Further setback for Port of Tauranga as High Court rules Fast-track application is out of scope

Further to our previous update, the High Court has now determined the judicial review challenge in respect of the substantive application by the Port of Tauranga (“The Port”) for its Stella Passage Development project (“Project”) under the Fast-track Approvals Act 2024 (“FTAA”).

The Court has ruled that the Environmental Protection Authority (“EPA”) made an error of law in determining that the substantive application was within scope, because the Project applied for was not as it is described in Schedule 2 of the FTAA. The Project’s FTAA Schedule 2 description refers to an extension to the Port’s Sulphur Point wharf; however, the substantive application for the Project also included an extension to the Port’s Mt Maunganui wharf. It remains unclear why the reference to the Mt Maunganui wharf component of the Project was omitted from Schedule 2.

Due to this omission, all work on the application under the FTAA has been placed on hold. An Expert Panel was due to begin considering the application on 1 September.

In this article, we provide context on the scope issue faced by the Port and summarise the High Court’s approach to scope under the FTAA. We also comment on the broader issues with the operation of the FTAA that this decision reflects.

Context

After a substantive application under the FTAA is lodged, and prior to it being referred to an expert panel for consideration, it must pass an initial scope and completeness check undertaken by the EPA. Section 46(2)(b) of the FTAA requires the EPA to be satisfied that the application “relates solely” to a listed project. The term “solely” has been an issue which has the potential to ‘foot-fault’ applicants right from the start of the process.

The Port’s Project as listed in Schedule 2 of the FTAA is described as: “In stages, extend the Sulphur Point wharf, including associated reclamation and dredging of the seabed”. The approximate geographical location of the Project is described in Schedule 2 as “8.5 hectares of the coastal marine area within Tauranga Harbour at Sulphur Point and Mount Maunganui”.

The Port’s argument  

The Port argued that there had clearly been a drafting error in the preparation of Schedule 2 of the FTAA because the Port’s listing application for the Project had included both the Sulphur Point and Mount Maunganui wharves, and the Project, as described in the Minister’s press release announcing the listed projects for inclusion in the Fast-track Approvals Bill, made explicit reference to the Mount Maunganui wharf. It read “the project is for extension of the Sulphur Point (stage one) and Mount Maunganui wharves (stage two), and to carry out the associated reclamation and dredging of the sea bed.”

It was only during consideration of the Bill by the Committee of the whole House shortly prior to its passing that the reference to the Mount Maunganui wharf was removed – without explanation.

The Port also argued that in any event, the reference to the Project in Schedule 2 was generic enough to incorporate all aspects of its substantive application.

High Court’s approach to scope   

Regarding the Port’s first argument, the Court set out as a matter of principle, that it is rare to read words into a statute when Parliament has not thought fit to include them.  Further, that courts are slow to conclude that unexpected or difficult statutory wording is the product of a drafting error. While acknowledging that amendments made at the Committee stage without Select Committee scrutiny may have a greater potential for error, the Court considered it would be wrong to find there was a drafting mistake unless it was the only available conclusion.

The Court then referred to Parliament’s intention in enacting the FTAA. It noted Parliament’s deliberate decision to de-emphasise factors which might militate against approval, and the premium placed on speed and reduced emphasis on cultural and environmental considerations – which means fast-tracking may be inappropriate where complex countervailing factors are present. Applying this to the facts, the Court drew on the history of the Project – including that:

• it was not referred under the COVID-19 Recovery (Fast-Track Consenting) Act 2020, as it was considered to be more appropriate for it to go through a standard consenting process under the RMA; and

• the Environment Court, when earlier considering the Project under direct referral (in a proceeding that has since been discontinued due to the FTAA requirement that if a substantive application is lodged, any application for the same activity must be withdrawn), expressed material reservations around the granting of resource consents for the stage of the Project that included the Mount Maunganui wharf extension due to environmental and cultural concerns.

  
  

In view of this, the Court considered there were good reasons why the Minister may have decided that the Mount Maunganui wharf extension was not well suited to the fast-track process, hence removing it from the Project’s Schedule 2 listing. There was no evidence that this was however the case. Notwithstanding, the Court was not persuaded the only available conclusion was that this was a drafting error.

Regarding the Port’s second argument, the Court considered the Project’s name alone was not sufficient to bring the entire application within the scope of the FTAA. If that was intended, there would have been no need for Schedule 2 to describe each project.

The Court overall held there was no basis, when reading the description of the Project, to look beyond the words in Schedule 2. It held that these words “could not be clearer” – the extension of the Sulphur Point wharf is included; the extension of the Mount Maunganui wharf is not. As such, the Port’s substantive application did not comply with s46(2)(b), and the EPA’s decision that the application was within scope was wrong at law.

Comment

The High Court’s approach to scope focuses narrowly on adherence with the FTAA’s Schedule 2 project description. In that sense it reflects a traditional “black letter” interpretation.

In our view, this judicial review proceeding highlights broader issues with the FTAA. There is considerable complexity in the application of the legislation, including with respect to preliminary matters – such as scope and “ineligibility” matters – before the substantive consideration of applications. The available scope to amend substantive applications from what is described in Schedule 2 (for listed projects) or in referral notices (for referred projects) is creating considerable uncertainty and is something that has been foot-faulting a number of FTAA applicants.

In our view, there would be merit in amendments to the FTAA to provide explicit scope for applicants to pursue changes to projects, including beyond the Schedule 2 project descriptions (and the original descriptions of projects in listing applications).

More broadly, the Port of Tauranga High Court proceeding also highlights the risks in advancing a very detailed Amendment Paper that was not subject to prior consultation.

While Port of Tauranga navigates the FTAA processes, a nationally significant project remains on-hold.