 |
Friends of Turitea Reserve Society Incorporated v
Palmerston North City Council
This case concerns the legality of use of a Council-owned reserve for a wind farm. The reserve had previously been classified under the Reserves Act 1977 as a "local purpose reserve (water supply and protection of indigenous flora and fauna)". With the worldwide interest in renewable energy, this had become a very sought-after site as the ridge line of the Tararua Ranges is considered to be amongst the top 5% of potential wind farm sites in the world.
In 2005 the Palmerston North City Council entered into agreements for the wind farm development and carbon credits with Mighty River Power Limited. The Council intended to use the revenue stream for reserve purposes, to provide for the creation of an eco-park. In October 2006 the Council approved a change of purpose of the reserve under s24A of the Reserves Act by adding as its first purpose "renewable electricity generation", and also changed the Reserve Management Plan. The Friends of Turitea Reserve Society Incorporated challenged the decision by way of judicial review.
They applied on the grounds that:
- the decision was beyond the power of the Council and made for an improper purpose;
- the Council's decision was biased in the light of the commercial contracts it had entered into with Mighty River;
- the Council had failed to properly consult the community, in breach of its obligations under the Local Government Act 2002.
The outcome of the decision, and the reasoning behind it, is significant in that it affirms a wide interpretation of what may be a "local purpose" under the Reserves Act, and confirms that such a public purpose can be fulfilled by private commercial operators.
It also provides a useful analysis of councils' general obligations relating to decision-making and consultation in matters relating to its own reserves and other landholdings.
So can a commercial wind farm be established on a local purpose reserve?
The Court analysed the reference to local purpose reserves in the Act, in the light of the general purpose of the Act in s3. It found that although there is a strong theme of conservation in the Act, the reference to "community value" in s3 should be read in the light of the actual usage of reserves historically, which included purposes such as gravel pits, quarries and landfills. It therefore found that "community values" are not to be confined to conservation values.
It also found that, since local government legislation from 1908 had empowered local authorities to generate electricity, and since s10 of the Local Government Act 2002 conferred a general power to "promote the social, economic, environmental and cultural well-being of communities", with the requirement in s14 to aim for "sustainable development", the sustainable generation and supply of electricity falls within the public purposes of the Local Government Act and the Reserves Act. It was therefore competent for the Council itself to establish a wind farm in this case.
The Court held that there was a sufficient link between the generation of the energy from the wind farm and the revenue stream from the wind farm (which was required to be utilised for reserve purposes), to warrant its characterisation as a local purpose rather than a government purpose.
Finally, it was satisfied that the Council could lawfully contract with Mighty River, in effect fulfilling a local purpose through the agency of a commercial (although state owned) power company, because:
- it had found that the purpose of establishing the wind farm was a public purpose within the powers under the Reserves Act; and
- the purpose of the receipt of revenue from Mighty River to be applied to the reserve was therefore also lawful.
Bias
The Reserves Act required the Council to act as decision-maker in relation to the change of purpose of the reserve. On the question of whether the Council had been biased, it found that the proper approach in this context does not require that the Council be "without predisposition" rather that it be "prepared, despite predisposition, honestly to consider whether to change its mind".
The contractual benefits, in the form of the funds from Mighty River, did not affect that conclusion, and were consistent with the requirement under the Local Government Act to ensure prudent stewardship and the efficient and effective use of its resources in the interests of its district.
Consultation
Finally, the Court considered that the Council had met its obligation to consult under the Local Government Act 2002 and the Reserves Act. Consultation had been carried out by a variety of means, including home visits, a formal consultation document, an information meeting, an open day on the reserve and brochures. The fact that some of the technical reports had not been made available was not relevant, since the Court considered that anyone who was truly interested had not lacked the opportunity to respond to the essential issues in the decision-making process.
Conclusion
Probably the most significant aspects of this decision are the confirmation 1) that the concept of a “local purpose” reserve is flexible enough to include electricity generation and 2) that the operation of such an activity can be carried out on reserve by a private commercial organisation for profit. The second conclusion may not only be confined to local purpose reserves and warrants further consideration for councils.
This newsletter is produced by Simpson Grierson. It is intended to provide general information in summary form. The contents do not constitute legal advice and should not be relied on as such. Specialist legal advice should be sought in particular matters.
|
|
