Waitaki Irrigators Collective Limited v Canterbury Regional Council

[2018] NZHC 2064

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2017-409-000496

[2018] NZHC 2064

BETWEEN

WAITAKI IRRIGATORS COLLECTIVE LIMITED

Appellant

AND

CANTERBURY REGIONAL COUNCIL

Respondent

Hearing:	On the papers
Appearances:	P A Steven QC and B Irving for Appellant P A C Maw and K J Wyss for Respondent
Judgment:	14 August 2018

JUDGMENT OF DUNNINGHAM J

[1]                   This judgment deals with the  proposed  settlement  of  an  appeal  by  Waitaki Irrigators Collective Limited (WIC) against  the  decision  of  the  Canterbury Regional Council (the Council) on Plan Change 5 to the Canterbury Land and Water Regional Plan (Plan Change 5).

[2]                   The appellant and the Council have reached agreement on how this appeal should be resolved. That agreement is supported by the following parties, all of whom have joined the appeal:

(a)Barrhill Chertsey Irrigation Limited;

(b)Combined Canterbury Provinces, Federated Farmers of New Zealand Incorporated;

WAITAKI IRRIGATORS COLLECTIVE LIMITED v CANTERBURY REGIONAL COUNCIL [2018] NZHC 2064 [14 August 2018]

(c)Dairy Holdings Limited; and

(d)Royal Forest and Bird Protection Society of New Zealand Incorporated.

[3]                   The parties seek the Court’s approval of the proposed amendments to the Canterbury Land and Water Regional Plan (LWRP) as negotiated, under the Court’s power to substitute its decision for that of the Council.

[4]                   In support of the request that orders are made in accordance with the settlement negotiated, the parties have filed a detailed memorandum setting out:

(a)the procedural background to the appeal;

(b)the issues raised in the appeal;

(c)the agreed position on the alleged errors of law made by the Council; and

(d)the proposed amendments to Plan Change 5.

The appeals

Background

[5]                   Plan Change 5 was publicly notified on 13 February 2016 pursuant to clause 5 of the First Schedule of the Resource Management Act 1991. WIC lodged submissions and further submissions on Plan Change 5, as did a number of other parties.

[6]                   The Council delegated the hearing of submissions on Plan Change 5 to independent hearing commissioners. Their recommendations in the form of a narrative report dated 1 June 2017 and appendices containing the provisions to be incorporated in the LWRP were adopted by the Council as its decision on 15 June 2017 (the Decision). The Decision was publicly notified on 24 June 2017.

[7]                   Section 66 of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act 2010 (the ECan Act) restricts appeals  to  the High Court on errors of law only. The appeal is made under this section.

[8]                   WIC’s appeal alleges three errors of law and raises three questions of law in relation to Rule 15B.5.8, which was introduced into the LWRP by Plan Change 5.

Rule 15B.5.8

[9]                   Part B of Plan Change 5 seeks to amend Section 15 of the LWRP to introduce a new Section 15B containing catchment-specific provisions that apply to the Waitaki sub-region as defined in the LWRP. These rules prevail over the relevant nutrient management rules in the region-wide provisions of the LWRP, and the specific nutrient management rules in Section 15B. In brief, these rules were:

(a)Rule 15B.5.6 which provided for the use of land for a farming activity as a permitted activity in the Waitaki sub-region where:

(i)the nitrogen loss is managed under a resource consent held by an irrigation scheme; or

(ii)the land is subject to an existing water permit that specifies the maximum rate of nitrogen loss (NDA) and the permit requires a farm environment plan (FEP).

(b)Rule 15B.5.7 which provided for the use of land for a farming activity as a controlled activity in areas of the Waitaki sub-region, described as the Hakataramea, Northern Fan, and Valley and Tributaries, where the land is subject to a water permit granted between 1 November 2009 and 31 August 2010 where that permit requires an FEP, but does not have an NDA, provided certain conditions are met.

[10]               Based on the evidence presented at the hearing, the Council Officers recommended in the Section 42A Reply Report that the use of land for farming activities managed under existing water permits without an NDA, be instead classified

as permitted activities, subject to conditions (including that the conditions of the resource consent have not been amended since 13 February 2016).

[11]               On that basis, the Hearing Commissioners deleted Rule 15B.5.7 and added a new category of permitted activity, by adding a new clause (c) to Rule 15B.5.6 (which was subsequently renumbered to Rule 15B.5.8).

