Palmerston North Airport Limited v Palmerston North City Council [2026] NZHC 224 is a judicial review of a decision to process a resource consent application for a resource consent on a non-notified basis.  The High Court was required to consider the extent to which environmental decision makers can accept the assurances of resource consent applicants that a proposal will comply with certain requirements without interrogating the evidence or feasibility of those assurances.  The High Court was also called upon to consider whether a series of errors in the information that was before the decision maker were material to the decision to process the application non-notified.

The Airport Development Proposal

The Palmerston North Airport (the Airport) is unlike other airports in residential areas as it operates 24 hours a day. The Airport’s masterplan recorded that businesses are likely to be attracted to the surrounding area to take advantage of proximity to the Airport. In this case, Paul Barris and Brian Green Properties (Palmerston North) Limited (the Developers) intended to do exactly that through a joint venture to build a commercial storage facility. The proposed building would consist of 296 units, with external dimensions of 198 by 27 metres. Importantly, if built as planned the nearest edge of the building would be 150 metres from the south-eastern corner of the runway.

In late 2023, the Developers first applied to the Palmerston North City Council (the Council) for a resource consent on a non-notified basis. However, in September 2024 an Independent Commissioner appointed by the Council (the Commissioner) determined that the application should be the subject of limited notification to enable the Airport to make submissions as an affected person.

Instead of proceeding on a notified basis, the Developers submitted an amended application in October 2024, which sought to address the aspects affecting the Airport. The Commissioner allowed the application to proceed on a non-notified basis, and a subsequent resource consent was issued on 17 February 2025.

Judicial Review of Notification Decision

The Airport sought judicial review of the Commissioner’s decision that the application could proceed on a non-notified basis. The Airport submitted that the information advising the Commissioner’s decisions was materially inaccurate and therefore, it should have been quashed. The Developers acknowledged that there were some errors, but they argued that the errors would not have made any difference to the notification decision and therefore, it should stand.

The Developers engaged an expert aviation industry consultant who prepared four formal reports in support of the application. The expert ensured that the storage facility complied with both the requirements in the District Plan and the Civil Aviation Rules. The particular rules at issue in this case were the obligations to have sufficient Airport Protection Surfaces (APS) to keep the runway clear of obstacles, and a Runway End Protect Area (REPA) to protect people on the ground in the event of an accident.

The initial resource consent required notification because the construction phase was expected to penetrate the APS, creating potential adverse effects for the Airport. In the revised application, however, the developer made a series of minor amendments and assured the Commissioner that it no longer sought consent to breach the APS, either during construction or once the facility was completed. On that basis, the Commissioner accepted that the consent would not authorise any such breach.

In the revised application, the maps showed that part of the facility would fall within the REPA. In order to comply with the REPA, the Developers added a condition to the application in which no more than nine people would be allowed inside the facility at one time through a technology-based solution. The Developers proposed that every business at the facility would be issued with an access card which they must tap to enter and leave the building. Once nine people are inside the building, no-one else will be permitted to enter until someone leaves, ensuring the development always adheres to the nine-person limit under the District Plan.

The revised application addresses the APS issue by proposing dig the stormwater trench in a shape that curved away from the runway, as opposed to running parallel with it. This would provide an extra 90 centimetres of head room for aircrafts to pass over.

It was uncontested that the information provided in the revised application contained several errors. Such errors meant the proposed changes were no longer viable. The issue before the Court was whether those errors were sufficiently material to justify setting aside the Commissioner’s decision not to notify. The first error was that the planning maps failed to show that the facility and its entire carpark would be inside the REPA. The second was that the plans did not reveal that the whole building would permanently protrude above the APS. The final issue was that the Commissioner had been led to believe that a similar development would be acceptable near an airport in the United States, but this proposition was incorrect.

JV argued that the errors were immaterial and that it was up to the JV to find a lawful solution and it did not matter that it had not done so yet. In response, PNAL’s counsel submitted that it was impossible to be confident the Commissioner would have recommended the application proceed on a non-notified basis if she had been aware of the true picture. For example, it was difficult to imagine how the JV proposed to build such a major structure without construction equipment or earthworks ever protruding more than a couple of metres into the air. If such a feat is possible, counsel submitted it was at least incumbent upon the developer to give the Commissioner an idea of how the work might be undertaken without breaching the APS zone.

Outcome

The Court held that these errors were fundamental, given the scale of the facility and its proximity to the runway. These mistakes cannot be characterised as immaterial as they deprived the Commissioner of the necessary evidence to properly assess the development discount the risks it created. Therefore, the Commissioner’s notification decision and subsequent resource consent were set aside.

If you need advice on any of the issues raised in this article, please contact Joanna Beresford | Environmental Partner | 021 114 1277    

Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only. It is provided without charge, is not comprehensive, and does not provide legal advice or other advice. Please seek independent advice before acting on any information in this article.

The RMA as introduced was founded on the notion of public participation. The concept was that it was fundamental for local authorities to have the information needed to properly assess the effects of proposals on the environment. On this basis, the public would be expected to be accepting of development proposals in their community, safe in the knowledge that potential issues would be thoroughly canvassed and the effects of development, avoided, remedied or mitigated.

Successive legislative amendments to the RMA have progressively eroded this approach. New plan making processes have evolved the planning system to become more focused on speed and efficiency (and more recently achieving development outcomes) over public participation. These processes may be fast, but as this article explores, they may also come at a significant increased cost if planning durability is compromised.

RMA Public Participatory Regime

Public participation has been regarded as a fundamental pre-requisite for achieving sustainable development since the World Commission on Environmental Development published the Brundtland Report. The primary objective of the Brundtland Report was to address sustainable development; however, it simultaneously created a platform for public participation. The Brundtland Report said:

“The law alone cannot enforce the common interest. It principally needs community knowledge and support, which entails greater public participation in the decisions that affect the environment. This is best secured by decentralizing the management of resources upon which local communities defend, and giving these communities an effective say over the use of these resources. It will also require promoting citizens’ initiatives, empowering people’s organizations, and strengthening local democracy.”

