In its recent decision in Clutha District Council v Otago Regional Council [2022] NZHC 510 the High Court has considered the relevance of the end-use of water to the term of a water-take permit for a community water scheme.

Key Point:

• The High Court held that the Environment Court was correct to consider the end-use of water when considering the environmental effects of a proposed water-take for a community water scheme under section 104 of the Resource Management Act 1991, and the appropriate term of consent.

Background

The Clutha District Council (District Council) applied to the Otago Regional Council (Regional Council) to renew its consent to take water from the Clutha/Mata-Au River for the Stirling (Bruce) community water scheme (Scheme) as a controlled activity.  While the District Council sought a consent duration of 35 years, the Regional Council granted consent for only 25 years. 

On appeal, the sole issue before the Environment Court was the duration of the consent.  The Environment Court upheld the Regional Council’s decision, in part because a significant portion of the water taken from the river (up to 30%) was used for washing down dairy sheds.  Less than 20% of the water supplied under the Scheme was used for human consumption.  The District Council appealed the Environment Court’s decision on questions of law, and the High Court upheld the Environment Court’s decision. 

High Court decision

In the High Court the District Council’s main argument was that the Environment Court made an error of law in considering the end use of water from the Scheme, because the effects of that use were too remote. The District Council argued that consent was sought only for the take of water for supply to the Scheme, not the subsequent use of water by the third parties supplied by the Scheme.

Nation J held that the end-use of the water for dairy shed wash, and the subsequent discharge of that water to the environment, were sufficiently connected to the water take.  They were therefore effects the Consent Authority should had to have regard to when determining the duration for the consent. His Honour held that it was appropriate to consider the end use of the water and its effects for the purpose of achieving integrated management under the RMA and for the purpose of promoting the “sustainable management of natural and physical resources”. It did not matter that the end use of the water was also “subject to management under the RMA and by the Regional Council”.

The Court noted the physical connection between the water take and the end use: up to 30% of the water supplied to the scheme was already being used for dairy shed wash: the use was more than just was more than inevitable or foreseeable.  As the owner of the Scheme the District Council was effectively providing water directly to the properties, determining who water was allocated to, and therefore to a certain extent how that water was used.

Nation J considered, but distinguished, previous High Court decisions in Aotearoa Water Action and Te Rūnanga o Ngāti Awa.^[1]  In those cases, the adverse effects of consumers discarding plastic bottles were found to be too indirect or remote to require consideration in an application for a water permit to take water from the aquifer.  Nation J held that the use of water for dairy shed wash and the associated discharges of it were physically much more connected to the initial take than was the case with the potential discarding of water bottles in Aotearoa Water.^[2]

The Court also noted the directions in the National Policy Statement for Freshwater Management 2020 (NPS-FM) that:

• Freshwater is managed in a way which gives effect to Te Mana o te Wai (Policy 1).  The Court noted that Te Mana o te Wai inherently connects water to the broader environment;
• The management of freshwater considers the effects of the use and development of land on a whole-of-catchment basis (Policy 3); and
• Regional councils must give effect to Te Mana o te Wai and in doing so adopt an integrated approach to freshwater management (clause 3.2(2)(e)).

Our Comment

The High Court’s decision makes clear that where an applicant for consent has a high degree of control over the end use of water, the assessment of effects of a proposed water take needs to consider the end use of that water.  By contrast, it suggests that where there is not a sufficient nexus between the water take and the end use, or where the effects of the end use are too remote, the end use will not be relevant.  The case may be less relevant to large scale municipal water takes, where concepts such as the consent holder’s control over the end use (an influential factor in this case) will be less applicable.

There is clearly some logic to the position of end use being relevant when considering a water take.  The positive effects of a proposed water take, which are relevant under section 104 of the Act, will almost invariably be based on the end use of that water.  On the other hand, in this case the end use was seen as having a relevant adverse effect, and had a negative rather than positive impact on the term of consent granted. 

Underlying the High Court’s approach is the hierarchy of prioritised obligations that form part of Te Mana o te Wai under the NPS-FM.  Those obligations are the:

1. health and well-being of water bodies and freshwater ecosystems;
2. health needs of people (such as drinking water);
3. ability of people and communities to provide for their social, economic, and cultural well-being, now and in the future.

Given evidence that approximately 80% of the water from the Scheme was used for stock water and dairy shed use, the use of most freshwater from the Scheme was of a lesser priority in terms of the NPS-FM, and the 25-year consent term reflects that.  In other cases, for example where the proposed end use is generally for drinking water purposes, the NPS‑FM and Te Mana o te Wai may support a longer consent term.

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Get in touch with one of our contacts (pictured to the right) if you would like to understand the implications of the decision for your resource consent application.