The Supreme Court's decision in Port Otago Limited v Environment Defence Society[1], released yesterday, unanimously found that the Court of Appeal erred in holding that the ports policy in the New Zealand Coastal Policy Statement (NZCPS) was subordinate to the policies which directed that certain effects be avoided.

In coming to that conclusion, the Supreme Court has provided guidance as to how plan makers should address the conflicts between competing policies in national policy statements (NPSs) made under the Resource Management Act 1991 (RMA).

Gerald Lanning and Chris Ryan of Simpson Grierson’s Planning and Environment team are representing Auckland Council in the Royal Forest and Bird Protection Society of New Zealand v New Zealand Transport Agency appeal, which was heard by the Supreme Court in November 2021 (that decision is still reserved). As a part of that appeal, they also made submissions to the Supreme Court on behalf of Auckland Council during its hearing of the Port Otago appeal.

In this article we briefly discuss the background to the proceedings, the Supreme Court’s decision, and its impact.

Background and the Court of Appeal’s decision

The proceedings relate to the proposed Otago Regional Policy Statement (proposed ORPS). Once in force, the proposed ORPS must be given effect to by lower order planning documents, such as the Otago Regional Plan and the Dunedin City Plan. However, the proposed ORPS itself must "give effect" to the New Zealand Coastal Policy Statement 2010 (NZCPS) and other NPSs. Policy 13 of the NZCPS requires that adverse effects in areas of outstanding natural character are “avoided”.

Port Otago Limited appealed the Otago Regional Council’s (ORC) decisions on the proposed ORPS, seeking an additional policy providing for port activities at Port Chalmers. The Environment Court recommended a policy that allowed adverse effects from the operation or development of Port Otago in areas of outstanding natural character to be “avoided, remedied or mitigated”.

Both the High Court and Court of Appeal held that the policy, as worded by the Environment Court, did not “give effect” to the avoidance directive in the NZCPS, as that test had been formulated by the Supreme Court in its previous King Salmon decision. In King Salmon the Supreme Court held that the requirement to “give effect” to the NZCPS created a “strong direction”, and so where the NZCPS directed that effects were to be “avoided” that term should be given its ordinary meaning of “not allow” or “prevent the occurrence of”. The Court in King Salmon also held that it was unlawful to read down a NZCPS "avoid" policy by balancing it against all of the other relevant interests when making a decision.

The Court of Appeal confirmed that approach, holding that "a bottom line requiring adverse effects be 'avoid[ed]' cannot be substituted with 'avoid, remedy or mitigate'" on the basis that the latter formulation fundamentally dilutes the former. Policy 9 of the NZCPS, which requires that ports are “recognised", was therefore to operate within the bounds set by the more directive avoidance policies, such as policy 13 of the NZCPS.

The Supreme Court overturned the Court of Appeal's decision

The key difference between the two courts is that the Supreme Court considered that both of the NZCPS policies at issue were directive. While the Court held that NZCPS "avoid" policies have a directive character, it also held that the combined effect of the verbs "recognise" and "require" was directive in nature, such that policy 9 made provision of a port network mandatory.

In doing so, the Supreme Court endorsed Miller J's partial dissent in the Court of Appeal where His Honour interpreted policy 9 as giving the ORC no choice but to provide for the existing port at Port Chalmers.

The Supreme Court considered that conflict between competing directive policies, such as policies 9 and 13, should be done in regional policy statements and regional plans. However, accepting that it may not be possible for planning instruments to entirely resolve conflicts between competing policy objectives, the Court went on to provide guidance as to how decision-makers on resource consents should address the potential conflict between the ports policy and the avoidance policies in the NZCPS.

In providing this guidance, the Court appears to have softened the approach it took previously in King Salmon. Despite having previously held that a policy in the NZCPS could be so directive that "it may nevertheless have the effect of what in ordinary speech would be a rule", this new decision suggests otherwise. The Court held that:

…There can be no presumption that one directive policy will always prevail over another… The appropriate balance between the avoidance policies and the ports policy must depend on the particular circumstances, considered against the values inherent in the various policies and objectives in the NZCPS (and any other relevant plans or statements).

Does "avoid" really still mean "avoid"?

The Court was clear that it did not consider this approach to be a return to the "overall judgment" approach rejected by the Court in King Salmon, on the basis that the reconciliation of competing policies should be done though a disciplined, analytical framework. The Court provided an example of such a framework in its discussion of how the resource consent decision-makers should address the potential conflict between the ports policy and avoidance policies of the NZCPS.

Nevertheless, we consider that the Supreme Court's approach does provide greater scope for decision-makers to weigh up competing policies, and so it is no longer as clear that "avoid" requires the prevention of the occurrence of certain effects. For example, the Supreme Court considered that it would be acceptable for a resource consent to result in a narrow breach of an avoidance policy if that was required to provide for the safe and efficient operation of a port. The Court also accepted that the concepts of "mitigate" and "remedy" may serve to satisfy an "avoid" directive, by bringing the level of harm from an activity below a material threshold.

Although the RMA is being replaced, this decision will remain influential

While the RMA is still operative, the Supreme Court's decision will clearly be highly influential.

First, the decision provides direction to Council's preparing plans and plan changes, and to private plan change applicants, as to how national direction is to be interpreted, reconciled (where tension exists) and given effect to. The decision emphasises that conflict between higher order national direction is most appropriately resolved in regional policy statements and regional plans.

Second, the decision provides an exemplar framework for the resolution of conflict at the resource consent stage between competing policies in higher order planning documents.

The decision is also likely to be influential in the future, despite the replacement of the RMA by the Natural and Built Environment Act 2023 (NBEA). As we summarised in our previous article (see here), the NZCPS and other NPSs are going to be subsumed into the National Planning Framework (NPF). The NPF will provide one comprehensive framework, and is intended to (as much as possible) address any conflict between existing national documents. It is possible that the NPF will take some guidance from the Supreme Court’s decision in setting out principles for resolving conflicts.

However, it is likely that some conflict between various NPF policies will remain, as plans made under the NBEA will still be required to “give effect” to the NPF. Therefore the Supreme Court’s approach to reconciling conflicts between various directive policies that must be given effect to, is likely to be influential on regional planning committees and Courts as they consider the first NBEA plans.

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To learn more about this decision and its implications, please contact one of our experts listed below.

Special thanks to Chris Ryan for his assistance with the case, and writing this article.

 

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