Pelorus Wildlife Sanctuaries Ltd v New Zealand King Salmon Co Ltd [2012] NZHC 995; [2012] NZRMA 321 (11 May 2012)

Last Updated: 29 May 2012

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

CIV-2011-406-270 [2012] NZHC 995

UNDER the Resource Management Act 1991

IN THE MATTER OF an appeal under s 299 of the Act against a declaration made under s 313 of the Act

BETWEEN PELORUS WILDLIFE SANCTUARIES LIMITED AND NGATI KOATA TRUST

AND NEW ZEALAND KING SALMON CO LIMITED AND MARLBOROUGH DISTRICT COUNCIL

Hearing: 9 May 2012

Counsel: J C Ironside for Appellants

B A Fletcher and Q A M Davies for Respondents

Judgment: 11 May 2012

In accordance with r 11.5, I direct the Registrar to endorse this judgment with the delivery time of 3:30pm on the 11th May 2012.

_{JUDGMENT OF WILLIAMS J}

[1] Pelorus Wildlife Sanctuaries Limited (Pelorus) appeals against the decision of His Honour Judge Dwyer in the Environment Court dated 1 November 2011. The court granted a declaration under s 311(1) of the Resource Management Act 1991 (RMA) that New Zealand King Salmon Co Limited (King Salmon) had a deemed coastal permit under s 10(9)(c) of the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004 (ARA) to discharge 3,000 metric tonnes of salmon pellets

_{annually until 31 December 2024.}

PELORUS WILDLIFE SANCTUARIES LIMITED AND NGATI KOATA TRUST V NEW ZEALAND KING SALMON CO LIMITED AND MARLBOROUGH DISTRICT COUNCIL HC BLE CIV-2011-406-270 [11 May

2012]

[2] Pelorus is supported in this appeal by the Ngati Koata Iwi Trust Board and the Friends of Nelson Haven and Tasman Bay.

Background facts

[3] King Salmon and its predecessors have been marine farmers in the Marlborough area for a long time. The company has been marine farming on this site at Waihinau Bay since 1991. It obtained a licence for this site on 24 April of that year. The licence is designated MFL 456. The licence was granted under the Marine Farming Act 1971 (MFA). It authorised the farming of salmon and mussels at the site. It was to last for the standard period of 14 years although, provided all conditions were adhered to, there was a firm expectation of ongoing renewals.

[4] Salmon farming involves the use of dry pellet food brought onto the farm and fed to salmon held in large cages in the water. Clause 1(7) of the licence provided:

Only dry pelleted feed is to be used. The use of alternative food must be approved in writing by the Regional Manager, MAF Fisheries, NELSON.

[5] No food quantity is set in the licence.

[6] The RMA came into effect on 1 October 1991. It changed the regime for consents in respect of marine farming. Under the new Act, separate consents would be required for space occupied, structures placed, activities undertaken and discharges made. For completeness, I note that additional consents were also required after 1991 under ss 67J and 67Q of the Fisheries Act. That Act’s focus in this respect was to protect wild fin fisheries from marine farming activities.

[7] Existing MFA leased or licenced marine farms were exempted from this new dual permitting regime by the terms of s 426 RMA. That section grandfathered in all previously permitted farms and continued to apply the MFA regime to them as if that Act had not been repealed.

[8] The legislative scheme was complicated to say the least. Confusion developed among licence holders as to which regime applied in any given

circumstance. Matters came to a head over variations to marine farming licences. An application was made by Southern Ocean Seafoods Ltd (a predecessor to King Salmon) to the Planning Tribunal (as it was then known) for declarations as to which regime applied, when licence holders sought to vary their pre-RMA marine farming licences. The Tribunal held in Marlborough District Council v Southern Ocean

Seafoods Limited[1] that the grandfathering provision in s 426 provided no greater

protection than the parameter of the existing licence. Any variation to it required

RMA consents.

[9] On 11 August 2000, King Salmon applied to Marlborough District Council for consent to change its structures on MFL 456 and to discharge up to 3,000 metric tonnes of salmon feed per annum into Waihinau Bay. King Salmon did not concede that it was required in law to do so. It felt it could rely on the general terms of clause 1(7) of MFL 456. But, strategically, the company felt it would be easier (and no doubt quicker and cheaper) to make the application under protest rather than fight the issue out in the Environment Court.

