-Jet had adopted the practice of consigning consent numbers to each boat in the fleet and recording the consent each boat was operating under for each trip. K-Jet had then prepared a quarterly “snap shot” report on the exercise of all the consents held by K-Jet based on this allocation record which it forwarded to QLDC.54
[167] The Environment Court referred to the observations of the High Court in Biodiversity Defence Society v Solid Energy NZ and its reference to the Planning Tribunal decision Katz v Auckland City Council referred to earlier. The Court accepted the submission for QWT that these policy considerations precluded the practice of assigning multiple consents to an activity on a rotational basis as a means
of giving effect to each of these consents. The Court decided:55
53 2015 Decision, above n 3, at [65].
54 At [57].
55 At [79].
The practice of KJet in doing this for its activity on the lower Shotover was a paper exercise only, introduced following the 2010 Kawarau decision for no other purpose than to defeat the application of s 125.
[168] The Court referred to:
[81] … the uncontested fact that KJet quite properly operated 6 boats using 3 consents covering 6 boats from 1999. From 2004 the 2 additional boats were covered by consent RM 040414(d). No additional consents were required to authorise the activity of these 8 boats. The only exception to this would be when all 8 boats are required to be on the Lower Shotover at one time. Under this circumstance only 2 of the 4 boats authorised by RM
990112 and 990113 are permitted at any one time as noted earlier. The other
2 boats could be operated under alternative consents. Under this scenario the unused third boat authorisation under RM 040414(d) would be required and the single boat authorisation under RM 040414(c) would also be required, thus giving effect to the full extent of these two consents.
[82] It is clear to us that, in the absence of any defined resource management purpose, the practice of KJet of rotating consents is not consistent with the policy considerations underpinning s125 as described in Solid Energy regarding the need for certainty. What is certain is that KJet holds and continues to operate under 5 consents authorising the activity of
10 boats on the Lower Shotover, 8 of which can be on the River at any one
time. It was Ms Steven’s submission that to give effect to any of the “surplus” consents held since 2004, KJet would need to have acquired additional boats to the 8 already operating. This has not occurred.
[169] The Court referred to a submission for K-Jet that all of the consents had been given effect to before they were “transferred” to K-Jet, so s 125 could not apply. K- Jet’s counsel had referred to QLDC’s practice of requiring new consents because it did not consider succession under s 134 was available and submitted that the new consents had authorised an existing activity.
[170] The Environment Court accepted the submission for QWT that, with a new consent being issued, the question of whether or not the consent it derived from had been implemented was no longer relevant. The Court accepted that the consents from which RM 990398 and 990399 were derived expired in 1999 so that the activities covered by those consents had to be the subject of new consents issued in
2007. The Court noted “[in] the intervening 8 years KJet operated its full fleet of
boats under other consents, which remain current”.56
56 At [87].
[171] The Court held:57
All of the consents held by various operators prior to their acquisition by KJet had either expired in 1999 at the end of their 7 year fixed term, or were surrendered following replacement by new consents issued to KJet. It must follow that the 4 new consents issued in 2004 were subject to the 5 year lapsing provision of s 125 RMA. As noted earlier, consents RM 040414(c) –
1 boat and (d) – 3 boats – are required by KJet to fully utilise the current fleet of boats. No new boat was purchased to replace that authorised by RM
040414(b) and this consent was surplus to the operating requirements of the
company through to its lapsing date in 2009.
[172] It was on that basis the Court found consent RM 040414(b), the Twin Rivers
(b) consent, had lapsed under s 125.
[173] The Court found consents RM 990398 and 990399 were new consents granted in 2007. They noted that no new boats had been purchased since 2007 and the consents were not required for the current operation. They held that there was no plausible evidence from K-Jet on the resource management purpose of rotating allocation of the consents on a boat and trip basis initiated in 2011 and the practice was for no other purpose than to avoid the lapse period for these consents applying, contrary to the policy underpinnings of s 125 set out in Solid Energy. They held that those consents were not required for K-Jet to operate its current fleet, constant since
2004. Accordingly, they found consents RM 990398 and 990399 had not been implemented and therefore lapsed on their fifth anniversary under s 125.
