IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000573 [2015] NZHC 313

BETWEEN	ROBERT WILLIAM SUTTON,
MEGHAN ELIZABETH SUTTON AND LONE STAR FARMS LIMITED Applicants	

AND	
CANTERBURY REGIONAL COUNCIL First Respondent

INFINITY INVESTMENT GROUP LIMITED AND ROBERT HAY ROBERTSON
(Second Respondents)	

Hearing:	25 February 2015	

Appearances:	
P A Steven QC and M F Joyce for Applicants
PAC Maw and J A McKeown for First Respondent
R J Somerville QC and H G Marks for Second Respondents	

Judgment:	
27 February 2015	

JUDGMENT OF GENDALL J

Introduction

[1]       The applicants, Robert and Meghan Sutton (“the Suttons”) and Lone Star Farms Limited (“Lone Star”), are the holders of several resource consents to take and use water from the main stem and/or tributaries of the Hakataramea River for irrigation of farmland in Kurow. Both applicants’ consents are subject to the same low flow conditions on the taking of water. The first respondent (“the Council”) is a regional council under the Local Government Act 2002, with additional powers and duties  pursuant  to  the  Environment  Canterbury  (Temporary  Commissioners  and
Improved Water Management) Act 2010.

SUTTON v CANTERBURY REGIONAL COUNCIL [2015] NZHC 313 [27 February 2015]

[2]       Foveran Station (“Foveran”) is a farm located in the Hakataramea Valley containing 560 ha of irrigated land using water from the Hakataramea River and from a tributary, the Brothers Stream.  Resource consents for Foveran are held by the R H and J Robertson Family Trust.  Mr R H Robertson died on 1 November 2014 and his executor, Pamela Roberta Higgins, has been substituted as the second-named second respondent.

[3]     The first-named second respondent, Infinity Investment Group Limited (“Infinity”), is a company based in Dunedin owned essentially by Robertson Family interests as I understand it.  Infinity is involved in the ownership of Foveran.  For present purposes it is appropriate to refer to both the second respondents together as “Infinity” and I will now do so.

[4]       Foveran has been on the market for sale for some time and I am told Infinity has an immediate issue regarding urgent refinancing of debt obligations over the farm.  Counsel for Infinity states that any potential sale of Foveran is being delayed because of these judicial review proceedings brought by the applicants who also farm in the Hakataramea Valley.  He also advises that refinancing of Infinity’s debt obligations is due today, 27 February 2015 (only some two days after this Court heard the present application as a matter of urgency), and therefore a decision on the applicants’ judicial review application is required without delay.   As a result this decision and judgment is given on an extremely urgent basis.

[5]       The applicants seek judicial review of a decision of the Council that it was not required to notify them of an application by Infinity for resource consent. They also seek judicial review of the Council’s substantive decision, which granted to Infinity and its interests consent as a discretionary activity rather than as a non- complying activity.

[6]       The applicants seek an order setting aside each of the Council’s decisions.

[7]       Infinity resists this judicial review.  The Council has indicated it is not taking any active role in the proceedings and will abide the decision of this Court.

Background

[8]       The non-notified consent, granted on 9 December 2013 by the Council to Infinity, relates to a water take permit of 93 litres per second (93 L/s) for land irrigation on Foveran. The relevant Regional Plan, the Waitaki Catchment Water Allocation Plan (“the WCWARP”), contains objectives, policies and rules for the allocation of water for activities, and sets environmental flow and level regimes together with allocation to specific activities.

[9]     The WCWARP was prepared following the enactment of the Resource Management (Waitaki Catchment) Amendment Act 2004 (“the Waitaki Act”) and became operative in 2006. The Waitaki Act was intended, inter alia, to require allocation of water in the Waitaki Catchment for activities as appropriate, along with provisions for the management of allocated water, including during periods of low flow conditions.

[10]     The relevant provisions of the WCWARP may be summarised as follows:

(a)       Rule 2 sets environmental flow and level regimes for all the water bodies in the catchment as a whole and provides constraints on taking, using, damming, and diverting surface water and groundwater to maintain the various environmental flow regimes (EFRs).

(b)       Any activity that falls outside the annual volume allocation limits, instantaneous rate limits and EFRs established under the plan must demonstrate the effect of granting the consent on the entitlements to other activities over the timeframe of the consent.

(c)       With limited exceptions, applications for resource consents are still required for taking and diverting within the annual allocation volumes and flow limits will be subject to consideration of effects under the resource consent process.

(d)       Any subsequent consent application must (inter alia) be subject to a thorough evaluation of the effects on existing consent holders in addition to other effects on the environment.

(e)       The status of any water take application falls to be determined on the basis of a calculation as to the availability of water within the set limits for annual volume allocation, and instantaneous take rates, in light of the allocations made under existing consents.

(f)       Activity status is also governed by the particular EFR proposed by an applicant, and whether that complies with the specifications set by the WCWARP for the particular body of water.

