19 Dec 2007
Environmental and Public Law Bulletin - New Zealand
Welcome to the final edition of the Environmental and Public Law Bulletin for 2007. The Environment and Public Law Team at DLA Phillips Fox would like to wish you the very best for the coming festive season and a happy new year.
This publication includes:
To download a PDF of this publication, please click here.
Swimming pools - the need for clear fencing guidelines
As summer approaches, many Kiwis will seek cool relief from the heat by plunging into their household swimming pools. But tragically, according to statistics, every year 4 to 5 children drown, and 35 to 45 more are seriously injured in pools. To help prevent fatal and near fatal outcomes, pool owners need to ensure that their swimming pools comply with the fencing requirements of the Fencing of Swimming Pools Act 1987 (FOSPA) and Building Act 2004.
However, the legislation does not provide pool owners with clear guidance on how they should fence their swimming pools because there is a disconnect between the FOSPA, on one hand, and the Building Act 2004 and Building Code, on the other.
The general requirement for swimming pool fencing is contained in section 9 of the FOSPA which requires pool owners to fence all or some of the 'immediate pool area' (a relatively uncertain definition in itself) with a fence that complies with the Building Code. This is significant because pool owners are not required to fence their pools in accordance with the more prescriptive fencing requirements set out in the Schedule to the FOSPA. Instead, the Schedule to the FOSPA is only a 'compliance document' under the Building Act (see section 13B FOSPA) so a pool owner will be deemed to have complied with the Building Code if they comply with the Schedule (a position restated in clause 1.2.7 of Acceptable Solution F4/AS1 2007, itself also not an absolutely binding document).
As a compliance document is only one means of complying with the Building Code, pool owners are free to argue that the Building Code has been complied with although they may not have complied with the Schedule to the FOSPA. Alternatively, pool owners may apply to the territorial authority for an exemption from the FOSPA's fencing requirements; or for a waiver or modification of the Building Code under the Building Act.
When considering whether the Building Code has been complied with, or whether to grant an exemption under the FOSPA, or a waiver or modification under the Building Act, the recently 'operative' New Zealand Standard NZS 8500:2006 'Safety Barriers and Fences Around Swimming Pools, Spas and Hot Tubs' is a relevant consideration. The Standard is ultimately intended to replace the schedule to the FOSPA as setting out the standards for swimming pool fencing but is unlikely to be incorporated into the legislation during the term of the current government.
In the meantime, the Standard is useful as a guide to what industry, regulators and water safety interest groups consider to be appropriate swimming pool fencing requirements. Pool owners who have complied with the Standard may attempt to defend their current fencing arrangements as being in accordance with the Building Code.
However, more legislative certainty is required for territorial authorities. Parliament needs to tighten the FOSPA to make the minimum standards for the fencing of swimming pools binding in the absence of an exemption granted under that Act. Perhaps the best way to do this would be to amend the Schedule to the FOSPA by duplicating the Standard and amending section 9 of the FOSPA to require pool owners to fence all or some of the immediate pool area with a fence that complies with the Schedule. That would certainly make enforcement more effective.
Case note: Palmerston North City Council v M D Courtney Orthodontics Limited - CA198/06 [2007] NZCA 521
This recent judicial review case considers the permitted baseline and when public notification of an application for resource consent is required.
The facts
Michael Courtney, an orthodontist, applied for resource consent to convert a residential property into a dental practice. Under the Palmerston North City Council District Plan, health facilities are permitted activities on the relevant site provided that they meet certain performance standards. The proposal did not comply with all the standards and therefore a resource consent was required. The Council investigated Dr Courtney's application and was satisfied that the adverse effects of the proposal on the environment would be minor. The Council therefore decided that public notification was not required and granted consent.
The neighbouring residents brought an application for judicial review of the Council's decision not to notify the application. The High Court found in favour of the residents and the resource consent was set aside. This decision was appealed to the Court of Appeal by Dr Courtney. The Court of Appeal found that the High Court was wrong to have set aside the resource consent granted to the Dr Courtney and restored the consent.
