Resource Management Update – September 2016

Home Insights Resource Management Update – September 2016

In this edition:

A ‘quick fix’ for housing

The Government has recently acted under urgency to pass the Housing Legislation Amendment Act 2016 (Amendment Act). The Amendment Act came into force on 15 September 2016.

The Amendment Act amends the Housing Accords and Special Housing Areas Act 2013 (HASHAA) to:

  • extend the date for establishing special housing areas (SHAs) for three years to 16 September 2019;
  • extend the date of repeal of the entire Act by three years to 16 September 2021;
  • allow plan change requests made but not completed under the HASHAA to continue when proposed plans become operative;
  • set time limits for lodging applications for resource consents and requests for plan changes or variations of a proposed plan, and provide ministerial discretion on revoking SHA status; and
  • clarify the relevant planning document that local authorities use to assess consent applications and plan change requests under HASHAA.

The Amendment Act also amends the offer-back provisions in the Housing Act 1955.

HASHAA Extended

The HASHAA came into force in 2013 as a short term measure to fast track housing development. The Amendment Act extends the HASHAA so that sections 16 and 17, which provide for the establishment of SHAs now expire on 16 September 2019. The rest of the HASHAA will expire on 16 September 2021, instead of 16 September 2018.

The extension is a response to high housing demand, particularly in areas outside of Auckland (including Hamilton, Tauranga, Nelson and Queenstown) where existing plan review processes are likely to be too slow to enable further housing development. The extension is also intended to act as a stopgap until the National Policy Statement on Urban Development Capacity is implemented, the RMA reforms are progressed, and a new urban development authority mechanism becomes available.

As a consequence of the Amendment Act, in terms of the possibility of new special housing areas being identified:

  • For areas with a housing accord, new SHAs can still be made on the recommendation of the local authority. This includes Auckland which recently had its housing accord extended until the end of 2016, with the view that it may be extended further.
  • For areas without a housing accord, or where a housing accord has terminated or expired, new SHAs can be made on the recommendation of the Minister.

Government addresses glitch

Previously, under section 75 of the HASHAA, if a proposed plan became operative in relation to a SHA before a SHA plan variation was made operative, that variation was treated as withdrawn where the matters covered in the plan variation were considered and determined in the proposed plan. 

Section 75 did not anticipate the situation which arose in Auckland, where the developers of eight SHAs, with capacity for 7,900 new homes, were faced with a situation where their plan variation processes might not be completed and the Proposed Auckland Unitary Plan did not provide for residential housing in the proposed SHA.

Such an outcome would have undermined the significant time and resources invested in the preparation of applications for plan variations under HASHAA, and could have slowed the provision of housing even further.

The Amendment Act amends section 75 to fix this anomaly. It allows plan variations to proposed plans (including the Proposed Auckland Unitary Plan) to be determined, notwithstanding that the proposed plan has become operative in relation to the SHA.

Changes to offer-back provisions

The Amendment Act also allows land acquired by the Government for state housing to be sold on to developers, without the developers having to offer it back to the original owner under the Public Works Act 1981. Hon Dr Smith said the change was necessary to protect the Government’s sales of surplus Crown land for housing developments and to provide ‘total certainty’ that the current law allowed developers to sell houses without the requirement to offer them back to the original owner.

The Unitary Plan: and so it goes on

On 19 August Auckland Council’s decision on the Unitary Plan went live. Unsurprisingly, the Council accepted the majority of the Panel's recommendations. However, it did reject a number of key recommendations and substituted its own provisions.

All appeals on the Unitary Plan were due on Friday 16 September 2016. Despite the limited appeal rights under the Unitary Plan process, 64 Environment Court appeals have been filed, as well as 38 appeals to the High Court on questions of law and seven applications for judicial review. Auckland Council has uploaded all appeals to its Unitary Plan webpage which can be accessed here.

