Woolley v Marlborough District Council
[2019] NZHC 2726
•24 October 2019
IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE
CIV-2018-406-25
[2019] NZHC 2726
BETWEEN PHILIP JOHN WOOLLEY
Applicant
AND
MARLBOROUGH DISTRICT COUNCIL
Respondent
Hearing: 17 June 2019 Appearances:
D J Clark for the Applicant
J W Maassen and B D Mead for the Respondent P McNamara for the Intervener
Judgment:
24 October 2019
JUDGMENT OF CULL J
[1] Mr Woolley seeks judicial review of the Marlborough District Council’s (the Council) refusal to process Mr Woolley’s application to transfer a water permit from one parcel of land to another, under s 136 of the Resource Management Act 1991 (the RMA). Constellation Brands New Zealand Ltd (Constellation Brands), to which part of the permit was transferred, was granted leave to intervene in the proceedings by this Court on 23 October 2018.1
[2] At the heart of these proceedings is the issue of whether the water permit has lapsed. The Council declined to process the application because of its interpretation of an Environment Court decision.2 The Council understood the Court to have held that Mr Woolley’s resource consent U060329 to take water had lapsed.
1 Woolley v Marlborough District Council HC Blenheim CIV-2018-406-25, 23 October 2018.
2 Koha Trust Holdings Ltd v Marlborough District Council [2016] NZEnvC 152.
WOOLLEY v MARLBOROUGH DISTRICT COUNCIL [2019] NZHC 2726 [24 October 2019]
[3] Mr Woolley contends this was not a correct interpretation of the Environment Court decision. He submits the Court did not hold the consent had lapsed. The Council by way of counterclaim seeks a declaration that the consent has lapsed.
[4] Constellation Brands is concerned that if the Court were to find that the consent had lapsed, this could have implications for the water rights held by Constellation Brands under their new resource consent U161146 because those rights derive from the former consent. Constellation Brands’ new resource consent was granted after the final lapse date of Mr Woolley’s original consent.
Background
[5] There is a significant history which needs to be understood in the context of this review proceeding, particularly the Environment Court’s decision in Koha Trust Holdings Ltd v Marlborough District Council.3
[6] The 2016 proceedings in the Environment Court involved a third party, Koha Trust Holdings Ltd (Koha Trust), seeking declarations that Mr Woolley’s permit had lapsed. If it had, Koha Trust wished to obtain the water permit itself. The Environment Court ultimately did not exercise its discretion to make the declarations that were sought by Koha Trust. The Court addressed separately the position of Mr Woolley and Constellation Brands, to which Mr Woolley had transferred part of the permit, and stated it made “findings about lapse” but decided against exercising the discretion to grant the declarations sought.4
[7] The decision under review in these proceedings is the subsequent failure of the Council on 11 June 2018 to process Mr Woolley’s application to transfer the water permit from one parcel of land to another under s 136 of the RMA. The basis for returning the application was the Council’s interpretation of the findings of the Environment Court in Koha Trust, and its own records.
[8] By way of background, Mr Woolley took over his family’s farm at Tuamarina in 1974 and converted it to a dairy farm. Mr Woolley acquired joining land which,
3 Koha Trust, above n 2.
4 At [72].
when amalgamated, totalled approximately 320 hectares. It was intended the farming unit was to have four separate water “takes”, three from wells and the fourth from a spring.
[9] The beginning of the water permits commenced with the drilling of “the cowshed well” in 1974. The then-Marlborough Catchment Board granted a permit to Mr Woolley to irrigate water from this well and subsequently, water permits were granted for both this well and the other water “takes”. Those permits were to expire in 2006, so Mr Woolley sought a renewal consent for all four water takes on the farm property on 31 March 2006. On 5 February 2010, consent was granted under resource consent U060329. Water has been drawn for irrigation purposes from the cowshed well since 1974 to the most recent irrigation season.
[10] On 20 December 2013, Mr Woolley entered into an agreement to lease most of his dairy farm to Constellation Brands. Constellation Brands wished to convert the land to viticulture. The commencement date of the lease was 1 July 2015.
[11] On 26 May 2015, Koha Trust applied to take and use water, on the premise that Mr Woolley’s consent U060329 had lapsed. The Council did not accept Koha Trust’s application and on 1 July 2015, it accepted and transferred:
(a)part of U060329, being 3960 cubic metres, to Constellation Brands under s 136 of the RMA; and
(b)a separate part of U060329 to Constellation Brands of 2445 cubic metres, also under s 136 of the RMA.
