Case Law

Hurunui Water Project Ltd v Canterbury Regional Council [2015] NZHC 3098

Following lodgement of the draft consent documents, the Environment Court issued two memoranda raising a number of issues.  The memoranda queried how the review conditions operated, whether there was “moral hazard” (with allocating water that then cannot be used without breaching nutrient limits) and the application of the National Policy Statement on Freshwater Management 2014.  The Court also requested further information regarding nutrient load limits in the relevant catchment.

In response to the Environment Court’s queries, the parties lodged a joint memorandum seeking to withdraw the appeal.  The memorandum was not opposed by Ngai Tahu Property Ltd, a section 274 party.  The Environment Court questioned the legality of the proposed withdrawal, and called for a hearing on whether the Court’s leave is required to withdraw an appeal in such circumstances; and whether or not to do so would be an abuse of process.

The Environment Court referred to the decision in Mullen v Parkbrook Holdings Ltd [1999] NZRMA 23 (“Mullen“), in which the Court of Appeal found that an appellant could withdraw or abandon an appeal without leave at any time before the hearing or a decision is released, unless there is found to be an abuse of process.  The Environment Court distinguished Mullen on the basis that it did not involve a withdrawal of an appeal after consent documents had been lodged.  Alternatively, the Environment Court held that the addition of section 290A in 2005 (which requires the Court to have regard to the decision that is the subject of the appeal), narrowed the application of Mullen.  The Environment Court concluded that its leave was required before the appeal could be withdrawn.

In respect of abuse of process, the Environment Court found that while the withdrawal of the appeal did not cause unfairness, the change in position by the Canterbury Regional Council could have the effect of “undermining confidence in the administration of the RMA”.  For this and other reasons, it found that the proposed withdrawal amounted to an abuse of process.

The High Court carefully reviewed the Environment Court’s reasoning and findings and held that there was no requirement to seek leave to withdraw and that there was no proper basis to find, in the circumstances, that withdrawal would be an abuse of process.
In respect of the requirement to seek leave, the High Court considered what it referred to as the Environment Court’s four “previously unrecognised propositions” on which it based its conclusion.  Justice Mander found:

·        There is no requirement or implication that consent memorandum “better” achieve the purposes of the RMA.  No reference is made to such a requirement in the RMA, Environment Court standard form consent order or the Environment Court Practice Note.  If a “better” outcome were required in each case, it would be difficult for negotiated settlement of appeals to be reached, significantly limiting the value of alternative dispute resolution.
·        Filing consent documents does not render a consent authority functus officio.  Contrary to the Environment Court’s finding, the High Court held that a position advanced in consent memoranda is not equivalent to a new, final decision.  Filing consent memoranda is not, in fact or law, the making of a decision in a judicial or quasi-judicial sense.  Justice Mander identified that potentially illogical consequences could result if a consent authority was functus officio following lodgement of memoranda, including how it could address any changes to the memoranda proposed by the Environment Court.
·        Filing consent documents does not amount to a representation or undertaking that cannot be resiled from.  The High Court held that there is no authority to support the suggestion that a consent memorandum is a binding representation or undertaking.
·        There was no basis to distinguish Mullen.  The Court of Appeal in Mullen had explicitly stated their reasoning in general terms.  The High Court held the nature of consent memoranda had no bearing on the application of the principles in Mullen.  It further held that the addition of section 290A as a basis to distinguish Mullen was unsupportable.

In respect of abuse of process, Mander J observed that section 279(4)(c) allows the Court to prevent its procedures from being misused in a way that achieves a manifestly unfair result or perverts the administration of justice.  Abuse of process is a serious allegation and the threshold for such a finding is high.  After assessing the Environment Court’s reasons for its decision in Amuri (many of which relied on errors addressed in respect of the requirement to seek leave to withdraw), the High Court found that there was no proper factual basis to find that the proposed withdrawal amounted to an abuse of process.
Accordingly, Mander J set aside the decision in Amuri and made a declaration that the appeal was validly withdrawn.

This decision confirms that the Court of Appeal’s decision in Mullen remains good law – an appellant may withdraw its appeal at any time before a hearing occurs or a decision is released, unless there is opposition from a party to the appeal, or it can be established that there has been an abuse of process.  A high threshold must be met to find that there has been an abuse of process.

Despite Amuri being set aside, appellants should remain conscious of the clear message from the Environment Court that consent documents can be the subject of close scrutiny, particularly where there have been changes to a receiving environment.