[11]     In  October  2013,  Infinity  brought  this  application  for  A  Band  resource consent, as I have noted, to take up to 93 L/s per day of water from the Hakataramea River. On 9 December 2013, the Council granted the water permit to Infinity (“the substantive decision”) subject to the imposition of several conditions, pursuant to s 108 of the Resource Management Act 1991 (“the RMA”). That application was considered by the Council on a non-notified basis and as a discretionary activity in terms of ss 104 and 104B of the RMA. On 10 December 2013, the Council also released its reasons why the application need not have been dealt with on a notified basis.

[12]     When Infinity lodged their application in 2013, a number of existing consent holders held consents for the take and use of water from the Hakataramea main stem and/or tributaries, including the applicants.

[13]     Overall,  the  policy  and  rule  framework  of  the  WCWARP provide  some certainty to consent holders that existing reliability will be maintained. Policy 26 in particular envisages that a certain (specified) level of reliability is to be afforded to a consent holder through the setting and allocation of priority bands. The applicants had shown themselves as vitally concerned to ensure that the reliability enjoyed under their consents would not be eroded by future applicants subsequently seeking water.

[14]     The  applicants  hold  consents  within  the  primary  (“A  band”)  consents, whereas others hold consents described as “B Band” consents, conditions of which afford priority to A Band consent holders. This hierarchy of consents was established in order to implement Policy 26.  In the Hakataramea Catchment, as I understand the position, existing reliability is less than the level set in Policy 26(a).  The applicants claim that any application for new takes should be granted in terms that ensure that the reliability of supply for existing consent holders is maintained. Their existing reliability they say will be significantly eroded as a consequence of the grant of A Band consent to Infinity.  In addition, a real issue has arisen as to whether, with the
93 L/s consent in question granted to Infinity, this is generally an over-allocated catchment.

[15]     It is interesting to note that earlier, during the course of 2008-2010 hearings over  allocation,  the  Council  had  made  rulings  on  various  provisions  of  the WCWARP, including those that are triggered by Infinity’s application for consent now under review. Of particular relevance to Infinity’s application, the Council ruled that:

(a)       A grant of all consents sought for irrigation above Black Point (which includes the Hakataramea Catchment) would result in the annual volume allocation being exceeded such that  all applications being decided at the relevant time fell to be decided as non-complying activities (regardless of proposed low flow cut-off conditions).

(b)       Consents sought on terms that proposed an alternative low flow cut- off condition to that specified in the WCWARP fell to be decided as non-complying activities and therefore triggered s 104D of the RMA.

(c)       All diversion for agriculture and horticulture should be included in the allocation limits for the purpose of applying allocation limits in the WCWARP.

[16]     Those rulings were never challenged. And, following those hearings, take and use  applications   for  surface  water   and   groundwater   from   the   Hakataramea

Catchment   were   decided   by  the   Council   as   non-complying   activities   as   a consequence of the Council’s rulings. These included consents held by the applicants and one already held by Infinity (prior to the consent currently under review).

Notification decision

[17]     As I have noted, the Council decided the application in question should be processed on a non-notified basis.  The reasons for this were outlined in the report of a Council officer made pursuant to s 42A of the RMA as follows:

Notification

73.       The assessment of adverse effects undertaken above indicates that adverse effects on the environment will be no more than minor.   I also note that public notification is not required by a National Environmental Standard or rule in a plan.   I do not consider that special circumstances would require public notification.  Given the above, I consider that public notification of this application, pursuant to s 95A RMA 1991, is not required.

74.       I also note that adverse effects on persons will be less than minor, and that there are no affected order holders. Given this, I consider that limited notification of this application, pursuant to s 95B RMA
1991 is not required.

75.       In conclusion, I recommend that this application be decided on a non-notified basis.

[18]     According to Infinity, the Council properly considered the relevant statutory provisions in making this decision not to notify the application.

The substantive challenge to the decision

[19]     A principal issue here is whether 93 L/s was in fact available and properly permitted within the summer allocation of 0.5m3/s or 500 L/s set out in Table 3 xix of the WCWARP prescribed for the Hakataramea River (September to March) as a minimum flow and allocation limit.

[20]     Several  expert  consultants  prepared  what  seems  to  be  a  comprehensive

87 page Assessment of Environmental Effects (“AEE”) that supported the resource consent application. These experts were of the opinion that a resource consent for 93

L/s fell within the allocation limit effectively amounting to 500 L/s set out in Table 3 xix, as noted above.  In reaching this conclusion they stated:

The current allocation tables held by Environment Canterbury indicate that primary main stem allocation has been authorised up to 447 L/s of the
500 L/s  allocation  limit.     However,  within  the  allocation  assessment provided by Environment Canterbury, an existing riparian groundwater take
permit appears to have been triple-counted.

Existing consent CRC051769.1 (Aspley House Limited) enables a riparian take from three wells at a maximum combined rate of 20 L/s.   However, within the Environment Canterbury assessed take, consent CRC051769.1 had been assessed at 60 L/s, i.e. three of 20 L/s from each pumping well. From the CRC051769.1 condition C2 which limits the combined take from all three wells to 20 L/s, the correct authorisation of allocation for the Hakataramea River main stem should be 407 L/s of the 500 L/s allocation limit.   This then implies that  there is  93  L/s  of  primary allocation still available for abstraction from the main stem of the Hakataramea River.