[12]               Accordingly, the Decision’s version of Rule 15B.5.6 (which was renumbered as Rule 15B.5.8), provides as follows:

15B.5.8Despite Rules 15B.5.9 to 15B.5.9C, 15B.12 to 15B.5.17 and 15B.5.21 to 15B.5.4835 the use of land for a farming activity in the Waitaki where either:

…

(c)the land is within the Valley and Tributaries Zone, Hakataramea Flat Zone Hakataramea Hill Zone, Hakataremea River Zone or the Greater Waikākahi Zone and is subject to a water permit that authorises the use of water for irrigation; and

(i)the permit was granted between 1 November 2009 and 13 February 2016; and

(ii)the permit has commenced as specified in    s 116 of the RMA; and

(iii)the permit is subject to conditions which require the preparation and implementation of a plan to mitigate the effects of the loss of nutrients to water and that plan specifies auditing requirements; and

(iv)the conditions of the permit have not been changed since 13 February 2016; and

(v)the property is registered in the Farm Portal by 1 July 2018 and information about the farming activity and the property is reviewed and updated by the property owner or their agent every 36 months thereafter, or whenever a material change in the land use associated with the farming activity occurs; or whenever any boundary of the property is changed

is a permitted activity.

The issues raised in the appeal

[13]               WIC’s appeal challenges the Council’s decision on Rule 15B.5.8(c), alleging that errors of law have occurred in relation to the jurisdiction for the amendments and also based on unreasonableness.

[14]The questions of law raised by WIC are:

(a)Did the Council err in law by making amendments to Rule 15B.5.8(c) that were outside its jurisdiction under clause 10 of the First Schedule of the RMA?

(b)Was there evidence before the Council upon which it was reasonably capable of supporting the amendments made to Rule 15B.5.8 (in particular, the inclusion of a new clause (c))?

(c)Was the Council’s decision to make the amendments to Rule 15B.5.8 unreasonable?

WIC’s position

[15]               One of the conditions for a permitted activity under Rule 15B.5.8(c) is that the relevant water permit was granted between 1 November 2009 and 13 February 2016. This is because the nutrient losses from the activity authorised by these water permits were included in the modelling of the Waitaki Catchment load limit.

[16]               WIC contends that some of its members were technically granted water permits after the qualifying date of 13 February 2016, but in circumstances where these water permits were accounted for in the calculation of the Waitaki load limit because those new permits were derivatives of water permits granted within the qualifying period of 1 November 2009 and 13 February 2016. Four consents fall into this category because they are replacements for consents issued in the applicable date range or because they resulted from a “split” of an existing water permit that was granted within the applicable date range into two new water permits.

[17]               WIC therefore contends that applying the reasoning in the hearing commissioners’ report, these water permits should also have been provided for as a permitted activity under Rule 15B.5.8(c).

[18]               A further requirement to be a permitted activity under Rule 15B.5.8(c) is that the conditions of the water permit have not been changed since 13 February 2016. This condition is intended to ensure that the land use activity associated with the water permit has not changed, such that the associated nutrient load increases beyond that modelled in the Waitaki load limit.

[19]               WIC’s appeal contends that farmers who hold water permits granted between 1 November 2009 and 13 February 2016, may have been required to subsequently vary the conditions of their consent to address matters which are unrelated to water quality issues.

[20]               WIC has given the example of consent holders who have made voluntary changes to bring minimum flow and other environment flow regime provisions into line with changes recently made operative via Plan Change 3 to the Waitaki Catchment Water Allocation Regional Plan. A further example given by WIC is a change which is required for the purpose of giving effect to a transfer into the name of a new land-owning entity.

[21]               WIC says there is no logical reason to exclude permits from the permitted activity rule where they have had changes to conditions which are unrelated to increased impacts or water quality.

Agreed position

[22]               The parties consider that in finding that the date range in Rule 15B.5.8(c)(i) be limited  to  water  permits  that  were  granted  between  1  November   2009  and   13 February 2016, the Council has erred in law by failing to take into account a relevant matter; which is that some derivative consents were granted in the subsequent period of time, but in circumstances where the load associated with those permits was already included in the modelled Waitaki catchment load.

[23]               Council staff have also confirmed that amending Rule 15B.5.8(c)(i) to extend the date range to 20 December 2016 will not capture any other water permits that will impact the Waitaki load limit.

