“Blue Horizons” published in the Resource Management Journal (August 2011 RMJ pp21-24) offered some preliminary views on further improvements in practice under the Resource Management Act 1991 (RMA) against the background of the proposed RMA Phase II reforms and the government’s focus on simplifying and streamlining the process under the RMA. In particular, “Blue Horizons” focused on the use of alternative methods of environmental conflict resolution (ECR) and collaborative governance methods in the plan preparation process. Subsequently, a series of papers prepared by other authors have focused on speed of decision by the Environment Court when deciding appeals against submissions on plan changes and variations. This article, “Blue Horizons 2”, responds to the calls for merits based appeal rights to be replaced by appeals to the High Court on questions of law only.
Before considering the “chosen path” selected by the critics of the Schedule 1 process it is relevant to consider the streamlining effect of the RMA plan process on other aspects of resource management, and the effect of reforms made to Environment Court procedure.
Streamlining effect of the RMA plan process
The plan preparation process under the RMA enables resource consent processing to be streamlined by defining the status for activities that require consent, and by providing the objectives, policies, and method based criteria against which applications are assessed. This has a direct consequence on the number of applications that need to be notified in some way. The most recent RMA survey data (2010/2011) available from the Ministry for the Environment reveals that 2,263 (6%) applications were notified in some way, that 1,414 (4%) applications were publicly notified, and that 357 (1%) resource consent decisions were appealed to the Environment Court. While the number of resource consent applications made during the period 2010/2011 was down compared with previous periods due to the prevailing economic climate, the survey data indicates that the percentage of applications notified or appealed has remained reasonably static during the period 1997-2011.
The most recent survey data also reveals that the majority of resource consent applications that were processed without notification (94%) were also processed on time.
These are important outcomes, they are likely to be closely related to the certainty provided by operative plans, and indicate that the investment made in preparing these plans by the community either as ratepayers or submitters may be worthwhile. In particular, the current system avoids the need for an adversarial hearing in most (94%) cases. These outcomes are also consistent with the government’s focus on simplifying and streamlining process under the RMA.
It is therefore valid to question whether public participation in the resource consent process would remain static if appeal rights against RMA plan decisions were curtailed. For example, the discussion document on the Auckland Plan canvassed whether there should be greater opportunity for the people to become involved in resource consent decision-making while also advocating for plan appeal rights to be curtailed (see: paragraph 411, p136; and paragraph 402, p134).
Arguably, the current RMA reform agenda is the ongoing remnant of the reform process launched in 1998 by the then Minister for the Environment, Hon Simon Upton. It is interesting to note in that context, that the Minister originally proposed that “appeals on resource consents be limited to points of law”, and that the “Environment Court would continue to hear appeals on plans” (speech at the RMLA 6th Annual Conference 1998).
Similarly, it is also interesting to note in the context of planning reforms in the UK in the 1970’s, the trenchant views of Sir Desmond Heap, the doyen of planning lawyers, that public participation should be limited to the plan preparation process (see: (1973) JPL 201-215). In particular, he drew attention to the “sometimes … bitter sense, of frustration and the feeling that they have not had a fair deal” when submitters discover too late that the consent process results in development being approved either because it complies with the plan or because any adverse environmental effects are less than minor.
Again, these are important points and it would be unfortunate if curtailing plan appeal rights were to result in more public interest in resource consent decision-making as the only available opportunity for contesting the merits of development.
Court reforms
Since 2002 significant reforms have been made regarding procedure before the Environment Court. These include changes to the Court’s practice notes to provide for case management and a code of conduct for expert witness, the appointment of case managers and hearings managers, investment in digital recording for evidence transcription, taking evidence as read where appropriate, departing from de novo hearings and holding focused hearings in appropriate cases, increased emphasis on mediation and expert witness caucusing facilitated by Environment Commissioners, and provision for Commissioner only hearings.
Overall, these reforms resulted in number of appeals awaiting a hearing being reduced from 3,000 in 2001 to 1,400 in 2004. The number of appeals awaiting a hearing has reduced further since 2004, with just over 1,100 appeals awaiting a hearing as at June 2011.
The practical effect of the reforms is that parties can normally expect appeals to be heard by the Court within 6 months from the appeal being filed, unless the appeal has been placed “on hold” by the parties while other methods of resolution are explored. In particular, all plan appeals are actively case managed in the “complex track” unless put “on hold” by the parties themselves. Regardless of which case management “track” an appeal is assigned to, plan appeals are also normally subject to regular reporting back to the Court, by the local authority, on progress with resolution. As at June 2011 there were 705 plan appeals before the Court, with 297 (42%) having been put “on hold” by the parties.