Environment Court Appeals

Appeals to the Environment Court could be made only if:

  • the Council rejected the Panel’s recommendation and proposed an alternative solution; or
  • the Council accepted a recommendation from the Panel that was identified as being out of scope and a person is unduly prejudiced by the amendment. (The Panel took a liberal approach to whether or not it had scope for changes, so few amendments were identified as out of scope).

The Environment Court appeals cover a range of topics, with notable appeals including industry challenging Auckland Council’s reinstatement of the Auckland Ambient Air Quality Standards, Transpower challenging the reduction of its National Grid Corridor Overlay and retailers challenging the Council’s changes to parking minimums and maximums. There are also a large number of site-specific appeals.

To join an Environment Court appeal, a person must file a notice under section 274 of the RMA by 7 October 2016. The Environment Court has made directions and granted waivers in respect of service of section 274 notices. Notices can be filed in the Environment Court by email to [email protected] Service can be effected by sending a copy of the notice to the appellant and emailing a copy to the Council at [email protected]

It is likely that the Environment Court will seek to process appeals as expeditiously as possible. Appellants and interested parties should be prepared to engage constructively in the usual alternative dispute resolution processes, which may begin shortly after the period for section 274 notices closes.

High Court Appeals and Judicial Review

For those parts of the Unitary Plan where the Council accepted the Panel’s recommendation, appeals could be made to the High Court on questions of law only. The Unitary Plan's legislation also preserved the right for parties to seek judicial review.

Like the Environment Court appeals, the High Court appeals and judicial review proceedings cover a range of topics. Notably these include a challenge by the Independent Maori Statutory Board to the decision to remove the Sites and Places of Value to Mana Whenua Overlay and a challenge by the Character Coalition and Auckland 2040 to the scope to make wide-scale residential zoning changes across Auckland. If the Character Coalition and Auckland 2040 appeal is successful, large swathes of Auckland's residential land that has been up-zoned in the Unitary Plan will potentially be subject to challenge in the Environment Court or reconsideration by the Hearings Panel and Auckland Council.

In response to requests by appellants to waive the normal service requirements for High Court appeals, Whata J issued a minute on 23 September 2016 waiving the normal requirement to serve parties a notice of appeal within 5 working days. In the minute, Whata J directed that service requirements will be addressed at the first case management conference for High Court appeals on 14 October 2016 and indicated that the approach taken by the Environment Court to service of Unitary Plan appeals may be adopted by the High Court. The memorandum did not address service requirements for notices of intention to appear, which are usually required to be filed and served within 10 working days of service of a notice of appeal. For parties that have been served copies of High Court appeals already, it would be prudent to serve notices under the usual procedure in the High Court Rules. We expect that the process for notices to appear will also be addressed at the first case management conference. 

If a person wishes to intervene in a judicial review proceeding, he or she would need to file an application for joinder with the High Court, pursuant to the High Court Rules.

Here we go again – TTR lodges second application to mine iron sands of South Taranaki coast

On 23 August 2016, Trans Tasman Resources Limited (TTR) lodged an application with the Environmental Protection Authority (EPA) for marine consents and marine discharge consents to extract and process iron sand within the South Taranaki Bight under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012. The application was publicly notified by the EPA on 17 September 2016.

The application area covers 65 square kilometres of seabed between 22-36 kilometres off the coast of Patea, in waters 20-42 metres deed. TTR proposes to extract and export up to 5 million tonnes of iron sand per year, for up to 35 years.

This is TTR's second application to the EPA for marine consents for iron sand extraction in the South Taranaki Bight. A similar application was lodged in 2013 and attracted significant public opposition, as we reported here. Of the 4,702 submissions received by the EPA, only 11 supported the proposal. Most submissions in opposition were from private individuals using an online form prepared by Kiwis Against Seabed Mining (KASM).