The RMA was founded on the principle that increased public involvement in resource management processes results in more informed decision making, and ultimately better environmental outcomes^.. In Westfield (New Zealand) Ltd v North Shore City Council [2005] NZSC 17 the Supreme Court stated that the objective of these participatory mechanisms was to recognise and protect the rights and interests of those affected and enhance the quality of decision making. This was the prevailing ethos for the first two decades of the RMA’s existence, with the proposition that increased public involvement in resource management processes results in more informed decision making, and ultimately better environmental outcomes, described as a founding principle of the RMA.

Successive Shifts in Plan Making Process

Under the original process, when a council initiates a plan change, it is required to notify the public. At the council level any person can make a submission on the proposed plan change. After initial submissions, there is a further submission stage where people can support or oppose other submissions. Hearings are required, allowing submitters to present their views and evidence for consideration. Decisions on the submissions require explanations as to whether they are accepted or rejected. Submitters retain full rights of appeal to the Environment Court with a hearing de novo on the merits. In addition, in relation to resource consents the original process was that notification of the application, which triggered a submission process, was presumed to have to occur.

In 2009 a fundamental shift occurred with the enactment of the Resource Management (Simplifying and Streamlining) Amendment Act 2009, which removed the statutory presumption of notification in resource consenting.

Since that time there have been conscious efforts aimed at curbing the significant amount of the time taken for plans to become operative, in particular the time spent resolving appeals to the Environment Court. Initially bespoke processes were to address urgent issues in particular regions, but the principles were later incorporated into the RMA generally. In terms of bespoke processes:

• The Auckland Unitary Plan hearing process, introduced by the Local Government (Auckland Transitional Provisions) Act 2010, was a streamlined process where an Independent Hearings Panel (IHP) heard submissions and made recommendations that Auckland Council then decided on. The rights of appeal to the Environment Court were limited to where Auckland Council departed from the IHP’s recommendations, otherwise appeals were limited to the High Court on points of law.
• A similar process was adopted following the Canterbury Earthquake Recovery Act 2011, where instead of the Christchurch City Council (CCC) hearing submissions itself, an IHP was appointed to conduct hearings and make decisions on the proposed replacement Christchurch District Plan. Decisions made by the IHP had a limited right of appeal to the High Court, restricted to points of law only.

Subsequently, the Resource Legislation Amendment Act 2017 introduced a new Streamlined Planning Process (SPP) under which councils can request, directly from the Minister, a process to address matters such as the implementation of national direction and/or a significant community need (or urgency). Once agreed, the Council must follow the SPP as set out in the Minister’s direction. There are no general appeal rights on decisions made under a SPP (with recourse to the High Court only through judicial review or via an appeal on a point of law).

The Shift from Local to Central Planning in Urban Environments

In 2020 with the promulgation of the National Policy Statement on Urban Development (NPS UD) central government became more directive about the specific outcomes sought in plan making in urban environments, particularly in our largest centres.

The key direction is found in Policy 3, requiring city centres to realise as much development capacity as possible, and for metropolitan centres and areas within a walkable catchment of city centres, metropolitan centres and existing and rapid transit, to enable at least six storey buildings. Subsequent legislative amendments have shifted from only directing a planned streamlining process to also directing specific planning outcomes:

• This was followed by the Resource Management (Enabling Housing Supply and Other Matters) Amendment Act 2021 (Housing Supply Amendment Act), a bi-partisan amendment, which amended the NPS-UD, introduced the highly prescriptive Medium Density Residential Standards (MDRS) enabling at least three, three storey dwellings across all other areas of urban environments (unless a council could point to a qualifying matter – such as a matter of national importance or for instance special character ).
• The prescriptive outcomes sought by Housing Supply Amendment Act were coupled with the introduction of another bespoke planning process – the Intensification Streamlined Planning Process (ISPP). The ISPP moved further away from full public participation towards a focus on efficiently achieving the centrally specified outcomes with limited or no public participation. It required councils to promulgate, notify, hear and decide intensification planning instruments (IPI) (special plan changes to implement the NPS-UD and MDRS) within specified and shortened time frames, with no ability to withdraw an IPI and no rights of appeal.

Enduring Environmental Outcomes?

In Auckland and Christchurch, the MDRS and IPI plan changes were not popular nor were they enduring.

Christchurch

In 2022, CCC initially voted not to notify an IPI. Following a Ministerial investigation under s 24 of the RMA, CCC accepted that it was legally obliged to notify an IPI (and did so in the form of Plan Change 14 (PC14)) but in doing so noted that it did not work well for the City. A key concern for CCC appeared to be the shift away from the RMA’s public participatory model that allowed communities to have meaningful input into the types of urban environments they wished to live in, as expressed in a letter from the CCC Mayor’s office in March 2023:

But above all else, the concern felt by most people – which is shared by our Council – is that the public have had very little say in the development and implementation of these rules. The Act requires councils to undertake specific actions. Even once the plan change is notified, there is little scope for a community to respond or amend if it is outside of the Act’s parameters …

Auckland

Auckland notified its IPI, Plan Change 78 (PC 78) as required in August 2022, but it was not without problems. PC 78 excluded a large area of central Auckland within which the Auckland Light Rail (ALR) corridor route was anticipated. The ALR corridor was intended to be upzoned via a variation to PC 78 following confirmation of the ALR route. PC 78’s use of a special character qualifying matter was controversial, in the context of the ongoing debate about maintaining the quality of urban environments as opposed to intensifying to allow a greater quantity of dwellings. There was also strong community opposition on the grounds of inadequate infrastructure, particularly in relation to stormwater. Following the Auckland Anniversary Weekend and Cyclone Gabrielle flooding in January and February 2023, Auckland Council recognised that a variation to PC 78 was required to address new flood hazard modelling. Ultimately, the ALR did not survive a change of Government, multiple extensions were required to the PC78 timeframes, and the problems of PC 78 became insurmountable.

