Environmental / Resource Management

Financial Contribution Conditions Now Confirmed to be Available for Designations

Earlier this month, in the decision Tauranga City Council v Minister of Education [2019] NZEnvC 032, the Environment Court considered as a preliminary question of law whether sections 171 or 174 of the RMA allow a territorial authority to recommend, and the Environment Court to impose, conditions requiring “monetary contributions” on designations (other than conditions that are offered on an Augier basis)

Background

The particular notice of requirement that gave rise to this question concerned a proposal to designate land for primary school and early childhood education purposes.  The Council recommended a condition requiring financial contributions in accordance with the relevant rules of its District Plan for transport network, stormwater, wastewater and water supply infrastructure unless a separate funding agreement was reached.  The Minister contended that financial contribution conditions could not be applied because a notice of requirement is not a resource consent.  It rejected the condition and the Council appealed. 

Section 171 provides the power to council to recommend to a requiring authority that it “impose conditions” on its designation.  Section 174 affords the Environment Court the power to “impose conditions … as the Court thinks fit” on appeal.  These sections are worded with less detail than section 108 whereby a resource consent may be granted on any conditions that a consent authority considers appropriate including specific types of conditions listed at section 108(2).  Section 108(2)(a) provides expressly for financial contribution conditions. 

Considerations

The Court considered the following points arising from case authority:

  1. With regard to a council’s statutory powers to impose charges or require contributions, a power to levy money may arise by express words or by “necessary implication” - the Court noted that it is mindful of the Court of Appeal’s observation in Harness Racing New Zealand v Kotzikas [2005] NZAR 268, that it had not located a case in which a “necessary implication” has been held to arise;
  2. A condition requiring some form of contribution imposed on a person seeking permission under the RMA is part of the regulatory consenting process rather than a power of expropriation and the validity of such a condition should be considered in the same way as for any other condition (per the Supreme Court in its decision in Waitakere City Council v Estate Homes Limited [2007] 2 NZLR 149).

While not binding on the Court, it also considered the Final Report and Decision of the Board of Inquiry into the New Zealand Transport Agency Waterview Connection Proposal (2011).  The Board of Inquiry concluded that, while section 149P(4), being the relevant corresponding provision under that process, does not expressly provide that a condition on a designation may require a payment of a financial contribution, this is the necessary implication from the purpose of the RMA, including the mitigation of adverse effects on the environment, and from the unambiguous logic that necessarily follows from the express provisions. 

We note the Final Report and Decision of the Board of Inquiry into the Proposed Men’s Correctional Facility at Wiri (also 2011), where the Board considered that it had the power to impose a financial contribution where there is a logical connection between the proposed development and the particular condition proposed (also referring to Estate Homes).

Findings

The Minister contended that the specific types of conditions listed in section 108(2) extended the general power in section 108(1) to impose conditions and therefore the more broadly worded powers in section 171 and 174 cannot be read to include the availability of financial contributions.  The Court disagreed.  It considered that the more specific list of types of conditions included in section 108(2) (including, for example, financial contributions, bonds and services or works) clarify the essential power in section 108 to impose conditions rather than extending it by stating types of conditions that go beyond it. 

The Court recorded that it is difficult to identify any reason why the powers to impose conditions in resource consents and notices of requirement should be substantially different in any way.  In coming to this conclusion, the Court noted that conceptually there is not a great deal of difference in requiring a person to undertake works to mitigate adverse effects and requiring a person to pay the consent authority to undertake the same works.  The latter may be more efficient especially in dealing with incremental or cumulative effects. 

Ultimately, the Court found that the power to impose financial contributions is not so much implied or otherwise created or even extended.  Rather, the identification of the power amounts to interpreting the provisions for designations on the basis that designations should be subject to the imposition of conditions on the same basis and for the same reasons as for resource consents, including financial contributions where provided for in the applicable district plan. 

Section 108(9) and (10) also concern financial contributions.  In particular, section 108(10) provides that such a condition must be imposed in accordance with the purposes and levels specified in the district plan.  The Court records that, to the extent that the scope of the power to impose such a condition amounts to incorporating the provisions in section 108(2)(a), (9) and (10) into sections 171 and 174, that is a “necessary implication” in order to ensure that designations can be made subject to appropriate conditions to the same extent as resource consents in light of the purpose of the RMA.  It would follow that any financial contributions are constrained by district plan provisions.

Comment

The relevance of this decision may be set to have a short shelf life as the Resource Legislation Amendment Act 2017 repeals section 108(2)(a), (9) and (10) on 18 April 2022.  Whether or not that survives the current government’s proposals to review the Amendment Act remains to be seen.

© Brookfields Lawyers 2019 – All Rights Reserved

 

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