[12] Importantly, Mr Woolley retained 4273 cubic metres per day under consent U060329. Constellation Brands converted the farm to viticulture and used water from U060329 in the summer months of 2015.
[13] On 30 September 2015, Constellation Brands was granted resource consent under U150465 by the Hearings Committee of the Council to take that part of Mr Woolley’s consent U060329 that had already been granted to it from a new well at
Hinepango, near the coast. The issue that Mr Woolley’s consent had potentially lapsed was raised by the Council’s reporting officer and the Hearings Committee, presided over by a retired Environment Court Judge, after hearing evidence determined that it did not lapse. The finding was:
Resource consent U060329 was given effect to as required by s 125 RMA, and is valid until 1 February 2030. It did not lapse.
[14] Koha Trust then lodged its application with the Environment Court on 14 January 2016, seeking a declaration that Mr Woolley’s permit had lapsed. The Environment Court, in its decision of 15 August 2016, refused to grant the declaration that the water permit had lapsed but stated it made findings of lapse.5
[15] On 13 December 2016, Constellation Brands was granted a new resource consent (U161146), to merge the water from the Hinepango well with the water that was transferred on 1 July 2015 into one combined consent. The Council granted consent, recording that there would still be 4273 cubic metres per day of water in Mr Woolley’s consent U060329 after granting Constellation Brands’ application. In its reasons, the Council records that “leaves Mr Woolley with 4273 cubic metres per day”.
[16] Mr Woolley, then, on behalf of Awarua Farm (Marlborough) Ltd (Awarua Farm), applied for a new consent to take 1900 cubic metres of water that still remained in U060329 from the well at Hinepango. On 4 August 2017, the Council granted consent to Mr Woolley’s application under permit U150453 and again the issue of whether Mr Woolley’s consent permit U060329 had lapsed arose. The Commissioner, on behalf of the Council, referring to Koha Trust, noted that the “referee” had chosen to not “make a ruling” and concluded that the resource consent must be considered as not having lapsed.
[17] In 2018, Mr Woolley leased land from the estate of Anthony Chaytor at Marshlands. As that land did not have its own irrigation water, Mr Woolley applied to the Council on 25 May 2018 under s 136 of the RMA to transfer water from the existing take points of consent U060329 through to the Chaytor property.
5 Koha Trust, above n 2.
[18] On receipt of Mr Woolley’s application, the Council sent a letter back on 29 May 2018 saying:
According to Council records and based on the Koha decision the Woolley portion of U060329 has lapsed.
Consequently neither a transfer nor a variation can take place as all interests held by Mr Woolley in relation to the permit have ceased.
Your application is returned.
[19] In response to further communication from Mr Woolley’s solicitor, the Council sent another letter, dated 11 June 2018, confirming its position:
However the finding and reasoning of the 2015 decision was in essence overturned in 2017 by the Environment Court in Koha Trust Holdings Ltd v MDC (the Koha decision). The Court held:
a)Establishment conditions must be implemented in full in order to ‘give effect’ to the consent.
b)Conditions 3 and 4 of the resource consent were establishment conditions.
c)Conditions 3 and 4 were not implemented.
d)The resource consent had lapsed.
e)Any difficulties in implementing the conditions were the responsibility of the consent holder and should have been dealt with prior to the lapse date.
f)Any shortcoming in Council in monitoring and enforcing conditions of a resource consent cannot absolve the consequences of failing to comply with a consent.
g)Rights or privileges held by the consent holder are lost when a consent lapses.
h)A declaration should not be made with respect to the portion transferred to Constellation Brands Limited as it would affect the rights of a third party which had legitimately organised its affairs and made considerable investments.
i)Whilst acknowledging the finding of lapse a declaration would not be made in respect of Mr Woolley’s portion as there should be further testing of the evidence that should take place.
The decision to make, modify or decline a declaration encompasses broader considerations than a finding of fact. The matters to be considered are addressed in the Koha decision. The decision not to make a declaration, in
this case positively declare a state of lapse, does not negate the finding of a state of lapse.
…
With respect to transfer as noted in the Koha decision as a consequence of lapse the consent holder’s interest in the consent cease. Your client is unable to transfer the consent as there is no interest to transfer and consequently Council is not in a position to register the transfer.
[20] Thus, the Council declined to exercise its powers under s 136 because the Council considered Mr Woolley had no interest in the consent as it had lapsed, and therefore Mr Woolley had no right to lodge an application to transfer it under s 136.