The Next Round – Auckland’s PC120

National campaigned on the basis that it would make the MDRS “optional” and, following a change of Government, the Resource Management (Consenting and Other System Changes) Amendment Act 2025 (Amendment Act 2025) was enacted. The Amendment Act 2025 again directs specific planning outcomes which introduces alternative intensification provisions for Auckland and Christchurch:

• In Christchurch, CCC was allowed to withdraw the remaining parts of PC14 that proposed to implement the MDRS, without a replacement plan change, on the basis that CCC could demonstrate that its planning framework enables at least 30 years of housing growth.
• In Auckland, the Council was allowed to withdraw the remaining parts of PC 78, including the MDRS on the basis that it would promulgate an alternative plan change (Plan Change 120 (PC 120)) using an SPP that would provide at least as much housing capacity and enable fifteen storeys within walkable catchments of three urban city rail link stations and ten storeys around two suburban city rail link stations.

Submissions on PC 120 closed in December 2025 but media reports on community meetings suggest the proposed level of intensification will be controversial. The most controversial aspects are likely to be those mandated by the Amendment Act 2025, and these will be matters that Auckland Council cannot address through the submission and hearing process as they are prescribed by legislation.

The 20-month timeframe for PC 120 spans the next electoral cycle. It will be interesting to see whether exclusion of these matters from the full rigours of RMA public participation results in acceptance (which would in fact achieve the aims of faster and enduring planning processes) or elevates debate on these planning matters to a political level, which in the case of the MDRS and PC 78 and PC 14 was time consuming and fallible to change in central Government direction.

Early indications are that PC120 may be similarly fallible.  The Council received around 10,000 submission on PC120 and, although the summary of submissions has yet to be released at the time of writing, the collective tenor of those submissions can perhaps be gleaned from observing that just five working days after the close of submissions the media was already reporting on a soon to be announced central Government U-turn on the controversial housing targets.

Building Consensus in a Centrally Directed System?

While the RMA has been a political football in recent years, the above records that there have been many attempts to mould planning processes under the guise of the need for efficiency since 2009. At present, the RMA stands to be repealed and replaced, but, as the history of recent years has shown, change is constant.

NZPI’s recent paper, The Role of The Planner, identified the functions of planners as including being pragmatic arbiters of conflicts, and intermediaries between communities and the planning system who apply creative thinking and a collaborative approach to align community outcomes with the requirements of the planning system.  The Paper also envisaged that where the political and legislative context for planning changes relatively frequently through political cycles, there is also an opportunity to build consensus across political boundaries, both in central and local government, that endures regardless of the political ideologies of the day.

Disputes and disagreements about the environment do not go away simply because the ability for communities to influence planning outcomes is more constrained. Arguably there will be greater need to find other avenues for avoiding entrenched division and building consensus. Recent history has told us that communities always find a way to fight back either through the legal system or the ballot box.

If you need advice on any of the issues raised in this article, please contact Joanna Beresford | Environmental Partner | 021 114 1277    

Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only. It is provided without charge, is not comprehensive, and does not provide legal advice or other advice. Please seek independent advice before acting on any information in this article.

The Supreme Court recently released its decision in Cloud Ocean Water Limited v Aotearoa Water Action Incorporated [2023] NZSC 153 (Cloud Ocean Water) and the Court of Appeal has also considered the end use of water in Sustainable Otakiri Incorporated v Whakatāne District Council and Te Rūnanga O Ngāti Awa v Bay of Plenty Regional Council (Sustainable Otakiri).   In this article, Resource Management and Environmental Partner, Joanna Beresford, explains what the two cases are about.

The Cloud Ocean Water case

Cloud Ocean Water addresses issues arising when a resource consent to take and use groundwater is transferred to a new owner who wishes to use the allocated water for a different purpose from the use permitted under that consent.

In this case the consent, was originally granted to “take and use” water for a wool scouring business but was renewed to allow a water bottling operation.

The Canterbury Regional Council granted new “use” consents for commercial water bottling relying on rule 5.6 of the Regional Plan, which treats as discretionary all activities not otherwise classified in the Plan.

The issue for the Supreme Court was whether the Regional Plan allowed the “take and use” consent in question to be decoupled and a new use-only consent granted independently this decoupling under rule 5.6, or whether a completely new take and use consent was required (as set out in rule 5.128).

If take and use elements could be decoupled under rule 5.6, water permit holders could “bank” the take components of their permits and repurpose (through a new consent application) the use component.  This would enable applicants to avoid having to justify the volume of water to be deployed in the new use. If rule 5.128 apply, any new use for which a consent was required would also need a take component.

The Supreme Court unanimously dismissed the appeal.  The RMA did not require take and use to be considered conjointly in all cases.  Nor was take and use to be considered separately where the Plan does not so prescribe.

There was nothing in the Plan that suggested the drafters envisaged take and use consents would or should be divisible.  While rule 5.6 filled a gap where the Plan did not classify an activity, rule 5.128 of the Plan did classify the use of water in relation to groundwater in a context where it required it to be considered as a component of an aggregated “take and use” activity.

Williams J wrote separately, concurring with the result but for the reason that the policies and objectives of the National Policy Statement on Freshwater Management and the Canterbury Regional Policy Statement would be undermined by decoupling “take” and “use” elements.

The Sustainable Otakiri case

Sustainable Otakiri relates to issues around the proposed expansion of a water bottling plant in the Bay of Plenty. It raises the relevance of the “end use” effects of an activity (in this case the relevance of the use of plastic bottles) when considering a resource consent under the RMA.

In 2016, Creswell NZ Ltd entered into an agreement to buy a water extraction/bottling business, Otakiri Springs Ltd, and the land where it was located.  Creswell then sought various resource consents from the Regional and District Councils relating to water take and land use for the operation and expansion of the water bottling plant.

Environmental groups Sustainable Otakiri and Ngāti Awa appealed against the decisions.  The Environment Court, followed by the High Court upheld the consents.

High Court held that the “end use” of plastic water bottles should not be taken into account; the activity was a discretionary “rural processing activity” rather than a non-complying “industrial activity”; and the proposed operation was the expansion of an existing activity rather than a new activity.

The High Court also rejected arguments that the resource consents would negatively affect te mauri o te wai and the ability of Ngāti Awa to exercise kaitiakitanga (collectively, the negative tikanga effects).

