By: Amanda Douglas
Published: 30/10/2010
The Central Plains Water saga - all the way up to the Supreme Court, and this is just the preliminary skirmishing.  The hearing of CPW's application to take water for irrigation, by the Council's commissioners, has not yet concluded - so appeals on the actual application are still just a twinkle in the parties' eyes.

But in the course of the preliminary skirmish, the Courts have discussed the issue of when an application becomes notifiable and therefore obtains priority over later competing applications.

Central Plains Water Trust and Ngai Tahu Property Limited had competing applications to take water, for irrigation, from the Waimakariri River.  CPW had lodged its application before NT, but Canterbury Regional Council decided that CPW's application should be put on hold, under section 91, until all of the related applications to enable the irrigation scheme had been lodged.

NT's application for take was subject to a similar direction, and NT lodged the related applications before CPW did - in fact, NT lodged those related applications and got all of its applications notified, heard and decided before CPW lodged its related applications - which was almost 5 years after it lodged the initial application for water take.

In the Environment Court and the High Court, NT obtained decisions that notifiability, and therefore priority, did not occur until all of the applications had been lodged.  So NT's application gained priority over CPW's application for water take.

But the Court of Appeal reversed that ruling.  It said that CPW's application to take water obtained priority at the time it was lodged, because it was notifiable at that time - it wasn't so devoid of detail as to be a nullity, or to be rejected under section 88(3).  And the fact that the Council had required the related applications to be lodged before it would proceed to notify the application did not affect that priority.

The Court of Appeal accepted the argument that large, complex projects should be able to proceed as staged applications, and should not lose priority to water simply because smaller, simpler applications were able to be brought to completion earlier.  A staged application approach would let the application for water take be decided ahead of the related applications, so that the proponent of the scheme would know whether or not it had got its water before undertaking the expense of preparing and prosecuting the related applications.

However, it's still the case that the Council can refuse to proceed to notification or hearing of an application until the related applications are also lodged - in that case a truly staged approach will not be taken.  The only benefit to the applicant is that a bare application for water take can be lodged and obtain priority - and then the related applications can dribble in at the applicant's leisure.

That would mean that other applications which have later priority, but get to hearing earlier, could only be granted "subject to" the unheard application which has priority.  So you'd get a consent which would say "if X's application for consent is not granted, then you can take this amount of water.  But if X's application is granted, then you can't take the water." A conditional consent.

The Court of Appeal acknowledged that priority, once gained, can be lost through delay.  But how long would that delay would have to be to lose priority when, in this case, a delay of 5 years was not too long?

Delay, and other exceptions to the general first in, first served priority rule, were referred to in the earlier decision of the Court of Appeal in Aqua King, and that was repeated by the Court of Appeal in CPW.  In CPW, the Court listed numerous factors that were considered relevant to the question of priority - those factors, in the main, were about the benefits to be derived for various parts of the community from the proposed irrigation.  Presumably those are the sort of factors which might establish an exception to first in first served in a particular case.

However, many of those factors are matters which would not be apparent on a bare application to take water - the benefits of an irrigation scheme do not result from taking water out of the river or the ground - they result from applying that water to crops or pasture.  So if the related applications are not also lodged with the Council, it would be difficult for the factors listed by the Court to be assessed.
The final word in this litigation comes from the Supreme Court, which attempted to open up a can of worms, but unfortunately, the worms were not given a chance to crawl out.  NT lodged an appeal to that Court, which heard argument, and then issued an interim decision which expressed a certain amount of disgruntlement with everyone assuming that first in first served is the appropriate way to determine priority - the Court said that it wanted to hear further argument on whether priority should be decided by a rule or through the exercise by consent authorities of a discretion, and if the latter, on what principles should the discretion be exercised.  It heard that argument, but then NT withdrew its appeal before a decision was issued - so for now, we still have first in, first served.  No doubt that is one of the issues which will be tackled in any move to reform water management.
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