The three main issues identified in the Court of Appeal were:
- Whether the Council had adequately inquired into the noise effects from the property.
- Whether the Council had adequately inquired into the effects the proposed activity would have on traffic and parking requirements in the Avenue the dental practice was to be located.
- Whether the judge had been right to take into account evidence filed on the residents' behalf as to what had happened since the orthodontic practice had commenced.
Court of Appeal ruling
In determining whether the Council had adequately inquired into the noise effects from the property the Court of Appeal supported the Council's application of the permitted baseline test. The permitted baseline test is 'the established principle of assessing the effects of the proposed activity against the permitted baseline, namely "what either is being lawfully done on the land or could be done there as of right": Bayley v Manukau City Council [1999] 1 NZLR 568 at 576 (CA)'. The permitted baseline used by the Council was the Council's noise standard for residential areas which was set out in r 10.9.1. Dr Courtney asserted that he would comply with these standards, and on that basis the Council found that the noise effects from the property fell within the permitted baseline and therefore the noise was an adverse effect the council was entitled to disregard. The Court of Appeal agreed that the noise standard limits were within the permitted baseline, and that no adverse deviation was planned. As the Council had applied these standards in determining the effect, the council had adequately inquired into the effects of the noise. The Court also held that in determining the effects of noise, it is sufficient for an applicant to establish that they will comply with noise standards, unless there is something that will indicate that compliance is unlikely.
Regarding the effects on traffic and parking, the Court of Appeal supported the baseline that the Council had applied in reaching its decision. This baseline was identified from the District Plan provision which imposed an indirect traffic control by stating that the health facility must not involve more than three health practitioners. Dr Courtney had complied with this condition, and so any traffic that would result from his practice was found to be within the permitted baseline. The Court found that through applying the permitted baseline test, the Council had adequately inquired into the effects on traffic and parking.
Lastly the Court held that the judge in the High Court was wrong to take into account evidence as to traffic generated after the resource consent was granted. It was held that this evidence was not relevant as it did not relate to the reasonableness of the Council's decision not to notify based on the information available to it at the time it made its decision.
Case note: Waikato Regional Council v Hydro Energy (Waipa) Limited and Robert Wilkin Neal (District Court Hamilton, Judge Smith, CRI 2007-019-3364, CRI 2006-073-450, CRI 2006-073-447, 12 October 2007)
This is a recent sentencing case that illustrates that in appropriate circumstances the fines the Court is prepared to impose can be substantial.
The facts
A guilty plea to nine charges under the Resource Management Act 1991 (RMA) was entered by Hydro Energy (Waipa) Limited (HEWL). Three charges related to excavation and soil disturbance in and around the Waipa River and Waiharakia Stream and the remaining six to breaches of abatement notices.
Mr Neal pleaded guilty to three charges, excavation of the Waipa River bed, diverting the Waiharakia Stream and soil disturbance in the Waipa River Gorge.
The facts in the matter were complex and the Judge took the somewhat unusual course in a prosecution where a guilty plea is entered of undertaking a site visit Importantly at the time of the site visit some of the works that had been undertaken were significantly greater than at the time the charges were laid. The Court therefore relied on photographic evidence in relation to these works.
A summary of facts (some 27 pages) was largely agreed. However there was a hearing on disputed facts that the Court ruled on separately to sentencing.
HEWL was seeking to build a run-of-the-river hydro-electric power scheme in the upper Waipa River valley near Te Kuiti. Mr Neal was the earthworks contractor for HEWL. The power scheme held a series of consents from the Regional Council and Waipa District Council. The Judge had this to say about the nature of the consents:
Perusal of these consents shows that they are particularly generic in their terms and essentially provide for a consent on the basis that construction will not commence until a CMP [construction management plan] covering all the critical matters of regional concern is provided. That CMP must be approved by the Regional Council, based upon technical certification ...
The actual mechanism for such technical certification and/or approval, however, is not set out in the consent. Nor are the particulars of the content of the CMP or the various requirements to be achieved. Not unnaturally, given the size and complexity of this project, this led almost immediately to ongoing problems between HEWL and the Regional Council.