[21]     The Council when processing this application also, it seems, relied on its own database of water take consents supplied earlier in about July 2012 by it to Infinity’s consultant, Mr Heller.  In processing the application, the Council at that time agreed with Infinity’s consultants that there was this error over the Aspley House Limited take calculation in its database.

[22]     The Council’s s 42A report author stated specifically:

33.	I  agree  with  the  applicant’s  assessment  and  their  conclusions  in regards to the following potential effects:

a.	Water Body and Minimum Flow

The WCWARP provides an allocation limit of 0.5 m3/s between September and March.

CRC135581 enables a take from three wells that are hydraulically connected to the Hakataramea River at a maximum combined rate of 20 L/s.   The applicant states Environment Canterbury has included 60 L/s, not 20 L/s under CRC051769.1.   It is on this basis that the applicant believes that there is still 93 L/s available for abstraction from the Hakataramea River.  I agree with the applicant.  I note that Sam Nevin, who undertook the s88 check for this consent also agrees with the applicant.

[23]     Although the Council initially did not resile from this finding, before me

Mr Maw, counsel for the Council, confirmed that all these calculations on which the

Council relied at the time clearly contained a significant error, an error which was now acknowledged.  Ms Johnston, a consultant to the applicants, had as recently as November 2014 undertaken an inventory review report for the Council detailing the total consented water take (including Infinity’s 93 L/s) from the Hakataramea River and its tributaries.  This showed clearly a total take of 565 L/s, thus exceeding the allowable take by some 65 L/s.  The Council accepts now this was always the correct position and before me there was no real dispute of any kind regarding this conclusion.  This was despite the fact that Ms Johnston’s inventory review report had been circulated to all parties at the end of January 2015.

The legislative framework:  the Resource Management Act

Notification provisions

[24]     By s 95A(1) of the RMA, a consent authority may, in its discretion, decide whether to publicly notify an application for a resource consent for an activity. Since the   passage   of   the   Resource   Management   (Simplifying   and   Streamlining) Amendment Act 2009, there is no longer any statutory presumption in favour of notification.

[25]   However, s 95A(2) compels a consent authority to publicly notify the application if –

(a)        it decides (under section 95D) that the activity will have or is likely to have adverse effects on the environment that are more than minor; or

(b)	the applicant requests public notification of the application; or

(c)        a rule or national environmental standard requires public notification of the application.

[26]     Pursuant  to  s  95B,  if  a  consent  authority  does  not  publicly  notify  an application for a resource consent for an activity, it must decide (under ss 95E to
95G) whether there is any affected person, protected customary rights group, or customary marine title group in relation to the activity. Section 95E clarifies that the consent authority must decide that a person is an affected person, for the purposes of

the RMA, “if the activity's adverse effects on the person are minor or more than

minor (but are not less than minor).”

[27]     If such an affected party is deemed to exist, the consent authority must give limited notification of the application to any affected person unless a rule or national environmental standard precludes limited notification of the application.1  In certain circumstances, the authority is permitted or required to disregard adverse effects on an affected person. The consent authority:2

(a)        may disregard an adverse effect of the activity on the person if a rule or  national  environmental  standard  permits  an  activity  with  that effect; and

(b)        in the case of a controlled or restricted discretionary activity, must disregard an adverse effect of the activity on the person that does not relate to a matter for which a rule or national environmental standard reserves control or restricts discretion; …

Substantive decision-making

[28]     Section  14(2)(a)  of  the  RMA  prevents  any  person  from  taking,  using, damming or diverting any of the specified types of water, unless expressly allowed by a national environmental standard, a rule in a regional plan, or a resource consent.

[29]     The RMA then establishes the statutory standards that apply to discretionary and non-complying activities under s 104B, which states:

After considering an application for a resource consent for a discretionary activity or non-complying activity, a consent authority—

(a)	may grant or refuse the application; and

(b)	if it grants the application, may impose conditions under section 108.

[30]     Section 104(1) sets out mandatory considerations for the consent authority when considering an application for resource consent, including (relevantly):

(a)        any actual and potential effects on the environment of allowing the activity; and

1	Resource Management Act 1991, s 95B(2).
2	Section 95E(2)(emphasis added).

(b)	any relevant provisions of—

(i)	a national environmental standard: (ii)	other regulations:
(iii)	a national policy statement:
(iv)	a New Zealand coastal policy statement:
(v)      a regional policy statement or proposed regional policy statement:
(vi)	a plan or proposed plan; and

(c)        any  other  matter  the  consent  authority  considers  relevant  and reasonably necessary to determine the application.

…

(5)        A consent authority may grant a resource consent on the basis that the activity is a controlled activity, a restricted discretionary activity, a discretionary activity, or a non-complying activity, regardless of what type of activity the application was expressed to be for.

(6)        A  consent  authority  may  decline  an  application  for  a  resource consent  on  the  grounds  that  it  has  inadequate  information  to determine the application.

