Titirangi Protection Group Incorporated v Watercare Services Limited

[2018] NZHC 1026

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2017-404-2762

[2018] NZHC 1026

BETWEEN

TITIRANGI PROTECTION GROUP INCORPORATED, NATASHA BERMAN and DAVID AND JOLIE HUTCHINGS

Appellants

AND

WATERCARE SERVICES LIMITED

First Respondent

AUCKLAND COUNCIL

Second Respondent

Hearing:

8 May 2018

Appearances:

D A Cowan and B J Matheson for Appellants

W S Loutit and K M Stubbing for First Respondent R S Ward and M J L Dickey for Second Respondent

Judgment:

14 May 2018

JUDGMENT OF LANG J

[on appeal against a decision of Environment Court refusing to grant declaratory relief]

This judgment was delivered by me on 14 May 2018 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

TITIRANGI PROTECTION GROUP INC HUTCHINGS v WATERCARE SERVICES LTD [2018] NZHC 1026 [14 May 2018]

[1]                 This appeal follows the refusal of the Environment Court to make a declaration that a proposed water treatment plant to be constructed on land designated for water treatment purposes in West Auckland fell outside the purposes of the designation.1

The parties

[2]                 The Titirangi Protection Group Incorporated is an incorporated society having the principal purpose of protecting and supporting the natural and human environment of the Titirangi area.

[3]                 The remaining appellants, Mr and Mrs Hutchings and Ms Berman, are residents who live near the designated area in which the new plant would be constructed.

[4]                 The first respondent, Watercare Services Limited (Watercare), is a company now owned and controlled by the Auckland Council (the Council). It is responsible for administering the city’s water supply and wastewater assets. It is also required to meet a number of statutory obligations. These include a requirement to act consistently with any Council plan or strategy to the extent directed by the governing body of the Council.2

[5]                 The Council is the local authority for the Auckland region and is responsible for the development, administration and application of the Auckland Unitary Plan.

Background

[6]                 For many years a significant proportion of Auckland’s water supply has come from dams and catchment areas within the Waitakere Ranges. Water from four dams in that area has been processed at the Nihotupu Filter Station and the Huia Water Treatment Plant. Both are located near Titirangi on land acquired by the then Auckland City Council in 1926 and now owned by Watercare.

1      Titirangi Protection Group Inc v Watercare Services Ltd [2017] NZEnvC 181.

2      Local Government (Auckland Council) Act 2009, s 58.

[7]                 The Nihotupu Filter Station was commissioned in 1928, whilst the Huia Plant was commissioned in 1929. Over the years the plants have been upgraded progressively to provide them with greater processing capacity to meet the city’s increasing need for treated water for human use and consumption.

[8]                 During the 1990s, the Huia Plant was subject to a significant upgrade including automation. When this was completed the Nihotupu Station was decommissioned. Water formerly treated at that station was diverted to, and treated at, the Huia Plant. The Nihotupu Station is now only used for water storage. It plays no role in the water treatment process.

[9]                 The Huia Plant is now responsible for providing approximately 20 per cent of Auckland’s water supply. It primarily services the western and northern suburbs of the city, but water from the station can also be distributed to all parts of the Auckland water network as required. It is currently the third largest water treatment plant within the Auckland region.

[10]              Watercare has been planning to replace or significantly upgrade the Huia Plant since 2008. A recent independent high-level asset review has identified that it is not viable for Watercare to invest significant capital into the Huia Plant because it is nearing the end of its economic life. Even with careful ongoing maintenance it is unlikely that the Huia Plant will be able to perform its current role for more than five to ten years. Watercare has therefore concluded that traditional treatment processes used in the existing plant should be replaced by advanced processes now considered more appropriate for the treatment of water received from the dams that supply it.

[11]              Watercare has also concluded that any new capital investment in this area should focus on the development of a modern water treatment plant rather than upgrading of the Huia Plant. Any new plant will not only incorporate more advanced processing systems but will also address seismic design requirements and other limitations faced by the existing facility.