[24]               In relation to Rule 15B.5.8(c)(iv), the parties consider that in finding that permitted activity status only be afforded where there has been no change in conditions to a qualifying water permit, that the Council has erred in law because its decision on the amendment to 15B.5.8(c)(iv) is inconsistent with the reasoning in the decision. The decision accepts that it is the fact that the permit requires a FEP to limit nutrient losses that mitigates the effects of the loss of nutrients to the water. Logically it is only changes to conditions that are intended to limit nutrient losses, by loosening them, that are of concern. Changes which are irrelevant to nutrient losses, or which are designed to reduce nutrient losses, could not have been intended to be captured.

[25]               The parties agree, therefore, that the Council erred in  law  by  amending Rule 15B.5.8(c)(iv) in a way that amounts to an evident logical fallacy based on inconsistency.

[26]               The parties agree that any amendments to Rule 15B.5.8(c)(iv) need to ensure that the intensity of the activity associated with the water permit is not changed. This is because the effects of the farming activity that was originally consented were included in the catchment modelling and any change to the farming activity which has the potential to increase these effects may not be accounted for in the catchment load limit.

Changes to remedy error

[27]               In order to remedy the errors of law which have occurred in relation to the Council’s decision, the parties consider that amendments are required to Rule 15B.5.8.

[28]               A copy of the amendments proposed to Rule 15B.5.8 is set out in Appendix A. In summary:

(a)Changes are proposed to Rule 15B.5.8(c)(i) to extend the qualifying date for permitted activities to 20 December 2016.

(b)Changes are proposed to 15B.5.8(c)(iv) to enable water permits where the conditions have been changed to fall within Rule 15B.5.8(c), in limited circumstances, along with a consequential change to the date in (c)(iv) as a result of the change proposed to (c)(i).

(c)Consequential changes are also required to Rule 15B.5.9 due to the change in the date range in Rule 15B.5.8(c)(i) as set out in (a) above.

Jurisdiction to determine appeal

[29]               The Court has jurisdiction to determine this appeal under r 20.19 of the    High Court Rules 2016. It provides:

(1)After hearing an appeal, the court may do any 1 or more of the following:

(a)make any decision it thinks should have been made:

(b)direct the decision-maker—

(i)to rehear the proceedings concerned; or

(ii)to consider or determine (whether for the first time or again) any matters the court directs; or

(iii)to enter judgment for any party to the proceedings the court directs:

(c)make any order the court thinks just, including any order as to costs.

…

[30]               I am satisfied that I have heard from the parties through the comprehensive joint memorandum they have filed. It is open to me to amend Plan Change 5 in accordance with the proposed changes set out at Appendix A to the memorandum. The proposed changes have been fully explained and I accept that they are intended to ensure the rules made, reflect the reasoning in the decision.

[31]               I am also satisfied that approval of the amendments is appropriate in the present circumstances because:

(a)the orders sought by consent address the issues raised in the appeal;

(b)the proposal to settle the appeal by making the proposed amendments represents a just, speedy and inexpensive way to determine this proceeding. In that regard, one of the fundamental purposes of the ECan Act is to enable Plan Change 5 to be made operative as soon as possible;

(c)agreement has been reached on the resolution by all parties joined to the appeal proceedings, with all parties accepting that there has been an error of law;

(d)the proposed amendment is consistent with the purpose and principles of the Resource Management Act, particularly Part 2; and

(e)given the scope of the relief jointly requested, it is not necessary for the matter to be remitted back to the Council for determination.

[32]               The parties recognise that there can be no expectation that, in every case, consent orders are suitable for approval through appeals to the Court. As Whata J said in Meridian Energy Ltd v Canterbury Regional Council, “[t]his is a public law process and there must be due consideration given to the wider public interest in the promulgation of planning instruments”.1 Counsel acknowledge that statement applies in this situation, and as such, all submitters on Plan Change 5 were served with a copy of the appeal and had an opportunity to join the proceedings as an interested party. I consider that Whata J’s concerns have been appropriately dealt with.

Outcome

[33]               I am satisfied that it is appropriate to exercise the Court’s power under r 20.19 to amend the text of Plan Change 5, as proposed in the parties’ joint memorandum.

[34]               Accordingly, I order that Plan Change 5 to the Canterbury Land and Water Regional Plan be amended as set out in Appendix A to the joint memorandum of counsel recording settlement dated 9 July 2018, as replicated in an attachment to this decision.

1      Meridian Energy Ltd v Canterbury Regional  Council HC Christchurch CIV-2010-409-2604,   23 May 2011 at [11].

[35]               The parties agree that there is no issue as to costs in respect of the resolution of this appeal.