[21] Because of the importance of the sequence of events and the Council’s records of its grants of consent involving U060329, the relevant events can be summarised as follows:
5 February 2010: Consent U060329 granted with a lapse date of 1 February 2012. 1 July 2015:
The Council transferred resource consent U060329 (one part 3,960 cubic metres, another of 2,445 cubic metres), from Mr Woolley to Constellation Brands under s 136 of the RMA.
30 September 2015:
Council decides to grant new consent to Constellation Brands (U150465) of 2,445 cubic metres of water from different well at Hinepango and records that U060329 has not lapsed.
13 January 2016:
Koha Trust applies for declaration to the Environment Court that consent U060329 has lapsed.
14-15 March 2016:
Environment Court hearing.
17 March 2016:
Council records that conditions 3 and 4 of U060329 have been met.
15 August 2016:
Environment Court decision declining to make declaration that U060329 has lapsed.
13 December 2016:
Council grants consent U161146 and in doing so records that there is still 4,273 cubic metres per day in U060329.
4 August 2017:
Council grants Awarua Farm (a company owned by Mr Woolley) resource consent U150453 and records that as the Environment Court chose not to make a ruling,
U060329 must be considered as not having lapsed.
25 May 2018: Mr Woolley applies to transfer remaining part of U060329 from Mr Woolley to the estate of Anthony Chaytor under s 136 of the RMA. 11 June 2018:
Council refuses to process the transfer under s 136 on the
basis that the Environment Court decision determined that the permit had lapsed.
Issues
This proceeding raises the following issues:
(a)Is the Council’s failure to process the s 136 RMA application amenable to review or is it an appeal question?
(b)Did the Council err in rejecting the s 136 application?
Review or appeal?
[23] A decision on an application under s 136, like a resource consent application, is subject to an appeal right to the Environment Court under s 120:
120 Right to appeal
(1)Any 1 or more of the following persons may appeal to the Environment Court in accordance with section 121 against the whole or any part of a decision of a consent authority on an application for a resource consent, or an application for a change of consent conditions, or on a review of consent conditions:
(a)the applicant or consent holder:
(b)any person who made a submission on the application or review of consent conditions:
(c)in relation to a coastal permit for a restricted coastal activity, the Minister of Conservation.
[24] Mr Clark for Mr Woolley submits that in order to be able to appeal to the Environment Court the Council must first make a “decision”. He says that given the wording of s 120, the Council’s return of Mr Woolley’s application, and its refusal to make a decision, an appeal was not the correct process to adopt. He says it is a matter for judicial review.
[25] Mr Maassen for the Council submits that the appropriate response for Mr Woolley was to appeal the decision. He submits the RMA was developed as a comprehensive resource management system, and although resort to judicial review is not excluded by the RMA, challenges as to the correctness of the exercise of local authority functions and power are made under Part 12 of the RMA. That regime, Mr Maassen says, provides superior avenues for a challenge of the type raised by Mr Woolley, and ought to be used rather than judicial review where the challenge is to correctness and legality.
[26] It has long been an available remedy in judicial review proceedings, to require a decision maker that refuses to enter the enquiry and make a decision, to carry out the process and make a decision.6 Indeed, it is recognised as a specific purpose of judicial review under the Judicial Review Procedure Act 2016 at s 3(1)(b), which describes it as the “failure to exercise a statutory power”:
3 Purpose of this Act
(1) The purpose of this Act is to re-enact Part 1 of the Judicature Amendment Act 1972, which sets out procedural provisions for the judicial review of–
…
(b) the failure to exercise a statutory power:
[27] I consider that this issue can be dealt with in short measure. There are three reasons why I find that the matters at issue in this proceeding are amenable to judicial review.
[28] First, the Council did not exercise its statutory powers under s 136, nor under any other section of the RMA. This falls within s 3(1)(b) of the Judicial Review Procedure Act and Mr Woolley is entitled to review the failure of the Council to exercise a statutory power in these circumstances.
[29] Second, if Mr Woolley were to appeal, s 120 of the RMA requires a decision of a consent authority. Apart from noting its records and relying on its interpretation
6 Broadcasting Corporation of New Zealand v Broadcasting Tribunal [1986] 2 NZLR 620 (CA) at 634.
of the Koha Trust decision, it is difficult to understand how Mr Woolley would have structured his appeal. In returning his application, the Council expressly advised Mr Woolley that it was not making a decision but was simply abiding the decision in Koha Trust. Even if it were arguable that the Council made a “decision”, it was one based on the Environment Court’s decision in Koha Trust. Any appeal would therefore be construed as a collateral attack on the Environment Court’s decision.
