There are a number of decisions relating to the problem of priority of applications when there are two applicants competing for the same resource. Fleetwing Farms Limited v Marlborough DC established a "first come, first served" principle. This principle has been qualified over time. The Court of Appeal decision in Central Plains Water Trust v Canterbury Regional Council, stated (at Order B):

An application for resource consent to take water which is not disqualified by unreasonable delay and which, although recognising the need for subsequent use applications could not as filed be rejected as a nullity, takes priority over an application which relates to the same resource and which, although complete in itself, was filed later by a party with knowledge of the earlier application.

Parliament amended the RMA in 2005 (aware of the Central Plans Water Trust facts) for the situation where a person applies for a resource consent for an activity covered by "any of sections 12, 13, 14 or 15" and there is an existing consent that has more than three months to expire in respect of the same resource – i.e. preference to an existing consent holder if certain circumstances apply.

In a recent declaration proceeding, Christchurch Ready Mix Concrete Limited v Canterbury Regional Council [2011] NZEnvC 195, the Court looked at whether sections 124A to 124C of the RMA apply in order to establish whether Fulton Hogan Limited (FHL) or Christchurch Ready Mix Concrete Limited (Ready Mix) has the priority to be heard by the Canterbury Regional Council on applications for the excavation of gravel.

The question was important to Ready Mix and others because if a "first come/first served" or "first ready for notification/first heard" principle applied then FHL's application would have to be heard first before any of the "renewal" applications filed later by Ready Mix and other existing consent holders.

The Court considered that section 124A(1) appears to require:

  1. An application for a resource consent for an activity referred to in one of sections 12, 13, 14, and 15;
  2. Where the application is "affected by section 124", that is it meets the conditions in section 124, in particular:
    • A resource consent is due to expire; and
    • The holder of the consent applies for a new consent for the same activity; and
    • The application is made to the appropriate consent authority; and
    • The application is made at least 6 months before the expiry of the existing consent; and
  3. The relevant (regional) plan "... has not allocated any of the natural resources used for the activity".

The Court considered that "allocated" in (3) above has a narrow meaning, so that it refers only to defined allocations in rules made pursuant to section 30(1)(fa), i.e. water, heat or energy; and does not apply to resources not allocatable under the RMA.

The Court decided that river bed gravel is not an allocatable resource because the taking or removal of gravel, as opposed to its excavation, is a matter of property rights. Therefore existing consents for its excavation (such as that held by Ready Mix) do not come within section 124A(1), and therefore neither section 124B nor section 124C apply. Ready Mix did not have priority over the new application by FHL.

Judge Jackson considered that the references to sections 12 and 13 in sections 124B and 124C are a mistake, as they do not apply to allocatable resources. He considered that to make sections 124A to 124C work, they are for establishing priorities when a new application is made in respect of an activity and resource controlled under sections 14 and 15.

This is likely to have significant implications for Ready Mix's "renewal" application as the gravel in the relevant area of the river was apparently "fully allocated". Further, the consent was cited as being critically important to Ready Mix's operations and Ready Mix had been using that area of the riverbed as a source of aggregate since the establishment of the company in 1963.

The decision is of relevance to existing users of resources in the coastal marine area and beds of lakes and rivers. It means that existing users of resources may not have priority over competing users for the same area. This may have consequences for investment in related infrastructure and commercial certainty about ongoing operations. We note the decision has been appealed to the High Court.