[12]              Watercare proposes to relocate the bulk of the water treatment processes currently carried out at the Huia Plant to a new plant to be built on a 4.2 hectare parcel

of land adjacent to the land on which the Huia Plant is now located. It intends to re- locate primary water treatment processes, chemical storage and administrative facilities to the new site. Other systems will remain on the existing Huia site. Surplus assets on the existing site that are not considered to be heritage assets will be demolished. Once the new plant has been completed, the three plants will operate together as a single water treatment facility.

Designation 9324

[13]              The land on which the two existing plants are located is subject to a designation known as Designation 9324. The new plant will also be located on land having that designation. The designation is annexed to the judgment as an appendix for ease of reference.

[14]              Under the heading “Purpose”, the designation states “Water supply purposes – Huia and Nihotupu water treatment plants and associated structures”.

[15]              Designation 9324 is a legacy designation, having been in existence in one form or another since 1972. Prior to its incorporation in the Auckland Unitary Plan it comprised designation WSL4 under the former Waitakere District Plan. Designation 9324 is largely in the same terms as Designation WSL4, although the earlier designation did not include the words “and associated structures”.

[16]              The designation applies  to  three  parcels  of  land  encompassing  in  total  57 hectares. The first is a four hectare parcel of land on which the existing Huia Station and associated pipelines are located. The second is an adjoining 4.2 hectare parcel of land that is presently covered in regenerating bush. This is the land on which the new plant is to be built. The remaining parcel of land comprises 49 hectares. The decommissioned Nihotupu Filtration Station is located on one corner of this parcel of land, as is a pipeline network.

[17]              The designation was incorporated into the Auckland Unitary Plan (AUP) after Watercare gave the Council notice of its requirement that the whole of the land was to

remain subject to a designation for water treatment purposes.3 The rollover process occurred between 2013 and 2016.

[18]              No submissions were received in opposition to the rollover of the designation. The appellants point out, however, that nothing in the rollover process provided any hint that Watercare proposed to construct a new plant on the designated land. By that stage the proposal must have been well advanced. The appellants say the lack of notice about the proposal meant they effectively lost the opportunity to make submissions about it at the time of the rollover.

[19]              The designation is subject to three conditions. The first relates to matters that Watercare is required to address or include in any outline plan of work (OPW) it might submit to the Council. The second relates to sedimentation and erosion control measures for any earthworks to be carried out on the designated site. The third comprises a prohibition on future works that might adversely affect those elements of the Filter Stations that are identified as having heritage value.

The Environment Court’s decision

[20]The appellants sought the following declarations in the Environment Court:

(a)That “Designation 9324 Huia and Nihotupu Water Treatment Plants” at Woodlands Park Road, Manuka Road, and Exhibition Drive, Titirangi for “water supply purposes – water treatment plants and associated structures” in the partly Operative Unitary Plan of Auckland Council does not authorise the use of that property in terms of the RMA for the construction and operation of a new water treatment plant.

(b)That the construction and operation of any new water treatment plant on the designated land would require a new or further designation.

[21]              As the Environment Court noted, the question was whether the existing designation covered a new water treatment plant outside the existing footprint but within the designated area.4 That issue turned on the correct interpretation of the

3      The process to be used when designations are to be rolled over into subsequent district plans is prescribed by cl 4 to Schedule 1 to the Resource Management Act 1991. The public are entitled to make submissions once a designation has been incorporated in a proposed district plan: cl 5(2), Sch 1, Resource Management Act.

4      Titirangi Protection Group Inc v Watercare Services Ltd, above n 1, at [6].

purpose contained in the designation: “Water supply purposes – Huia and Nihotupu water treatment plants and associated structures”.

[22]              The Environment Court noted that the wording of the designation gave rise to two possible interpretations.5 Which of these was correct depended on the meaning to be attributed to the hyphen between the words “water supply purposes” and “Huia and Nihotupu water treatment plants and associated structures”. The first, and that for which the appellants contended, treats the hyphen as being synonymous with the words “being the”. This would restrict the designated purpose to those water supply activities undertaken at the two named water treatment plants and their associated structures. It would not extend to an entirely new plant constructed in a new location.

[23]              The second interpretation treats the hyphen as meaning “including the”. This would not exclude water supply activities undertaken at other locations within the designated land from the designated purpose.