The Court of Appeal granted leave to appeal on all issues, apart from that relating to negative tikanga effects. The Court of Appeal dismissed the appeal, upholding the High Court’s decision, except for the ruling that the proposal was simply the expansion of an existing activity (although this did not affect the final outcome).

Sustainable Otakiri and Ngāti Awa applied for leave to appeal against the decision of the Court of Appeal to the Supreme Court.  Ngāti Awa further applied for leave to appeal directly from the High Court decision on the negative tikanga effects.

At this point the position remains that “end use” of plastic water bottles should not be taken into account but the point will not be settled until the appeals are determined the Supreme Court.  The cases were heard together by the Supreme Court in late November 2023, with a decision expected this year.

If you need advice on any of the issues raised in this article, please contact Joanna Beresford | Environmental Partner | 021 114 1277    

Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only. It is provided without charge, is not comprehensive, and does not provide legal advice or other advice. Please seek independent advice before acting on any information in this article.

1. When will it take effect? While technically most of the NBEA comes into effect the day after it receives the Royal Assent, the repeal of the RMA will occur later and for the most part will keep operating until each region’s NBEA date (which are yet to be determined).  The transition is expected to take close to a decade.

2. Environmental Protection Purpose: The previous two-limbed purpose in the first reading of the Bill gave equal weight to the use, development protection of the environment and te Oranga o te Taiao (which broadly translates to upholding the health of the environment).  The NBEA as passed makes it clear that the “use and development of the environment” subservient to protecting the health of the environment.  There is a clear theme throughout the legislation of the health and protection of the environment is the core purpose, which will be given effect to through a new tools of system outcomes and environmental limits and targets.

3. National Planning Framework: The existing national policy statements and national environmental standards are going to be grandfathered into a new National Planning Framework. This is going to create a somewhat strange transition given that the first NPF will be grounded in the policy of RMA national direction rather than the new environmental protection regime of the NBEA.  The Ministry for the Environment has been working on this in preparation of the NBEA passing and it is expected to be notified for submissions soon.  This will be followed by a year long board of inquiry process. Given the change to a more environmental protection based legislative regime, it will be important for businesses to have their say on the NPF to try and ensure that any environmental bottom lines that come out of this process are realistic and workable.

4. Polluter pays: The NBEA introduces a considerably strengthened enforcement regime with a raft of new enforcement tools and significantly increased penalties (i.e. from 600,000 to 10 million for companies).  Statutory liability insurance for fines, infringement fees and pecuniary penalties imposed for environmental offending havs been prohibited.  Even with the best environmental management systems and processes.  Accidents and unforeseen events happen.  It would be prudent for any businesses to discuss with their broker and review their risk management approach now that the option of managing some aspects of environmental financial risk through private contract has been removed.

5. What happens if there is a change of Government? National and Act made minority Select Committee Reports opposing the Bills and have indicated that the Acts will be repealed before then end of the year if they form the next Government.  Even if the Acts are not repealed in their entirety, we would expect a new centre right Government to substantially amend the Acts before they come into effect.

If you require assistance understanding the implications of the environmental law reform on your business or property then please contact contact Joanna Beresford, Partner, Environmental Law, joanna@beresfordlaw.co.nz  +64 21 114 1277.

 Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only.  It is provided without charge, is not comprehensive, and does not provide legal advice or other advice.  Please seek independent advice before acting on any information in this article.

Background

In 1997 the New Zealand Local Government Insurance Corporation Ltd established RiskPool, a mutual scheme, to provide an alternative to commercial insurance for councils.  The purpose of RiskPool was to enable local authorities to pool risk and to act as insureds and insurers.

Initially, RiskPool provided professional indemnity insurance to councils and covered weathertightness claims.  However, leaky building claims and the unavailability of reinsurance, meant that cover for weathertightness claims was phased out over time.

From 2009 onwards, RiskPool excluded cover for weathertightness claims.  It introduced, and relied on, an exclusion clause which stated that the insurance contract did:

“not cover liability for Claims alleging or arising directly or indirectly out of, or in respect of … the failure of any building or structure to meet … the requirements of the New Zealand Building Code … in relation to leaks, water penetration, weatherproofing, moisture, or any water exit or control system”.

(the exclusion)

In 2012, and in relation to a different building, Napier City Council notified a claim to RiskPool which alleged losses arising from weathertightness and non-weathertightness defects (the 2012 Claim).   RiskPool declined to indemnify the Council for the 2012 Claim on the basis that the weathertightness exclusion excluded that claim entirely.   The Council did not reply to RiskPool, and instead appears to have accepted RiskPool’s position in relation to the 2012 Claim.

In 2013 the Napier City Council was sued by owners of a 51-unit development known as the Waterfront Apartment complex.  The owners claimed the Council had been negligent in issuing building consents, failing to ensure adequate inspections took place, and issuing code compliance certificates.  The owners alleged a range of construction defects.  This included weathertightness defects and other defects that did not involve any weathertightness aspect such as structural or fire defects.

The Council notified RiskPool of this claim, and RiskPool declined cover on the same basis as it had in relation to the 2012 Claim.

In 2019 the Council settled with the owners and other parties involved in the construction of the Waterfront Apartments.   The Council paid $12.355 million towards a global settlement.   The other parties paid a further $1.295 million towards that settlement.

The Council then sued RiskPool seeking indemnity for the non-weathertightness part of the settlement.  The Council accepted that the weathertightness excluded cover for the cost to repair all weathertightness defects, but RiskPool declined the entire claim on the basis that the exclusion (as set out in full above) excluded the entire claim.

At first instance, the High Court agreed with RiskPool.  The High Court reached its decision partly by relying on correspondence relating to the 2012 Claim.

However, the Council appealed, successfully, to the Court of Appeal.

Interpretation of the exclusion

The Court of Appeal noted that contracts of insurance are to be interpreted in the same way as any other contract.  Interpretation is an objective search for common intention.  The Court of Appeal cited with approval a leading insurance law text (Derrington and Ashton) which explained, that as a general principle, an insuring clause should be given a liberal construction in favour of cover, while an exclusion should be construed strictly.

