Environmental / Resource Management

Smoke Settles on Supermarket Wars

The Environment Court takes a hard line on trade competition

The decision in General Distributors Limited v Foodstuffs Properties (Wellington) Limited clarifies the approach the Environment Court will take with regard to the new trade competition provisions in Part 11A of the Resource Management Act 1991 (RMA).

The discussion revolved around two proposed supermarkets in the suburb of Tawa, Wellington. General Distributors had operated a Woolworths in the Tawa town centre since the 1970s. However, in 2009 Foodstuffs bought the fee simple to this property from the previous owner, meaning General Distributors needed to look elsewhere to establish a Countdown supermarket and maintain a presence within the Tawa community. General Distributors found a site beyond the Tawa town centre, and consequently applied for resource consent to establish a Countdown supermarket. Foodstuffs lodged a submission in opposition to that application.

A declaratory judgment was sought by General Distributors that Foodstuffs' submission opposing the application was in breach of sections 96 and 308B of the RMA. General Distributors also sought a consequential enforcement order requiring Foodstuffs to withdraw its submission.

Section 96 of the RMA allows anyone to make a submission on a notified resource consent application, but limits this right in relation to trade competition.

Section 308B of the RMA relates to the identification of trade competitors and surrogates. The Court identifies the strength of the new provision as being the requirement for a would-be submitter, if challenged, to demonstrate that it is directly affected by an adverse effect on the environment created by the proposal, and that the adverse effect does not relate to trade competition or its effects.

Foodstuffs' opposition to the resource consent related more to issues of District Plan integrity than specific effects on the environment and focused on the alleged harm the new Countdown would cause to the viability and vitality of the Tawa town centre.

The Environment Court concluded that the reason the opening of the Countdown might have such an effect on the viability and vitality of the Tawa town centre was that it would "compete" with the soon-to-be opened Foodstuffs supermarket on the existing in-centre site, and attract sufficient customers away from it that it would have an adverse effect on that supermarket and on the centre of which it is part.

The Environment Court held that:

"...as a matter of fact and common sense...no matter how you dress it up, that [effect] relates to (ie has connection with) an effect of trade competition in s308B terms."

The Environment Court made a declaration that Foodstuffs' submission breached sections 96 and 308B of the RMA. It decided that an enforcement order requiring Foodstuffs to withdraw its submission was unnecessary as the implications of the declaration were clearly evident.

The declaration in General Distributors sets a benchmark for how the Environment Court will deal with the new trade competition provisions in the RMA in the future, and sends a clear message to submitters that the Court will take a hard line when it comes to identifying trade competition.

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The contents of this publication are general in nature and are not intended to serve as a substitute for legal advice on a specific matter. In the absence of such advice no responsibility is accepted by Brookfields for reliance on any of the information provided in this publication.


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