[24]              The Environment Court preferred the latter interpretation for the following reasons:

[20]      I have reached the clear conclusion that the words “Huia and Nihotupu filter station” or “Huia and Nihotupu water treatment plants and associated structures” does not describe the full extent of the water supply purposes. There are several reasons for this:

(a)major aspects of both the Huia and Nihotupu treatment stations are protected by condition 3. That is not for a water supply purpose but for a heritage purpose. At the time of the designation, Nihotupu was providing either no or limited water supply purposes. I conclude that the reservoir aspect of it would have been covered as part of the associated works in any event;

(b)the WSL34 did not refer to associated works and structures, yet they are clearly part of the ongoing operation of this water supply purpose. Without them, the filtration plant could not operate. They have had to be upgraded and modified over the years. Accordingly, the full extent of the designation cannot simply be the water filtration plants themselves;

(c)designation WSL4 (and in the AUP) conditions 1 and 2 make it clear that further works are anticipated on the site. If these were only minor, incremental changes within the existing footprint,

5 At [19].

then it would seem unusual that full outline development plans would be required, with a full assessment of adverse effects;

(d)it appears to be contemplated that any new works required within the designation should avoid the Huia and Nihotupu heritage elements. If one looks at the explanation to condition 3, it notes:

… works otherwise in accordance with the designation, but which adversely affect the items or elements of items identified as being of heritage significance, may only be carried out if the designation is altered to specifically alter (or remove) the condition.

Given that Nihotupu is not currently used as a water treatment plant, this would suggest that any construction of a replacement water treatment plant for that or Huia would be better on a new site than affecting heritage items within the existing sites.

[25]The Environment Court then observed:

A holistic approach

[21]      Looking at the designation as a whole, the question is “How would a reasonable person understand that designation?” Looking at the relevant map, it is clear that the designation does not just cover the area around Woodlands Park or Manuka Drive, but the entire 57ha. Although it clearly includes the water treatment plants, it must also include the existing reservoir, roading, parking, pipelines, dams or reservoirs situated over the land.

[22]      Given the generality of the purpose, a reasonable person would understand that there may be changes to the operation and process for water treatment in the Auckland region over decades. The controls in this case are not exercised through the land use control, but through the conditions on the designation and the requirement for regional consents. In this designation there are significant constraints that would avoid the possibility of the entire site being converted to a water treatment plant, for example. Even if only aspects of the activity are non-complying, or fully discretionary, it is clear that the regional consents would require considerable attention to the details of design.

[23]      I conclude that a reasonable person would expect that the water treatment plants and processes could be replaced over time and new ones constructed.

[26]In addition, the Environment Court went on to say:

[28]      Given my primary conclusion it is not, strictly speaking, necessary to discuss this issue further. Nevertheless, I conclude there is a further impediment to the applicant’s position. Although it is correct that the Huia and Nihotupu treatment plants’ buildings can currently be identified, I am not satisfied that this means that the designation would be limited to those buildings.

[29]      The treatment of water is, in fact, a process involving many stages and parts, as I have identified earlier in this decision. Over the years, the requirements for water quality have changed, and this has added elements such as testing laboratories, chemical additions and, more latterly, UV and microbiological treatment of waters through various means. New technology is being developed all the time, including membrane filtration and other similar methodologies.

[30]      I cannot accept that the description of the two areas as Huia and Nihotupu treatment plants means that they are constrained to the existing buildings or footprints. This position is strengthened by a reference to the identifiers. Huia and Nihotupu are references, not to these particular buildings, but to areas that are the sources of the water. In both cases the water supply dams Huia and Nihotupu are not within the designation, but are in different parts of the catchment. They may refer either to particular reservoirs and dams, or to catchments.

[31]      On that basis, the use of those names before the water treatment plant would simply identify the source of the water, not the footprint or structures associated with it. Thus, the Huia water treatment plant would be the treatment plant that treats the Huia water and similarly for the Nihotupu. At the current time, the so-called Huia treatment plant treats the water for both Nihotupu and Huia since the decommissioning of the Nihotupu water treatment plant.

[32]      Overall, I have concluded that the reason for the identification of the water treatment plants is to be descriptive of areas from which the water is sourced and the general nature of the activity on the site. Given that the Nihotupu plant never operated during the time of either the Waitakere District Plan or the Unitary Plan, it cannot be that the descriptor words [relate] to the water supply function of those particular two structures.