The Court of Appeal found that the Policy made it clear what was meant: cover does not extend to liability for claims “alleging or arising directly or indirectly out of, or in respect of” a weathertightness defect.  So, an inquiry into the nature of the Council’s liability was required.

For the exclusion to apply, there had to be a connection between a weathertightness defect and the Council’s liability.

The Court of Appeal also found that the weathertightness exclusion only applied to the extent that weathertightness defects caused (directly or indirectly) the loss for which compensation was claimed.   The Court of Appeal did not consider that Riskpool and the Council had intended to exclude liability for sums not causally related to weathertightness.  The language used did not support this conclusion.

Admissibility of extrinsic evidence

The Court of Appeal also gave useful guidance on the Supreme Court decision of Bathurst Resources Ltd v L & M Coal Holdings Ltd [2021] NZSC 85, [2021] 1 NZLR 696.  In Bathurst the Supreme Court held that the admissibility or otherwise of extrinsic evidence, to interpret a contract, is to be regarded as an evidential issue.  The approach taken in Bathurst is very open and could potentially render almost any background information relevant to contractual interpretation.  Fortunately, however, the Court of Appeal has walked back the potential open-endedness of Bathurst.

The Court of Appeal said that the objective approach to contract interpretation is grounded in policy objectives of certainty, of holding people to their bargains, and of efficiency in the conduct of proceedings.   Where parties have framed their contract in writing the intended meaning is extracted from the document.  The language of the document retains primacy, and evidence extrinsic to the document is confined to what a reasonable person would consider relevant.

In a statement that may be widely cited in the future, the Court of Appeal said:

So extrinsic evidence is admissible if it crosses a threshold of a) relevance and b) probative value relative to the risk that it will needlessly prolong the proceeding. When approaching the threshold courts must look first to the language of the contract, interpreted in accordance with ordinary usage. That language retains primacy and its ordinary meaning is a powerful, but not conclusive, indication of shared meaning. Extrinsic evidence must be adjudged reasonably capable of altering the ordinary meaning before it is admissible. As with any reasonableness standard, this calls for the exercise of judgement.

Applying these principles, the Court of Appeal disagreed with the approach taken by the trial Judge, who had reached their conclusion in part based on the evolution of the Policy, and the parties’ conduct after it took its final form in 2009.   The Judge had reasoned that this evidence might resolve ambiguities in the language of the Policy.  However, the Court of Appeal considered that there was no ambiguity in the language of the Policy, so there was no need to have regard to this material.  Similarly, the correspondence in relation to the 2012 claim was found to be irrelevant and inadmissible to interpret the Policy.

The Court of Appeal also rejected an argument by RiskPool that it had intended to exclude cover for all claims “involving” moisture ingress.  RiskPool had used the word “involving” in some extrinsic materials it prepared in relation to the weathertightness exclusion.  But the word “involving” did not appear in and was not relevant to interpreting the exclusion.

Commercial Absurdity?

The Council argued that RiskPool’s approach would lead to absurdity and gave the scenario whereby it was sued for entirely non-weathertightness defects (so the claim was covered) but the claimant then amended the claim to include a single weathertightness defect.  At that point the claim which was previously entirely covered would become entirely uncovered because it was “tainted”.

The Court of Appeal considered this to be a telling argument.  If Riskpool was right a claim would be excluded if a “trifiling” part of it was casually connected to weathertightness.  This would amount to the “tail wagging the dog” and the Court of Appeal did not see any intention in the Policy, or the context, to permit that.

Supreme Court

In the Supreme Court RiskPool’s argument focused closely on the meaning of the word “Claim”.   Riskpool argued  that each of the unit owners had a single claim and as their claims included weathertightness (given the weathertightness defects were present in the building) that was enough to exclude cover.

RiskPool also argued that the subject of the exclusion was the Claim and that the Claim could not be divided into weathertightness and non-weathertightness defects.

The Supreme Court disagreed.  It concluded when the exclusion clause was read as a whole, in context, it was clear that the common intention was only to exclude weathertightness risks.   However, the Council faced liability for separate and divisible loss for breach of weathertightness and non-weathertightness breaches of the Building Code.   The Supreme Court also concluded that the correspondence between Riskpool and the Council did not assist with interpreting the meaning of the exclusion clause, and that there was no error in the Court of Appeal’s interpretation of the exclusion clause.

Outcome

In the end result the exclusion did not apply.  So, Napier City Council may recover a portion of the $12.355 million it paid to settle the claim against it.    The figure payable to the Council by Riskpool is still to be confirmed.

If you would like to discuss any of the issues raised in this article, please contact Geoff Beresford | Civil Litigation and Insurance Partner | 0277 396 896   

Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only. It is provided without charge, is not comprehensive, and does not provide legal advice or other advice. Please seek independent advice before acting on any information in this article.

After the Auckland Anniversary Weekend Flooding many property owners and business will have had, or continue to face, a massive clean-up job.  Teams of volunteers and contractors are working flat out to get contaminated furnishings out of homes as fast as possible, to decontaminate and dry out homes and businesses, make them safe and sanitary again, and to attempt to avoid further water and mould damage.The Auckland Council (and other local authorities) must as a priority ensure that critical infrastructure is operational given the serious risks to people’s safety if our power, water supply, and wastewater systems cannot cope.  Right now, the most important thing is for Auckland to get back up on its feet as quickly as possible.

Notify claims promptly

Property or business owners affected by the flooding, need to notify claims to insurers straightaway.  Insurers are busy due to the high volume of claims.   The longer you leave notifying your insurer, the longer it will be until you (as an insured) have indemnity confirmed.   It will also become harder to satisfy your insurer of vital details.

Understand your policy

Insurance policies are a contract between an insurer and insured that sets out which losses are covered and which are not.  It will help both parties to resolve claims under that contract more quickly if there is a common understanding about how that contract operates.

Generally, the first and most important question is whether the loss is covered by the insuring clause.   The next issue is whether any exclusions apply.  Additionally, extensions may displace exclusions.  (Extensions can also contain exclusions).

