Kawarau Jet Services v Queenstown Lakes District Council
| Jurisdiction | New Zealand |
| Judge | NATION J |
| Judgment Date | 25 September 2015 |
| Neutral Citation | [2015] NZHC 2343 |
| Docket Number | CIV-2015-425-000024 |
| Court | High Court |
| Date | 25 September 2015 |
and
[2015] NZHC 2343
Nation J
CIV-2015-425-000024
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
Appeal against a decision of the Environment Court decision (EnvC) which held the appellant's resource consent had lapsed under s125 Resource Management Act 1991 (RMA) (lapsing of consents) on the basis that they had not been implemented within five years of their being granted — the EnvC held that consents that had been granted to the appellant in 2004 had not been implemented and had lapsed — the Council had advised that consents that had been granted to the owner of a business that the appellant had purchased could not be transferred pursuant to ss134–137 RMA (transfer of consents) and the appellant would have to surrender the consents and reapply for them — whether procedural errors such as a failure to observe natural justice constituted an error of law or went solely to the separate question of whether or not a party was granted a fair hearing — whether the EnvC breached natural justice by not putting the appellant on explicit notice that it faced the risk of a finding that the consents had lapsed — whether the Council had acted lawfully when it required the appellant to surrender its existing consent and apply for the new consent resource consent — whether the consent could have been transferred under s134 RMA (land use and subdivision consents attach to land) — whether a collateral challenge to the EnvC decision could be permitted, having regard to the seriousness of the error alleged and whether the challenge was central to the case — whether the EnvC had given insufficient regard for the real value of resource consents and the investment made in obtaining those consents.
J D K Gardner-Hopkins, E J Hudspith " C R Gubb for the Appellant
N M H Whittington and M R Walker for the First Respondent
P A Steven QC for the Second Respondent
Kawarau Jet Services Holdings Limited (K-Jet) had its origins in a business and company in which Mr Neville Kelly, his wife and his brother Mr Shaun Kelly were shareholders. In the late 1980s it was one of a number of jetboat operators offering jetboat excursions on Lake Wakatipu and nearby rivers. After the Resource Management Act 1991 (RMA) came into effect, such activities had to be authorised by resource consents.
The business expanded through the acquisition of various other jetboating businesses, associated boats and consents.
In 1997, the K-Jet business applied for consents to operate on the gorge section of the Shotover River. That application was opposed by the sole operator there, Shotover Jets Limited (Shotover Jets).
An agreement was reached between Shotover Jets and the Kellys. Basically, the Kellys and their company agreed not to compete for business on the gorge section of the Shotover River. Shotover Jets agreed not to operate on the lower Shotover and Kawarau Rivers or on Lake Wakatipu. Through that agreement, the Kellys' company began operating the jetboats previously used by Projet Limited and Helijet Limited, companies and businesses owned by Shotover Jets.
In 1999, Mr Neville Kelly and his wife sold out of the business.
In 2004, K-Jet took over the business of another operator, Twin Rivers Jet Ltd. As a result, it acquired resource consents relating to that company's jetboat activities on Lake Wakatipu and the lower reaches of the Kawarau and Shotover Rivers.
In 2007, K-Jet acquired from Shotover Jets the business and associated jetboating assets of Projet Limited and Helijet Limited which it had been operating in the years previous. It also obtained consents for the operating of jetboats on Lake Wakatipu and lower reaches of the Kawarau and Shotover Rivers.
In 2008, Mr Neville Kelly and his wife purchased Queenstown Water Taxis Limited (QWT). That company had consent to operate charters and taxis on Lake Wakatipu. It had also applied for a consent for jetboating activities on the Kawarau River.
The application was:
(a) to operate one commercial jetboat on the Kawarau River from River Bridge approximately 14 kilometres downstream to near the Arrow River confluence;
(b) to operate up to three boats (approximately 10 trips per day) on Lake Wakatipu and the Kawarau River to approximately 14 kilometres downstream to near the Arrow River confluence; and
(c) both applications involving pick-up and drop-off of passengers at an established berth at a jetty in Queenstown Bay or at Frankton Marina.