The approach on appeal

[27]              Appeal to this Court from a decision of the Environment Court is only permitted on questions of law.6 An error of law may occur in different ways. The appellants allege the Environment Court applied the wrong test, failed to take into account relevant factors and/or took into account irrelevant factors. I accept that these would constitute errors of law if established.7 Relief would only be granted, however, if the errors materially affected the outcome of the Environment Court’s decision.8

6      Resource Management Act 1991, s 299(1).

7      See Countdown Properties (Northlands) Ltd v Dunedin City Council [1994] NZRMA 145 (HC) at 153.

8      Royal Forest and Bird Protection Society Inc v W A Habgood Ltd (1987) 12 NZTPA 76 (HC) at 81-82.

Errors of law

[28]The appellants contend the Environment Court erred in law in three respects:

1.in concluding that the words “Huia and Nihotupu water treatment plants” did not constrain the application of the designation primarily to those facilities;9

2.in concluding that the designation authorises a new water treatment plant, reservoirs and associated structures; and

3.in taking into account or giving undue weight to several factors that were either irrelevant or of little relevance to the issue the Environment Court was required to determine.

[29]              Before considering the alleged errors in greater detail it is necessary to have regard to the statutory scheme relating to designations and to the approach the courts have taken to interpretation of designations.

The statutory scheme relating to designations

[30]              Part 8 of the Resource Management Act 1991 (the RMA) provides for designations. The Act defines the term “designation” as follows:10

designation means a provision made in a district plan to give effect to a requirement made by a requiring authority under section 168 or section 168A or clause 4 of Schedule 1

[31]              As will be evident from this definition, a designation gives effect to a requirement made by a requiring authority under s 168. The RMA defines “requiring authority” as follows:11

requiring authority means—

(a)a Minister of the Crown; or

9      Counsel for the appellants used the words “meaning of the designation” rather than “application of the designation” but I consider the latter more aptly describes the issue on appeal.

10     Section 166.

11     Section 166.

(b)a local authority; or

(c)a network utility operator approved as a requiring authority under section 167.

[32]              There is no dispute that Watercare is a network utility operator approved as a requiring authority under s 167 of the Act.

[33]Section 176 of the Act prescribes the effect of a designation as follows:

176     Effect of designation

(1)If a designation is included in a district plan, then—

(a)section 9(3) does not apply to a public work or project or work undertaken by a requiring authority under the designation; and

(b)no person may, without the prior written consent of that requiring authority, do anything in relation to the land that is subject to the designation that would prevent or hinder a public work or project or work to which the designation relates, including—

(i)      undertaking any use of the land; and

(ii)     subdividing the land; and

(iii)    changing the character, intensity, or scale of the use of the land.

(2)The provisions of a district plan or proposed district plan shall apply in relation to any land that is subject to a designation only to the extent that the land is used for a purpose other than the designated purpose.

…

[34]              As s 176(1)(a) makes clear, land that is subject to a designation will no longer be subject to the requirements of s 9(3) of the RMA. That section prohibits land being used in a manner that contravenes a district rule unless the use is expressly allowed by either a resource consent or ss 10 or 10A of the RMA. Designations have been described as “notice to the world” of the use to which the land subject to a designation may be put.12

12     Waimairi County Council v Hogan [1978] 2 NZLR 587 (CA) at 590.

[35]              Although a proposed work that is covered by a designation does not require a resource consent in the form of a land use consent, it remains subject to other requirements. First, the requiring authority must comply with s 176A of the RMA before carrying out the work. This requires the requiring authority to provide the territorial authority, in this case the Council, with an outline plan of any works (OPW) the requiring authority proposes to carry out on the land subject to the designation. Section 176A relevantly provides as follows:

176A   Outline plan

(1)Subject to subsection (2), an outline plan of the public work, project, or work to be constructed on designated land must be submitted by the requiring authority to the territorial authority to allow the territorial authority to request changes before construction is commenced.

(2)An outline plan need not be submitted to the territorial authority if—

(a)the proposed public work, project, or work has been otherwise approved under this Act; or

(b)the details of the proposed public work, project, or work, as referred to in subsection (3), are incorporated into the designation; or

(c)the territorial authority waives the requirement for an outline plan.

