The recent decision of the Court of Appeal in Rodney District Council v Eyres Eco-Park Limited  NZCA 13 (20 February 2007) has reversed earlier rulings of the Environment Court and the High Court as to the correct interpretation of section 10 of the Resource Management Act 1991 (RMA). In particular, the decision focuses on the identification of existing use rights as progressively more restrictive plan provisions are rolled out.
The case concerned an area of coastal land which had traditionally been used for farming purposes. Eyres Eco-Park Limited sought approval from Rodney District Council to subdivide the land and develop an eco-tourist venture. In considering the application the Environment Court had to determine the scope of existing use rights. The question of existing use rights was triggered by the adoption of a rule limiting the scale of destruction of vegetation on the land. That rule was contained in the Transitional Plan notified in 1988. Since that time, the rules had changed through a Plan Change in 1995 and through a Proposed Plan notified in 2000. Also during this time, the scale of the farming had reduced significantly, with a corresponding diminution of the effect on native vegetation.
The Court of Appeal had to consider which of these rules, and therefore what point in time, applied in the assessment of the change in the character, scale and intensity of the effects of the activity under section 10(1)(a)(ii) of the RMA. For reference, section 10(1)(a) provides:
10 Certain existing uses in relation to land protected
(1) Land may be used in a manner that contravenes a rule in a district plan or proposed district plan if—
- The use was lawfully established before the rule became operative or the proposed plan was notified; and
- The effects of the use are the same or similar in character, intensity, and scale to those which existed before the rule became operative or the proposed plan was notified.
Despite receiving submissions about the policy behind the preservation of existing use rights, the Court was ultimately satisfied that the issue could be resolved through the careful interpretation of the relevant statutory provisions.
The Court established that the word ‘rule’ in the introductory wording of section 10(1) means a rule which is currently in force and that the reference to ‘rule’ in the rest of section 10(1) must have the same meaning. This lead to the conclusion that existing use rights must be assessed at the time the current rule (in this case, the rule notified in 2000) came into force, not the initial rule (in this case the rule from 1988). In other words, in making an assessment under section 10(1)(a)(ii), the effects of the use at the point immediately before the notification of the current plan (and not the effects at the time the activity first contravened a rule in a plan) must be compared with the effects of the use arising after notification.
The case addressed an apparent consequence of this interpretation - if an activity has temporarily ceased or reduced immediately prior to the notification of a relevant rule existing use rights may be lost. When considering such a scenario, the Court warned that a ‘snapshot’ view of the effects of an activity the day before a new rule comes into force should not necessarily be taken. Rather, in the case of inherently cyclical activities, existing use rights are to be assessed on the basis of the normal year-round operation of the activity.
The Court was careful to note that where an ongoing activity contravenes a number of rules that have been enacted over time, the scale and effects of the activity as at the date of coming into force of the initial rule will still be relevant, as it is necessary to determine that the activity has remained ‘lawfully established’ throughout.
In addition, the Court considered whether a reduction in the character, intensity and scale of the effects of the activity over time might impact upon the protection afforded by section 10(1)(a). Answering this question in the affirmative, it held that section 10(2) (which provides that existing use rights are lost after 12 months of discontinuance) will apply in two situations, namely:
- where the use of the land has discontinued completely; or
- where the effects of that use have diminished to such a point that the use no longer contravenes the plan (i.e. the activity becomes 'permitted').
In this case, it is possible that when the Environment Court reconvenes to hear the appeal, it will find that the farming operation diminished to such a point that the effects of that land use on vegetation clearance were within the levels permitted by the district plan. If that is the case, then the consequence of the Court of Appeal’s decision is that the existing use rights will be lost.