Case Law

Kapiti High Voltage Coalition Incorporated v Kapiti Coast District Council

New Zealand’s electricity transmission and distribution networks are essential to our society’s wellbeing. Those networks need to be maintained and upgraded so as to be able to deliver electricity when and where it is needed.  These networks have been developed over many years, and pursuant to different statutory regimes, both with regard to the property rights conferred on the network operator (when the network extends over private property) and also the planning instruments that specify what resource consents might be needed.  This complex statutory framework is further complicated by the restructuring of the electricity industry that has occurred over the past decade.  Finally, technological advancements and new industry standards have meant that lines, poles and conductors are of different shapes and sizes, and this inevitably raises questions about whether these electrical works fall within the scope of previous approvals.

This decision of the High Court examines a number of these issues in the context of proposed work undertaken by Transpower New Zealand Limited (“Transpower“), including “existing uses” under the Resource Management Act (“RMA“); “existing works” under the Electricity Act 1992 and the Resource Management (National Environmental Standard for Electricity Transmission Activities) Regulations 2009 (“NES“); the validity of certificates of compliance (“CoC“); and whether the failure to obtain the appropriate property rights could result in an actionable trespass by Transpower.

The case highlights the importance of all network operators very carefully identifying, at an early stage in a project’s planning, which aspects of any proposed upgrade might require new or amended property rights, and whether (and to what extent) new resource consents or an amendment to a designation (or outline plan) might be required.  The decision also highlights the evidential requirements for any party wanting to challenge the lawfulness of any network, including what is required to be demonstrated to make out a claim of trespass.

Background facts

Between 1998 and 2008 Transpower undertook extensive works on the Mangahao to Paekakariki transmission lines.  These works can be broadly separated into two parts:

  • Replacement of the original copper conductors (11.7 mm) with larger “Hyena” conductors (14.6 mm) and replacing 13 of the 84 poles in the vicinity of Waikanae  (“Waikanae works“).  These works were enabled by way of a CoC issued in 1998 and an extension and alteration to that CoC in 2002.  The CoCs confirmed that the works were permitted under a rule in the District Plan which provided for the “maintenance, operation, repair and upgrading of existing network facilities” as permitted, provided that the character and scale of any visual effects were the same as or less than the previous position and there was no increase in line size.  While there had been an increase in the diameter of the lines, the Council considered this change to be de minimis.
  • Replacement of the original copper conductors with larger “Wolfe” conductors (18.1 mm) and replacement of 70% of the poles between the Paraparaumu substation and the Paekakariki substation (“Southern works“).  These works were enabled by way of resource consents issued in 2002 and 2003.  In addition to the resource consents, a CoC was issued in 2007 confirming that the conductors could run at a higher maximum temperature (70°C) and a variation was made to an outline plan altering the alignment of the lines. 

In both cases the replacement poles, cross arms and conductors were larger in size than the existing equipment. Relevant to the Waikanae works, the line was not actively in use from 1992-2004 but could be used in cases of emergency if a fault brought down the main Bunnythorpe-Haywards line.  In 2004, switches were removed (meaning it could no longer be used for emergencies), but the line was retained in case it is needed to support future urban development around Levin.

Proceedings before the Court

The Plaintiffs, Kapiti High Voltage Coalition Incorporated (“KHVC”) and Messrs Alexander, Hindry and Jenkner, challenged the legality of the works undertaken by way of judicial review of various Kapiti Coast District Council (“KCDC”) decisions and an application for declaration that the reconductoring was not protected by existing use rights under s10 of the RMA.  The Plaintiffs further claimed that by reason of this illegality, the activities associated with the works and the ongoing use of the lines was a trespass.   (Mr Jenker’s claim was ultimately withdrawn as it occurred outside the limitation period.)

Prior to the hearing, the parties agreed that a number of KCDC’s decisions were invalid, in particular the resource consents and CoC relating to the Southern works.  The focus of the hearing was therefore on the lawfulness of the Waikanae works and whether Transpower’s actions in entering private property and the ongoing use of the land for both the Waikanae and Southern works amounted to a trespass.

 

Judicial Review – Validity of certificate of compliance

KHVC argued that the Waikanae works were unlawful because:

  • Transpower could not rely on the District Plan’s rule for maintaining existing lines because it had no existing use rights in relation to this line as it had not been used to carry electricity since 1992; and
  • the CoC issued in 1998 and extended in 2002 were invalid and should never have been issued (which KCDC accepted but Transpower did not).

