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Supreme Court rules on Canterbury water-use dispute

1 Dec 2023

| Author: Andrea Hilton

Resource Management Act 1991 ss 5, 14, 30, 45A, 62(1) (a) & (c), 62(3), 91,95A, 104, 127, 136 & 142(2)(a) –Legislation Act 2019, s 10 – Canterbury Land Water Regional Plan (LWRP) s 1 cls 2.1-2.3, s 3, 3.1-3.2, 3.5,3.8 -3.12 & 3.24, s 4, 4.23B,4.4(e) – 4.4(f), 4.5, 4.50, 4.65 & 4.67, s 5 rr 5.6, 5.115,5.121-5.122, 5.128-5.130, 5.133,11.5.41– statutory interpretation

Cloud Ocean Water Ltd v Aotearoa Water Action Incorporated & Ors [2023] NZSC 153

 

An unsuccessful appeal by Cloud of the Court of Appeal’s decision to set aside its consent from Canterbury Regional Council (ECan) to use water for bottling.

A consent to take and use groundwater was transferred to Cloud but the use was for the purpose of wool scouring and Cloud wanted to bottle the water. It applied to ECan for a “use-only” consent. ECan granted a water use consent under LWRP rule 5.6 and merged this new-use consent and the pre-existing consent into one single consent. The judgment also deals with Southridge Holdings Ltd which also obtained its consent to bottle ground water from ECan under rule 5.6.

Aotearoa, a water action group, unsuccessfully challenged the granting of consents to both Cloud and Southridge by the High Court. Aotearoa also claimed ECan should have considered the effects of plastic bottles on the environment and “the adverse effects on cultural values and tikanga”. The Court of Appeal allowed Aotearoa’s appeal, finding that ECan could not grant resource consent for use only and it should have processed Cloud’s consent application under LWRP r 5.128 not r5.6. Therefore, the consent was unlawful.

Cloud appealed to the Supreme Court. ECan took a neutral position in this appeal and since there was “no material difference between Cloud and Southridge’s position, the judgment mainly referred to Cloud.

The issue on appeal was whether ECan was correct to process the consent as a “use-only” application under rule 5.6 rather than under rule 5.128 of the LWRP. Hence the decision focused on statutory interpretation. The majority judgment examined the primary and secondary legislation text, context and purposes while the minority judgment applied the purposive approach to interpretation, considering the LWRP in the context of the RMA, National Policy Statement on Freshwater Management (NPS-FM) and the Canterbury Regional Policy Statement (CRPS).

 

Applicable principles: whether RMA ss14 and 30 require take-and-use to be a single package – whether existing water consent can be disaggregated – whether RMA contemplates disaggregation of existing consent into components – whether LWRP required to expressly state take-and-use are aggregated activities – whether separating take-and-use activities is inconsistent with LWRP policies – whether LWRP objectives and policies help interpretation – whether the LWRP classifies the use activity – whether environmental impact of plastic bottles is relevant – whether consideration of cultural values and tikanga should have been considered.

 

Held: The majority and the minority agreed to dismiss the appeal because rule 5.128 was the correct rule but took different routes to reach their decisions.

The majority held:

  • It is possible that take-and-use could be considered separately because ss 14 and 30 of the RMA do not require take-and-use of ground water to be considered separately, nor in a single package. Rules of the relevant plan or policy statement are determinative; however, the fact that the LWRP does not specifically require take-and-use to be considered together is not significant.
  • Rule 5.6 does not apply because the LWRP classifies “use” as a “component of an aggregated take-and- use activity under rule 5.128”.
  • The LWRP objectives and policies are of little assistance in resolving the interpretation of rules 5.6 and 5.128.
  • The LWRP does not suggest its drafters envisaged that take-and-use consents would be divisible into separate take-and-use consents.
  • A decision on the impact of plastic bottles issue is unnecessary because the appeal has been dismissed. Further leave has been granted to Te Rūnanga o Ngati Awa v Bay of Plenty Regional Council [2023] NZCA 598 where arguments about the effect of plastic bottles will be heard.
  • Neither is it necessary to address the cultural values and tikanga issue because the consent will have to be reconsidered since the appeal has been dismissed. However, the court acknowledged there were failures in that area when processing both applications and those failures should not be repeated.

The minority judgment held that applying the purposive approach leads to a conclusion that rule 5.128 applies to an application for a new use because this rule embodies ECan’s obligations under the RMA to give effect to the NPS-FM and CRPS, specifically “the relevant objectives and policies provide that this is how the risks of inefficient use and overallocation are mitigated”.

 

After 14 years as general counsel for a local authority, Andrea Hilton is now a sole practitioner practising local government law

Cloud Ocean Water 20231120-Cloud Ocean Ltd v Aotearoa Water Action Inc [2023] NZSC 153

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