In relation to works affecting the Waipa River it was not alleged that there would have been any significant effect upon the Waipa River as a result of these works. The Judge also found that the Stream was already compromised. This is to be contrasted to the effects of constructing a track down the Waipa Gorge which the Judge accepted the Regional Council estimate that around 32,000m2 of land was either cleared or subject to the side cast work (ie 8,100m2 for the Rock Spill).
The abatement notices generally applied to both the gorge track and the Waiharakia Stream and are essentially related to sediment and erosion control mechanisms not being installed at various periods. While there was debate about the nature and extent of the abatement notices between HEWL and the Regional Council, it was accepted that that notices were not complied with and the non-compliance was for a longstanding period.
The Court discussed whether or not it ought to make enforcement orders as part of the suite of matters it can consider in such cases. The input from the parties, particularly the Regional Council, was influential in the Court's decision on making orders. The Court concluded that orders in relation to remedial works related to the Rock Spill ought to be made.
Sentencing principles
Having traversed the facts and related issues the Court then went onto consider the relevant sentencing principles. The sentencing principles considered by the Court are those laid down in the seminal case on RMA sentencing - Machinery Movers Limited v Auckland Regional Council [1994] 1 NZLR 492, and the provisions of the Sentencing Act 2002. Of particular note the Court paid due attention to the following Court of Appeal statement in Machinery Movers:
In combination these changes [to the RMA] constitute a clear legislative direction for the Courts to ensure that higher penalties are imposed which would have a significant deterrent quality. If fines are too low they will be regarded as a minor licence fee for offending.
In terms of the enforcement orders for remedial works that the Judge had already flagged, these were considered to constitute "reparation" in accordance with the Sentencing Act principles. This was important in this case because the defendant argued any costs incurred for remediation works should be deducted from the amount of the fine that the Court would otherwise impose.
The Court concluded that the remedial work it was to order would not overcome the environmental damage caused. Rather its impact would be to reduce the potential impact in the future of the Rock Spill.
Setting the fines
The Court accepted the agreement of the parties that a fine was the appropriate course of action to take in sentencing. The Court then considered the various matters set out in the Machinery Movers case and the Sentencing Act including:
Nature of the environment affected (in this case the Rock Spill).
Extent of the damage inflicted (again the Rock Spill was the worst affected).
The deliberateness of the offending. (A distinction between the company and its contractor was drawn. The former knew there was no approval for the works. The latter ought to have known or found out but clearly did not know from first hand knowledge. However, in the scheme of things the deliberateness of offending was the highest end of the scale particularly for the company.)
The attitude of the defendants. (Again a distinction between the two defendants was made. Mr Neal was helpful with investigations and showed genuine remorse for his actions. The Court did not form the same view about HEWL however held that this issue was a minor aggravating factor linked closely to the issue of deliberateness.)
The Court then weighed up these factors and formed a view as to the starting point (ie a base level of fine) for each of the charges it was considering. At the lower end of the scale for some of the soil disturbance matters the starting point was $5,000. This rose to $70,000 for the Rock Spill. The abatement notice offences sat somewhere in the middle at $30,000.
After reflecting on the legal and other costs being sought by the Regional Council the Court went on to consider the matters in totality. In total the fines and costs the Court had reflected on would amount to some $220,000 ($48,800 in costs and some $100,000 in remedial costs). The project value was in the order of $15 million. Therefore the total financial penalty would be in the region of 2.5% of the cost of the project. The Court did not consider that this percentage was out of keeping with the type of offences that had occurred. In fact the Court said something in the region of $500,000 would be more in keeping.
The Court then went on to apportion the penalty to the two defendants and concluded that the maximum that Mr Neal ought to pay, taking into account all the factors including his ability to pay, was $30,000. The total penalty against HEWL was in the order of $130,000 plus remediation costs which were at the estimated to be around $100,000.
Of note is that the remediation costs could in fact be substantially higher but the Court concluded that even if they were as high as $300,000 this would not affect the outcome on fine and costs.