(7)        In making an assessment on the adequacy of the information, the consent authority must have regard to whether any request made of the applicant for further information or reports resulted in further information or any report being available.

[31]	Pursuant to s 104D, however, particular jurisdictional restrictions apply to the determination of applications for non-complying activities. This section states that:

(1)        Despite any decision made for the purpose of section 95A(2)(a) in relation to adverse effects, a consent authority may grant a resource consent for a non-complying activity only if it is satisfied that either—

(a)        the adverse effects of the activity on the environment (other than any effect to which section 104(3)(a)(ii) applies) will be minor; or

(b)         the application is for an activity that will not be contrary to the objectives and policies of—

(i) the relevant plan, if there is a plan but no proposed plan in respect of the activity; or

(ii) the relevant proposed plan, if there is a proposed plan but no relevant plan in respect of the activity; or

(iii) both the relevant plan and the relevant proposed plan, if there is both a plan and a proposed plan in respect of the activity.

[32]      The  consent  authority  has  a  discretion  to  decide  whether  to  grant  the application having regard to the s 104 considerations only if one of the jurisdictional thresholds of s 104D(1) is met.

[33]     In evaluating a non-complying activity, the Court generally identifies the relevant s 104 matters for consideration, then considers whether the gateway tests are met having regard to s 104D, and then as part of the overall discretion, evaluates the relevant matters under Part 2 and s 104B of the RMA.3

Principles of judicial review

[34]     The  principles  of  judicial  review  of  a  decision  of  this  kind  are  well- established, and are amenable to summary. The following propositions are relevant to this proceeding:4

(a)        All relevant considerations must be taken into account and irrelevant considerations ignored.

(b)        The decision must be one a reasonable decision-maker could reach on the basis of the material available to it.

(c)        The weight given to relevant matters is for the decision-maker, but there must be something there to which the decision-maker can give weight.

(d)        This Court will scrutinise the decision more closely and with a less tolerant eye than it would decisions where broad policy considerations were present and there was less impact on peoples' lives.

[35]     In terms of the first principle, the applicants submit that if the Council has not asked itself the correct legal question prior to making a decision, it will have failed to take into account relevant considerations. As the substantive decision flowed from the  factual  and  legal  errors  of  the  non-notification  decision,  both  decisions  are
therefore able to be impugned.

3	Cookson Road Character Preservation Society Inc v Rotorua District Council [2013] NZEnvC
194 at [14].
4	Petone Planning Action Group Inc v Hutt City Council HC Wellington CIV-2006-485-405, 10
October  2006  at  [36],  citing  Northcote Mainstreet Inc  v  North  Short  City  Council [2006] NZRMA 137 at [170].

Agreed issues

[36]     In  accordance  with  the  Court’s  directions,  the  parties  have  agreed  on  a Statement  of  Issues  arising  from  the  pleadings.  This  Statement  lists  seven overlapping factual and legal issues, which are effectively reducible to two areas of focus: the challenge to the Council’s non-notification decision and to the Council’s substantive decision. The key issues  that  the Court  will  need  to  resolve are as follows:

(a)       Are the applicants adversely affected, to a more than minor extent, by the Infinity resource consent, for the purposes of ss 95B and 95E of the RMA?

(b)       Did the Council fail to consider the actual and potential effects of granting the water permit on existing consent holders, and whether such effects would be minor or more than minor for the purposes of ss 95A, 95B and 95E, in respect of an activity with non-complying status under the RMA?

(c)       Did the Council erroneously process the resource consent application as a discretionary activity when it ought to have been processed as a non-complying activity pursuant to the WCWARP?

(d)       By incorrectly classifying the activity as discretionary, did the Council fail to apply the statutory test for a non-complying activity under s 104D of the RMA?

[37]     If  the  answers  to  these  questions  reveal  errors  of  law  in  the  Council’s decision-making,  then,  as  judicial  review  is  discretionary,  the  next  question  is whether the resource consent should be set aside and Infinity’s application referred back to the Council for reconsideration.

The applicants’ submissions

Challenge to the Council’s decision on notification

[38]     The  applicants  allege  that  the  Council  followed  an  unlawful  process  in deciding that Infinity’s application need not be notified, thereby failing to exercise properly the discretion given to it in s 95A. Infinity’s application was accompanied by the AEE.   In deciding to consider the application on a non-notified basis, the applicants contend that the Council proceeded on the basis of material mistakes of fact and law contained within the AEE. The Council erred in accepting Infinity’s claim that the application was “plan compliant”, as:

(a)       it incorrectly determined that the proposed take in the application was WCWARP-compliant, when the proposed flow regime would not comply with the prescribed EFR for Rule 2; and

(b)       it proceeded on the basis that there was a primary allocation of 93 L/s available  as  a  discretionary  activity  consent  within  the  allocation limits  of  the  WCWARP  in  circumstances  where  only  53  L/s  of primary allocation or even less was available for allocation.