[30] Thirdly, the Council submits that Mr Woolley’s application was incomplete and so it was returned to Mr Woolley under s 88(3) of the RMA. On that basis, the Council contends Mr Woolley could have objected to the Council’s decision to return the application under s 357(3) of the RMA which provides specifically for that, and/or made a challenge to the correctness of the exercise of the Council’s functions and powers under Part 12 of the RMA.
[31] If the Council had returned Mr Woolley’s application because it was incomplete, it must provide written reasons for its determination.7 However, in the Council’s correspondence with Mr Woolley and his counsel, there is no reference to s
88 of the RMA and an incomplete application. Indeed, it is clear from the correspondence that the Council’s interpretation of the Environment Court’s decision in Koha Trust was the reason for the Council’s return of the application. I do not uphold the Council’s submission that the s 357 pathway was available to Mr Woolley, because I consider the Council did not make a determination under s 88(3).
[32] Further, Mr Maassen says that Mr Woolley could have applied to the Environment Court for a declaration that the consent had been given effect to, or that it had not lapsed, under Part 12 of the RMA. Although perhaps an available alternative, this does not vitiate Mr Woolley’s right to elect to bring judicial review proceedings in these circumstances.
Conclusion
[33] The Council’s decision to return Mr Woolley’s application without processing it under s 136 of the RMA is amenable to judicial review under s 3(1)(b) of the Judicial
7 Resource Management Act 1991, s 88(3A).
Review Procedure Act 2016, as a failure to exercise a statutory power. I find that the Council received Mr Woolley’s application and returned it to him based on its records and the Koha Trust decision that Mr Woolley’s water permit had lapsed. The Council was not exercising its powers under s 88 of the RMA, and the right to appeal under s 120 of the RMA was not engaged because the Council had not made a decision against which Mr Woolley could appeal.
Did the Council err in rejecting the s 136 application?
[34] The application was returned to Mr Woolley, accompanied by a letter recording that according to Council records and based on the Koha Trust decision, “the Woolley portion of U060329 has lapsed. Consequently, neither a transfer nor a variation can take place as all interests held by Mr Woolley in relation to the permit have ceased.” Because of the Council’s reliance on Koha Trust, the Environment Court’s findings must be understood.
[35] The Council and Mr Woolley have opposing views as to what the Koha Trust decision found. The Council interpreted Koha Trust to mean that Mr Woolley’s portion of the water permit had lapsed, and accordingly Mr Woolley could not bring an application to transfer the water permit under s 136. For the Council, Mr Maassen says that the Council was entitled to rely on the Koha Trust decision and this Court should not get into the correctness of the Environment Court’s decision. Nevertheless, the Council seeks a declaration that the Council was entitled to rely on Koha Trust.
[36] For Mr Woolley, Mr Clark contends that the water permit had not lapsed, and relies on the fact that the Environment Court in Koha Trust expressly refused to grant a declaration that the water consent in the hands of Constellation Brands and the balance of the water held by Mr Woolley had lapsed.
[37] This Court, sitting in its supervisory function on judicial review, is in no position to substitute its opinion for the Environment Court’s decision, as to do so would be the exercise of an appellate function. The focus of this Court’s inquiry is whether the Council has fallen into reviewable error, by declining to process Mr Woolley’s transfer application on the basis of the Koha Trust decision and the Council’s records.
[38]I will deal first with Koha Trust.
What did the Environment Court decide in Koha Trust?
[39] On 14 January 2016, Koha Trust lodged an application with the Environment Court seeking a declaration from the Court that U060329 had lapsed. It did so on the basis that the resource consent was not “given effect to” within the meaning of s 125(1A)(a) of the RMA prior to its final lapse date of 1 February 2012.
[40] The principal ground for the application was that on 5 February 2010 the Council granted resource consent U060329 to Mr Woolley which included the following conditions:
3.The consent holder shall install a pulse-emitting water meter(s) to measure surface water use. The meter(s) is to record all water taken pursuant to this consent with an accuracy of plus or minus 5%. Prior to exercising this resource consent, the consent holder shall contact the Marlborough District Council to arrange an inspection of the water meter installations. No water is to be taken under this resource consent (except for testing or calibration of the meters) until such time as the inspection of the meter installations has been carried out.
4.The consent holder shall provide a telemetered datalogger, approved by the Manager, Resource Consents, Marlborough District Council, to record and store water use data at fifteen minute intervals. Data gathered is to be provided to the Marlborough District Council at 12 hourly intervals. Marlborough District Council staff will perform an audit role in respect of water use records and may call to take readings from time to time.
It was submitted these conditions were not fully complied with by the lapse date prescribed in condition 6 of the resource consent, being 1 February 2012.
