A road to nowhere? The role of the overall broad judgment post-Davidson
Author: Aidan Cameron, Employed Barrister, Bankside Chambers
The phrase “overall broad judgment” (or OBJ) has had much ink spilled over it in the last 20 years of resource management law in New Zealand. Once the widely accepted means of determining both resource consents and plan changes alike by reference to the competing considerations within s 5 of the RMA, the OBJ approach was hobbled by the Supreme Court’s decision in Environmental Defence Society Inc v New Zealand King Salmon Co Ltd ( NZSC 38,  1 NZLR 593).
The new normal, a phrase we have all become accustomed to this year, has replaced the OBJ approach for plan changes with the fundamental statutory requirements to give effect to higher-order planning documents, and a reversion to the “environmental bottom line” theory first espoused by the Resource Management Bill’s final sponsor, the Rt Hon Simon Upton in 1995.
In his recent RMLA 2020 Salmon lecture, Mr Upton suggested that the “overall broad judgment” approach had finally been put to bed by recent case law – sentiments that were echoed by the Hon Tony Randerson QC in his most recent address to the RMLA Mini-Conference, held in Wellington in October this year.
However, a question still remains as to whether reversion to bottom–line (or environmental limit) theory has rendered the OBJ approach obsolete for all purposes. This article will review the genesis of the approach, the criticisms which led to its curtailing in King Salmon, and the Court of Appeal’s decision in R J Davidson Family Trust v Marlborough District Council ( NZCA 316,  3 NZLR 283), before positing a view as to its continued relevance (or otherwise) for resource consents and designations.
Origins of the OBJ approach
The OBJ approach has its origins in a decision of the Planning Tribunal in New Zealand Rail Ltd v Marlborough District Council (1993) 2 NZRMA 449 (PT). Judge Skelton, hearing an application for the establishment of a new port facility in Shakespeare Bay within the Marlborough Sounds, was tasked with determining the weight to be given to various factors under s 104 when considering whether or not to grant consent under then s 105 of the RMA. The Tribunal held that, in the absence of the now-familiar drafting mechanism making the factors in s 104 “subject to” pt 2 of the RMA, no particular matter was to be given primacy. The Tribunal then went on to say (at 464, emphasis added):
That is not to say, of course, that in any particular case the strength of any one or more of them may not, as a matter of judgment, outweigh other factors. All we are deciding here is that those matters do not, for the purposes of s 105 of the Act, have a headstart as it were when it comes to formulating the overall judgment required by subs 1(b) of that section.
The Tribunal’s decision was appealed to the High Court, including on the grounds of whether pt 2 of the RMA had primacy over the other criteria in s 104. Greig J found no error in the Tribunal’s approach, which in turn was consistent with an earlier decision of the Full Court of the High Court in Batchelor v Tauranga District Council (No 2)  2 NZLR 84 (HC).
In considering a similar argument addressing the weight which could be given to the protections in s 6(a) of the RMA, the Court noted that “there is a deliberate openness about the language [in Part 2], its meanings and its connotations which I think is intended to allow the application of policy in a general and broad way” (emphasis added). The Court concluded:
In the end, I believe that the tenor of the appellant’s submissions was to restrict the application of this principle of national importance, to put the absolute preservation of the natural character of a particular environment at the forefront and, if necessary, at the expense of everything except where it was necessary or essential to depart from it. That is not the wording of the Act or its intention. I do not think that the Tribunal erred as a matter of law. In the end it correctly applied the principles of the Act and had regard to the various matters to which it is directed. It is the Tribunal which is entrusted to construe and to apply those principles, giving the weight that it thinks appropriate.
The test was further refined on appeal to the Environment Court in North Shore City Council v Auckland Regional Council  NZRMA 59 (EnvC), which was a challenge to the boundaries of the metropolitan urban limit set by Auckland Regional Council under its proposed regional policy statement. The question of “central importance” identified by the Environment Court in that decision was (at 70):
[w]hether the policy defining the metropolitan urban limits in the Long Bay/Okura area in the proposed regional policy statement is necessary in achieving the purpose of the Act, being the sustainable management of natural and physical resources?
The Court reviewed a series of earlier decisions building on New Zealand Rail above, before concluding (emphasis added):
Application of s 5 in the way described … involves consideration of both main elements of s 5. The method calls for consideration of the aspects in which a proposal would represent management of natural and physical resources in a way or at a rate which enables people and communities to provide for their social, economic and cultural wellbeing, health and safety. It also requires consideration of the respects in which it would or would not meet the goals described in paras (a), (b) and (c).