(3)An outline plan must show—

(a)the height, shape, and bulk of the public work, project, or work; and

(b)the location on the site of the public work, project, or work; and

(c)the likely finished contour of the site; and

(d)the vehicular access, circulation, and the provision for parking; and

(e)the landscaping proposed; and

(f)any other matters to avoid, remedy, or mitigate any adverse effects on the environment.

(4)Within 20 working days after receiving the outline plan, the territorial authority may request the requiring authority to make changes to the outline plan.

(5)If the requiring authority decides not to make the changes requested under subsection (4), the territorial authority may, within 15 working

days after being notified of the requiring authority's decision, appeal against the decision to the Environment Court.

(6)In determining any such appeal, the Environment Court must consider whether the changes requested by the territorial authority will give effect to the purpose of this Act.

(7)This section applies, with all necessary modifications, to public works, projects, or works to be constructed on designated land by a territorial authority.

[36]              As the section makes clear the Council has the ability to request changes to any OPW that might be submitted by a requiring authority. The Council also has a right of appeal to the Environment Court if the requiring authority does not make the changes requested. As the appellants point out, however, no party other than the territorial authority has the ability to have any input into the OPW process.

[37]              In addition, the requiring authority must also seek any necessary resource consents under the regional plan components of the AUP.

[38]              Before considering the alleged errors of law it is also appropriate to consider the approach the courts have taken to the interpretation of designations.

The interpretation of designations

[39]              Historically, most designations were drafted in very broad terms. Many designations of this type, commonly known as legacy designations, remain in existence because they have been “rolled over” into successive district plans with or without modification. More recently, however, the trend has been to prescribe the activity or use to which a designation relates with some precision so that all persons who have cause to consider the designation can be left in no doubt as to its potential scope.

[40]              As the present case demonstrates, broadly worded designations can raise issues as to whether a current or proposed use of the land in question is covered by or included within the designation. Often the designation will have been drafted at a time when a proposed use could not have been contemplated.

[41]              There is no dispute regarding the test to be applied when interpreting the purpose of a broadly worded designation. As confirmed in numerous cases, the test is what an ordinary, reasonable member of the public who is considering a district scheme or plan would have taken from the designation.13

[42]              There are numerous examples of the courts and planning authorities applying the test. It is worth referring to some of these because they provide practical examples of the approach the courts have taken.

[43]              In Concerned Citizens Group v Wanganui District Council, the High Court was required to consider whether the Planning Tribunal had correctly concluded that the designation “Wanganui Base Hospital” included the construction and operation of a medium secure psychiatric unit within the land subject to the designation.14 That type of facility would not have been foreseen when the designation was first included in the District Scheme. Neazor J concluded that the proposed development “should be regarded as one of the hospital services which may contribute to the totality of services provided by a base hospital”.15 This prompted his Honour to uphold the Planning Tribunal’s decision that the proposed development fell within the designation.

[44]              In Hororata Concerned Citizens v Canterbury Gliding Club Inc, a gliding club sought a declaration that gliding activities constituted a recreational activity so that it could be accommodated on an area designated as a recreation reserve.16 The Environment Court concluded that the designated purpose of “recreation reserve” would cover all recreational activities.17 It held that gliding was clearly a recreational activity and the existing designation was therefore sufficient to cover it.

13     Waimairi County Council v Hogan, above n 12, at 590 applying Maunsell v Olins [1975] AC 373 (HL) at 391.

14     Concerned Citizens Group v Wanganui District Council HC Wellington AP19/92, 17 July 1992.

15     At 18.

16     Hororata Concerned Citizens v Canterbury Gliding Club Inc  EnvC Christchurch C185/2004,    8 December 2004.

17 At [51].

[45]              In Ngataringa Bay 2000 Inc v Minister of Defence the Planning Tribunal was required to decide whether the establishment of a Damage Control School fell within the purpose of the designation “defence purposes”.18 The Tribunal concluded:19

In my opinion a thoughtful member of the public, considering the designation “Defence Purposes” in the context of a document listing the range of activities given in that paragraph (including Naval training), might reasonably expect that it would include a facility for training Naval personnel in damage control on ships. I hold that the use and development of part of the site so designated for the Royal New Zealand Navy Damage Control School is in accordance with the designation.

