The Environment Court has given a clear message that it has jurisdiction to make a declaration that a would-be submitter is acting contrary to the new trade competition provisions in the RMA through its involvement in a Council hearing.

A would-be submitter, if challenged, is required to demonstrate that it is directly affected by an adverse effect on the environment created by the proposal, and that the adverse effect does not relate (i.e. has no connection with) trade competition or its effects.

In General Distributers Limited (GDL) v Foodstuffs Properties (Wellington) Ltd [2011] NZEnvC 212, an application was made by GDL for a declaration that Foodstuffs was in breach of the trade competition sections 96 and 308B of the RMA by making a submission to the Council opposing an application for resource consent for the construction of a supermarket. The Court granted the order sought.

The RMA does not define the terms ‘trade competitor' or ‘trade competition'. The Court referred to the relevant definitions in the Concise Oxford dictionary and concluded that "if we have two or more organisations striving to establish superiority over the other(s) in the buying and selling of (in this case) goods, then we have trade competition, and those organisations are trade competitors." Foodstuffs had tried to argue that it was not a trade competitor with GDL as it did not engage in retail trading and only leased supermarket sites to franchisees. The Court rejected the argument noting that exactly what structure or form a would-be competitor chooses to adopt is irrelevant and that Foodstuffs is clearly a competitor of GDL in the supermarket trade.

The Court saw no reason in principle why an asserted breach of section 96(2) should not be regarded as within the power to make a declaration, and there is good reason why it should. The motivation for the inclusion of trade competition sections in the RMA was the frustration of seeing developments being bogged down in seemingly endless RMA litigation that was motivated by nothing more than the wish to stifle the opening of a rival store in a given location. The Court considered that to confine the power to do something about that until the litigation is concluded in the Environment Court would make no sense.

It held that, while the purpose of the section 308G procedure is to enable substantial penalties to be imposed on a party who has pursued a trade competition purpose through the appeal process, it should not be understood as impliedly prohibiting an application for a declaration at an earlier stage.