The method of applying s 5 then involves an overall broad judgment of whether a proposal would promote the sustainable management of natural and physical resources. That recognises that the Act has a single purpose … Such a judgment allows for comparison of conflicting considerations and the scale or degree of them, and their relative significance or proportion in the final outcome.
That approach would prevail in the determination of both resource consents under ss 104 and 105, and plan reviews or changes under sch 1 to the RMA, for another 17 years before the Supreme Court’s decision in King Salmon.
What does the RMA look like now?
As can be seen from the above, the beginnings of the OBJ approach were founded in the broad discretion given to consent authorities under then s 105 of the RMA to determine consent applications. The legislative language at the time provided that, subject to additional criteria for non-complying activities and the matters in s 104 (including pt 2 of the RMA), “after considering an application for resource consent for any activity”, not being a controlled activity, a consent authority “may grant or refuse its consent”. The reference to “may” is the foundation stone of the discretion available to consent authorities to which I will return.
The RMA has been the subject of countless amendments since, and ss 104 and 105 have been no exception. The formulation we are familiar with now, with the different threshold requirements for controlled, restricted discretionary, discretionary and non-complying activities divided into different sections (rather than combined under one, as was previously the case) first applied following amendments in 2003. However, the discretion previously embedded within s 105(1)(b) has been retained in ss 104B and 104C of the RMA, namely that after considering an application under s 104, the consent authority “may grant or refuse the application”. Importantly, under both ss 104 and 171, consideration of factors is still “subject to [pt] 2”. So, the same or similar wording confronted by the Planning Tribunal, Environment Court and High Court in New Zealand Rail and North Shore City Council above continues to exist today.
Some things change, some things stay the same
This brings us to the Supreme Court’s decision in King Salmon. Others have dissected the impact of the decision in greater detail (see, for example, Derek Nolan (now QC) and James Gardner-Hopkins “EDS v New Zealand King Salmon – the implications” (2014) RMJ November 1). However, for present purposes, the key implication of the decision was the majority’s rejection of the “overall judgment” approach in relation to the implementation of the New Zealand Coastal Policy Statement 2010 (NZCPS). Central to that finding was an interpretation that s 5, as far as plan changes were concerned (at ):
… was not intended to be an operative provision, in the sense that it is not a section under which particular planning decisions are made; rather, it sets out the RMA’s overall objective.
The majority of the Court went on to say (also at , emphasis added):
Reflecting the open-textured nature of Part 2, Parliament has provided for a hierarchy of planning documents the purpose of which is to flesh out the principles in s 5 and the remainder of Part 2 in a manner that is increasingly detailed both as to content and location. It is these documents that provide the basis for decision-making, even though Part 2 remains relevant. It does not follow from the statutory scheme that because Part 2 is open-textured, all or some of the planning documents that sit under it must be interpreted as being open-textured.
The Court was concerned that, too often, reference to Part 2 was used to balance ostensibly-competing policy considerations, bypassing clear and directive requirements in planning documents. The Court went on to find that the objectives and policies of the NZCPS, “while necessarily generally worded, are intended to give substance to the principles in [pt] 2 in relation to the coastal environment”, and failure to meet the environmental bottom lines in policies 13(1)(a) and 15(a) of the NZCPS resulted in aspects of the private plan change failing. However, as will become clear later in this article, these comments were made in the context of the express requirement in s 67(3) of the RMA to give effect to the NZCPS – a requirement that does not feature in ss 104–104C and 171.
From King Salmon to King Shags
For a period of time, the impact of NZ King Salmon on resource consents and designations was limited. The Environment Court in KPF Investments Ltd v Marlborough District Council  NZEnvC 152, (2014) 18 ELRNZ 367, released shortly after the Supreme Court’s decision, held that (at , emphasis added):
[I]n light of the words “subject to Part 2” in s 104(1) there are no absolute bottom lines when a resource consent is being considered under s 104 even if a [NPS] does have to be had regard to. Further, once Part 2 comes into play – as it does in most cases – the judgment does become quite broad because the decisions must achieve the purpose of the RMA.
The Court concluded that the summary of the Tribunal in North Shore City Council above was still applicable, provided that the weight to be given to the relevant considerations (at ):
… must be carefully allocated by reference to both the strong directions in [ss] 6 to 8 and to any particularisation of those in the statutory instruments from national policy statements down to district plans.