[46]              In Waimairi County Council v Hogan, the Court of Appeal was required to determine whether a playcentre could be erected as of right on land designated as a “public recreation (play) area”.20 It held that the proposal was contrary to the designation because it would “exclude the public at large from a substantial part of the reserve”.21

[47]              In Olsen v Minister of Social Welfare, the Planning Tribunal dealt with both an appeal and an application for a declaration that the designation of the “Epuni Boys Home” did not authorise the use of the designated land for purposes including the custodial detention of young persons on remand from the courts.22 The appeal was filed by persons living near the Epuni Boys Home after the Hutt City Council had accepted a requirement issued by the Minister of Education that an existing designation of “Boys Home” be altered to “Social Welfare purposes: residents (sic) for care and control (including detention) of children and young persons and related office accommodation”.

[48]              The Planning Tribunal held that the requiring authority that had originally obtained the designation “was intent upon using a name [Boys Home] for the purpose of pacifying the public”.23 It considered the Minister had adopted the same approach

18     Ngataringa Bay 2000 Inc v Minister of Defence (3) (1992) 2 NZRMA 318 (PT).

19     At 325.

20     Waimairi County Council v Hogan, above n 12.

21     At 590.

22     Olsen v Minister of Social Welfare [1995] NZRMA 385 (PT).

23     At 389.

in seeking a new designation naming the facility as a “residential centre”. The Tribunal observed:24

Lastly we observe that despite the declarations the legality of the activity eventually becomes a matter of degree. A “Boys Home” may well contain one or two boys who are at the worse end of the offending scale and some type of mix is probably inevitable. The Epuni institution however was well past being accommodated by the expression “home” which is misleading to the general public. The closest description we can give to it is a young persons detention centre.

Decision

First alleged error: Did the Environment Court err in concluding that the words “Huia and Nihotupu water treatment plants” did not constrain the application of the designation primarily to those constructed facilities?

[49]              I accept that the wording of the purpose of the designation can be interpreted in differing ways as identified by the Environment Court. It is common ground, however, that the purpose of the designation must be ascertained having regard to the whole of the designation and not just the words used in setting out the purpose.

[50]              I agree with the Environment Court that the conditions are relevant in this context. They clearly anticipate that Watercare will carry out further works in reliance on the designation because they make provision for what will happen in that event. As I have already observed, Condition 1 prescribes matters Watercare must include or cover in any future OPW; Condition 2 deals with sedimentation and erosion control measures in relation to future works; and Condition 3 deals with future works that adversely affect elements of the treatment plants identified as having heritage values. The designation itself therefore contemplates further works within the scope of the designation being carried out in the future.

[51]              The appellants do not take issue with this. They acknowledge Watercare will need to maintain and upgrade the Huia plant to ensure it maintains the ability to meet future water needs. They part company with Watercare and the Council in relation to the scope of works that may be carried out within the boundaries of the designation. The appellants acknowledge that the designation permits Watercare to maintain and if

24     At 390.

necessary replace the two existing plants without a resource consent or new designation, but only if the work is carried out within the footprint of the existing sites. They say the designation does not extend to the construction of a new plant on another site. They contend Watercare is required to obtain a new designation or resource consent if it wishes to take that step.

[52]              As the Environment Court correctly observed, the ultimate test in the present context is what the ordinary, reasonable person would understand the designation to mean. That hypothetical person must be taken to have the level of knowledge about the factual context likely to be possessed by any ordinary and reasonable person who takes the trouble to examine a designation.

[53]              I deal first with an argument by the appellants regarding the meaning an ordinary and reasonable person would take from the words “Given effect to (i.e. no lapse date)”. These appear in the designation in response to the words “Lapse date”. The appellants argue that these words would suggest to such a person that the effect of the designation is spent because the designated works have already been constructed. As a result, no reasonable person would interpret the designation as authorising substantial works in the future.

[54]              This argument has several flaws. First, a designation of this breadth does not relate solely to construction works. Rather, it relates to the purpose for which the land has been designated. The land has been designated for water supply purposes. Although the plants may have been built, the conditions clearly anticipate that further works may be carried out in the future.