[39]     As a result of these errors, the Council also wrongly accepted the statements made in the application that the adverse effects on existing consent holders had not been assessed but would be “no more than minor.” The Council did not have sufficient information before it to properly evaluate the actual and potential effects of granting the water permit to Infinity, whether on the environment, the applicants, or any other existing consent holders. The Council thus failed to consider a mandatory consideration, namely, whether these effects would be minor or more than minor for the purposes of ss 95A, 95B and 95E of the RMA.

[40]     As  a  result  of  these  errors,  the  applicants  say  they  were  denied  the opportunity to participate in a notified process where information could have been provided to the Council as to the way in which they would be affected by the grant of the consent.

Challenge to the Council’s substantive decision

[41]     The applicants  maintain here  that the Council’s substantive decision  was “infected” by the same error that had influenced its decision on notification: the acceptance of plan-compliance. The Council it is said processed the application on a mistaken factual basis, in consequence of which it made its first material error of law: processing the application as a discretionary activity (rather than as a non- complying activity). As a result of this incorrect classification and analysis, the Council failed to apply the correct statutory test for a non-complying activity, set out in s 104D of the RMA.

[42]     Thus, the Council applied the wrong statutory standard and made an error of law in making its substantive grant of consent. In consequence of that error, the Council failed to take into account all relevant considerations, including:

(a)       the actual and potential effects on the environment, including on the applicants, of granting consent for a non-complying activity;

(b)       Policy 26 of the WCWARP (which affords certain levels of reliability to  consent  holders  through  the  setting  and  allocation  of  priority bands); and

(c)     the National Policy Statement on Freshwater Management 2011 (especially  those  objectives  and  policies  aimed  at  avoiding  and phasing out over-allocation of freshwater).5

[43]     They  contend  that  the  information  provided  to  the  Council  regarding available allocation and EFR-compliance within the application was “demonstrably wrong.” Moreover, the Council accepted this information without any verification, and on a basis that was inconsistent with its treatment of earlier, factually similar resource consents. The application was therefore erroneously treated (and decided)
as a discretionary activity, rather than a non-complying activity under the WCWARP.

5	Since superseded by the National Policy Statement for Freshwater Management 2014.

[44]     It was incumbent on the Council to satisfy itself that the application’s factual contentions were correct. The Council can only determine activity status under the WCWARP if the information contained in the application is correct.  The assessment of effects on existing consent holders was materially influenced by the errors made as to the activity status under the WCWARP. That was so in respect of the evaluation leading to the notification and substantive decisions. The Council accepted the application’s assessment of effects, the underlying basis of which was clearly wrong.

Respondents’ submissions

[45]     Infinity denies that the Council made any errors of law in respect of either the non-notification decision or the substantive decision.  It submits that, despite the acknowledged errors in the Council’s database and documents relating to the application, the Council still found 93 L/s to be available for allocation to Infinity. Infinity also contends that the RMA does not require the Council, while deliberating over an application, to search out further information to verify the record.

[46]     It maintains that, even if the Council did make an error of law, it was not material and thus if the matter were to be remitted back to the Council, the outcome is unlikely to change. Finally, Infinity asserts that quashing the contested resource consent would result in expensive and significant implications for them, as it would lead to lengthy delays in completing their urgent refinancing arrangements or in finalising any potential sale of their property.  They therefore argue that no relief is appropriate here.

Analysis

The Council’s decision on notification

[47]     Discussing the precursor to s 95A in Westfield (NZ) Ltd v North Shore City

Council (“Westfield”), the Supreme Court held:6

6	Westfield (NZ) Ltd v North Shore City Council [2005] NZSC 17 [Westfield] at [146] per Tipping J. This case dealt with RMA provisions prior to the 2003 amendment. These provided that, where a consent authority was satisfied it had adequate information on an application, it was required to publicly notify an application unless satisfied that the adverse environmental effects would be minor.

Before a consent authority can properly conclude that adverse effects will be no more than minor, there must be an adequate informational basis for that conclusion. Information should be distinguished from assertion.

[48]     For  the  purposes  of  RMA notification,  the  Court  defined  “adequate”  as requiring that “the information must be sufficiently reliable and comprehensive to justify a decision in favour of non-notification.”7  The Court went on to clarify:8

That will be so if the consent authority can properly be satisfied that it is improbable  that   notification   will   result   in   further   information   being presented to it which might cause it to change what, ex hypothesi, will be its current view that the level of adverse effect will be minor only.

[49]     In my view, in the case before me, the requisite standard as to the adequacy of information is higher, as the decision of non-notification has significant consequences,   in   that   no   further   information   was   elicited   through   public participation.  Non-notification  excludes  the  public  from  the  decision-making process, thus the Court on review will:9

… carefully scrutinise the material on which the consent authority's non- notification decision was based in order to determine whether the authority could   reasonably   have   been   satisfied   that   in   the   circumstances   the information was adequate.

[50]     Here, as in Westfield, I am satisfied the Council had “nowhere near enough information of a reliable kind” to conclude that the applicants, as existing consent holders, would not be adversely affected by Infinity’s application.10 In terms of scope and reliability, the information possessed and relied upon by the Council was outdated, it contained readily ascertainable errors, it was contrary to earlier inventory reports from around 2008 and 2010 the Council itself had, and it failed to address in any real way the potential effects on the applicants.