[41] In discussing legal principles, the Environment Court referred to the High Court decision of Goldfinch v Auckland City Council.8 In that case, the Court noted that the answer to whether a consent has been given effect to must be one of degree, and will vary from case to case depending on the facts and the nature of the work authorised by the consent, what has been done, and why it has not been completed.9
8 Goldfinch v Auckland City Council [1997] NZRMA 117.
9 At 131–132.
The Environment Court noted that even taking into account subsequent legislative changes, Goldfinch remains good authority.10
[42] The hearing concentrated on whether compliance with conditions 3 and 4 of the consent was crucial to “giving effect to” the consent. On this point, the Council submitted that giving effect to the permit must mean implementing the authorised activity in accordance with conditions of consent that prescribe methods and requirements for establishing, as opposed to continuing, the activity. The Court therefore focused on whether conditions 3 and 4 concerned the establishment of an activity, as the Council submitted, or whether they were conditions to be performed on a continuing basis after establishment.
[43] The Council argued that breach of implementation or establishment conditions potentially lead to lapse under s 125, while breaches of continuation conditions may more often be amenable to enforcement or prosecution. The Court agreed with this distinction and found that condition 3 is in the nature of an implementation or establishment condition, while condition 4 is partly an implementation condition and partly a continuation condition.11 Condition 3 was described as requiring “meters on all four wells,” subject to inspection by the Council before water is taken,12 and condition 4 was classified in two parts: a telemetered data logger to be approved by the Council (an implementation condition) and the permit holder is to provide data at 12-hourly intervals for audit and checking by the Council (a continuation condition).13
[44] After this assessment, the decision records Mr Clark for Mr Woolley submitting that there was “ample evidence” that the consent was “sufficiently” utilised so that it did not automatically lapse under s 125; that aspects of the condition were impossible to comply with as they were now; and the Council “at no time had advised that the consent had lapsed but instead treated it as subsisting for many years.”14
10 Koha Trust, above n 2, at [12].
11 At [34]–[35].
12 At [34].
13 At [35].
14 At [44] (emphasis added).
[45] The Court did not undertake an analysis of the evidence which was adduced over the two-day hearing, including cross-examination. Nor is there any reference to the history of the permit and the decisions made in relation to the permit since the lapse date of 1 February 2012.
[46] After canvassing the legal submissions and finding that the conditions in this case were in the nature of implementation or establishment conditions, the Court held that if the steps were not carried out before the end of the lapse period, they must be tested against the standard in s 125(1A)(a).15 The Court in formulating its finding said:
[62] … Conditions of the former type [implementation or establishment conditions], particularly where they involve a prohibition against operation of the consent until the required steps are completed, are likely, if those steps are not carried out before the end of the lapse period, [to] be amenable to testing against the standard in s 125(1A)(a) “the consent is given effect to”. We find that this is one of those cases and hold accordingly.
[47] This finding is perplexing. The sentence in [62] is incomplete: if steps are not carried out by the lapse date, and the Court does not specify which steps or in relation to which condition, then what is amenable to testing against the standard in s 125(1A)(a) to determine whether the consent was given effect to? Without more, it is difficult to ascertain whether all of the consent has lapsed because the steps were not taken, and if so, which steps and to which condition they relate. It is only at the end of its decision, when the Court is dealing with the exercise of its discretion and “the balance of the subject permit”, that the Court says it has found elements of condition 3 that had not been triggered.16 But the elements are not specified. Nothing is related to the evidence, which the Court heard.
[48] Further, it is unclear what the Court made of Mr Clark’s submission that “the Council had a relaxed attitude to compliance, and at no time had advised that the consent had lapsed but instead treated it as subsisting for many years”. It appears to me that, in part, the Court took this into account in declining to exercise its discretion to grant a declaration. In deciding whether to make a declaration or not, the Court considered that delay, namely Koha Holdings’ alleged delay in bringing the proceedings by approximately six months, “prejudice to third parties”, and the
15 Koha Trust, above n 2, at [62].
16 At [72].
punitiveness of the result were particularly important. The Court concluded (emphasis added):17
[71] We accept the arguments of Mr Maassen [for the Council] concerning the position of Constellation Brands. It would be wrong to exercise the discretion to make a declaration that could affect the rights of a third party which has legitimately organised its affairs and made considerable investments in establishing an irrigated vineyard.