[174] Counsel for both QWT and K-Jet referred to the judgment of the Supreme Court in Bryson v Three Foot Six Ltd as articulating the test which has to be determined before an appellate court can find that a Court’s determination on the facts was so unsupportable that the Court’s conclusion amounts to an error of law.58
The Supreme Court said:
[25] An appeal cannot however be said to be on a question of law where the fact-finding Court has merely applied law which it has correctly understood to the facts of an individual case. It is for the Court to weigh the relevant facts in the light of the applicable law. Provided that the Court has not overlooked any relevant matter or taken account of some matter which is irrelevant to the proper application of the law, the conclusion is a matter for the fact-finding Court, unless it is clearly insupportable.
57 At [88].
58 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721.
[26] An ultimate conclusion of a fact-finding body can sometimes be so insupportable – so clearly untenable – as to amount to an error of law; proper application of the law requires a different answer. That will be the position only in the rare case in which there has been, in the well-known words of Lord Radcliffe in Edwards v Bairstow, a state of affairs “in which there is no evidence to support the determination” or “one in which the evidence is inconsistent with and contradictory of, the determination” or “one in which the true and only reasonable conclusion contradicts the determination”. Lord Radcliffe preferred the last of these three phrases but he said that each propounded the same test.
[175] It was submitted for K-Jet that the Environment Court was in error in deciding K-Jet could not give effect to consents through the implementation of its rotational policy. It was submitted that greater scrutiny of the actual use of the consents was required, beyond simply comparing the number of consents to the number of boats. It was submitted that, where a consent holder has multiple consents authorising substantially the same activity, the consent holder is entitled to choose which it wishes to rely on.
[176] In oral submissions, Mr Gardner-Hopkins developed this further in saying the Environment Court had considered whether or not consents have been given effect to on the premise that, where there were multiple consents, it had to be demonstrated that one consent had been used to its full extent before it could be argued that another consent had been utilised. He described this as a “full bucket” approach. He suggested this approach was inconsistent with the judgment of the High Court in Solid Energy.
[177] Through a single application, Solid Energy had applied for numerous consents relating to a mining operation. The appellant had sought a declaration in the High Court that 15 of the granted consents had lapsed through not being given effect to. The Environment Court considered each consent on an individual basis and on the facts found they had each been sufficiently carried out but also considered that it was appropriate to consider the package of resource consents as a whole. On that basis too, the Environment Court found the consents had not lapsed.
[178] In the High Court, Fogarty J considered the better approach in applying s 125 was to consider whether or not a suite of consents had been given effect to. He stated:59
[83] This judgment opens with the fact that Solid Energy made one application for numerous consents. It is of the character of a coal mining operation, and in the way in which the RMS is drafted, that a suite of consents was inevitable. Coal could not be extracted without there being a suite of consents. Secondly, it is in the nature of a coal mining operation that good deal of sophisticated planning work had to be undertaken, once consent had been granted, by way of development of management plans, for both regulatory and commercial reasons, to integrate development of Cypress Mine into the overall exploitation of coal on the Stockton Plateau. I accept there may have been a degree of deferment of exercise of the licences to integrate with economic activity. But such integration of projects with economic activity is realistic, and was recognised by the Court of Appeal in the Body Corporate 97010 dealing with the alteration of the scale fo the apartment project, as a result of market forces.
[84] The evidence does not disclose the consents simply being put to one side, with a thought that they might be given effect to one day. It is to the contrary.
[85] To examine whether each individual consent had been given effect to, with the possibility that some might drop out because they had not been given effect to, risks making the law a nonsense. Some of the consents, of their nature, are dealing with activities which will not take place until the mining starts, such as dewatering of certain areas.