The Court found that the lines continued to be an “activity relating to the transmission or distribution of electricity” (as required by the District Plan) even though they were not actively being used to carry electricity at the time.  Williams J agreed with Transpower that the lines served a purpose and were “in use” as an alternative in case of emergency. 

However, the Judge found that the Waikanae works did not meet the requirements of the relevant District Plan rule.  While the District Plan provided for the maintenance or upgrading of network utilities as a permitted activity, this was subject to any upgrade not increasing the size of existing lines. The replacement “Hyena” lines were some 25% larger in diameter than the existing copper lines.  The Court held that no CoC should have been granted and Transpower could not rely on the CoC as authorising the works.

Declaration – Existing use under the RMA

Williams J then considered whether Transpower otherwise had authority under the existing use provision of the RMA (s10).  This was despite Transpower’s position that the Court did not need to consider the matter because Transpower was not seeking to rely on existing use. 

Williams J decided that existing use rights did apply to the Waikanae works while the lines could be used for emergency purposes, but not after 2004 when the switches were removed and the line was isolated from the national grid.  He held that maintaining disabled infrastructure on this scale while awaiting the occurrence of a contingent event did not amount to “using”.  In this case, there was not a “limited or passive use but rather a hope of use at some time in the future”.

There was no issue with the lines not being used to carry electricity with the Southern works as they were live throughout this period.  Williams J therefore asked whether the effects of the new use (rather than the use itself) were the same or similar in character, intensity and scale.  Thus, for example, the mere fact that a line has been realigned will not extinguish its existing use rights unless that changed alignment induced new, more intensive or greater effects, taking the use outside the s10 parameters.

In terms of electromagnetic field effects, while there was an increase of some 60% it was still less than 10% of the maximum allowed under the ICNIRP Guidelines.  Williams J agreed generally with the approach adopted in Fernwood Dairies Ltd v Transpower New Zealand [2007] NZRMA 190 (EnvC) at [107]-[114] and found that there was no evidence that the increase in voltage from the Southern works produced a relevant effect under s10.

The Plaintiffs argued that a new and negative effect had arisen as a result of the Southern works which meant that Transpower could not rely on existing use rights.  This effect was the potential for injury or a fatality from “earth potential risk” (“EPR“) (ie, the enlivening of the ground around a pole) due to the replacement of wooden poles with steel reinforced concrete.  Williams J determined from the expert evidence that the practical implications of EPR were too minor to be an effect that is new in character, such that the effect would negate existing use rights.  Two exceptions to this were located on the Hindry property where the Court held that the EPR effects were new, potentially material and, unless mitigated, were in excess of the s10 existing use right limits for that site. While the Court held that existing use was potentially not maintained in these two locations, Williams J noted that in the circumstances of this case, those exceptions did not cause a failure of the s10 test for the whole line.

NES

The decision includes some useful judicial guidance on the NES, finding that the lines in question were existing transmission lines within the meaning of the NES (but not necessarily permitted activities) despite:

  • the Waikanae line having been disabled.  Williams J found they were still “able to be operated” in terms of Regulation 4 as they were capable of carrying current and not defective; and
  • all parties agreeing that the consents for the Southern works were invalid.  Williams J found that, in the case of the NES, “existing transmission line” relates to fact not legal status, therefore unlawfully installed lines could still be existing within the meaning of that phrase in the NES.

While the Court held that, prime facie, the NES applied, Williams J considered there was too little evidence to determine whether the permitted activity performance standards in the regulations are satisfied.

Trespass

The Plaintiff’s claim in trespass was three pronged: the physical entry onto land, the physical space taken up by the reconductoring, and the increase in intensity of use through thermal uprating (50 – 70ËšC).  Williams J quickly dismissed the last claim as a regulatory consent issue rather than amounting to a trespass.

The second named Plaintiffs (Messrs Alexander and Hindry) attempted to bring a representative action in relation to the 20 members of the KHVC who own and occupy land over which the transmission lines pass.  Williams J did not accept this, finding that there was no common interest as required by Rule 4.24 of the High Court Rules.  Alexander and Hindry both pleaded discrete cases relating to the effects of the lines on their land and it could not be assumed that all landowners were affected in the same way without direct evidence on point. Therefore these matters were only considered in relation to the properties where there was direct evidence before the Court (Messrs Hindry, Alexander and Harris). 

Williams J confirmed that an action in trespass required “unjustified direct interference” with another’s possession of land (including airspace) and that all relevant entries onto land for the works were direct interferences with land and would be trespasses unless justified (eg, in this case, justified by s23 of the Electricity Act).