The EPA's Decision-Making Committee (DMC) refused to grant consents to TTR’s first application, because that application was premature and did not meet the purpose of sustainable management under the EEZ. The DMC found that more time should have been spent understanding the proposed operation of the relevant environment, while engaging more constructively with existing interests and iwi, as we reported here.

While TTR initially appealed the decision to the High Court, it discontinued its appeal, instead electing to make a fresh application to the EPA designed to address the shortcomings identified by the DMC. TTR Executive Chairman, Alan Eggers stated in a recent press release that TTR has “undertaken a comprehensive program of additional science and engineering work to update and refine the environmental assessments of its application and how it can be successfully undertaken”.

TTR claims the mining operation will generate taxes, royalties and export earnings of over $300 million a year, as well as the support of 1650 jobs, 300 jobs in the immediate Taranaki region. However, it is certain that this second application will also face stiff opposition. KASM has already stated that it will be submitting against the application and coastal iwi including Ngāti Ruanui and Ngā Rauru have voiced opposition. Taranaki iwi are dissatisfied with TTR's consultation prior to its re-application and by the lack of information available to them in relation to the application. Iwi have also expressed concern about the environmental impacts of the proposed extraction, particularly the effect on Maui’s dolphin and blue whale populations.

The EPA will produce a Key Issues Report for the DMC which will identify matters for the DMC to address in its decision-making process. This report will likely be made available to submitters during the submission period. Submissions on the application must be received by the EPA no later than 5pm on 14 October 2016.

When conservation conversations dam development

The Ruataniwha Water Storage Scheme may be in troubled waters after the Court of Appeal found that the Director-General of the Department of Conservation (Department) was not entitled to revoke special conservation status of part of the Ruahine Forest Park (RFP) land, in order to facilitate a land swap to enable the Scheme.

A copy of the case is available here.

The Scheme involves a proposed dam project across the Makaroro River that would capture and store about 900 million cubic metres allowing up to 30,000 cubic metres of land to be irrigated, and enabling water release to improve river flows in the Tukituki catchment through summer for river life and other river users. It would require flooding of 22 hectares of the Ruahine RFP, which is subject to protection as a conservation park held for recreation purposes under the Conservation Act 1987. There are different categories of protection under the Act, each subject to distinct management regimes. As a conservation park, the RFP is subject to a statutory prohibition against disposal or exchange, but this does not apply to land designated as a stewardship area (which is more of a holding status).

To give effect to the Scheme, the Hawke’s Bay Regional Council, through its investment vehicle, Hawke’s Bay Regional Investment Company (HBRIC), proposed to exchange the Ruahine RFP land for a 1,270 hectare area of farming land known as Smedley Block, which was agreed with the Department conditional on approval by the Director-General of Conservation. The Director-General accepted HBRIC’s proposal following a public hearing and inquiry, formally revoking the conservation park status and substituting a stewardship designation for the Ruahine RFP land and exchanging that land for the Smedley Block.

Royal Forest and Bird Protection Society of New Zealand Inc applied for judicial review of the Director-General’s decision on the basis that the Director-General acted unlawfully with reference to broad conservation purposes. The High Court declined to review the decision, and Forest and Bird appealed to the Court of Appeal.

In the Court of Appeal, Forest and Bird argued that the decision to revoke conservation park status of the Ruahine RPF land must relate to the land’s value, not whether the revoking of that status and the land’s subsequent disposal would result in a net gain.

The Court of Appeal (in a 2:1 split, with Justices Rhys Harrison and Helen Winkelmann in the majority) allowed the appeal, ordering that the revocation be set aside and a new application be considered by the Director-General. The majority found that under the Act, the Director-General needs to be satisfied that a specially protected area (here, a conservation park) no longer merits its particular designation, and should be reclassified. In this inquiry, the Director-General must be convinced that the intrinsic values of the land in question were no longer worth permanent protection. He was not entitled, as the High Court had ruled, to base his decision on a broad assessment of the merits of the proposed land swap for the conservation estate as a whole.