[10] King Salmon was granted Discharge Consent No. U000956 accordingly on

2 December 2003. That consent expired on 31 October 2010. King Salmon has not applied to renew or extend it.

[11] So, as Judge Dwyer sets out in his judgment, as at 1 January 2005, King Salmon held two different forms of permission to carry out salmon farming activities at Waihinau Bay. It held MFL 456 due to expire on 30 April of that year, and it held the discharge permit U000956 due to expire on 31 October 2010.

[12] 1 January 2005 is important because that is the date that the ARA came into force. That Act drew a line in the sand on marine farming by bringing an end to the old grandfathered MFA regime, albeit a long slow end. The Act lifted the moratorium on the grant of further marine farming permits that had been in place for

_{some years and gave effect to the settlement of Maori aquaculture claims.}

[13] Section 10 is the primary substantive provision covering the transition from the old MFA to the new RMA. Section 10(1) deems MFA leases and licences to be coastal permits under the RMA. Section 10(3) converts the conditions of any MFA lease or licence into coastal permit conditions. Subsection (4) gives consent authorities 12 months to review any deemed coastal permits including their conditions and, if necessary, to bring them in line with RMA requirements.

[14] Subsection (8) is significant. It gives all of those deemed coastal permits one term of 20 years from the commencement of the ARA.

[15] Thus, the effect of s 10 is to end the old perpetual 14 year renewal regime under MFA once and for all, in return for granting the grandfathered leases or licences a final term of 20 years.

[16] Subsection (9) is the focus of the debate in this appeal. It provides:

(9) A deemed coastal permit is to be treated as if it–

(a) authorises the holder to undertake aquaculture activities in the area specified in the lease or licence concerned to the extent consistent with the lease or licence as in force immediately before the date specified in subsection (2); and

(b) includes all the coastal permits that would otherwise have been required under sections 12 and 14 of the Resource Management Act 1991 to undertake those activities; and

(c) includes all the coastal permits that would otherwise have been required under section 15 of the Resource Management Act 1991 to undertake those activities to the extent that they were being undertaken at the commencement of this Act.

[17] The focus is subsection (9)(c) relating to discharges under s 15 RMA.

[18] It will be recalled that in 2005 at the commencement of this Act, King Salmon held a discharge permit under s 15 to allow it to discharge up to 3,000 metric tonnes of dry pellet fish food per annum at the site. It also had the benefit (the extent of which remained untested) of clause 1 (7) of MFL 456.

[19] Pelorus’ argument comes down to a narrow point. It says that paragraph (c)

does not apply to give King Salmon a deemed coastal permit to discharge because

that paragraph only applied to lease or licence holders who had not obtained a relevant permit either under s 21(3) of the old Water and Soil Conservation Act 1967 or s 15 RMA.

[20] King Salmon argues that paragraph (c) seen in context, was intended to free MFA lease or licence holders from any requirement to obtain discharge permits under s 15 RMA in any circumstances but only to the extent that the activities at the site were undertaken when the Act commenced – that only to the extent of their existing use.

[21] King Salmon is surely right.

[22] There is nothing in the terms of s 10 that suggest those with separate RMA discharge permits were not intended to be beneficiaries of this comprehensive reform. In fact all of the words point to there being no exclusions from its benefit. Section 10(1) says: “each lease and licence is deemed to be a coastal permit ...”. Section 10(9) says that each of these deemed coastal permit is a comprehensive consent to undertake aquaculture activities in the area of the lease or licence. Most particularly s 10(9)(b) and (c) say that deemed coastal permit is at once an occupation right, a right to place or attach structures, a right to use or divert water, and finally a right to discharge contaminants into water. If there was any doubt about the comprehensive application of s 10, such doubt is removed by s 8(1). That provides:

Sections 9 to 17 apply to every lease or licence that –

(a) has been executed under the principal Act; and

(b) is in force immediately before the commencement of this Act. (my emphasis)

[23] MFL 456 clearly fits that description.

[24] Mr Ironside focuses on the phrase “would otherwise have been required under s 15” in paragraph (c) of s 10(9). He says that must be taken to mean “is required in the particular case” – or words to similar effect. From this he argues that if, as at the date of commencement of the Act, such a discharge permit was not

required (in this case because King Salmon already had one), that would prevent paragraph (c) from applying in the case of that lease or licence holder.

[25] I do not think that is right. The phrase “would otherwise have been required under s 15” plainly means would have been required if not for this deeming section. The fact that King Salmon already had one is beside the point. Subsection (9) is intended to apply generically to all MFA leases and licences irrespective of their particular circumstances. In other words, the subsection refers to the need in law for a discharge permit, not the need in fact for one.