The High Court in the Basin Bridge decision (New Zealand Transport Agency v Architectural Centre Inc  NZHC 1991,  NZRMA 375) endorsed the Board of Inquiry’s application of an OBJ where an evaluation under pt 2 (and in particular, s 5) was required. The Court emphasised the different statutory context, the Privy Council’s decision in McGuire v Hastings District Council  2 NZLR 577 (PC), and the description by Randerson J of pt 2 as the “engine room of the RMA” in confirming that approach.
However, that return to the status quo was short-lived. In R J Davidson Family Trust v Marlborough District Council  NZEnvC 81, the same division of the Court that heard the matter in KPF Investments Ltd cast doubt on its earlier findings, setting aside the OBJ approach in favour of a much more proscriptive test based on the three caveats identified in King Salmon – namely invalidity, incomplete coverage or uncertainty of meaning. Briefly, the test laid down by the Court required (first) assessment of a proposal against the objectives and policies of the relevant district plan, with recourse back through the hierarchy of planning documents (and, ultimately, to pt 2) only where those same caveats existed in each higher-order document. (This was despite all parties accepting in their submissions that KPF Investments was a correct statement of law). That formulation was challenged on appeal to the High Court, and, following leave, to the Court of Appeal. In the interim, numerous decisions of other divisions of the Environment Court cast doubt on the appropriateness of the formulation.
The impact of King Salmon on resource consents was the essence of the Court of Appeal’s judgment in Davidson. The argument was that the formulation ignored the very different statutory language in ss 104 and 171 of the RMA, which required regard to be had to planning provisions listed “subject to [pt] 2”, and not to give effect to them (as was the case with the NZCPS provisions in King Salmon); and that the Supreme Court had not purported to address the role of the OBJ approach under s 104 for resource consents; the Court agreed.
It did so for three reasons. First, the Supreme Court had made no reference to s 104 nor to the words “subject to [pt] 2” in its judgment. The Court held that if the Supreme Court intended to reject that approach altogether, “it would be very surprising that it did not say so” (at ). Secondly, the Supreme Court’s criticisms of the uncertainty generated by the OBJ approach, and the possibility of different outcomes where it was applied, were a “long way from establishing that the Court intended to proscribe an [OBJ] approach in the case of resource consents generally” (at ). Finally, the Court held that the RMA’s general provisions dealing with resource consents “do not respond to the same or similar reasoning to that which led the Supreme Court to reject the [OBJ] approach” (at ).
The Court then considered two scenarios under the NZCPS.
The first was where a proposal was “demonstrably in breach of one of the provisions of the NZCPS”. The Court held that a consent authority would be justified, applying King Salmon, to take the view that separate recourse to pt 2 would not be required, as it would not provide further guidance not already provided by the NZCPS (at ). That was the case in Davidson on the facts before the Court – although contested in the Court below, the Environment Court’s findings of the risk to King Shag habitat from the proposed mussel farm meant that the proposal could not satisfy the directive “avoid” requirement in Policy 15(1)(a) of the NZCPS, and therefore the appeal failed.
The second, however, was where a hypothetical proposal was affected by different policies within the NZCPS such that it was unclear whether consent should be granted or refused. In that case, the Court held “the consent authority would be in a position where it had to exercise a judgment” (emphasis added). The Court’s reference to “judgment”, especially in the context of its immediately preceding discussion of the impact of King Salmon, must be taken to mean an OBJ under s 104. In that context, the Court could not see “any reason why the consent authority should not consider [pt 2]”. The Court held that the same logic would apply to other plans, especially those that had been competently prepared under the RMA, where in the face of a “coherent set of policies designed to achieve clear environmental outcomes”, reference to pt 2 as part of a broader judgment “would add nothing to the evaluative exercise” (at  and ). But, “absent such assurance, or when in doubt, it will be appropriate and necessary to do so” (emphasis added).
The continued relevance of the OBJ approach and a view on how to approach it
We are fortunate that, particularly in the case of new plans like the Auckland Unitary Plan and the Christchurch Replacement District Plan, careful attention has been paid to the Supreme Court’s guidance in King Salmon in formulating clear and unambiguous policy directives. Those policy directives, when aimed at environmental bottom lines, may leave little room for argument, whether by reference to pt 2 or in the exercise of discretion under ss 104B and 104C.
