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The permitted baseline in plans

The permitted baseline in the RMA

The permitted baseline is a concept designed to disregard effects on the environment that are permitted by a plan or have been consented to (see Queenstown Lakes District Council v Hawthorn Estate Limited [2006] CA45/2005). In Lloyd v Gisborne District Council [2005] W106/05, the Court summed up the three categories of activity that needed to be considered as part of the permitted baseline (further developed through cases such as Bayley and Arrigato) as being:

  1. What lawfully exists on the site at present
  2. Activities (being non-fanciful activities) which could be conducted on the site as of right; ie, without having to obtain a resource consent (see for example Barrett v Wellington City Council [2000] CP31/00).
  3. Activities which could be carried out under a granted, but as yet unexercised, resource consent.

The High Court in Rodney District Council v Eyres Eco-Park Limited [2007] CIV-2005-485-33 held that existing use rights are not part of the permitted baseline as they are not permitted by the Plan. The High Court noted that they may however be important in assessing the receiving environment. Although this case was appealed to the Court of Appeal, this particular point was not in issue ([2007] CA87/06)

The Resource Management Amendment Act 2003 inserted s.104(2) which provides as follows:

“When forming an opinion for the purposes of sub section (1)(a), a consent authority may disregard an adverse effect of the activity on the environment if the Plan permits an activity with that effect.”

This has been regarded by many commentators as ‘codification’ of the permitted baseline. However it remains unclear to what extent this subsection is a code and overrides the existing case law on the issue. The main difference is that the permitted baseline has changed from being mandatory to discretionary.

In its codified form, the permitted baseline test is most explicitly applied during the resource consent process when decisions are being made as to whether a consent application needs to be notified (ie, deciding whether the effects are more than minor and who is affected), decisions on consents (s.104) and in some enforcement matters.

Section 94A(a) provides that a consent authority “may disregard an adverse effect of the activity on the environment if the plan permits an activity with that effect”. Section 94B(3)(b) provides that a person ”may be treated as not being adversely affected if, in relation to the adverse effects of the activity on the person, the plan permits an activity with that effect”.

The use of the word ‘may’ in sections 94A and 94B conveys an element of discretion and it is therefore up to the decision-maker as to whether the permitted baseline test is used when assessing effects and identifying affected parties.

Consideration of the permitted baseline when writing plan provisions

General implications for plan writing

The incorporation of the permitted baseline into plans will not have a noticeable effect on the way provisions look or are worded, although some of the standards, terms and conditions used may change. The greater effect is likely to be on the thought processes that go into writing rules for permitted activities and, to a lesser extent, other classes of activity (where these contain thresholds that distinguish between permitted activities and the relevant consent class). It will be important that plan writers not only have a clear understanding of the environment as it exists now, but also the environmental outcomes the plan is aiming to promote.

The following considerations may be useful for reflecting the permitted baseline in plan rules:

Permitted activities:

Controlled activities

While the permitted baseline is intended to consider what is permitted ‘as of right’ by a plan, cases such as Ohope Beach Development Society Inc. v Whakatane District Council [2002] A136/2002 have demonstrated a possible overlap that means care may be needed drafting rules for controlled activities. While it is unclear whether the ‘codification’ of the permitted baseline (in section 104C(2)) means this will continue to be the case, it may still be worthwhile to consider:

Case law relevant to the permitted baseline

Bayley v Manukau City Council [1999] CA115/98. Appeal to the Court of Appeal following an unsuccessful attempt in the High Court to overturn a decision by the Manukau City Council regarding non-notification of a resource consent to build a 57-unit apartment complex. The Court made several important observations that inform the application of what has become known as the ‘permitted baseline test’, these being:

  1. the appropriate comparison of the activity for which the consent is sought is what either is being lawfully done on the land or could be done there as of right,
  2. [expanding on Salmon] …consideration of the effect on the environment of the activity for which the consent is sought requires an assessment to be made of the effects of the proposal on the environment as it exists or would exist if the land were used in a manner permitted as of right by the plan.

The Court also noted that the words “activity for which the consent is sought” in s.94(2) do not extend to an activity which is able to be undertaken without that consent and, more importantly, is unable to be considered by the council.

Barrett v Wellington City Council [2000] CP31/00. A judicial review of a Wellington City Council decision not to notify an application to establish a retirement home. In considering the permitted baseline, the Court said:

“I accept that when the Court of Appeal was referring to what could be done on the site as of right and had in mind credible developments, not purely hypothetical possibilities which are out of touch with the reality of the situation. A test based on theory rather than reality would place an intolerable burden on consent authorities.”

Smith Chilcott Ltd v Martinez [2001] AP74-SW/00. Appeal on questions of law regarding an Environment Court decision to quash an Auckland City Council decision to grant resource consent for apartments in Herne Bay. The appellants claimed in their second question of law that the Environment Court was wrong to reject the appellant’s complying development being the credible alternative to which it should refer when applying the permitted baseline. The High Court accepted the approach taken in Barrett that it would not be appropriate to accept as a permitted development a proposal that is simply not credible. However the High Court considered that in using a ‘likely’ test in regard to possible development in this case, rather than ‘credible’ test, the Environment Court had erred and this affected the exercise of its discretion. The appeal was allowed.

