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Decision-making bound by policy: a damming verdict?

01 September 2017 - By Sally McKechnie and Charlotte Doyle

Sally McKechnie and Charlotte Doyle comment on the ramifications of the recent Supreme Court decision Hawke’s Bay Regional Investment Company Ltd v Royal Forest and Bird Protection Society of New Zealand Inc [2017] NZSC 106 (the Ruataniwha decision) for public and statutory decision makers.

The Supreme Court’s decision on the proposed Ruataniwha water storage scheme in Hawke’s Bay has received significant media coverage. Much of the reporting has focused on the relative conservation values of the land and what the decision might mean for the future of irrigation in the Bay.

The upper Tukituki River downstream of the proposed dam
The Upper Tukituki River, downstream of the proposed Ruataniwha water storage scheme. Photo by Phillip Capper CC-By.

In coming to its decision, the Supreme Court had a close look at the requirements of public decision-making and the role of policy documents. The Court considered a fundamental public law principle – to what extent are public bodies bound by their policies in their decision-making processes? – and was then split in their judgment 3-2.

This judgment may have potentially wide-reaching implications for public bodies and public decision makers, well beyond the treatment of conservation land.

The Director-General’s decision

The land at the heart of this litigation was 22 hectares of the Ruahine Forest Park that would need to be flooded for the water storage scheme to go ahead. To facilitate this step, the Director-General of Conservation first revoked the status of specially protected land and then agreed to a land exchange where other land would be obtained for the Park. The primary decision to revoke specially protected land was made in reliance on powers granted by section 18 of the Conservation Act 1987.

The majority of the Supreme Court held that this decision had been made unlawfully and should be set aside.

What did the Supreme Court say about public decision-making?

In coming to this decision, the Supreme Court considered to what extent was the Director-General, in making his decision, bound to observe provisions in statutory planning instruments when engaging with the decision-making process under s 18?

At a preliminary level, taking such documents into account may seem obvious. Developing policy documents and planning instruments is frequently encouraged or even mandated by statute to guide public decision-making. This is the case for the Conservation Act. Part 3A gives statutory form to the facilitation of the development of general policy statements and conservation management strategies and plans by the Director-General for the purposes of management planning. For local authorities, the Resource Management Act 1991 similarly sets out a hierarchy of policy statements and plans that are intended to support the overarching sustainable management purpose of the Act.

Where a policy document is mandated or enabled by the law, the extent to which these documents are binding on decision-makers may be clearly indicated in the legislation itself. Under the Conservation Act, the Director-General must administer and manage conservation areas “in accordance with” general policy developed for the implementation of the Act. Section 75 of the RMA dictates that local authorities “must give effect to” planning instruments in their district plans. By contrast, when considering resource consent applications decision-makers are only required to “have regard to” the same instruments under s 104.

What has been highlighted by the Ruataniwha decision is that there is divided opinion in our most senior court about which policies are mandatory considerations for which decisions. As a result, the effect of legislative directions on policies are no longer so straightforward.

In the Ruataniwha decision, the Supreme Court majority found the Director-General was bound to take policy instruments created under Part 3A into account when making a decision under s 18 which is in Part 4. The minority disagreed, adopting the view that these instruments created under Part 3A were not connected to a decision made under Part 4 of the Act, a section that deals specifically with specially protected land.

The majority, Elias CJ and Arnold and Glazebrook JJ, held that a decision under s 18(7) “must be exercised for the purposes for which it is conferred”. The majority found that the purposes underlying the decision-making power were not confined to the empowering section, but extended to the overarching scheme of the Act. In doing this, the court applied a wide reach to the policy instruments created in discrete parts of the Act. The majority identified that the guiding framework set up by planning instruments was vital for providing a context for all the choices made by the Minister under the Act. This is a wide and holistic approach to the purpose of the Act in its entirety.

Relying on a comparison between the Conservation Act’s framework and the hierarchy of policy documents established in the RMA, the court considered that the binding nature of the instruments would ensure consistent decision-making from the Minister. Therefore, by failing to take the instruments into account when making a decision over the status of land in Ruahine Forest Park, the Minister had acted in error.

By contrast, the minority took a different, narrower, approach. Justices William Young and O’Regan felt that the policy instruments in question were created specifically for the ‘ordinary course’ of administering and managing conservation areas. They considered that the policy instruments were not relevant to the specific decision-making power to grant or revoke conservation status of the areas in question. The powers in relation to those areas were conferred on the Minister in an entirely different section of the Act.

After considering the content of the instruments, the minority judges concluded that the statutory policies were concerned with general and periodic reviews of land classifications under departmental management and were irrelevant to a decision made under s 18. They considered that a broad planning instrument framework was unable to limit the scope of a discretion conferred on the Minister for a decision-making power with a very particular purpose. This is consistent with an orthodox interpretative approach, where the specific overrides the general.

The split decision raises questions for decision-makers operating under similar statutory schemes, both in central government agencies and local authorities alike. Which statutory policy instruments are relevant to specific decision-making powers conferred under an Act, and when? In all circumstances or only where it seems directly relevant? If decision-makers adopt too wide an approach, they could face the challenge of taking into account an irrelevant consideration. Following the Supreme Court decision, there is considerable uncertainty about which statutory policies should be considered in a given circumstance.

The majority further suggested that a failure to consider the statutory planning instruments would simply be “unaccountably wasteful of the effort” spent in developing these instruments. If these instruments were therefore able to be ignored, the “coherence and observance” of the instruments would be seriously deficient. The majority also observed that revocation of the conservation status of land would have an impact on the plans and strategies included in policy instruments. The limits of this reasoning are unclear. Could it extend to non-statutory planning instruments that dictate or guide the administration and management of a department or authority? Many non-statutory policy documents are none the less created through a range of more formal processes, including public consultation and input.

Moving forward

In light of the Supreme Court’s findings, and to avoid exposure to judicial review, agencies and local authorities will need to carefully consider the purpose and full potential effect of a policy document or instrument they are drafting.

The Ruataniwha decision has created a question mark over the weight and scope to be given to statutory policy instruments for statutory decision-making. It may ultimately be determined by a judicial interpretation.

But what certainty does this offer public bodies in the meantime? By applying a holistic and purposive approach to the Conservation Act, and potentially blurring the boundary between apparently distinct decision-making powers, our highest court has muddied the waters for public bodies.


Simpson Grierson partner Sally McKechnie sally.mckechnie@simpsongrierson.com and Charlotte Doyle charlotte.doyle@simpsongrierson.com are based in the firm’s Wellington office.

Last updated on the 1st September 2017