Enable councils to acquire land

Enable the Environment Court to allow councils to acquire land where planning provisions have rendered land incapable of reasonable use and placed an unfair and unreasonable burden on thelandowner

Problem

222. Under the RMA, there is limited legislated redress or remedy available for landowners whose use and development of their property is unduly restricted by local governmentregulations.

223. Section 85 of the RMA currently enables the Environment Court to require a council to modify, delete or replace a plan provision if that provision renders land incapable of reasonable use and places an unfair or unreasonable burden on a person who has an interest in thatland.

224. The existing process lacks flexibility to deal with situations where there is significant public interest in retaining a provision for purpose of the RMA, if that provision renders private land unusable. In some cases, a better outcome may be achieved if the particular plan provision was retained (eg, stringent provisions to protect significant heritage features), and the land was acquired by the council, allowing the person whose interest was affected to acquire interest in a place where that restriction does notapply.

Proposal

225. The proposal is to add a new remedy into section 85 of the RMA for landowners whose land is subject to a planning provisionthat:

· renders their land incapable of reasonableuse

· places an unfair and unreasonable burden onthem.

226. The proposal will enable the Environment Court on application or appeal by the affected landowner to give the council an alternative option to acquire all or part of the relevant land or interest in it under the Public Works Act 1991. The council will be able choose which remedy to use, however it could only acquire land or an interest in land with the consent of theowner.

227. The new remedy will be available to persons who owned land when a proposed provision affecting that land was publicly notified or otherwise included in the relevant plan and the plan restriction remained in substantially the same form (if the Court ultimately decides that provision meets the threshold and the council wishes to acquire the land). If a person purchases land after a proposed provision has been publicly notified or otherwise included in the relevant plan and the plan restriction remained in substantially the same form, that person will not be eligible for the new remedy but can still seek a change or removal to that provision.

228. The proposal is considered to meet the three objectivesof:

· incentivising councils to consider the direct costs of a proposed plan provision on landowners

· providing councils and landowners with a wider range of options of redress in cases where the use and development is unreasonably restricted;and

· incentivising more proactive council engagement with landowners in developing plan provisions to minimise the risk of increases in litigation in the Environment Court in the medium to longterm.

229. The impact of this proposal is likely to be quite limited. Section 85 has been used to challenge plan provisions in a very small number of cases (15 between the years of 1991 and 2013). Only three of these were successful. As the proposal does not change the stringency of the test, situations in which councils find themselves able to choose acquire relevant land would occur veryinfrequently.

230. The scale and potential significance of the impacts of this proposal is unknown in the absence ofconsultation.

231. The Courts have interpreted section 85 to allow persons to challenge a provision by applying directly to the Court. Persons may also challenge a provision by way of making a submission or applying for a private plan change to the relevant council. The proposal does not change the procedural aspects of challenging a provision under section 85, aside from updating to provide for the new collaborative and streamlined planningprocesses.

Alternatives Alternative options to proposal for new remedy Environment Court can ordercompensation

232. This option would enable the Environment Court to order compensation to be paid by councils to landowners whose property has been rendered incapable of reasonable use, or whose ability to use and develop their property has been unreasonably restricted. This option carries a fiscal risk which is difficult to quantify but could besignificant.

Introduce a less stringenttest

233. This option would introduce a less stringent legal test for a successful challenge by a landowner under s 85. This option could be combined witheither:

· enabling land acquisition as a remedy as per the primaryproposal

· enabling a compensation order as per the alternativeabove

· no change to the remedy available if the test ispassed

234. This group of options would mean a significant increase in the number of cases brought to the Environment Court under section 85. The council will have the double cost of the increasing burden of litigation along with the costs of whichever of the three remedies was decided on, because it lowers the threshold for successful application under section 85.This is likely to impose more cost on the council, as each of the possible remedies have fiscal implications.

235. Overall, it is not considered appropriate to change the legal threshold for a successful application under section 85. Although there have only been three successful applications in the past 22 years, we consider that this is consistent with the fact that this is a last resort remedy for landowners whose rights of use and development of land have been imposed upon by a planprovision.

Non-legislative option: develop funds for local authorities to allocategrants.

236. Local authorities could develop funds to use for allocating grants to private property owners whose ability to use and develop their land is restricted by a plan provision. A non-legislative funding option has the potential to provide alternative redress for councils and landowners. However, there are significant risks and uncertainties around this option. It is unlikely to create a direct cost incentive for councils to consider private property rights when making resource management plan provisions unless they provided a significant portion of the funding involved. This option would require significant further research to be done to assess itsworkability.

Conclusion

237. This proposal is linked to a proposed amendment to Part 3 that requires decision-makers to ensure that any restrictions on the use of land are only made as far as is reasonably required to achieve the purpose of the Act (P1.6).

238. A low risk approach of monitoring the status quo was initially recommended. The current proposal is preferred out of the legislative options available, and is the only option considered to have the potential to meet all three of the criteria for achieving the policy objectives. As outlined above, the proposals which involve lowering the threshold of the legal test in s 85 are considered too highrisk.