[72] Concerning the balance of the subject permit, we have made findings about lapse, but have decided against exercising the discretion to grant a declaration. There are many disputed facts recorded in written statements which have not been tested in cross-examination, and while we have found sufficient basis for saying that the implementation or establishment elements of Condition 3 had not been triggered, we consider that to go further and make a declaration could resemble a punitive result more aligned to outcomes in enforcement proceedings where the cogency of evidence required to meet proof on the civil standard would no doubt be high, given what is at stake, and cross-examination of witnesses would occur.
[49] As the chronology shows, Constellation Brands, subsequent to the lapse date of 1 February 2012, took a lease of part of Mr Woolley’s land on 1 July 2015 and obtained a transfer from the Council of a significant portion of the consent U060329. I note that Constellation Brands, although described by the Court as “a third party”, is the other holder of permit U060329.
[50] The Court declined to grant a declaration that the consent had lapsed, but it is unclear from the decision whether the Court held that the whole consent or part of the consent had, in fact, lapsed. If those findings of lapse were determinative, the result, absent a declaration, is that Mr Woolley’s portion of the consent had lapsed but Constellation Brands’ had not, which was the position Council was advocating. However, that result is inconsistent with the facts.
[51] The Court does not explain how a transfer to Constellation Brands on 30 June 2015 under the consent permit could have occurred if the consent had lapsed three years earlier. Nor does the Court explain why it distinguishes or overrules the findings of the Hearing Commissioners, who heard evidence and found that the subject permit “did not lapse”. Despite recording that finding, the Court says that the Commissioners’ finding “of course is not binding on us and may not have been considered in the detail
17 Footnote omitted.
that matters have been presented to us.”18 The Court, however, does not canvass “the detail” of the matters before it, apart from legal references to cases in Counsel’s submissions. There is no analysis of how the Court reached a different decision to the Commissioners, including a former Environment Court Judge, who set out detailed evidence and the basis for finding the permit had not lapsed. The difference in approach between the Court’s view and the Commissioners’ findings is both marked and unexplained.
[52] Essentially, the wording of the Court’s finding at [62] is unclear. The Court’s use of the words “[c]oncerning the balance of the subject permit, we have made findings about lapse, but have decided against exercising the discretion to grant a declaration” has given rise to an inference that the Court found Mr Woolley’s portion of the permit had lapsed. This is the inference the Council drew in returning Mr Woolley’s permit.
[53] In the absence of an analysis of the evidence pointing to Mr Woolley’s failure of compliance with the permit conditions, the fact that the Court did not make a declaration is telling. If the permit had lapsed, a declaration should have been made, as sought. The courts have long reinforced that there must be extremely strong reasons to decline a grant of relief.19 However, if the Court had granted relief and a declaration of lapse was made, it follows that Constellation Brands was not entitled to have received the transfer of the permit after the lapse date. The Court declined relief on the basis of prejudice to Constellation Brands. No declaration of lapse was made in respect of Mr Woolley’s portion or Constellation Brands, and on the face of the decision, as I read it, there was no clear finding that the consent in Mr Woolley’s possession had lapsed.
[54] As testament to this lack of a clear finding, in granting Mr Woolley’s company, Awarua Farm, consent in 2017, the Council-appointed Commissioner, Dr Michael Freeman, described the outcome of the decision as “unsatisfactory” and decided that
18 Koha Trust, above n 2, at [66].
19 Air Nelson Ltd v Minister of Transport [2008] NZCA 26, [2008] NZAR 139 at [60] referring to
Berkley v Secretary of State for the Environment [2001] 2 AC 603 (HL).
consent U060329 must be considered as not having lapsed. His reasoning was as follows:
38. The extension of the Environment Court’s decision [in Koha Trust] to this situation is that while technically the resource consent lapsed, because of the significant potential adverse implications of that for an innocent third party and for the evidential reasons outlined by the Court, a declaration was not made and therefore the remaining portion of U060329 should be considered as not lapsed. In some respects, this is an unsatisfactory situation. However, to use some analogies, the ‘referee’ has chosen to not ‘make a ruling’ or the party is not “guilty” and therefore my interpretation of this is that the resource consent must be considered as not having lapsed.
[55] It is plain from Dr Freeman’s decision of 4 August 2017 that the Environment Court’s decision was capable of contradictory interpretation. Despite Dr Freeman’s decision on Awarua Farm’s resource consent, the Council, just under a year later, took the opposite view in returning Mr Woolley’s application to transfer the permit.