The Court held that, without justification under s23 of the Electricity Act, there would be a trespass on the Hindry property (the new lines permanently encroached into the Hindry’s airspace whereas the old lines only infringed in certain wind conditions) and the Alexander property (a pole was moved by approximately three metres, resulting in a change to the alignment).  Williams J agreed that there was certainly an encroachment on the Harris property during a 13 month period when the line was installed in the incorrect position but this has since been corrected and Williams J agreed that it was up to the Plaintiff to demonstrate that it was Transpower’s negligence (rather than its subcontractor) that resulted in the lines going in the wrong place (alternatively, the plaintiff should have joined Transpower’s contractors in respect of the Harris trespass claim).

Justification for trespass – statutory authority

To the extent that trespass was prima facie made out, Transpower plead the defence of statutory authorisation by virtue of ss22 and 23 of the Electricity Act, which allow entry to land in order to maintain existing works.  In reaching a determination, Williams J took into account:

  • whether the lines were “existing works” in terms of the Electricity Act;
  • the pre-2001 definition of maintenance in the Electricity Act which did not include upgrade (relevant to the Waikanae line); and
  • the post-2001 definition of maintenance in the Electricity Act which included upgrading provided there was no injurious affection (relevant to the Southern works).

Williams J determined that both the Waikanae works and the Southern works were existing works in terms of the Electricity Act.  In doing so, the Judge rejected the Plaintiff’s claims that:

  • The Waikanae works were not existing works because they were not in operation.
  • The Southern works were not existing works because they had not been installed lawfully under the RMA.  Williams J held that the RMA and Electricity Act have different purposes (environmental management as compared to competing property rights, as between the holder of statutory rights of access to electrical work and the private property rights of landowners), and a breach of the RMA does not preclude something from being an existing work under the Electricity Act.

The Court held that it was a question of degree as to whether the Waikanae works were maintenance and determined that, while the replacement Hyena lines were 25% larger, it was appropriate to treat the work as maintenance within the old definition of the Electricity Act.  Williams J agreed that there was a good argument that the Hyena lines were the modern day equivalent and certainly did not introduce something substantially different.

Injurious affection – Southern Works

All parties agreed that the Southern works were an upgrade within the post 2001 definition of maintenance and the question was whether an injurious affection had occurred.  While changes to height, width, and alignment were relevant considerations in assessing injurious affection, Williams J confirmed that they are not gateway questions for the application of s23 of the Electricity Act.

The Court reviewed Fernwood Dairies and Grey District Council v Graham and determined that injurious affection is “a matter of valuation rather than law” and, just because there was an encroachment of land, it did not follow that every encroachment would diminish enjoyment and therefore value, causing injurious affection.  It will always be a question of degree, assessed in the particular circumstances of each case.  The Court therefore rejected the “absolutist conclusion” reached by the Environment Court on this point in Fernwood Dairies.

Williams J considered the valuation and visual evidence provided.  The effects of EPR were not considered as the expert valuers advised that this was not yet a matter generally recognised in the market.  Williams J determined that the increase in dimensions and change in colour of the lines on the Alexander property, and the increase in pole height and cross arm width on the Kerr property, were not step changes resulting in injurious affection.  Similarly Williams J decided that the temporary encroachment on the Harris property did not amount to injurious affection.

The Court held that there was injurious affection (and therefore trespass) in relation to the Hindry property where a line now permanently encroached.  Williams J put the disputes around the valuation evidence to one side, stating that he was satisfied from having seen the land and hearing evidence that a willing buyer reasonably acquainted with the property and appraised of the relevant facts would consider that such a change diminished the value of the land.

Discretion to grant relief and delay

Transpower argued that no relief should be granted because of the significant delay in bringing the case to court whereas the Plaintiffs argued that it had taken time to build grass roots support and have pre-litigation discussions. The Court held that the delay in bringing proceedings is a major factor and must have some effect on relief because the potential impact of invalidation is significant but, on the other hand, the Court took account of the fact that Transpower accepted that the resource consents for the Southern works were invalid and should not be quashed despite the five to nine year delay.

Determination

The Court held that:

  • The CoCs issued in 1998 and 2002 in relation to the Waikanae works be declared invalid and quashed along with the other approvals as agreed by the parties.
  • Transpower could not claim existing use rights in relation to:
  •  
    • maintenance work carried out in 2000 in Waikanae; or
  •  
    • maintenance and upgrade works carried out in a section opposite the Hindry property and that this work constitutes a continuing trespass.

Williams J directed Transpower to make an application (to be served on the Plaintiffs) for any approvals required to make the works compliant with the RMA within three months.