[55]              More importantly, the hypothetical person must be taken as having a reasonable knowledge of the manner in which designations operate. Ordinarily a designation will lapse after five years if it is not given effect.25 The words in the designation are designed to alert the reader to the fact that the designation has been given effect so that it will not lapse. This argument has no merit.

25     Resource Management Act 1991, s 184(1)(a).

[56] I deal next with an issue raised by the Environment Court in the passage set out above at [25]. In that passage the Environment Court noted, albeit as a subsidiary conclusion, that the two existing facilities take their names from the dams that supply them with water for processing.26 The evidence from Watercare is certainly to that effect and it might also be within the knowledge of some persons who live in the area and/or who have an interest in water treatment activities. I would be surprised, however, if that fact was within the knowledge of most ordinary and reasonable persons. I suspect that few persons outside the immediate area would know the names of the dams that supply the two facilities.

[57]              The hypothetical reasonable and ordinary person would, however, know that the treatment of water from its raw state to a product suitable for human use and consumption will require a number of steps to be taken. These will vary in nature and intensity as knowledge and technology advance, and as the demand for water rises with the steady increase in Auckland’s population.

[58]              That person would also know that, in common with plant used for most industrial and commercial purposes, the plant installed at Watercare’s sites will have a finite working life. New and more advanced water treatment methods will inevitably emerge as time goes on. The hypothetical person may also know that the Nihotupu plant reached the end of its working life nearly twenty years ago, and has been decommissioned as a result. Even if the person is not aware of that fact, he or she will know that all water treatment plants eventually become obsolete or unable to process water in an appropriate or economic way. The ordinary and reasonable person would therefore anticipate the eventual construction of one or more new facilities to either replace the existing facility or, as is now proposed, to operate in conjunction with it.

[59]              I do not consider the ordinary and reasonable person would conclude that any new or replacement facility would necessarily be located on the same site as the Huia or Nihotupu plants. That would be inherently unlikely in the case of the construction of an entirely new plant to operate in conjunction with the existing plant. The person would know that Watercare has required 57 hectares to be designated for water

26 At [31].

treatment purposes. He or she would therefore appreciate that Watercare is likely to build the new facility within that area and most probably in relatively close proximity to the two existing sites. This would enable the new facility to take advantage of the area’s proximity to the sources from which water was to be drawn for the new plant. It would also enable the three sites to be operated in the most efficient way.

[60]              I therefore consider the ordinary, reasonable person would understand the designation permitted the construction of a new water treatment facility within the area designated for that purpose but not in the same position as the two existing sites. This is the conclusion reached by the Environment Court for essentially the same reasons and applying the correct test. The Environment Court accordingly did not err in interpreting the wording of the designation as permitting water treatment activities beyond those carried on at the two existing plants.

Second alleged error: Did the Environment Court err in authorising a new water treatment plant, reservoirs and associated structures?

[61]              Reading the decision of the Environment Court as a whole, I do not consider it amounted to authorisation of a new water treatment plant with reservoirs and associated structures. The Environment Court expressly declined to make a declaration in favour of the Council.27 Having regard to the conclusions the Environment Court reached, however, it is implicit from the decision that it considered the construction of a new water treatment plant on a new site was covered by the designation. Having regard to my own conclusion in relation to the first alleged error, the Environment Court was entitled to reach that view.

[62]              As argument developed, it became evident that the appellants’ focus was directed to another issue. Mr Matheson for the appellants argued that the Environment Court had erred by failing to have regard to the fact that any new plant will inevitably add substantially to the scale and degree of the activity carried out on the designated land. He submitted this could place the new activity outside the scope of the designation. He also contended the Court needed to take into account the fact that the designated area falls within an ecologically important area. He contended it was

27     At [36]-[37].

essential that the public be given the opportunity to provide input into the proposal to build a new plant by making submissions in opposition to an application for resource consent or a new designation.

[63]              The appellants rely for this ground on observations made by the Court of Appeal in Hogan and the Planning Tribunal in Olsen. As noted above,28 the Court of Appeal in Hogan held that the proposed erection of a playcentre within an area designated as a public recreation reserve was not covered by the designation because it would exclude the public from using a substantial portion of the reserve. Mr Matheson for the appellants submits it can be inferred from this that the Court of Appeal may not have decided the case the same way if the proposed activity had only excluded the public from using a small or minor part of the reserve.