[56] Finally, it seems the Environment Court did not make a declaration, at least in part, because it was concerned that it could resemble a punitive result where, given what is at stake, the civil standard would have to be high, and cross-examination of witnesses would occur.20 However, this is precisely the result for Mr Woolley, where the alleged finding of lapse of Mr Woolley’s portion of the permit has considerable consequences for him and does “resemble a punitive result more aligned to outcomes in enforcement proceedings”.21
[57] The question for this Court on judicial review is whether the Council fell into error by returning Mr Woolley’s application. Even if the Council was entitled to draw the inference that the Environment Court had found Mr Woolley’s portion of the consent had lapsed, its response to Mr Woolley had to be considered in light of all of the information and records before it, as the Council itself stated in its letter to Mr Woolley. It was not open to the Council to decline its jurisdiction under s 136 of the RMA simply because its “ears” were shut to the application before it.22
20 Koha Trust, above n 2, at [72].
21 At [72].
22 Hammond v Hutt Valley & Bays Metropolitan Milk Board [1958] NZLR 720 at 730.
[58] I turn, then, to consider the Council’s consideration of its own records, which it referred to at the time as the second reason for returning Mr Woolley’s application.
The Council’s own records
[59] Mr Woolley’s solicitors requested the Council to review its assertion that the consent had lapsed and pointed out the Council’s database, with records showing that the consent was still live. The Council replied that that “does not of itself negate lapse”, and “[f]urther it is recorded on Council’s files that effect has not been given to this consent.”
[60] I consider the Council’s reference to its records is problematic. From the Council’s records, and as the chronology demonstrates, there are five occasions, before and after Koha Trust, demonstrating that the consent had not lapsed.
[61]In summary, they are:
1 July 2015: The Council transferred resource consent U060329 (one part 3,960 cubic metres, another of 2,445 cubic metres), from Mr Woolley to Constellation Brands under s 136 of the RMA. 30 September 2015:
Hearing Commissioners appointed by the Council decide to grant new consent to Constellation Brands (U150465) of 2,445 cubic metres of water from different well at Hinepango and record that U060329 has not lapsed.
17 March 2016:
Council records that conditions 3 and 4 of U060329 have been met.
13 December 2016:
Council grants consent U161146 and in doing so records that there is still 4,273 cubic metres per day in U060329.
4 August 2017:
Council grants Awarua Farm resource consent U150453 and records that as the Environment Court chose not to
make a ruling, U060329 must be considered as not having lapsed.
[62] From a perusal of the chronology, it is plain that the Council treated the consent as live after the lapse date of 1 February 2012. The Council transferred a part of the consent to Constellation Brands on 1 July 2015 and on 30 September 2015, the Commissioners appointed by the Council granted consent to Constellation Brands recording that the permit had not lapsed.
[63] Just after the Environment Court hearing on 14 – 15 March 2016 and before the decision was issued, the Council’s records show that conditions 3 and 4 of the permit have been met. Further consents were then granted after the Koha Trust decision, on the basis that the permit has not lapsed. The conclusion reached by Dr Freeman on 4 August 2017 sets out the Council’s then-view of the Koha Trust decision and, in the absence of a declaration from the Environment Court, the Council granted Mr Woolley’s Awarua Farm resource consent, specifically stating that the permit must be considered as not having lapsed.
[64] In returning Mr Woolley’s application, the decision of the Commissioners in September 2015, referred to as the decision of Commissioner Kenderdine, is dismissed as having been overturned by the Koha Trust decision, and the post-Koha Trust decision of Commissioner Dr Freeman is simply regarded as not negating the finding of lapse in the Koha Trust decision. The flaw in the Council’s approach, on its own records alone, is self-evident. One part of a lapsed permit, acquired three years after the lapse date, cannot be valid when the remaining portion is treated as lapsed.
Was there an error?
[65] On making an application for transfer under s 136 of the RMA, an applicant must ensure that the application is in the prescribed form and be lodged jointly by the holder of the water permit and the person to whom the interest in the water permit will transfer. Importantly, s 136(4)(b) requires, in mandatory terms, that the application (emphasis added):
136 Transferability of water permits
(4) …
(b)shall be considered in accordance with sections 39 to 42A, 88 to 115, 120, and 121 as if–
(i)the application for a transfer were an application for a resource consent; and
(ii)the consent holder were an applicant for a resource consent,–
[66] The Council, on receipt of Mr Woolley’s transfer application, was obliged to consider the application as if it were an application for a resource consent. I have
already referred to the provisions of s 88 and found the Council’s return of Mr Woolley’s application was not done on the basis of it being an incomplete application. In the Council’s letter of 29 May 2018, the Council expressly refers to returning Mr Woolley’s application because, according to Council records and based on the Koha decision, his portion of the permit had lapsed.