An added complexity with flooding claims is that some related events, such as slips and subsidence, are covered by the Earthquake Commission (EQC) scheme, although initially EQC claims for insured property are manged by private insurers.

Mitigate loss

Importantly, insureds under a contract of insurance have a duty to mitigate their losses.  The concept of a “prudent uninsured” is used to help describe what is expected from insureds. An insured is required to take all the steps that “a responsible (and or reasonable) person” who was not insured would take to minimise their loss.  Practically, following a flooding event, an insured will need to clean up as best as they can to minimise further damage to the insured property.

Gather evidence

In ordinary times insurance companies prefer to gather their own evidence from specialist assessors and trained loss adjusters.  However, the scale of the Auckland flooding event means that it won’t be possible for insurers to send an assessor to every property before clean-up needs to be undertaken.  You can help yourself and your insurer by gathering good evidence of the loss.  Keep accurate and well organised written, video, and photographic records of the damage to property and contents to minimise the scope for misunderstanding further down the track.

Scale and timing

Flooding is New Zealand’s most frequently occurring natural disaster but there are two things about the Auckland event that have made the scale of loss significantly greater.

First is the urban nature of the area affected.  Auckland is our most densely populated region.  The damage to a large number of residential and commercial premises will be costly to repair.  Second, the flash flooding nature of the event meant that people did not have an opportunity to protect their property (for example by sandbagging or moving valuables to higher ground).  Some people did not even have a chance to safely move vehicles.

While we hear that the insurance industry is mobilising to bring on additional resource to help process claims, the scale of the event is going to put our insurance system under pressure.  Claims will take longer to process.

Premium increases

Businesses and households will need to be prepared for increases in insurance premiums.   The scale of this event means New Zealand based insurers will be drawing on their overseas based reinsurance to cover their losses.  This will result in insurance in New Zealand becoming more expensive, as the cost of reinsurance will in turn increase.

Intensification

Central Government mandated intensification plan change processes are currently underway.  Hundreds of submitters in urban areas have raised their concerns about the lack of adequate stormwater infrastructure.   The magnitude of this flooding event underlines the concern of these submitters.

It remains to be seen whether central government directed intensification requirements will change to take into account the recent flooding events.   The strategic aim of developing well-functioning urban environments cannot be met when our largest city is under water.   Further intensification requires that there is sufficient infrastructure in place.  The funding, timing, and delivery of the integration of infrastructure with development in Auckland is clearly of critical importance to the whole of New Zealand’s economy.

If you need advice on any of the issues raised in this article, please contact Geoff Beresford | Civil Litigation and Insurance Partner | 0277 396 896   

Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only. It is provided without charge, is not comprehensive, and does not provide legal advice or other advice. Please seek independent advice before acting on any information in this article.

These proposed reforms have significant implications.  While they apply largely the same processes as the RMA, the Bills have a different philosophy and seek to apply different values, most notably a more centralised and “top down” approach to planning and land use.  If enacted as drafted the Bills will require many organisations to relearn what they know about environmental and planning law.

Below is a guide to some aspects of the Bills.  Please note that submissions to the Environment Select Committee close 30 January 2023.

A new mindset

No to sustainable management

When enacted in 1991 the RMA introduced what was then considered the world leading concept of sustainable management into New Zealand’s environmental law.  The purpose of the RMA was to promote the sustainable management of natural and physical resources, and it established structures and processes designed to promote that purpose.

Yes to a range of new purposes

The NBE Bill has dual purposes.  The first purpose of the NBE Bill is to enable the use, development, and protection of the environment in a way that:

• supports the well-being of present generations without compromising the well-being of future generations; and
• promotes outcomes for the benefit of the environment; and
• complies with environmental limits and their associated targets; and
• manages adverse effects; and

The second purpose is to recognise and uphold te Oranga o te Taiao.

The introduction of the concepts of protection of and benefits to the environment suggests an expectation that use and development and natural resources contribute positively to the environment. This signals a move away from the more focussing only on whether adverse effects can be avoided, remedied or mitigated.

Te Oranga o te Taiao

Te Oranga o te Taiao is defined to include the health of the natural environment, the essential relationship between the health of the natural environment and its capacity to sustain life, the interconnectedness of all parts of the environment, and the intrinsic relationship between iwi and hapū and the environment.

New roles and funding mechanisms for Māori engagement

The NBE Bill requires all persons exercising powers and performing functions and duties under it to give effect to the principles of Te Tiriti o Waitangi (which are undefined).

The Bill also establishes a National Māori Entity to provide independent monitoring of decisions.

Consent authorities have new powers to recover costs on behalf of relevant Māori parties for engagement in consenting processes.

System outcomes

The proposed regime introduces a “system outcomes” approach requiring:

• The protection or, if degraded, restoration, of the ecological integrity, mana, and mauri of air, water, and soils, the coastal environment, wetlands, estuaries, and lakes and rivers and their margins, and indigenous biodiversity.
• Reduction of greenhouse gas emissions, removal of greenhouse gases from the atmosphere, and reduction of risks arising from, and better resilience of the environment to, natural hazards and the effects of climate change.
• Well-functioning urban and rural areas that are responsive to the diverse and changing needs of people and communities in a way that promotes the use and development of land for a variety of activities, including for housing, business use, and primary production, and the ample supply of land for development, to avoid inflated urban land prices, housing choice and affordability.
• The availability of highly productive land for land-based primary production.
• The recognition of, and making provision for, the relationship of iwi and hapū and the exercise of their kawa, tikanga (including kaitiakitanga), and mātauranga in relation to their ancestral lands, water, sites, wāhi tapu, wāhi tūpuna, and other taonga.
• The protection of protected customary rights and recognition of any relevant statutory acknowledgement.
• The conservation of cultural heritage.
• Enhanced public access to and along the coastal marine area, lakes, and rivers.
• The ongoing and timely provision of infrastructure services to support the well-being of people and communities.

Decision making principles

The NBE Bill provides that decision makers must provide for the integrated management of the environment and actively promote the above systems outcomes.

