Kawarau Jet Services v Queenstown Lakes District Council

JurisdictionNew Zealand
CourtHigh Court
JudgeNATION J
Judgment Date25 Sep 2015
Neutral Citation[2015] NZHC 2343
Docket NumberCIV-2015-425-000024

[2015] NZHC 2343

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

judge:

Nation J

CIV-2015-425-000024

BETWEEN
Kawarau Jet Services Holdings Limited
Appellant
and
Queenstown Lakes District Council
First Respondent

and

Queenstown Water Taxis Limited
Second Respondent
Appearances:

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

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.

The issues were: whether a failure by a court to observe principles of natural justice in reaching its decision was an error of law or went solely to fair trial issues; whether the EnvC erred by not putting K-Jet on explicit notice that it faced the risk of the Court making a finding that the consents had lapsed under s125 RMA; whether the council had acted lawfully in requiring the surrender of the existing consent and application for the new consent; whether the consent could have been transferred under the RMA; 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; and, whether the EnvC had insufficient regard for the real value of resource consents and the investment made in obtaining those consents.

Held: There was authority that procedural error such as failure to observe natural justice did not constitute an error of law and that a breach of natural justice went solely to the separate question of whether or not a party was granted a fair hearing (McFarlane v Chief Executive of the Department of Work and Income). If the decision-making authority had denied a fair hearing, s27(2) New Zealand Bill of Rights Act 1990 (NZBORA) (judicial review right) confirmed the common law position that the appropriate remedy was an application for judicial review. However, a breach, if proven, would not render the public authority's decision erroneous in point of law.

However, if a conclusion which was unsupportable on the evidence could constitute an error of law, it was difficult to see why a failure to observe the principles of natural justice, as required by s27 NZBORA, could not also constitute an error of law. There would normally be considerable advantage in having such an issue dealt with as part of an appeal rather than through separate proceedings.

There might be situations where the breach of natural justice principles could be shown only through putting further evidence before the Court, for example, where a party was seeking to show that a decision-maker reached his decision not on the basis of evidence that had been put before him but as a result of some inducement or coercion to which there was no reference on the record but of which a party learnt independently. Similarly, appeals based on the actual or perceived bias of a decision maker might well rely on evidence presented independently of the record. The particular natural justice challenges in this appeal were such that the validity should be measured against the record of what occurred during the proceedings. The formal written submissions were part of the record of the proceedings.

There had been no breach of natural justice in the EnvC determining that particular resource consents held by K-Jet had lapsed. The EnvC had to consider the extent to which K-Jet's consents were likely to be used in the future. When considering whether to grant consent, the EnvC had been required to assess the actual and potential effects of QWT's proposal “on the environment”, in the context of s104(1)(a) RMA (consideration of applications — any actual and potential effects on the environment of allowing the activity). It was inevitable that the EnvC would have to consider the extent to which those consents would permitted K-Jet to operate more boats on the river. The EnvC was almost inevitably going to be asked to decide whether certain consents had lapsed.

Through the evidence presented in advance of the hearing and through counsel's submissions, QWT had put K-Jet on plain notice that the Court was being invited to determine that, in reaching its decision, certain of K-Jet's consents had lapsed through the application of s125. Natural justice principles had not required the EnvC to put K-Jet on notice that it was considering making a determination that the consents had lapsed. Nor was the EnvC required to issue some sort of tentative or preliminary judgment, with the parties having the opportunity to then present further submissions or evidence.

The Council dealt with the Twin Rivers consent situation as if there was no option but for the parties to deal with it through the surrender of a consent and the grant of a new one. The legal advice it had received in this respect was correct. It was lawful for the Council, at least before 1996, to require the previous holder of a resource consent who was selling its business, to surrender the consent they had and for the purchaser to be granted a fresh consent. There was no provision in the RMA which provided for the transfer of surface-of-water resource consents where there needed to be a change in the resource consent holder through the sale of a business. In expressly excluding the application of s134(1) RMA (land use and subdivision consents attach to land) to the use of beds of rivers and streams, Parliament had indicated that rights to use the beds of rivers or lakes would not be rights attached to the underlying land.

Amendments made after 1996 were intended to ensure that successors in title could continue with statutory processes, rather than facilitate the transfer of existing consents. Interpreting “successors” to include those who purchased certain rights or assets from the previous holder of a consent and applying it so as to permit such purchasers to take over all rights and obligations attached to that consent, would effectively render the detailed provisions of s134 RMA redundant and/or ineffective.

It was possible the 1996 amendment with its reference to “successors” might not have permitted the Council to deal with the surface of water consents in the way it decided would be possible with the 2007 opinion it received. However, [it did not need to be decided] whether the reference to “successor” in the 1996 Amendment enabled any purchaser of a business which included a resource consent to take over from the vendor all existing rights in respect of that resource consent.

There was authority that the Court should be cautious in permitting collateral challenge to be a challenge to a judicial decision (Attorney-General v PF Sugrue Limited). This was an issue to be determined by the seriousness of the error in all the circumstances of the case and whether the challenge was central to the case (Brady v Northland Regional Council).

As far as the seriousness of the potential error was concerned, it remained in doubt as to whether the Council did in fact act unlawfully. It was open and transparent as to what it required and the reasons for that requirement. There was no suggestion that the Council had acted in bad faith, malice or dishonest intent, or that it had exercised its powers for an improper purpose. The Council was exercising its powers consistent with the policy it had adopted in dealing with earlier situations where companies had acquired the business of other jet boat operators and needed corresponding resource consents.

It was also relevant that the procedure the Council had adopted, on the basis of there being a gap in the RMA, was a procedure permitted by the RMA. This is not a situation where a council is alleged to have required the parties to deal with a resource consent in a manner which was not permitted by the RMA.

The seriousness of the alleged error also had to be assessed in all the circumstances of the case including the underlying scheme and policies of the RMA. All the parties and their advisors should have been aware that for resource consents to become and remain fully effective they had to be used. That requirement was reflected in the provisions of s125 RMA. K-Jet could not also have reasonably thought that in 2004 it was simply continuing to hold the Twin Rivers consent. K-Jet had been on notice.

There was authority that a collateral challenge in respect of administrative acts where a defendant had “clear and ample opportunity”...

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