Case Law

Christchurch Ready Mix Concrete Limited v Canterbury Regional Council

The recent case of Christchurch Ready Mix Concrete Limited v Canterbury Regional Council [2011] NZEnvC 195 has shed some light on a vexed area of the law which Judge Jackson states in his judgment has “troubled local authorities for the life of the RMA” – namely the issue of the priority to be given to resource consent applications where there are multiple applications for the same resource.

The decision concerned the order in which Canterbury Regional Council should hear consent applications for the extraction of gravel from the Waimakariri River.  The central issue was whether ss124A to 124C of the RMA applied in order to determine priority.  Section 124A directs when ss124B and 124C apply.  Section 124B purports to give priority to renewal applications by holders of existing consents, and s124C relates to fresh applications by persons who are not existing holders of consents.

Christchurch Ready Mix Concrete Limited (“Ready Mix“) held an existing resource consent to excavate gravel from the Waimakariri River, expiring in July 2011.  In October 2010, before Ready Mix had made any application for renewal of its existing consent, Fulton Hogan Limited (“Fulton Hogan“) applied for consent to also excavate gravel from the river.  In December 2010, the Council advised Ready Mix of the existence of the Fulton Hogan application and that it was the Council’s view that the priority conferred by s124B of the RMA did not apply to existing consents for gravel extraction.  Therefore, Fulton Hogan’s new application would be heard before any renewal application by Ready Mix.  Within a week, Ready Mix lodged a renewal application on the same terms as its existing consent.

Ready Mix applied to the Court for declarations that its application should be given priority over Fulton Hogan’s application under s124B of the RMA.  Ready Mix argued that s124 and ss124A to 124C of the RMA, which were introduced by the 2005 amendments to the Act, represent a new method for determining priorities for the hearing of applications for some resources, replacing the “first come, first served” approach laid down by the Court of Appeal in Fleetwing v Marlborough District Council [1997] 3 NZLR 257.  Ready Mix contended that these provisions operated to give priority to its renewal application.

In contrast, the main argument for Fulton Hogan was that ss124A to 124C of the Act were not relevant because they only apply to the limited range of natural resources which are specified as capable of being allocated by the Council under s30(1)(fa) of the RMA, for example, water, heat or energy.  Therefore, gravel was excluded.

The Court first considered the provisions of the RMA relating to gravel extraction.  Judge Jackson observed that while s13 covers the excavation and disturbance of the riverbed within the river footprint, it does not cover the taking or removal of gravel beyond the river banks, which the Court held was a separate matter controlled by common law property rights.  The Council could only authorise the uplifting of riverbed material and its stockpiling or spreading as far as the riverbank, and this was the limit of the Environment Court’s jurisdiction in this case.

Judge Jackson went on to analyse s124 and ss124A to 124C of the RMA.  The decision attempts to provide clarification on the working mechanics of the provisions, but notes a number of inconsistencies and uncertainties as to meaning, particularly with s124A.

The decision observes that, unlike s124 which applies where only one person is interested in a resource, ss124A to 124C apply where more than one person is interested.  These sections have to be read together and in the context of ss12 to 15 and s30 of the RMA.  This provides a strong indication that references to allocation or non-allocation in s124A are references only to resources for which it is the function of the regional council to allocate under s30(1)(fa) of the RMA (ie only resources covered by ss14 and 15 of the RMA).  Judge Jackson states that “section 124A is meant to be a door, and if it does not open [ss124B and 124C] do not apply”.

It was ultimately held, in accordance with the scheme of the 2005 amendments and the RMA as a whole, that ss124A to 124C are a mini-code that only apply to resolve priorities between an application for a renewal consent and a new application for the same allocatable resource under s30(1)(fa).  This means that ss124A to 124C only apply to resources controlled by ss14 or 15 because only these resources are allocatable under s30(1)(fa).  It was held that references to ss12 and 13 (s13 covers gravel excavation) in ss124B and 124C were made in error by the legislature.

Because riverbed gravel is not an “allocatable” resource, applications for its excavation were not covered by s124A.  Therefore, neither s124B or s124C applied, meaning the first come, first served principle applied and it was likely that Fulton Hogan’s application would have priority, though this was not ultimately decided due to a lack of evidence and the nature of the declaratory proceedings.  In light of this, the Court declined to grant any of the declarations for priority sought by Ready Mix. 

Judge Jackson’s pragmatic exercise in statutory interpretation, though expressly acknowledged as not providing a seamless answer (and perhaps not in keeping with the legislature’s intention under the 2005 amendments to implement a more comprehensive “new recipe for allocating resources”) was, according to Judge Jackson, required in order to make the RMA work. 

The decision goes some way to assist interpretation of the priority provisions under the RMA – at least to the extent that it clarifies (rightly or wrongly) that ss124A to 124C only apply to allocatable resources controlled by s14 or s15.  It provides food for thought for industry operators and may prompt them to reassess their competitive positions, and the true value of their existing consents.  The result in the context of gravel extraction consents may be a practice of seeking renewal consents earlier, rather than later.  Given the complexity of the issues and the current state of the law in this area, further legislative reform to provide a workable, fair and predictable priority framework may be a necessary, albeit unenviable, task.