Court reforms in Australasia have been dynamic. For example, a recent paper by Judge Michael Rackemann of the Planning and Environment Court of Queensland emphasized the importance of scheduling expert witness caucusing as soon as practicable in the appeal process (see: [2012] RM Theory & Practice 41). Analysis of that practice during the period 2006-2009 revealed the settlement of appeals had increased from 39% to 66%. The judge noted that:
A significant feature of this process is that it obtains the benefit of the professional discourse at an early stage, at a time when it can inform the parties in the dispute resolution process, not just a judge at trial. (p52)
More recently, a careful analysis of plan appeals based on Court records carried out by Judge Newhook indicates that the “parties hold” track may be one of the causes for delay in resolving appeals (see: August 2012 RMJ). More seriously, the analysis reveals that mediation may be impeded in some cases due to parties (including local authorities) not having the requisite authority to settle. In another paper Environment Commissioner Oliver noted that mediation successfully resolved 80% of appeals referred to mediation (see: [2012] RM Theory & Practice 220).
This experience may indicate that expert witness caucusing should take place at an early stage within a defined period of appeals being filed, followed by mediation; that the “parties hold” track should no longer be an option; and that costs should be awarded against parties who impede the progress of ECR.
The chosen path
Dormer and Payne considered the recent experience in the Waikato region with variations to the regional plan dealing with geothermal exploration and development, nitrogen discharges into Lake Taupo, and water allocation, and suggested that “over 70% of the time occurs in the appeals phase of the process”. They noted that delay results in “opportunity cost” and “policy lag”; and questioned whether it would be sensible to amend the RMA, either to substitute the current Schedule 1 policy statement and plan preparation process entirely or to provide a streamlined alternative that local authorities could adopt in appropriate cases.
Before turning to the reform options assessed by Dormer and Payne it is relevant to note the uptake of alternative methods of ECR and collaborative governance methods in the plan preparation processes considered by them:
- In the geothermal case mediation and negotiation did not occur until the period between the Environment Court and High Court hearings.
- In the Lake Taupo case negotiation and witness caucusing did not occur until the period between the interim and final Environment Court decisions.
- In the water allocation case mediation occurred before evidence exchange but expert witness caucusing did not commence until after all evidence had been exchanged, immediately prior to the Court hearing.
It is for note that in the water allocation case the local authority chose to rely on its own appointed mediator, rather than the appointment of an independent mediator by the Court. Oliver noted that “Where an Environment Commissioner controls a mediation the role is different to that of another outside person” (p236). This is clearly an important point to bear in mind in terms of the likely success of any ECR process. Nolan and others in a careful critique of the reform options assessed by Dormer and Payne (see: [2012] RM Theory & Practice 63) also noted that local authorities do not have a monopoly in relation to public policy. For example, they observed that:
For those parties who participated in the … proceedings it is clear that the Court’s principled approach during the hearings actively encouraged the parties to carefully weigh the merits of potential issues and arguments. This resulted in significant inter-party resolution during the hearings and the ultimate determination by the Court of a narrowed set of issues. In all cases the Variations which the Court ruled on included substantial changes from the version of the Variation introduced to the Court at the inception of the hearings. (p93)
These observations emphasize three points: first, that independent adjudication facilitates dispute resolution; second, that a contestable, evidence based approach to plan preparation delivers a better public policy outcome for the community; and third, that deploying these techniques at an earlier stage as part of an ECR process may be worth considering (as noted above in the discussion on recent Court-led procedural reforms).
Dormer and Payne considered three radical options, the direct referral of plan submissions to the Environment Court, the call-in of plan submissions to a Board of Inquiry, and allocation of the plan preparation function to central government, but discounted them for broadly similar reasons. They considered that these options would result in decision making being removed “from elected representatives who are politically accountable to their community”, a point that requires further interrogation.
The other two options considered by Dormer and Payne were variants on the same theme, namely, a “new one-hearing” procedure at local authority level either with a right of appeal on questions of law to the High Court or with cross-examination being allowed at the hearing. In both cases the rights of appeal to the Environment Court would be abolished. Ultimately, they favoured a hybrid of these options with a “new one-hearing” procedure at local authority level, a right of appeal on questions of law to the High Court, and with cross-examination being allowed at the local authority hearing, and observed that:
… the appeal to the Environment Court on plan matters “has historically provided an important matter for quality control and protection of property rights, as well as a means of ensuring that plans do in fact reflect the matters which Parliament has listed as being of national importance”. Merely leaving the present procedures intact, but simply removing the appeal to the Environment Court is likely to cause considerable anxiety amongst both the “development” and “Green” lobbies, neither of whom have a high degree of confidence in the universal competence of local authorities.
To mitigate these concerns Dormer and Payne proposed that the chair of the new one-hearing panel should be appointed by the Minister for the Environment, and should preferably be judicially qualified; that other members of the hearing panel should be selected by the chair after consultation with the local authority; that at least 40% of the members of the panel should be elected councillors; and that there should be an iwi member of the panel. They considered that this would ensure that hearing panels have the “political and technical experience to hear and decide” plan submissions.