However, it is also clear that this will not always be the case. Numerous district, regional and regional coastal plans remain to be updated in accordance with the Supreme Court’s guidance in King Salmon. Even for those that have been, with further time and the general tendency of the market to push and test planning boundaries (both literally and figuratively), there will undoubtedly be situations where the consideration of s 104 matters does not result in a clear answer one way or the other. In those cases, the Court of Appeal’s guidance is clear: a judgment must be exercised.
One criticism of the Court of Appeal’s dicta in Davidson regarding the power of coherent sets of policies directed at clear environmental outcomes to restrict the ability to look at pt 2 is that they ignored the scheme of the RMA, especially non-complying activities and, in particular, the relationship between the “effects” and “objectives and policies” gateways under s 104D(1). Section 104D(1)(a) allows for consideration of non-complying activities and the exercise of discretion under s 104B where effects of a proposal are minor, even where under s 104D(1)(b), the application is contrary to (in the sense of being “repugnant to”) the objectives and policies of the relevant plan as a whole (Dye v Auckland Regional Council  1 NZLR 337 (CA)). One might ask what the point of the “effects” gateway is, if a proposal is simply knocked back later under s 104B on the basis that it runs counter to the same policy framework. Overzealous subscription to the “coherent set of policies” theory might render non-complying activities that fail the objectives and policies gateway de facto prohibited activities. However, even the most directive (for example “avoid”) policies aimed at environmental bottom lines yield to minor or transitory effects (see King Salmon at  and ). In those circumstances, conflict between a proposal and policies may be more apparent than real, and scope for judgment remains via either gateway.
So, assuming that the OBJ continues to exist, whether sourced from the ability to refer back to pt 2 or under the overriding discretion in ss 104B and 104C of the Act, how do we go about applying it in the post-King Salmon and Davidson era? Case law has provided some tips.
First, there is the reversion, even within an overall broad judgment approach, to certain inalienable truths (or bottom lines). Within s 5(2), the deliberate linking of the general enabling aspects of the definition of sustainable management “while” meeting the recognised bottom lines in (a), (b) and (c) means that they must be achieved “at the same time” (per the majority in King Salmon at [24(c)]). So, a proposal cannot be justified by reference to pt 2 on the basis of its significant positive effects if it will fail to safeguard the life-supporting capacity of a water body.
Secondly, it is important to remember that many of the matters of national significance (excluding, for the moment, significant indigenous vegetation and significant habitats of indigenous fauna) within pt 2 are protected only from inappropriate subdivision, use and development. As the Supreme Court in King Salmon said and the Court of Appeal in Man O’ War Station Ltd v Auckland Council ( NZCA 24,  NZRMA 121) confirmed, what is inappropriate “should be assessed by reference to what it is that is sought to be protected” (at ). That will necessarily involve a series of value judgments, so long as the underlying policy framework that has been implemented in accordance with pt 2 leaves scope for debate.
Thirdly, and finally, whether balancing between factors within pt 2 or between different factors in ss 104 or 171 themselves, judgments must be made as to the weight to be applied to a particular factor. That is a consequence of the requirement to “have regard to” those factors (as to which, see New Zealand Fishing Industry Assoc Inc v Minister for Agriculture and Fisheries  1 NZLR 544 (CA) per Cooke P). As indicated above, policies that are more directive (for example “avoid”), or more recently promulgated (for example post-King Salmon) may be given more attention than policies that are cast in more vague and woolly language. A classic example of this difference exists currently between the directive policies 13 and 15 of the NZCPS and the more general policies that apply to aquaculture (policy 8) and ports (policy 9).
So, for all the talk of the death of the OBJ, scope remains for its use in resource consent applications. In my opinion, it is crucial that we keep some degree of flexibility in our system to respond more quickly to changing norms in society through resource consent applications. The OBJ is central to that premise. Otherwise, we are left at the mercy of the tortuous sch 1 process for any change that challenges those norms, no matter how beneficial they may be and no matter how inconsequential their environmental effects are.
The recommendation by the Resource Management Review Panel to remove the words “subject to [pt] 2” from the equivalent of s 104 in any new legislation would be a retrograde step for the quality of resource management decision-making. Far from recognising the decisions in King Salmon and Davidson, as the Panel suggested it would, any such repeal would betray the careful, fine-grained analysis in those decisions that preserve some remaining scope for judgment. In our haste to achieve greater certainty within our resource management system, we must be careful not to straight–jacket ourselves to the detriment of both the natural and built environments we seek to serve.
The author was junior counsel for the appellant in Davidson before the Environment Court and on leave to appeal to the Court of Appeal.