[64]              I do not accept this submission. I consider the Court’s decision was based on its conclusion that the reserve was designated for the use of the general public and the designation would not extend to any activity that excluded the general public. I do not consider the proportion of the reserve that might be affected by the proposed use could affect that proposition.

[65]              Mr Matheson points out that in the passage from Olsen set out above29 the Planning Tribunal referred to the fact that the legality of the activity “eventually becomes a matter of degree”. He submits this supports his argument that an increase in scale or degree of an activity can remove it from or place it outside the scope of a designation. I do not accept this submission because I consider the Planning Tribunal in Olsen was referring to the fact that eventually an increase in a different type of activity will change the nature or character of the purpose for which designated land is being used. In that case the use of a property designated as a boys home altered to that of a facility for the custodial detention of young persons on remand from the courts. The nature of the use therefore altered rather than the degree.

[66]              In general terms, and in the absence of any conditions in the designation limiting the scale or intensity of the use to which the land may be put, I do not see how

28 At [46].

29 At [48].

an increase in the degree or scale of an activity falling within the purposes of a designation can result in the activity falling outside the designation. Either an activity is covered by a designation or it is not. For that reason the appellants’ criticism that the Environment Court failed to set an “upper limit” for future development is without substance. This argument fails as a result.

Third alleged error: Did the Environment Court err by taking into account irrelevant considerations or giving undue weight to marginally relevant considerations?

[67]              I begin by observing that it will be an error of law for a decision maker to take into account an irrelevant consideration but the weight to be given to relevant considerations will be for the decision maker to asses.

[68]              The appellants’ challenge under this ground relies on the Environment Court’s observation that Watercare will still be required to obtain resource consents under the regional aspects of the AUP and it will also be required to file an OPW with the Council in respect of future work even if it is covered by the designation. These references appear in the following passage of the Environment Court’s decision:30

[22] Given the generality of the purpose, a reasonable person would understand that there may be changes to the operation and process for water treatment in the Auckland region over decades. The controls in this case are not exercised through the land use control, but through the conditions on the designation and the requirement for regional consents. In this designation there are significant constraints that would avoid the possibility of the entire site being converted to a water treatment plant, for example. Even if only aspects of the activity are non-complying, or fully discretionary, it is clear that the regional consents would require considerable attention to the details of design.

[69]              I consider these issues were relevant to the Environment Court’s reasoning process because they demonstrated that the designation, and in particular the conditions attached to the designation, contemplated future works being carried out within the designated area. Furthermore, I accept the submission for Watercare that the Environment Court may also have included these observations to provide the appellants with some assurance that Watercare would still be subject to some significant controls in relation to future construction works.

30     Titirangi Protection Group Inc v Watercare Services Ltd, above n 1.

[70]              Even if the observations were irrelevant, they can have no bearing on the outcome of the appeal because I have already concluded that the Environment Court’s interpretation of the designation was correct using the established test.

[71]              Before concluding, I acknowledge that the appeal does not, and cannot, address the appellants’ primary concern. This is that they were effectively denied the opportunity to make submissions on the rollover of the designation because Watercare did not provide any hint at that time of its intention to construct a new plant on the designated land. The appeal does not, however, provide the appellants with a forum within which to ventilate that concern. Furthermore, they now have no means under the RMA by which they may challenge the incorporation of the designation within the AUP. It was partly for this reason that the Environment Court directed that costs were to lie where they fell.31

Result

[72]The appeal is dismissed.

Costs

[73]              The respondents have succeeded and would ordinarily be entitled to an award of costs on a Category 2B basis together with disbursements as fixed by the Registrar. If counsel and the parties cannot reach agreement regarding costs the respondents are to file concise memoranda (no more than three pages in length) within 14 days. I will then give directions for the filing of submissions in response and reply.

Lang J

Solicitors:

B Matheson, Barrister, Auckland

Doug Cowan, Barristers and Solicitors, Auckland Simpson Grierson, Auckland

Brookfields, Auckland

31     Titirangi Protection Group Inc v Watercare Services Ltd above n 1, at [39].