[179] In the present case, the Environment Court was not dealing with a suite of consents relating to one integrated activity. Each consent was for the operation of a boat, or in some instances several boats, in a particular area of water and on certain parts of particular rivers. Each consent could be put into effect quite separately from the implementation of any other consent.
[180] The Environment Court did not adopt a “full bucket” approach in deciding whether or not particular consents had been used. For instance, it did not consider or require one boat to be operating on just one consent before another boat could be used pursuant to another consent.
[181] In contrast to the Solid Energy situation, in this instance, there was evidence
of consents simply being put to one side “with a thought they might be given effect to one day”.
59 Biodiversity Defence Society Inc v Solid Energy NZ Ltd, above n 34.
[182] It was open to the Environment Court to consider whether a particular resource consent had been given effect to by considering the number of boats that were being operated pursuant to other consents and to assess whether there had been any increase in the number of boats or any change in the nature of operations after a new consent had been acquired which necessitated the use of that consent. On the evidence before it, the Environment Court found there had been a change in that, if all K-Jet’s boats were required to be on the lower Shotover at one time, this necessitated the use of a third boat authorisation under RM 040414(d), and the use of the single boat authorisation under RM 040414(c). On that basis, the Court decided those particular consents had been given effect to and thus did not lapse.
[183] Whether or not a consent had in fact been used was a question of fact. In my view, it was reasonably open to the Environment Court to conclude that a consent authorising the operation of a boat on a particular area of water for commercial activities could not be given effect to by a bookkeeping entry to the effect that a boat that had for years been operating under another consent was at times operating under a different consent.
[184] I also consider there was no error in the Environment Court making its assessment of the evidence bearing in mind the policy of the RMA and, in particular, s 125 and the statements of that policy in Katz and Solid Energy.
[185] It was submitted for K-Jet that, in doing so, the Environment Court had insufficient regard for the real value of resource consents and the investment which people or companies can make in obtaining those consents.
[186] The value of resource consents was recognised by the High Court in Aoraki
Water Trust v Meridian Energy Ltd.60 A full Court recognised:
[36] The principle of non-derogation from grant is applicable to all legal relationships which confer a right in property. Common law principles apply to the express provisions of a statute unless Parliament has clearly indicted a contrary intention.
60 Aoraki Water Trust v Meridian Energy Ltd [2005] 2 NZLR 268 (HC).
[187] The Court adopted the observation of Blanchard J in Tram Lease Ltd v
Croad:61
… no one who has granted another a right of property, whether by sale, lease or otherwise, may thereafter do or permit something which is inconsistent with the grant and substantially interferes with the right of property which has been granted.
[188] The full Court held that, where a resource consent had been allocated to take water to the full extent that resource was available, the parties would have assumed the consent authority would not do anything during the term of the permit which might interfere, erode or destroy the valuable economic rights which the grant had created “unless expressly authorised by statute”. The Court considered a subsequent grant to another party would have the effect of derogating from the authority’s original grant because it would interfere with, erode or destroy the holders right to use the property which was the subject of the consent and analogously “an original permit holder enjoys a legitimate expectation that a public authority will not
deliberately erode a grant during its term by granting a permit to another party”.62
[189] The situation here is different. Given K-Jet had acquired new consents in
2004 and 2007 and had been expressly put on notice that those consents had to be given effect to within five years to remain effective, K-Jet could not have had an expectation that they would continue to have value as some form of property even if they were not used. In this instance, there was also a particular statutory provision, s
125, which could result in their lapse with the associated loss of value if the consents were not given effect to within five years.
[190] Policy considerations relating to the value of these resource consents did not require the Environment Court to assess whether or not the consents had been given effect to in any way differently than it did.
[191] Alternatively, K-Jet say there was no basis on which the Environment Court could conclude that the consents had not been given effect to because, both in 2004
when the Twin Rivers business was acquired and in 2007 when Shotover Jet sold the
61 Tram Lease Ltd v Croad [2003] 2 NZLR 461 (CA) at [24].
62 Aoraki Water Trust v Meridian Energy Ltd, above n 60, at [39]-[42] and [46].
Helijet and Projet businesses, the evidence established that the consents granted to K-Jet were for activities which had been carried out on a sustained basis in the period immediately preceding the grant of those consents.