[51]     In 2009, the notification provisions considered in Westfield were amended.11
In Coro Mainstreet v Thames-Coromandel District Council, the Court of Appeal considered  whether  the  2009  amendments  shifted  the  balance  towards  non-

7	At [149].
8	At [149].
9	At [144] per Blanchard J.
10	At [150].
11	Resource Management (Simplifying and Streamlining) Amendment Act 2009, s 76.

notification.12  Despite four key differences between the 2003 and 2009 provisions (including the removal of an express requirement that the consent authority have adequate information before making a notification decision), the Court held that Westfield was still good law.13 The Court then commented on the necessity of evaluation of the possibility that these substantial amendments, which were directed at providing greater facility for non-notification, have altered the law as articulated in Westfield.14

[52]     It is also useful to note here the Court’s obiter, which clarified that:15

We should not be taken to have accepted that the amendments made to the RMA since [Westfield] have had no effect on the non-notification process and on the analysis of the previous law in the Supreme Court’s decision in [Westfield]. If the point had affected the outcome of the present case, we would have wanted to consider whether the 2009 amendments gave effect to the apparent intention of Parliament to give consent authorities greater scope to  decide not to  notify resource consent applications,  and to reduce the intensity of review to be applied to non-notification decisions from that mandated in [Westfield].

[53]   The notification regime has more recently been rationalised under the overarching purpose of the RMA itself: the sustainable management of natural and physical resources.16 In the High Court, Toogood J explained that:17

The process of notification is tied to this purpose in that it allows the consent authority, so far as possible, to have access to all relevant information in order to make a determination as to the environmental impact of a proposed action. Public notification allows the authority to gather information from people who are likely to be affected by the proposed action, and gives those people  a right to  be  heard. In  general  terms,  where  a  consent  authority exercises a discretion to decide whether to publicly notify an application for a resource consent for an activity, notification should be made where it will assist the objective of sustainable management.

12	Coro Mainstreet v Thames-Coromandel District Council [2013] NZCA 665.
13	At [34] and [39].
14	At [34].
15         At  [41].  New  Zealand  academics,  too,  have  commented  that  the  disappearance  of  the presumption of public notification “arguably calls into question the ongoing applications of decisions such as Westfield”: Elizabeth Toomey “Public Participation in Resource Management: The New Zealand Experience” (2012) 16 NZ J Envtl L 117 at 138.
16	Resource Management Act, s 5(1).
17         Associated Churches of Christ Church Extension and Property Trust Board v Auckland Council [2014] NZHC 3405 at [56], citing RMA, s 5(1). It is worth noting, also, an article which questions whether the “first-in first-served” approach to freshwater allocation actually promotes these sustainable management principles: Barry Brunette “Freshwater Management and Allocation Under  the  Resource Management Act  1991:  Does  First-in First-served Achieve Sustainable Management Principles?” (2006) 10 NZ J Envtl L 169.

[54]     Regardless of the significant amendments made to the regime in 2009, it seems that notification is required wherever this will promote the legislative purpose.

[55]     Moreover, although Coro Mainstreet left the precedent value of Westfield undecided,  the  resolution  of  the  present  case  in  my  view  does  not  require adjudication of that issue. As the applicants correctly point out, those cases can be distinguished  from  the  present  application  on  their  facts.  Unlike  the  consent authority in Coro Mainstreet, the Council here did not have adequate and reliable information on which to exercise its discretion under s 95A.  Instead, its decision- making proceeded on the basis of incorrect, rather than inadequate, information.  An over-allocation of water take in the catchment has occurred as a result.

[56]     The Council did not possess a range of material concerning the potential for adverse   effects   on   the   environment,   as   such   an   assessment   was   adjudged unnecessary due to the incorrect assertions of EFR- and plan-compliance. The AEE provided for the application, although appearing to be lengthy and detailed, was in fact limited in scope, and deficient in reliability. The information as to allocation was not only “clearly outdated”, but “demonstrably wrong”. (This was critical to the standard applied in the substantive decision, and led to the mistaken non-notification decision.) There is no suggestion here, as in Coro Mainstreet, that the applicants are asking  the  Court  to  “second-guess”  the  Council’s  decision,  or  to  review  the
Council’s non-notification decision on the merits.18  The challenges of procedural

impropriety and illegality are made out.

[57]     In  its  attempts  to  refute  this,  Infinity  cites  Ferrymead  Retail  Ltd  v Christchurch City Council as authority for the proposition that “[any] suggestion that consent authorities are under a rigid obligation to check all the raw data accompanying resource consent applications… is untenable.”19 Problematically, however, the Court went on to say by way of example:20

… if there is some reason to doubt the integrity or reliability of the data then further enquiry might be expected, with the nature of the enquiry being a matter of judgment for the consent authority.

18	Coro Mainstreet v Thames-Coromandel District Council, above n 12, at [50].
19	Ferrymead Retail Ltd v Christchurch City Council [2012] NZHC 358 at [103].
20	At [103].