In essence, the Court of Appeal has confirmed that under the Act, the Department cannot trade protected land, unless that protected designation is first lawfully removed on the basis that the intrinsic values of the land no longer justify protection. The Court of Appeal’s direction that the Director-General cancel the land swap and reconsider the land exchange application acts as a handbrake on the Scheme, and there is suggestion that a newly-elected council may drop the Scheme altogether (which would be time-consuming and costly). However, at this stage HBRIC remains committed to seeing the process through, by confirming a cornerstone investor for the Scheme. The Department and/or HBRIC may also appeal the decision to the Supreme Court.

Productivity Commission’s preliminary views on a future urban planning system

The Productivity Commission has released an extensive draft report on ‘Better Urban Planning’. The Government asked the Commission to review New Zealand’s urban planning system and identify, from first principles, the most appropriate system for allocating land use to support desirable social, economic, environmental and cultural outcomes.

To view the Draft Report click here.

In the Commission’s view, a future planning system could feature, among other elements, a distinction between the built and natural environment (with clear and separate goals for each), a Government Policy Statement on Environmental Sustainability, and a permanent Independent Hearings Panel to consider plan changes and plan reviews.

The Draft Report also makes recommendations which reflect some of the reforms proposed in the Resource Legislation Amendment Bill, including greater central government intervention, more stringent notification requirements, and narrower access to appeals.

The Commission is currently inviting submissions on the Draft Report from all interested parties. Submissions close 3 October 2016. The Commission will present its final report to the Government on 30 November 2016.

For further details on the Draft Report see our September issue of Watching Brief.

Case note – Tasti Products Ltd v Auckland Council [2016] NZHC 1673

In a recent High Court case, Tasti Products Ltd and North Western Property Ltd (NWPL) applied for judicial review of decisions made by the Auckland Council. The decisions related to a consent application by Midpoint Investments Ltd for a commercial / residential development adjacent to Tasti's manufacturing site in Te Atatu. Tasti sought review of the decision not to give it limited notification of the consent application; the decision to grant consent for the redevelopment; and the decision not to notify a subsequent application to vary the consent conditions.

The first ground of review was that Council did not have adequate information to determine whether Tasti or NWPL were affected persons under the Resource Management Act 1991 (RMA). The Court found that the Council had comprehensive information before it, which was sufficient to make the decision not to limited-notify the consent application.

The Court then considered whether the adverse effects of Midpoint’s proposal were such that the plaintiffs were affected persons. The Court also looked into whether the Council erred in failing to consider the relevant objectives and policies of the Proposed Auckland Unitary Plan when making its notification decision.

The Court found multiple errors in the Council’s decision:

The Council considered the sites, rather than the persons affected when considering limited notification, and therefore misconstrued a relevant statutory assessment (s95E(1) of the Act).

The Council did not consider the potential for reverse sensitivity effects in a detailed and proper way (as it only took into account the operative plan).

The Council posed too high a test when considering whether or not a person was affected, as the Council considered whether the operative plan’s permitted activities were ‘precluded’ if the proposal was to proceed, whereas under ss 95B and 95E of the Act if the effects are minor or more than minor, a person is affected.

The Council failed to address the provisions of the Unitary Plan.

The Court held that the assessment of an affected person should not occur in isolation and that it needs to be considered in context. If the objectives and policies of a proposed plan were required to be taken into account under s104 of the Act in making a substantive decision on a resource consent, the Court found that they must also be relevant in determining whether a person was affected by the application under s 95E(1).

The Court also found that the Council failed to ask itself the right questions and take into account all relevant considerations. The Court ruled that the Council’s notification decision was invalid, and that it must follow that the consent and variation decisions must also fail.

The High Court's decision serves as a timely reminder to councils that when considering the notification of an application, they must take into account both the operative and proposed plans when determining whether a person is an “affected person” within the meaning of the RMA. The Council must also consider the persons rather than just the sites potentially affected by the application.

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