Case note: Coromandel Watchdog of Hauraki Incorporated v Chief Executive of the Ministry of Economic Development And Anor CA CA285/05 (31 October 2007)
The status of a 'prohibited activity' specifically in relation to mining was under review in this recent case heard by the Court of Appeal.
The facts
The environmental group, Coromandel Watchdog, sought and got special leave from the Court of Appeal to answer the following question:
Did the High Court err in holding that if a prohibited activity status can only be used when a planning authority is satisfied that, within the time span of the Plan, the activity in question should in no circumstances ever be allowed in the area under consideration?
The short answer is the Court of Appeal said yes the High Court did err, and it remitted the matter in issue back to the Environment Court.
The matter at issue concerned mining in the Coromandel - an issue of some considerable history.
Of particular note is who the parties in this case actually were. As noted Coromandel Watchdog (a well known opponent of mining in the Peninsula) was the appellant. The other parties were interesting in terms of who they are and why they were involved. Note the Thames Coromandel District Council (TCDC) was not a party to this appeal though it was in the earlier related proceedings.
The Ministry of Economic Development (MED) and the New Zealand Minerals Industry Association (NZMIA) - the respondents - had similar interests. Both wanted to see the proposed district plan give appropriate recognition of mineral and aggregate resources and the provision of their use. By way of context parts of the Coromandel are known to have significant deposits of gold and silver.
The two Auckland Councils (the city and the regional) sought and achieved status as interveners. As councils they were interested in the general question being asked by Coromandel Watchdog though obviously not the specifics relating to mining in the Coromandel.
Mining in the Coromandel has a long and tortious resource management history that culminated, in the case of these proceedings in the TCDC providing in its decisions versions of the proposed district plan that mining would be a prohibited activity in the conservation and coastal zones, and in all recreation and open space policy areas. In all other areas and zones it was non-complying.
The matter, not surprisingly went to the Environment Court. By the time of the hearing TCDC had modified its stance and moved more towards the position that MED and NZMIA were requesting. Needless to say this stance did not meet the concerns of any of the parties.
Defining a 'prohibited activity'
During the course of the Environment Court's consideration, a philosophical debate arose was as to whether prohibited activity was an appropriate status where a planning authority did not necessarily rule out an activity, but wished to ensure that a proponent of the activity would need to initiate a 'plan change'. The Court of Appeal summarised the Environment Court's position as:
[3] In short, the Environment Court held that prohibited activity status should not be used unless an activity is actually forbidden. In the words of the Environment Court (at [13]), prohibited activity status "should be used only when the activity in question should not be contemplated in the relevant place, under any circumstances". In particular, the Environment Court held at [12]:
It is not, we think, legitimate to use the prohibited status as a de facto, but more complex version of a non-complying status. In other words, it is not legitimate to say that the term prohibited does not really mean forbidden, but rather that while the activity could not be undertaken as the Plan stands, a Plan Change to permit it is, if not tacitly invited, certainly something that would be entertained.
[U]nless it can definitively be said that in no circumstances should mining ever be allowed on a given piece of land, a prohibited status is an inappropriate planning tool.
An important factual finding of the Environment Court (in the view of the Court of Appeal) related to the Court's criticism of TCDC for inconsistency in its treatment of some activities that had essentially the same effect as mining - ie quarrying and production forestry.
In essence, the case for Coromandel Watchdog was that the Environment and High Court were wrong in holding that the Council was incorrect to categorise mining as a prohibited activity in circumstances where the Council contemplated the possibility of mining activities occurring, but wanted to ensure that such activities could only occur if a plan change was approved. In short the criticism of the Environment and High Court's decisions were that they had set the test for prohibited activities too high.
In considering the primary question posed by Coromandel Watchdog the Court of Appeal provides a detailed overview of the provisions of the RMA relevant to prohibited activities and all those sections that pertain to plan formulation. The Court examined the interplay between sections 5, 32 and 75, observing:
[28] The important point for present purposes is that the exercise required by s 32, when applied to the allocation of activity statuses in terms of s 77B, requires a council to focus on what is "the most appropriate" status for achieving the objectives of the district plan, which, in turn, must be the most appropriate way of achieving the purpose of sustainable management.