QWT's application had originally been granted on a non-notified basis. This was quashed by the High Court in judicial review proceedings brought by K-Jet in March 2009. 1
The application was the subject of a lengthy hearing in the Environment Court in 2010. Consents were ultimately issued in accordance with the applications in an interim judgment of the Environment Court. 2
In 2013, QWT applied to the Queenstown Lakes District Council (QLDC) for a variation to each of two existing resource consents to increase the maximum number of passengers per boat on each consent and the grant of a land use consent (to allow for an optional run on the lower Shotover River). At that time, K-Jet was the sole incumbent commercial jetboat operator with consents to operate on the lower Shotover River.
QWT's 2013 applications were heard by commissioners in November 2013. The variations and the land use consent were granted.
K-Jet appealed this grant to the Environment Court. On 5 February 2015, the Environment Court confirmed the grant of a resource consent to QWT to operate four boats on the lower Shotover River in conjunction with the consents allowing it to operate on the lower Kawarau River and Lake Wakatipu. 3
K-Jet's opposition to the grant of the consent to QWT centred on safety issues. In considering those issues, the Environment Court had to consider QWT's proposed use of the lower Shotover River, not just in terms of how it was being used by other people and businesses, including K-Jet, but also how it could potentially be used having regard to K-Jet's existing consents.
In granting the consent to QWT, the Environment Court determined that three resource consents, previously granted to K-Jet, had lapsed under s 125 of the RMA. The Court decided that these consents had lapsed on the basis that they had not been implemented within five years of their being granted. 4
K-Jet has appealed to the High Court on the grounds of errors of law in relation to that aspect of the Environment Court's decision.
Counsel for all parties accepted and recognised that such appeals must be on points of law rather than on the facts or merits of the case. 5
The questions for this Court are whether the Environment Court: 6
(a) applied a wrong legal test; or
(b) came to a conclusion without evidence or one to which, on the evidence, it could not reasonably have come; or
(c) took into account matters which it should not have taken into account; or
(d) failed to take into account matters which it should have taken into account.
K-Jet also submitted that significant procedural errors and a failure to meet the requirements of natural justice can give rise to an error of law capable of consideration in a point of law appeal. 7
The natural justice issue:
K-Jet submits that there was an error of law in that the Environment Court breached the principles of natural justice in making the s 125 lapse finding without putting K-Jet on explicit notice that it faced the risk of the Court making such a finding.
The collateral challenge issue:
K-Jet also argues that, through the Environment Court's decision, K-Jet has lost consent RM040414(b) (“the Twin Rivers (b) consent”) because the QLDC acted unlawfully in requiring the previous holder of a resource consent to surrender the consent it held for one boat when it sold its business to K-Jet in 2004 and in requiring K-Jet to then apply for and be granted a new resource consent, albeit on virtually identical terms.
K-Jet makes a collateral challenge around this allegedly unlawful policy of the QLDC. K-Jet argues that the Twin Rivers (b) consent had been utilised and was thus an effective consent when transferred to K-Jet in 2004. K-Jet argues, but for the unlawful QLDC policy, the consent could not have lapsed through any subsequent non-use.
Unavailable findings:
There are two distinct aspects of this. K-Jet says that the Environment Court made an error of law in concluding that K-Jet's practice of allocating the use of a boat on a particular day to a particular resource consent on a rotational basis (“the rotational policy”) was not a valid way of giving effect to the consents. In the
alternative, if the rotational policy was not seen as a valid way of giving effect to the consents, K-Jet submits that the other evidence as to the way the consents were used was such that the Environment Court's decision was not one reasonably open to itOn 15 April 2015, K-Jet filed an application for leave to adduce the affidavit evidence of Shaun Kelly. QWT opposed the application. Consistent with its stance of only wishing to assist the Court in relation to the collateral challenge issue, QLDC neither opposed nor consented to the application.
Rule 20.16 of the High Court Rules states (as relevant):
(2) … a party to an appeal may adduce further evidence only with the leave of the court.
(3) The court may grant leave only if there are special reasons for hearing the evidence. An example of a special reason is that the evidence relates to matters that have arisen after the date of the decision appealed...
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