The proposals for amending plan appeal rights from Auckland Council and Local Government New Zealand follow a similar pattern, and also recommend a new “one-hearing” procedure at local authority level. But the proposals from Auckland Council appear to stop short of recommending that the chair of the hearing panel should be appointed by the Minister, whereas the recommendations in the Report of the Land and Water Forum give the local authority a power of “veto” to depart from stakeholder mediated consensus where it sees fit. This does not augur well for active local authority engagement in the collaborative governance process recommended by the Forum.
As noted above, there appears to be a real issue regarding the conduct of some local authorities in actively engaging in mediation, and entrenching a power of “veto” would be unlikely to improve that behaviour.
Public participation and natural justice
The current plan preparation process under Schedule 1 of the RMA makes careful provision for public participation and natural justice. For example, it provides the public with rights of submission and further submission on plans, rights to be heard in support of submissions, and rights of appeal to the Environment Court against decisions on submissions where the Court is free to inquire into the merits of the local authority decision and to substitute its own different decision in appropriate cases. The theory underpinning public participation is that public involvement in the plan process enhances the end product.
The Schedule 1 process also provides local authorities with considerable latitude to prepare plans with minimal public consultation prior to notification, to decide whether to engage in pre-hearing mediation, to appoint the members of the hearing panel that will decide submissions against its own plan, to decide whether to accept or reject the recommendations of the hearing panel, and to decide the pace at which any appeals are progressed by the Environment Court, including whether to participate in mediation or expert witness caucusing. These matters put local authorities in a privileged position and from a public law perspective provide tensions with natural justice and can give rise to the appearance of “institutional” bias, particularly where submissions are decided by the same elected politicians who were previously responsible for deciding to notify the plan.
Amending the Schedule 1 process by curtailing public participation rights will therefore bring into question other aspects of the compact that has been in place since enactment of the Town and Country Planning Act 1953. For example, to ensure natural justice the public may be entitled to question why the local authority should be responsible for appointing the members of the hearing panel, or why the local authority should retain the power to disagree with any recommendations made by the hearing panel and substitute its own view, or why the local authority should be able to refrain from mediation. As a result it is possible that further streamlining may come at a price.
A consequence of replacing merits appeals with appeals on questions of law only is that it would remove the reviewing court’s ability to substitute its own different decision in appropriate cases. The impact of this amendment in cases where appeals on questions of law succeed would be that decisions would be returned to the local authority to take again. That could require a further local authority hearing, and that outcome could negative any streamlining effect intended by the reform.
Compensation rights
Professor Barry Barton has emphasized the trade off between the constitutional guarantee provided by the submission and appeal rights under Schedule 1, and the absence of compensation where plan provisions render land incapable of reasonable use (see: RMLA 10th Annual Conference 2002 proceedings). While Barton defends the “legitimacy of regulation” he nevertheless acknowledges that compensation rights may be appropriate in certain cases under the RMA. Professor Philip Joseph also reached a similar conclusion, but from an entirely different legal and philosophical basis (see: RMLA 9th Annual Conference proceedings).
What is important here is the concurrence of view by leading New Zealand thinkers about regulation and property rights, which indicates that curtailing plan appeal rights may open Pandora’s box for more detailed debate about compensation rights for adverse planning decisions.
Some jurisdictions have managed to resolve these issues neatly. For example, in Queensland compensation was available for adverse planning decisions under the Integrated Planning Act 1997. Under that scheme owners of certain properties were given a period of two years to apply for consent under the previously operative plan. If the local authority refused consent for development, the owner was entitled to compensation for any diminution of land value that resulted from the loss of development potential.
The compensation issue is particularly important in relation to land use controls, because the starting point under s 9 of the RMA is that resource consent is not required unless the proposed activity is contrary to a rule in a plan. While defending the power to regulate, Barton (as noted above) is clear about the legislative safeguards included in the RMA to prevent abuse of discretionary power. For example, the requirement under s 32 for proposed rules to be soundly based on good science or other environmental evidence, and the provision made in Schedule 1 for affected owners to contest public policy via the merits based appeal process. Upsetting this delicate balance between governors and the governed is likely to result in a need to revisit the question of compensation.
Similar provisions to those found in Queensland may therefore need to be inserted into the RMA if plan appeal rights are curtailed in order to restore the constitutional balance between public and private rights. It is unclear whether the local authorities advocating for change to plan appeal rights have considered this consequence. For example, adopting the Queensland solution could result in newly operative plans being deprived of legal effect during their first two years, unless the local authority is prepared to pay out compensation in return for implementing its new plan with full rigour.
