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Natural justice adrift in Schmuck v Northland Regional Council

Natural justice adrift in Schmuck v Northland Regional Council

Natural justice adrift in Schmuck v Northland Regional Council

Monday 7 December, 2020

Douglas Schmuck operates a boatyard business in the Bay of Islands, opposite the Opua car ferry departure wharf. The consents and easements to operate the boatyard have been subject to more than twenty years of dispute, described by the Courts as “torturous” and “fraught with controversy”. Some local residents formed a group, the Opua Coastal Preservation Society Incorporated, to challenge the grants of the consents and easements. The reasons for the opposition include the boatyard’s occupation of the public reserve, which involves wrenching up and washing down boats on the reserve before moving the boats across to Schmuck’s private property.

Last year, the Supreme Court upheld the easements granted to Schmuck for rights of ways and occupation of parts of the reserve for the boatyard business. The final issue is Schmuck’s appeal to secure the renewal of resource consents under the Resource Management Act (RMA) to discharge wash water, contaminants from boat repair activities and stormwater onto Schmuck’s own property, parts of the adjacent reserve and the Coastal Marine Area (CMA), including the air above the CMA.  The discharge consents expired in 2018 but are still protected and exercisable under section 124 of the RMA whilst their renewal is being determined.

The Environment Court decision

The Environment Court decided it could only grant the renewals on Schmuck’s property, not those on the adjacent reserve or CMA. It granted Schmuck’s renewal applications for discharge consents but on different conditions. The Environment Court’s reasons included:

  • There was a typographical error in the conditions which did not correctly describe the survey plan for the reserve;
  • Following a site visit, the Environment Court considered there were better solutions to control the discharge activities whilst reducing use of the reserve; and
  • It did not consider it could grant the renewals over the reserve, due to the inaccurate reserve description in the renewal application and that most of the activities could be contained within Schmuck’s private land.

The High Court decision

Schmuck appealed to the High Court on the grounds that the Environment Court had breached natural justice by failing to seek comments or submissions from the parties on the typographical errors, its views concerning the reserve consents, and its solutions to the discharge consents. The High Court upheld the appeal on the grounds that there had been two substantive and fundamental breaches of natural justice by the Environment Court.

The first breach of natural justice

The High Court held that the Environment Court had breached natural justice by failing to make the parties aware of its findings about the typographical error before making its decision, which infringed Schmuck’s right to have his appeal fully heard. The Environment Court’s determination also effectively interfered with section 124 of the RMA.

The Environment Court also erred in law in taking a subjective, rather than objective, approach to reviewing the discharge consents when it decided that the consents did not apply to the reserve. The High Court pointed out that facts demonstrated that the incorrect description was obviously a typographical error. This view was supported by all parties’ certainty that the discharge consents applied to the reserve, being the core of the overall opposition to their renewal.

The second breach of natural justice

The High Court held that a second breach of natural justice arose when the Environment Court formed its own views and solutions after the site visit on how to improve the existing infrastructure and exercise the discharge consents, but failed to put these to the parties. The Environment Court made its decision to grant the consents based upon facts on which it had not heard evidence.

The Outcome

The High Court remitted the renewal applications back to the Environment Court to reconsider on the basis that the consents do apply to activities on the reserve and any solutions proffered by the Environment Court must first be referred to the parties for their submission and further evidence.

What does this mean for the consideration of resource consent applications?

This decision is a reminder to lower courts, and consent authorities, that they must be objective when interpreting legal documentation, whether legislation, court orders or consent conditions. They must also inform the parties if they consider there are other facts or issues which are relevant before issuing a decision. Failing to allow parties the opportunity to make submissions on such matters can be a breach of natural justice.


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