[58]     This in my view reinforces the applicant’s case, suggesting that the Council should  have  been  put  on  notice,  by  revelation  of  the  factual  errors  in  its  own database, that further enquiry into the raw data (both which they provided to Infinity, and which was subsequently cited back to them in the application) was necessary. The acknowledged data errors, and the Council’s own earlier inventory schedules showing a contrary position were red flags which the Council ignored, and those errors formed the basis for their conclusion of WCWARP-compliance and discretionary activity status.

[59]     Indeed, Mr Maw for the Council has acknowledged the Council’s duty to keep its records correctly and to ensure that water allocations are properly recorded. It seems to be conceded that this duty was not fulfilled here and its breach had significant consequences for the applicants.

[60]     The Council’s decision not to notify this application was based on it being for a discretionary activity. Once the application is recognised as properly being for a non-complying activity, it becomes clear that “the Council’s decision on notification will necessarily be flawed because it did not ask itself the questions relevant” to when a non-complying activity need not be notified.21

[61]     I find here that the applicants were and are adversely affected to a “more than minor” extent by the activity for which the Council granted consent. They ought to have been treated as adversely affected persons, triggering s 95A(2)(a) public notification.

The Council’s substantive decision to grant consent

[62]     Although the Council claims in its report that it had considered the National Policy Statement on Freshwater Management 2011 and Policy 26 of the WCWARP, as I see the position, the Council still applied the wrong statutory standard and made an error of law in assessing the application as a discretionary activity. In reliance on
this error of law, the Council failed to properly consider the actual and potential

21	MacPherson v Napier City Council [2013] NZHC 2518 at [81].

effects on the environment, including on the applicants, of granting consent for a non-complying activity, as required by s 104D of the RMA.

[63]     In Queenstown Central Ltd v Queenstown Lakes District Council, the High

Court held that it is:22

… an error of law to do the s 104 analysis before doing the s 104D(1)(b) analysis. When applying regulatory law it is important to ask the right question at the right time. Section 104D is commonly known as a gateway decision.

[64]     Subsequent Environment Court and High Court cases have clarified that the timing of the s 104D analysis is immaterial, provided that the consent authority asks itself these questions at some stage of their consideration.23  The s 104D threshold test can be undertaken either before or after the substantive test in s 104(1), so long as the consent authority ultimately asks itself the right question. Indeed, a consent authority can only grant a resource consent after it has considered the matters under s 104.24

[65]     In Matukituki Trust v Queenstown Lakes District Council, the High Court ordered  the  rehearing  of  a  consent  application  which  had  been  refused  by  the Council and then by the Environment Court in circumstances where the analysis and decision-making had been made on a false premise that the application was for a non-complying activity.25 The Court held, “[because] of the significance of the error treating this as an application for a non-complying activity, the matter has to go back to be reconsidered by the Environment Court.26

[66]     On this ground of review, the present case is the inverse of Matukituki Trust: the Council failed to identify and consider this application as one involving a non- complying activity. This error is based on distinct breaches of Rules 2, 15 and 16 of
the WCWARP.  By limiting its  decision-making process  to  the consideration  of

22	Queenstown Central Ltd v Queenstown Lakes District Council [2013] NZHC 817 at [21].
23	Cookson Road Character Preservation Society Inc v Rotorua District Council, above n 3, at
[48].
24	At [63].
25	Matukituki Trust v Queenstown Lakes District Council HC Christchurch CIV-2006-412-733, 19
December 2006.
26	At [57].

s 104(1) matters, and failing to undertake the s 104D analysis, the Council has erred in law. Because of the significance of the mistake of law, the decision must be quashed and remitted back to the Council for reconsideration under both ss 104(1) and 104D.

Relief

[67]     As an alternative here, and notwithstanding my findings above, before me Infinity sought to have this Court exercise its discretion to decline the relief sought. Infinity argues that this would avoid the need for reapplication for resource consent and the Council’s reconsideration thereof because it is “highly likely” that the same decision would be made.   This result, it is said, is inevitable even if the s 104D restrictions were fully considered.  Therefore Infinity suggests here it must serve no purpose to grant the orders sought. And, as I have already noted, it submits that the rapid dismissal of these proceedings is of especial importance, as Foveran is on the market and Infinity needs to meet its debt obligations urgently.

[68]     In  Independent  Fisheries  Ltd  v  The  Minister  of  Earthquake  Recovery, Chisholm J  summarised  Court  of Appeal  authority for the proposition  that  if  a claimant demonstrates that a public decision-maker has erred in the exercise of power, there must be “extremely strong reasons for declining relief”.27

[69]     Conversely, Rees v Firth suggests that “there should be a more “nuanced” approach reflecting the gravity of the error in the context of the circumstances of the case.”28  In Independent Fisheries, Chisholm J did not clarify which approach to relief he had taken, but he enumerated the following matters as satisfying him that this was an appropriate case for relief to be granted: no delay in issuing proceedings; and no “significant prejudice” to the respondents.29  Other factors relevant to the exercise of discretion as to whether or not to grant relief include the gravity of the
error and the inevitability of the outcome.30

27	Independent Fisheries Ltd v The Minister of Earthquake Recovery [2012] NZHC 1810 at [186], citing Air Nelson Ltd v The Minister of Transport [2008] NZAR 139 (CA) at [60] and [61].
28	Rees v Firth [2012] 1 NZLR 408 (CA) at [48].
29	Independent Fisheries Ltd v The Minister of Earthquake Recovery, above n 27, at [193].
30	MacPherson v Napier City Council, above n 21, at [93].

