The Courts in this litigation examined the relationship between existing use rights and the permitted baseline, and the relationship between the common law permitted baseline and the statutory permitted baseline. They also provided guidance on the date at which existing use rights are assessed, where activities lessen over time and further restricting rules are introduced.
This was a subdivision case on land of outstanding environmental significance. The landowner relied upon existing use rights to graze the land, because rules in various plans and plan changes prevented grazing, but those rules had been notified and come into effect after the grazing was established.
The Courts had to determine how those existing use rights should be taken into account in assessing the application for subdivision. This lead to an examination of the permitted baseline - in order to see whether existing use rights are part of the permitted baseline.
Originally, the permitted baseline was a construct of caselaw. Through a line of decisions, the "common law permitted baseline" was developed. Those judgments established the principle that effects of an activity which are permitted by a plan, or by existing use rights, must not be taken into account when assessing a proposal to grant a resource consent for that activity.
Then the 2005 amendments to section 104(2) of the RMA created a statutory permitted baseline, which is different in some respects to the common law baseline. In the Eyres Eco-Park case, the Court of Appeal said that, although the statutory permitted baseline does not replace the common law baseline, in any instance where the statutory one is different to the common law one, the statutory baseline prevails.
Two important differences were identified in this case:
First, the common law baseline was mandatory. The effects of a proposed activity which were within the common law baseline could not be taken into account - the decision-maker had no discretion about that. But the statutory permitted baseline is discretionary - those effects which are within the baseline may be disregarded by the decision-maker.
Secondly, the existing environment, including existing use rights, was part of the common law permitted baseline. But the statutory permitted baseline does not include the existing environment, or existing use rights.
So, under the statutory baseline, where an effect of a proposed activity already exists in the environment, or is being created pursuant to existing use rights, that effect may not be disregarded as being part of the permitted baseline. Only those effects which are permitted by the plan may be disregarded under the statutory baseline.
The existing environment, including existing use rights, is part of the resource consent analysis, but only as part of the receiving environment. Determination of the receiving environment comes earlier in the process. The High Court said that the procedure is:
first consider the character of the receiving environment, as required under s 104(1)(a) - it includes activities carried out under existing use rights
the adverse effects of a proposed activity, at this point of the analysis, will be those effects that are not already impacting upon the receiving environment
if, after this assessment, any additional adverse effects of the proposal remain for consideration, the permitted baseline becomes relevant under s 104(2)
at this point there is a discretion to disregard any of the remaining adverse effects of the proposed activity on the environment if the plan permits an activity with that effect
if such adverse effects are excluded from consideration, the remaining effects of the proposed activity on the receiving environment must be assessed and may ultimately determine whether a resource consent is granted.
The Courts also discussed what happens to existing use rights if the use made of them decays over time - do the rights decay also?
The landowners in this case had, prior to the introduction of non-grazing provisions in the plans, originally grazed hundreds of cattle on the property. But the grazing use had dwindled over the years, and there had been a plan change and then a new proposed plan which introduced even greater restrictions on grazing the land than the first non-grazing rule had.
When assessing the subdivision consent, could the landowners take advantage of the existing use rights in respect of hundreds of cattle which they used to have on the land, prior to the first rule? Or were the existing use rights which form part of the receiving environment only as great as the later grazing use, which existed when the most recent rule was introduced?
The Court of Appeal said the assessment of existing use rights must be as at the time of the latest rule - if the activity had declined since existing use rights were first established, and later rules were introduced, then the rights will decay. Use it or lose it.
In fact, the Court said that existing use rights can be lost altogether, even if the activity does not completely cease. If the activity diminishes to the point that the rules are no longer being contravened, then existing use rights will be lost.