Decision makers must recognise the positive effects of using and developing the environment to achieve the outcomes.  They also must manage the effects of using and developing the environment in a way that achieves, and does not undermine, the outcomes.  They also must manage the cumulative adverse effects of using and developing the environment.  They must also adopt a precautionary approach when the information available is uncertain or inadequate.

Further, all persons exercising powers and performing functions and duties under the NBE Bill must recognise and provide for the responsibility and mana of each iwi and hapū to protect and sustain the health and well-being of te taiao in accordance with the kawa, tikanga (including kaitiakitanga), and mātauranga in their area of interest.

Strategic planning

Spatial planning

The SP Bill aims to facilitate long-term, strategic spatial planning through the development of regional spatial strategies (RSS). Each RSS is required to set the strategic direction for the use, development, protection, restoration enhancement of the environment for at least a 30 year period.

RSS will be prepared by regional planning committees (RPC), comprising of local government, Māori and central government members. The NBE Bill provides that local authorities and the iwi and hapū committee in each region are to agree on the composition of each RPC.   Where there is disagreement the Local Government Commission will decide who gets to sit on the RPC.

National Planning Framework

The existing system of national policy statements and standards is to be replaced by a national planning framework (NPF).  The NPF is intended to provide an integrated approach to the management of the environment in relation to matters of significance or to ensure consistency.

The Minister for the Environment must set limits in the NPF for air, indigenous biodiversity, coastal water, estuaries, freshwater and soil, and may also set limits on other aspects of the natural environment. The purpose of limits is to prevent the ecological integrity of the natural environment from further degradation, and to protect human health.

The Minister also has discretionary powers to set targets for achieving environmental outcomes. Targets must be measurable, have a specified time limit for their achievement, and be designed to assist in achieving an outcome.

National Built Environment Plans

All existing Regional Policy Statements, Regional Plans, and District Plans are to be replaced by 15 National Built Environment Plans (NBE Plans).  It is estimated that this process will take seven to ten years to complete meaning that organisations that operate nationally will find themselves operating under the two systems for quite some time.

The RPCs will be responsible for preparing and determining the content of the plans.  Local authorities can submit on the NBE plans applying to their region or district.  Local authorities will be required to administer and implement NBE plans.

Resource consents, designations, and notifications

Changes to resource consents

The NBE proposes three alternative pathways for planning and consenting.  Proposals of National Significance and Direct Referral to the Environment Court will continue to be provided for and the fast-track process introduced to stimulate the economy during Covid will continue for specified housing and infrastructure projects.

Although the overall approach to consenting is retained there are some significant changes proposed:

• Consent categories are reduced from six to four – permitted, controlled, discretionary and prohibited (i.e. with non-complying and restricted discretionary activities removed).
• The permitted activities have been broadened. Some permitted activities may require a “Permitted Activity Notice” to cover the costs compliance, monitoring and enforcement.
• Controlled activities cover activities where the effects are well understood and there will be a limited ability to decline (currently these cannot be declined only have conditions imposed).
• There are greater powers for consent authorities to review consent conditions and cancel consents, especially to ensure compliance with limits or targets.
• The NBE Bill allows central Government or regional planning committees to make rules establishing allocation methods for resources, to address inefficient and inequitable allocation (this is a change from the current first, in first served approach to the allocation of scare resources).
• Issues that have been of particular importance to local communities under the RMA regime, such as scenic views and social housing have been explicitly excluded as a valid matter for consideration.

Notification

New notification rules are more tightly based around activity status.  Controlled activities must be non-notified and discretionary activities must be publicly notified unless there is a contrary rule in the NPF or a NBE Plan.

New rules also apply to the tests for public and limited notification.  The test of whether an effect is “minor” will no longer apply.  Instead, public notification will be required where:

• there is sufficient uncertainty as to whether an activity could meet or contribute to outcomes, or the activity would breach a limit;
• there are clear risks or impacts that cannot be mitigated by the proposal;
• there are relevant concerns from the community; or
• the scale or significance (or both) of the proposed activity warrants it.

Limited notification will be required where:

• it is appropriate to notify any person who may represent public interest;
• there is an affected person in relation to the activity; or
• the scale or significance (or both) of the proposed activity warrants it.

Challenges to notification decisions will be considered by the Environment Court, rather than judicial review to the High Court.

Changes to designations for infrastructure

The designation provisions in the NBE Bill differentiate between route protection requirements and a design and build scenario.  Assessments of alternatives will no longer be required if the infrastructure has been included in an RSS.

Enforcement and compliance

The NBE Bill includes fundamental changes to the environmental enforcement and compliance regime and signals a far more aggressive approach than under the RMA:

• District councils, regional councils and the Environmental Protection Authority have greater powers to require remediation of contaminated land and recover actual and reasonable costs from the polluter.
• Maximum fines for non-compliance are set to increase significantly from $300,000 to $1,000,000 for individuals and from $600,000 to $10,000,000 for companies.
• A new “polluter pays principle” requires landowners to actively manage land used for high-risk activities – which includes reporting on and actively managing contamination.
• The NBE Bill would prohibit individuals and companies insuring against such fines. This would have significant implications for insurers and insureds alike (as well as for local authorities who rely on typically being paid 90% of fines under the RMA to cover enforcement and clean-up costs).

Summary

There is a lot to digest in the proposed legislation.  The RMA took an approach that favoured local participation in planning on the basis that the “bottom up” model resulted in better and more enduring environmental outcomes.  The SP and NBE Bills instead take a top-down approach that consolidates control more centrally.

Whether it delivers on the Minister’s aspirations for a faster, cheaper, better resource management system remains to be seen.  This may depend on the ability of participants in the new system to weave together the diverse strands of thought represented by the new purposes, the concept of Te Oranga o te Taiao, the principles of Tiriti o Waitangi, systems outcomes, RSSs, the NPF, limits and targets, and mandatory decision-making principles.

If you would like to understand the implications for your business or property or would like assistance making a submission, then please get in touch.

 Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only.  It is provided without charge, is not comprehensive, and does not provide legal advice or other advice.  Please seek independent advice before acting on any information in this article.

There is a lot going on in the RMA sphere with law reform and consultation on national guidance instruments at the moment.  Some key dates in July are:

A summary of these consultations follows.

Exposure draft of proposed changes to the NPS-FM and NES-F (including wetland regulations)

The Ministry for the Environment (MfE) consulted on proposed amendments to wetland provisions in the NPS-FM and NES-F in September and October 2021.

MfE has now proposed drafting for these amendments, and is seeking feedback on whether the drafting is clear, and if there are any unintended consequences arising from the drafting.

The exposure draft of National Policy Statement for Indigenous Biodiversity 

From November 2019 to March 2020, MfE sought public feedback on the introduction of a NPSIB to help protect precious flora and fauna. MfE received over 7000 submissions, with the majority supporting the intent of the NPSIB.

MfE is now seeking feedback on the exposure draft to ensure its provisions are workable.  The exposure draft takes into account submissions received during the public consultation period.  The purpose of the exposure draft is to test the workability of the provisions with key stakeholder groups.

 Water Services Entities Bill

This Bill is the first of a suite of bills to reform New Zealand’s drinking-water, wastewater and stormwater services—the “three waters” services.

The Bill would create four publicly owned water services entities that will provide safe, reliable, and efficient water services in place of local authorities. Each water services entity would take on responsibility for delivering water services to a specific geographical area, from 1 July 2024.

The Bill sets out how the water services entities would operate, and how they would be accountable to the public.

If you require assistance understanding the implications of the upcoming environmental law reform on your business or property or need help preparing submissions then please contact contact Joanna Beresford, Partner, Environmental Law, joanna@beresfordlaw.co.nz   + 64 307 1277 or +64 21 114 1277.

 Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only.  It is provided without charge, is not comprehensive, and does not provide legal advice or other advice.  Please seek independent advice before acting on any information in this article.

The government has announced that the RMA will be repealed.  Although visible progress is slow at present, the intention is that the RMA will be replaced by the end of the current Parliamentary term.   Two statues will then take the place of one, being the Natural and Built Environments Act and the Spatial Planning Act, along with the addition of a new Climate Adaption Act.

Although the timeframe is not yet clear, the new legislation is expected to be consulted on later this year.  The RMA governs the subdivision and development of land, where and how land can be used for residential, commercial, industrial or rural businesses, the use of our coastal marine area, whether manufacturing or industry can use water or discharge pollutants to land, air or water and how infrastructure providers can provide essential infrastructure such as electricity generation,  highways, water supply, wastewater treatment or stormwater management, schools, hospitals, courts, prisons.  What emerges from that process will therefore affect how many businesses can operate, and also how New Zealanders live, work, and play.  If you want to engage effectively in the upcoming process, then it is important to get ready now.

1.     Do your homework

If you want to get up to speed with the policy direction proposed by Central government, here is our pick of the top three documents to read (warning – bullet points one and two are lengthy):

• The “Randerson Report” – “New Directions for Resource Management in New Zealand is a comprehensive review of New Zealand’s resource management system”. This is the most comprehensive source of environmental policy.  It can be found here.
• The Select Committee Report on the exposure draft. It can be found here.
• The Ministry for the Environment’s “Our future resource management system”. This summary consultation document was used to consult with key stakeholders earlier in the year and can be found here.

2.     Understand the challenges and opportunities your business

 What happens at the national level can make a big difference to development projects.  For example,  development projects around the country have recently come unstuck due to national level wetland rules that have made certain types of developments affecting wetlands much harder (or impossible).  There is long-term strategic value in seeking to ensure that environmental legislation and high-level policy supports your future projects.

Many developers, resource users and infrastructure providers who regularly participate in resource management processes will already have a good sense of the environmental challenges faced by their operations.  However, if these are new issues for your business, then there is no time like the present for considering the long-term aspirations and directions for your business and how these might be constrained by the environmental management regime.

3.     Get your team together

For your business to make a compelling submission that persuades decision-makers you may require  expert technical advice (for example stormwater engineers, traffic engineers, air or water discharge experts, ecologists, urban designers, development economists or planners).

Many experts have already been seconded to help with policy and legislation formulation, reducing the pool available to assist private enterprises.  With intensification plan changes in major cities also scheduled to commence in August 2022, the last quarter of this year is likely to be a very busy time for experts.  So, get ahead of the queue and assemble your team early.

4.     Engage with industry representatives

The issues facing your business are most likely shared by others in your industry.  Some industry bodies will take on an advocacy role for their members through the upcoming Select Committee process.  Now is a good time to engage with industry representatives to ensure they have a good idea of the  challenges faced by your business and that they can effectively advocate for your industry.

Taking this step does not stop you from making your own submission, but it will help decision-makers  understand that issues are faced collectively across your industry.

5.     Plan for the Select Committee process

Parliament will likely come under pressure to pass the RMA replacement legislation before the end of this term.  Based on the legislative process enabling intensification (see here for more detail) the environmental reform process may well take place under urgency.

Our view is that, notwithstanding the high significance of the reforms, the submission period and the Select Committee process is likely to be truncated.  So, be prepared.  Make sure that you and your team are aware of this possibility and plan to have resourcing available, so you are not caught short later in the year.

 We recommend that you also keep in mind that unless you are identified as a key stakeholder (typically these are iwi, councils, Government departments or national level environmental organisations) you will only have five minutes to present your case before the Select Committee.  If you are not engaging a lawyer or another advocate to make those submissions on your behalf, then practice your elevator pitch.  You will want this to be as strong as possible on the key issues affecting your business.

If you require assistance understanding the implications of the upcoming environmental law reform on your business or property or need help preparing for the Select Committee process then please contact contact Joanna Beresford, Partner, Environmental Law, joanna@beresfordlaw.co.nz  +64 21 114 1277.

 Disclaimer. The information in this article is intended to provide a summary of the topic covered and is for general information only.  It is provided without charge, is not comprehensive, and does not provide legal advice or other advice.  Please seek independent advice before acting on any information in this article.