[70]     In MacPherson v Napier City Council, Duffy J stated that once a plaintiff has established that the action challenged is unlawful, it should not be necessary for them to go further and show an additional justification to receive a remedy.31 There, the  Court  considered  that  “the Council  displayed,  albeit  inadvertently,  a serious disregard for the resource management requirements that it is obliged to adhere to” and noted that “applicants are entitled to expect the Council to discharge its statutory role properly, which includes determining applications for resource consents in accordance with the correct controls.”32

[71]     To some extent in my view, these comments apply also to this case.  As in MacPherson, the Council’s errors, as I see it, were “more than technical defects” – they were “serious”.33   Moreover, were the application to be correctly considered one for a non-complying activity, rather than a discretionary activity, it is by no means inevitable that the same outcome would result. In the context of an over-allocated catchment, the Council’s granting of consent according to a more liberal control than was lawfully applicable at the time may well be regarded as serious. This case involved a critical mistake included by Infinity in its application and accepted in
error on the part of the Council which had earlier records and previous involvement in other consent applications outlining the correct position.  It must follow therefore that this case exhibits aspects of decision-making whereby the consent authority has displayed “serious disregard for the resource management requirements that it is obliged to adhere to” under the RMA.34

[72]     As the Court of Appeal stated in Just One Life Ltd v Queenstown Lakes

District Council:35

[A] discretionary withholding of relief is not the normal outcome of a successful attack on a reviewable decision. If some form of relief could have practical value then it ought to be granted.

31	At [91].
32	At [113].
33	At [102].
34	At [113].
35	Just One Life Ltd v Queenstown Lakes District Council [2004] 3 NZLR 226 (CA) at [39].

[73]     There was minimal delay here in bringing these judicial review proceedings on  the  part  of  the  applicants  once  they  became  aware  of  Infinity’s  successful resource consent application.  The relief sought by the applicants here, in my view, would have  real  practical  value,  as  it  would  enable  Infinity’s  application  to  be decided according to correct statutory standards. The proper classification and analysis of the application as a non-complying activity would necessitate a more thorough assessment of effects on the environment. The applicants allege they would inevitably be adversely affected (in a more than minor way) by any grant of consent on the terms sought by Infinity.

[74]     Despite Infinity’s submissions of significant prejudice if relief were granted to the applicants, their situation is comparable to that of the respondents in MacPherson, who submitted that if the Court granted relief to the applicants, it would be subject to loss, undue delay and additional expense. Duffy J accepted that the respondents would be forced to suffer the consequences of the Council's errors, but held   that   they   “must   also   bear   some   responsibility”   for   their   “deficient
application.”36  Much like the Trust in MacPherson, Infinity should have realised that

“unless it ensured its application was fully compliant for this activity, it ran the risk

of being set aside by a successful legal challenge.”37

[75]     There are no alternative remedies available to the applicants here. The only way the reviewable error can be effectively addressed is by setting the Council’s decision aside. Further factors in support of relief are as follows:38

(a)	Denial of relief would effectively condone the reviewable errors that have been found to exist.

(b)	The second respondents were closely involved in those reviewable errors.

36         MacPherson v Napier City Council, above n 21, at [107]. See also Independent Fisheries Ltd v The Minister of Earthquake Recovery, above n 27, at [193]. Despite accepting that there would be several “unfortunate” consequences for the respondents, Chisholm J  warned that “those consequences need to be kept in perspective.” Firstly, no “significant prejudice” arose, and even if it did, the Minister could conceivably “ameliorate any prejudice” by taking specific steps.
37	MacPherson v Napier City Council, above n 21, at [107].
38	Independent Fisheries Ltd v The Minister of Earthquake Recovery, above n 27, at [194].

(c)	Overall fairness favours relief.

[76]     This application for judicial review has succeeded because the Council’s grant of resource consent did not achieve the legislative intent. Consequently, granting relief for the purpose of remedying the errors will not undermine, but rather, will support the intent of the RMA.

Conclusion

[77]     The application for judicial review is granted.  The Council’s decisions are set   aside   and   Infinity’s   application   is   remitted   back   to   the   Council   for reconsideration.

[78]     As to costs, they are reserved.  If the parties are unable to agree on any issue of costs between them then they may file memoranda on the question sequentially. These are to be referred to me and in the absence of either party indicating they wish to be heard on the matter, I will decide the question of costs based on the material then before the Court.

...................................................
Gendall J

Solicitors:
Pru Steven QC, Christchurch
Brandts-Giesen McCormick, Rangiora
Wynn Williams, Christchurch
Royden Somerville, QC, Dunedin
Greenwood Roche Chisnall, Christchurch Branch