[192] QLDC issued detailed decisions relating to the resource consents granted to K-Jet after its acquisition of the Twin Rivers business in 2004. In each instance, the application was dealt with on a non-notified basis. In each instance, the decision referred to the application being necessary to transfer rights associated with a consent previously held by Twin Rivers. The decisions referred to the proposed operation being the same as under the earlier consent held by Twin Rivers and to the fact that the activity covered by the proposed consent already existed. The Harbour Master had also provided a letter dated 3 May 2004. The letter indicated that, from a safety point of view, he was supportive of K-Jet continuing to operate the Twin Rivers business. His letter was written on the basis that Twin Rivers had an existing operation. He stated “it should be noted that the boat numbers will remain the same hence the intensity of operations will remain unchanged”.
[193] In 2007, QLDC issued two consents following K-Jet’s purchase of the Helijet and Projet businesses. In both instances, the applications had been made on a non- notified basis. In the reasons for the decision, the QLDC said:
The proposal is a retrospective consent to continue an existing operation for commercial jet boating trips on Lake Wakatipu, the Kawarau River down to the Smiths Falls and on the Shotover River from the confluence with the Kawarau River up to Taka Beach and return utilising one jet boat.
[194] With Mr Kelly’s proposed new evidence which I have disallowed, he also wanted to refer to a letter from the Harbour Master dated 26 April 2007. In that letter, the Harbour Master confirmed the Helijet and Projet consents “have been operated without a break of 12 months”.
[195] It was submitted that the only inference which could be drawn from this evidence was that K-Jet had acquired an existing operation involving the use of a consent identical to the consents which were granted to K-Jet in both 2004 and 2007. It was submitted that, in the absence of any evidence that the use of those operations
had ceased, the Environment Court had to conclude that they had continued so that the new consents had been given effect to.
[196] I do not consider the Environment Court had to come to such a conclusion.
[197] The evidence of Mr Neville Kelly was that in 2004 K-Jet acquired four consents authorising the operation of seven boats in total but the fixed assets acquired included only three boats. He said that at that time K-Jet had eight boats and no new boats had been purchased since then.
[198] Mr Shaun Kelly’s evidence was that K-Jet chose only to operate eight boats after the 2004 acquisitions and in May 2014 the K-Jet fleet remained at four twin and four single engine jetboats.
[199] Mr Taylor’s analysis, accepted by the Environment Court, provided an evidential basis on which the Environment Court could conclude that whatever use had been made of the Twin Rivers consents prior to 2004, or the Helijet and Projet consents prior to 2007, such operations had not continued except to the limited extent they found was the case in relation to consents RM 040414(c) and RM
040414(d).
[200] It cannot be said the Environment Court’s decision, that the three relevant consents had not been given effect to within five years, was so unsupportable, so clearly untenable as to amount to an error of law. Given this appeal can be only as to an error of law, it is neither necessary nor appropriate for me to consider any further the evidential basis for the Environment Court’s conclusion.63
Conclusion
[201] For all the above reasons, I do not consider the Environment Court made any error of law in determining that three of K-Jet’s resource consents had lapsed
pursuant to s 125. The appeal is accordingly dismissed.
63 Fogarty J approached the matter in the same way in Biodiversity Defence Society Inc v Solid
Energy NZ Ltd, above n 34, at [81].
[202] My tentative view is that the respondents are entitled to costs which should be fixed on a 2B basis. If agreement cannot be reached over costs, the first and second respondents are to file a memorandum as to what they seek by 16 October
2015. The appellant is to file a memorandum in response by 30 October 2015. The memoranda are to be no longer than five pages.
Solicitors:
Russell McVeagh, Wellington
Berry & Co., Queenstown
Meredith Connell, Auckland
Pru Steven QC, Christchurch.
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