[26] Apart from the fact that this is the plain meaning of the words used in subsection (9), to adopt any other approach would, in my view, be unfair. It would be to penalise those who have applied under the RMA for discharge consents accepting (albeit grumblingly) that there may be doubt about whether such consents are needed. In the case of pellet feeding, King Salmon clearly accepted in 2000 that clause 1(7) of MFL 456 may not have been enough to avoid the need for a discharge permit, and it was not worth the fight with the consent authority to clarify the position.

[27] I do not accept Pelorus’ argument that these deeming provisions were really aimed at protecting the position of more passive marine farming activity such as mussel and oyster farming, rather than fin fish farming which involves significant and active feeding.

[28] Hansard and the Select Committee Report both make it clear that fin fish farming was in the forefront of the minds of the Parliamentary reformers when they enacted this measure.

[29] I do agree with Mr Ironside that the Select Committee report on the ARA Bill suggests the Committee was focused on the needs of marine farmers who were in technical breach of RMA because most farmers did not think they needed discharge consents. But that does not mean farms that did have consents were not covered in the end. Clause 120 of the Bill as originally drafted was to cover discharges including, as the clause title makes plain, “artificial feeding”. It originally provided

that there would be no blanket transitional discharge right. Rather, if they did not already have discharge permits, marine farmers would be required to apply for such rights within three years in order to obtain transitional protection.[2]

[30] If that clause had been enacted, King Salmon would have received no automatic protection for its discharge activity. The clause was not enacted. Instead s 10(9)(c) was.

[31] The Select Committee decided that Parliament should reverse the onus, placing it on consent authorities to control the environmental effects of existing discharges by exercising special powers of review. The Committee said:

Clause 120 as drafted puts the onus on the marine farmer to apply within

3 years to regularise the discharge. We recommend a simpler and less costly course. This is to treat the deemed permit as including the discharge permit and giving the council the right to include appropriate conditions under clause 117(4) [now s 10(4)] when the deemed coastal permit is reviewed.

[32] To cut a long story short, the simpler and cheaper alternative to the complicated clause 120 regime was to give everybody a discharge permit (to sit

alongside all other deemed consents), and, by review under s 10(4), to require councils to claw back any discharge activity considered inappropriate

[33] Judge Dwyer is right when he says Parliament’s intention was to create security of tenure for all existing MFA licence holders and clear certainty that they would be able to continue in business for the next 20 years.[3]

[34] Pelorus’ argument would create a third class of deemed permit holder – an intermediate class – those who obtained RMA discharge consents in the years between 1991 and 2005. That class would not have the benefit of 20 years certainty, when all the indicators are that the reform was intended to have universal application to all grandfathered leases and licences.

[35] Even if I thought Mr Ironside’s interpretation was available on the plain words of the statute (and I do not), it would be quite inconsistent with that statutory purpose.

[36] The appeal is dismissed accordingly. I will reserve costs. They may be addressed by brief memoranda.

_{Williams J}

---

[1] [1995] NZRMA 220.

[2] The text of clause 120 was as follows:

Artificial feeding and discharge of contaminants

(1) A deemed coastal permit does not authorise the discharge of contaminants into water, including

feeding by artificial means, in contravention of section 15 of the Resource Management Act

1991.

(2) Subsection (1) applies even though the lease or licence that the coastal permit relates to expressly authorises the discharge of contaminants into the water.

(3) However, subsection (1) does not apply to the discharge of contaminants–

(a) if authorised by a right or authorisation that is deemed to be a coastal permit by section 386 of the Resource Management Act 1991; or

(b) if authorised by a coastal permit granted under that Act to do something that would otherwise contravene section 15 of that Act; or

(c) for 3 years after the commencement of this Part to the scale and extent done before commencement; or

(d) if an application is made for a coastal permit for the activity within three years after the commencement of this Part, to the scale and extent done before commencement until the application and any appeal have been determined.

(4) An application under subsection (3)(d)–

(a) is to be treated as an application for a controlled activity; and

(b) must not be notified under section 93 of the Resource Management Act 1991 unless the consent authority considers that section 94C(2) of the Resource Management Act 1991 applies to the application; and

(c) if the activity the application relates to is not provided for in a regional coastal plan, must be determined under section 104A of the Resource Management Act 1991 as if the consent authority had reserved control over all aspects of the activity for which the coastal permit is required.

(5) A coastal permit granted in relation to an application under subsection (3)(d) just be granted for a term that expires on the same day as the deemed coastal permit it relates to expires under section 117(8).

[3] NZ Parliamentary Debates, 3rd Reading, Vol 622, page 17777.