Solicitors:

P A Steven, Barrister, Christchurch Gallaway Cook Allan, Dunedin Wynn Williams, Christchurch

APPENDIX A

PROPOSED AMENDMENTS TO PLAN CHANGE 5 TO RESOLVE APPEALS

The amendments sought by the parties to the provisions of Plan Change 5 to the Canterbury Land and Water Regional Plan are shown below. Amendments are shown with insertions in underline and deletions in strikethrough.

General rules

15B.5.8

Despite Rules 15B.5.9 to 15B.5.9C, 15B.5.12 to 15B.5.17 and 15B.5.21 to 15B.5.35 the use of land for a farming activity in the Waitaki where either:

(a)the nitrogen loss from the farming activity is being managed under a resource consent that is held by an irrigation scheme or principal water supplier and the permit contains conditions which limit the maximum rate or amount of nitrogen that may be leached from the subject land;

or

(b)the land is subject to a water permit that authorises the use of water for irrigation; and

(i)the permit was granted prior to 18 February 2016; and

(ii)the permit has commenced as specified in s116 of the RMA; and

(iii)the permit is subject to conditions that specify the maximum rate of nitrogen (kg/ha/yr) or amount of nitrogen (kg/yr) that may be leached from the land; and

(iv)the water permit is subject to conditions which require the preparation and implementation of a plan to mitigate the effects of the loss of nutrients to water;

or

(c)the land is within the Valley and Tributaries Zone, Hakataramea Flat Zone, Hakataramea Hill Zone, Hakataramea River Zone or the Greater Waikākahi Zone and is subject to a water permit that authorises the use of water for irrigation; and

(i)the permit was granted between 1 November 2009 and 13 February 20 December 2016; and

(ii)the permit has commenced as specified in s116 of the RMA; and

(iii)the permit is subject to conditions which require the preparation and implementation of a plan to mitigate the effects of the loss of nutrients to water and that plan specifies auditing requirements; and

(iv)the conditions of the permit have not been changed since

13 February 2016 any change to the condition of a water permit granted before 20 December 2016 does not increase the volume or rate of water abstracted, or authorise a change in the use of the water, or increase the scale, intensity or character of the activity for which the water is used; and

(v)the property is registered in the Farm Portal by 1 July 2018 and information about the farming activity and the property is reviewed and updated by the property owner or their agent every 36 months thereafter, or whenever a material change in the land use associated with the farming activity occurs; or whenever any boundary of the property is changed

is a permitted activity.

15B.5.9

Despite Rules 15B.5.9A to 15B.5.9C, 15B.5.12 to 15B.5.17 and 15B.5.21 to 15B.5.35, the use of land for a farming activity within the Waitaki, on a property greater than 10 hectares in area, is a controlled activity, provided the following conditions are met:

1.A Farm Environment Plan has been prepared for the property in accordance with Part A of Schedule 7 and is submitted with the application for resource consent; and

2.The land is subject to a water permit that authorises the use of water for irrigation and:

(a)that water permit replaces an existing water permit that:

(i)       was granted prior to 18 February 2016; or

(ii)      was granted between 18 February 2016 and 20 December 2016, where the land is within the Valley and Tributaries Zone, Hakataramea Flat Zone,

Hakataramea Hill Zone, Hakataramea River Zone or the Greater Waikākahi

Zone; and

(b)is for the same activity in character, intensity and scale as that authorised under the previous water permit; and

(c)includes conditions that limit the maximum rate (kg/ha/yr) or amount (kg/yr) of nitrogen that may be leached from the subject land to a rate or amount that does not exceed that authorised by the water permit that was replaced; and

3.The Farm Environment Plan and nutrient budget submitted with the application for resource consent has been prepared or reviewed by an Accredited Farm Consultant.

The CRC reserves control over the following matters:

1.The commencement date for the first audit of the Farm Environment Plan; and

2.The content, quality and accuracy of the nutrient budgets provided with the application for resource consent; and

3.The timing of any actions or good management practices proposed to achieve the objectives and targets described in Schedule 7; and

4.Methods that limit the nitrogen loss calculation for the farming activity to a rate not exceeding the lesser of the Good Management Practice Loss Rate or the maximum rate of nitrogen (kg/ha/yr) that may be leached from the land; and

5.Methods to avoid or mitigate adverse effects of the activity on surface and groundwater quality and sources of drinking water; and

6.Methods to address any non-compliance identified as a result of a Farm Environment Plan audit, including the timing of subsequent audits; and

7.Reporting of estimated nutrient losses and audit results of the Farm Environment Plan to the Canterbury Regional Council.