[67] I consider that the Council’s interpretation of the Koha Trust decision, as set out at [19] above, bears little resemblance to what the decision actually held. Even in enumerating what the Council understood the Environment Court to hold, the articulation at “(d) the resource consent had lapsed” immediately presents a difficulty. As I set out above, if the resource consent had lapsed and if that is a definite finding of the Environment Court, both Constellation Brands and Mr Woolley no longer had transferable water permits. It is perplexing to understand the assertion by the Council’s Consents Officer that “Council records indicating the consent to be active does not of itself negate lapse”, when the Council has processed resource consents, transfer applications, and recorded compliance with the conditions from 2012 to 2017.
[68] Even with the Council drawing the inference it did from the Environment Court’s findings that Mr Woolley’s permit had lapsed, it still had to consider Mr Woolley’s application under s 136(4)(b) in accordance with the provisions of the RMA and treat it as an application for a resource consent. I accept Mr Clark’s submission that the provision describes the process to be followed as mandatory. The Council was obliged to receive the application, follow the resource consent application process under the RMA and then make a decision whether to grant permission or not.
[69] Instead of returning it, the Council may well have reached a decision to refuse the transfer of the permit on the grounds that the permit had lapsed, but at the very least, the Council had an obligation to make a decision on that basis and set out its reasons clearly. Instead, the Council expressly advised Mr Woolley’s solicitors that it had not made a decision in this matter, but simply abided by the findings of the Environment Court in the Koha Trust decision.
[70] I am driven to the conclusion that in this case the Council took a view that the Environment Court had effectively made a firm decision that Mr Woolley’s portion of
the permit had lapsed, even though the Court declined to make a declaration to that effect. The Council then treated its previous decisions, both pre- and post- Koha Trust, as “not negating lapse” despite the decisions which treated the permit as active. The general rule is that anyone who has to exercise a statutory discretion must not “shut his ears to an application”.23 In other words, each case calls for an individualised response. Despite its previous decisions, the Council relied on the Environment Court decision as conclusive and treated the contradicting Council’s decisions since 2012 as incidental and irrelevant. The Council did so at the expense of actually considering the application before it, as it was required to do.
[71] For these reasons, I find that the Council has failed to exercise its powers, as required, under s 136 of the RMA, by returning Mr Woolley’s transfer application under s 136 of the RMA without considering the application and making a decision. The reviewable error is that the Council refused or failed to exercise its powers and discretion under s 136(4)(b) of the RMA.
[72] For completeness, counsel addressed submissions on the provisions of the RMA and the cases concerning the lapse of a permit in addressing the categorisation of conditions 3 and 4 in relation to the facts in this case. As those factual and legal matters are in the nature of submissions on appeal, they are not relevant to the review of the Council’s actions in relation to Mr Woolley’s transfer application. For that reason, I have not canvassed the submissions in this decision. I turn, then, to consider relief.
Relief
[73] Mr Woolley’s application for judicial review seeks a mandatory injunction that the Council process the s 136 application in accordance with the statutory provisions in the RMA, and a declaration that Mr Woolley is entitled to have his application so processed and determined.
23 British Oxygen Co Ltd v Minister of Technology [1971] AC 610 (HL) at 625, referring to R v Port of London Authority, ex parte Kynoch Ltd [1919] 1 KB 176 (CA) at 183, and applied in Westhaven Shellfish Ltd v Chief Executive of Ministry of Fisheries [2002] 2 NZLR 158 (CA) at [39].
[74] However, if the Court is satisfied that an applicant who has filed an application for judicial review in relation to the refusal to exercise a statutory power of decision is entitled to relief under s 16 of the Judicial Review Procedure Act 2016, the Court may make a direction under s 17(3) instead of granting relief under s 16.24 Section 16 empowers the Court to grant relief in the nature of a declaration or injunction.
[75] I am satisfied that Mr Woolley is entitled to relief under s 16. In the exercise of my discretion under s 17(3), I direct the Council to reconsider and determine Mr Woolley’s s 136 application in accordance with the statutory provisions in the RMA, taking into account all of the relevant decisions made by the Council and the Environment Court from 1 February 2012 to 25 May 2018.
Result
[76]Mr Woolley has succeeded in his application for a grant of relief.
[77] I direct under s 17 of the Judicial Review Procedure Act 2016 that the Marlborough District Council is to reconsider Mr Woolley’s s 136 application.
Costs
[78] If counsel are unable to agree on costs within four weeks of the date of this judgment, counsel are to file memoranda. If it is of assistance to Counsel, I consider 2B costs with reasonable disbursements to be appropriate.
Cull J
24 Judicial Review Procedure Act 2016, s 17.