Non-adversarial dispute resolution
“Blue Horizons” noted that, generally, the RMA provides a litigation-based method of ECR. That article drew attention to the fact that other jurisdictions make effective use of ECR methods in situations similar to that provided for by the Schedule 1 process, e.g. negotiated rule making developed by the US EPA.
It is also relevant to note that all of the proposals for changing plan appeal rights (except the Report of the Land and Water Forum) focus on a court style hearing with cross-examination being conducted before the local authority, and fail to explore the alternative of non-adversarial conflict resolution.
However, the recommendations in the Report of the Land and Water Forum appear to miss the point that collaborative governance methods, such as negotiated rule making, are a substitute for the primary hearing before the local authority under the Schedule 1 process, and that a formal hearing of some kind would only be required to resolve “any areas where the group has been unable to reach consensus”.
Given the mind shift required to move from adversarial to non-adversarial conflict resolution, it is relevant to consider whether collaborative governance methods should be used before or after notification of the proposed plan. Derek Nolan and others have noted that selection of representative stakeholders may not be problem free (see: August 2012 RMJ), so using collaborative governance methods after notification could resolve participation issues by allowing all submitters to participate in the process.
Quis custodiet ipsos custodes
Who should guard the guardians? Professor Peter Cane makes the simple observation in his book Administrative Tribunals and Adjudication (2009) that merits appeals adjudicated by specialist courts and tribunals are merely an alternative to judicial review. In that sense, there is (at face value) nothing novel about transferring jurisdiction for plan appeals from the Environment Court to the High Court, or in changing the nature of the appeal rights from merits review to appeals on questions of law only. However, Dr Ludwig Kramer noted that the choice of legal forum will, in practice, be determined by local traditions (see: RMLA 7th Annual Conference proceedings). When we pause to reflect on the history of the Environment Court it is clear that there is a long-standing tradition of merits appeals in New Zealand. More importantly, the Environment Court and its predecessors have been leaders in the field since 1953, the Court is the longest standing environmental court, and specialist environmental courts have now been established in more than 40 different countries.
The quality of decision-making by the Court has been assessed independently by Professor Malcolm Grant as being of an equal standard to that of the High Court (see: Environmental Court Project (2000) DETR), and the Court has gained international recognition for best practice (see: Pring: 2009). These accolades open up a new field of enquiry: if merits appeals are to be replaced by appeals on questions of law only, which court should exercise that jurisdiction? Based on the studies compiled by Grant and Pring, there would appear to be no reason why the Environment Court should not continue to exercise jurisdiction in relation to plan appeals regardless of whether they are merits appeals or appeals on questions of law only are provided for. Here it is for note that the Land and Environment Court of New South Wales has a “mixed jurisdiction” that enables it to deal with merits appeals, civil and criminal enforcement and prosecution, and judicial review. As a result, expanding the Environment Court’s jurisdiction to include appeals on questions of law only would not be out of the ordinary in this part of the world.
Conclusion
What conclusions can be drawn from this analysis? Procedure before the Environment Court is continually evolving in accordance with best international practice, and the Court has been very successful in enhancing the speed of decision while maintaining high quality decision-making. Based on this track record, the preferred solution should be to leave the Court to make appropriate changes to its practice in light of the current debate. Such changes to Court procedure could include deleting the “parties hold” track from the Court’s case management practice note, directing that early expert witness caucusing commence within the period of three months after appeals are filed, directing that mediation should occur following expert witness caucusing to resolve any outstanding matters not agreed by the experts, and where necessary holding focused hearings to decide any matters not resolved by mediation. From the statistics available on the success of early expert witness caucusing and more generally in relation to mediation, these procedural amendments could result in up to 80% of plan appeals being resolved without the need for a Court hearing, possibly within 12 months of appeals being filed with the Court.
The alternative option put forward by certain local authorities and the Land and Water Forum for merits appeals to be replaced by appeals on questions of law only, could result in more wide ranging reforms in order to ensure that constitutional guarantees and natural justice are provided for under the reformed process. These reforms could include a requirement that all independent hearing commissioners deciding plan submissions should be appointed by the Minister or by the EPA, that elected councilors should be precluded from acting as commissioners regarding plan submissions, that the commissioners decisions on submissions should be binding on the local authority, that compensation should be payable for adverse planning controls as outlined above in this article, and that the Environment Court’s jurisdiction should be expanded to include deciding plan appeals on questions of law only.
When faced with more balanced analysis of their proposals for reform and knowledge of the possible impact on their own autonomy, it is possible that current criticism of the Court’s performance may dissipate.
Dr Trevor Daya-Winterbottom
Faculty of Law
University of Waikato
Dr Trevor Daya-Winterbottom was General Editor of Resource Management Journal published by the Resource Management Law Association of New Zealand in which this blog was first published