The Court also recognised that in addition to the s32 cost/benefit analysis, the Council must also have regard to its functions under section 31, the Part 2 purpose and principles, section 74 matters, and in relation to rules, the actual or potential effect on the environment of activities, including any adverse effects.
The Court agreed that none of these requirements and criteria gave support to the restrictive interpretation of prohibited activity that had been adopted by both the Environment and High Courts, to recap that prohibited activity status is only appropriate for absolutely forbidden activities.
The two intervening Councils had a slightly different position than that of the Coromandel Watchdog. They supported the case that the test for prohibited activities was not that high but said that having regard to section 32's emphasis on the most appropriate outcome, a prohibited activity classification could be imposed validly in a wide range of circumstances. These circumstances, included:
- Where a planning authority has insufficient information as to the likely effects and takes a precautionary approach, even though it does not rule out the possibility of that activity being permitted in the future.
- Where the Council takes a purposively staged approach or wishes to ensure a comprehensive development.
- Where it is necessary to allow an expression of social or cultural outcomes or expectation, for example prohibited nuclear power was expressly mentioned. Another example is the debate over GE crops.
- Where the classification is intended to restrict the allocation of resources, for example aquaculture location.
- When a council wishes to establish priorities otherwise than on a 'first in first served' basis.
The judgment
The Court of Appeal did not comment in detail on the merits of the particular scenarios posed by the interveners but noted that in some of the cases the 'bright-line' test of the Environment Court would not be met (that is that a local authority must consider that an activity be forbidden outright, with no contemplation of any change or exception, before prohibited activity status would be appropriate). The Court went onto observe, however, that having regard to the broad considerations applying to the formulation of a plan, a local authority could rationally conclude that prohibitive activity status was the most appropriate status.
The Court went on to comment that councils should not use a prohibited activity classification to defer undertaking an evaluation of a particular activity until it received a specific application to do so.
Overall the Court of Appeal agreed with Coromandel Watchdog's submission that prohibited does not mean forbidden (as held by the Environment Court).
There was some debate over whether the matter ought to be remitted back to the Environment Court in the circumstances. That is the substantive matter had moved on since the case had been heard in the Environment Court with the parties having been in negotiations. The Court of Appeal was unable to conclude that the Environment Court's decision would be unaffected by the appeal and remitted it back to that Court.
Climate change policy update
In May this year it was announced that New Zealand would aim for an emissions trading scheme (ETS) as a priced-based measure to address climate change. The ETS for New Zealand will, over time, apply to all sectors and all greenhouse gases. Sectors covered under the scheme include forestry, liquid fossil fuels, stationary energy, industrial processes, agriculture and waste.
The ETS is a cap and trade scheme, with the overall cap for the period 2008-2012 being the cap on New Zealand emissions under the Kyoto Protocol. New Zealand emission units (NZUs) are the primary domestic unit of trade under the scheme, and are equal to one metric tonne of CO2. Participants in the scheme will have an obligation to hold NZUs to match the emissions levels for which they are responsible.
On 4 December 2007, the draft Bill relating to the ETS was introduced in the House, accompanied by a change to the Electricity Act 1992 which places a moratorium on new fossil-fuelled electricity generation. The ETS appears relatively unchanged from the main points outlined in the draft documents released in September 2007. Over the coming months the Bill will go through the select committee and public consultation process.
The Bill has now had its first reading (12 December) and has been referred to the Finance & Expenditure Select Committee. A date for the submission period has yet to be set but is expected to be mid March 2008.
Even though only 200 companies will be directly affected by the ETS the indirect effects will be felt by everyone. All businesses need to evaluate the effect of the scheme on their operations, and make a decision whether to participate in the select committee process.
For more information, please contact:
Lucie Drummond
Lawyer
Tel +64 9 300 3862
lucie.drummond@dlaphillipsfox.com