Smith Chilcott Ltd v Auckland City Council [2001] 3 NZLR 473 CA267/00, CA12/01. Appeal on questions of law following from Smith Chilcott v Martinez. The second question of law asked what the permitted baseline test required: likely, credible, or not fanciful activities? The Court of Appeal agreed that it was not enough for the developer to point to a very remote possibility and to treat it as something that could be done as of right. However it also agreed with the High Court that comparative tests or tests that rely on assessments of financial viability stray from what is called for. The Court went onto say that:

“…in accordance with the purpose of the legislation anything that is permitted but fanciful does not provide a realistic indication of what is permitted and a proper point of comparison. There must be practical fact-specific assessment. Of the various phrases used in Barrett and elsewhere, ‘not fanciful’ appears to set the standard appropriately.”

Arrigato Investments Ltd. v Auckland Regional Council [2001] CA84/01. Court of Appeal decision on two questions of law relating to an earlier decision that had seen the Rodney District Council decline a subdivision consent. In regard to the permitted baseline the Court was asked whether the Environment Court determination (subsequently overturned in the High Court) that a granted, but unimplemented, resource consent [in this case for an earlier smaller subdivision] was relevant to the baseline approach.

The Court summed up the application of the permitted baseline as:

“…the existing environment [as defined in s.2(1)] overlaid with such relevant activity (not being a fanciful activity) as is permitted by the plan. Thus, if the activity permitted by the plan will create some adverse effect on the environment, that adverse effect does not count in the s.104 and 105 assessments…it is deemed to be already affecting the environment……”

The Court rejected the argument of unimplemented consents falling within the permitted baseline because a consent required permission to avoid being unlawful and therefore was not ‘as of right’. However the Court then went on to indicate that it would be ‘artificial’ to require the effects of unimplemented consents to be ignored entirely, or to be a compulsory component, so some flexibility was required.

88 The Strand Ltd v Auckland City Council [2002] M330-PL02. Unsuccessful application for a judicial review of a decision by Auckland City Council to process a resource consent application to establish a business that included noise generating activities such as a car wash on a non-notified basis. The Court accepted that the application said it would comply with rules in the district plan and also looked at the permitted baseline in terms of the existing environment. While the proposed development was not a permitted activity, there were a number of activities already on the site that were entitled as of right to generate noise up to the limits set in the plan. In that light, the noise making activities proposed (carwash and vacuum) were considered to be part of the permitted baseline provided that they did not exceed plan rules.

Ohope Beach Development Society Inc. v Whakatane District Council [2002] A136/2002. Appeal against a decision by Whakatane DC to grant a resource consent for the construction of a large residential and holiday accommodation complex at West Ohope. The Court took the floor area rule of ‘greater than 100m2’ for controlled activities in Plan Change 50 as “circumscribing” the permitted baseline but noted that in this case “minimal assistance is derivable from comparing the effects of hypothetical as of right building…” (due to the difference in scale). In paragraph 38 the Court noted:

“the observation was made that the permitted baseline is to be applied to those activities which are permitted under the relevant plan…. while that is so, it is open to contention that application of the permitted baseline extends to at least some controlled activity situations. Of particular import in that context is the type of situation where the matters over which council has reserved control lie within a plainly limited compass with little discretion available… In such an instance the consent outcome can perhaps be described as so apparent in its terms as to amount effectively to a permitted activity”.

Poll v Waitakere City Council [2003] A152/2003. An appeal relating to the proposed operation of a restaurant and wedding reception facility building on a business that had operated since 1988 and expanded in terms of building size and operating hours through previously granted resource consents. Activities already allowed ‘as of right’ under the previously granted consents were considered the permitted baseline.

Gulf District Plan Assn v Auckland City Council [2005] A188/05: In paragraph 43 the Court considered whether an unimplemented land use consent was relevant in considering the permitted baseline for a proposed non-complying subdivision consent. The Court noted:

“We have not examined the connection between the land use consent and the subdivision proposal in detail, and therefore do not address whether the land use consent could proceed without the subdivision being granted. However we consider it unlikely that the land use consent could be implemented on its own, given that significant elements of the vegetation clearance and works associated with access clearly arise from the proposal to create two lots. We therefore do not give the land use consent any weight”.

Lloyd v Gisborne District Council [2005] W106/05. Appeal against the granting of resource consent to re-establish an orchard with a 5.5 metre high shelterbelt. The Court usefully summed up the permitted baseline in paragraph 10.

“It means that in considering the adverse effects of a proposed activity the consent authority should not take account of any adverse effects which do not exceed adverse effects which would be produced by three possible categories of activity. They are, first, what lawfully exists on the site at present. Secondly, activities (being non-fanciful activities) which could be conducted on the site as of right; ie, without having to obtain a resource consent. Thirdly, activities which could be carried out under a granted but as yet unexercised resource consent”.

While the Court had discretion as to whether to apply the permitted baseline or not, it found it hard to think of a reason why it should be put aside as the effects of the shelter belt in this case. The effects were comparable with what could be done on site without a resource consent.

Queenstown Lakes District Council v Hawthorn Estate Limited [2006] CA45/2005. This appeal concerned an application to subdivide land in an area known as ‘the triangle’ near Queenstown. The Respondent Hawthorn, who owned the site, already had consent to subdivide into 8 lots and applied for consent to further subdivide into 32 lots. The Environment Court had taken into account consent of the unimplemented development on land owned by people other than Hawthorn in and around the triangle. The Court of Appeal noted the distinction between the concept of the permitted baseline and the receiving environment. The Court of Appeal also noted that the definition of environment is not fixed in time and embraces the future state of the environment as it might be modified by rights to carry out permitted activities under a District Plan, or to implement resource consents which have already been granted. This case is important in signalling a new direction for considering effects on the environment.