Aotearoa Water Action Incorporation v Canterbury Regional Council

[2019] NZHC 1191

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000121

[2019] NZHC 1191

UNDER

the Judicial Review Procedure Act 2016

IN THE MATTER

of an application for review

BETWEEN

AOTEAROA WATER ACTION INCORPORATED

Applicant

AND

CANTERBURY REGIONAL COUNCIL

First Respondent

CLOUD OCEAN WATER LIMITED
Second Respondent

RAPAKI NATURAL RESOURCES LIMITED

Third Respondent

On the papers:

Counsel:

P Steven QC for Applicant

L F de Latour and P Maw for First Respondent W McCartney for Second Respondent

M J Wallace and J R King for Third Respondent

Judgment:

24 June 2019

JUDGMENT OF CHURCHMAN J (COSTS)

AOTEAROA WATER ACTION INCORPORATED v CANTERBURY REGIONAL COUNCIL [2019] NZHC 1191 [24 June 2019]

Introduction

1. I gave a judgment dated 10 December 2018 in which the applicant was successful in obtaining three declarations in a judicial review context. I invited the parties to agree costs but, in the absence of agreement, the applicant had 14 days to file submissions and the respondents 14 days from service of the applicant’s submissions to reply.1

1. On 28 May 2019, I released a costs judgment in which I noted that submissions on costs had not been filed by the second respondent. A memorandum was subsequently filed by the second respondent, notifying me that it had, in fact, filed submissions on 29 January 2019. I was not, however, provided with a copy of those submissions.

1. Accordingly, I recalled my first costs judgment. What follows is my new costs judgment, taking the second respondent’s submissions into account.

1. The applicant seeks costs and disbursements of $28,533.11 in relation to the proceedings: 50 per cent from the first respondent and 25 per cent from each of the second and third respondents.

1. The parties have not been able to reach agreement as to the quantum and the apportionment of costs. The first respondent contends that costs in the sum of $18,721.11 should be awarded and says that the three respondents should each be equally liable for a third of any costs award. The second respondent argues they should be in the amount of $9,923.50, while the third respondent has calculated costs at $14,261.11; both are silent as to their apportionment.

Classification of proceeding

1. The applicant has calculated costs on what it describes as a “hybrid” basis, arguing that the hearing involved a judicial review rather than an orthodox interlocutory application. It says that it has, however, reduced the time allowance under the High Court Rules (HCR) for some of the steps, accounting for the reduced time required to be spent on some of the steps and

1. Aotearoa Water Action Inc v Canterbury Regional Council [2018] NZHC 3240 at [149].

because costs associated with other steps will be brought to account following further judgment of the Court on the judicial review.

1. The respondents, however, argue that it was an interlocutory application and costs should be allocated accordingly. It is noted that, in their joint memorandum of counsel dated 23 May 2018, the second and third respondents had sought a costs categorisation of 3. This was opposed by the applicant, who sought, and obtained, a categorisation of 2, and also submitted that, for the purpose of determining security for costs, the preliminary issues should be calculated on the basis of the time allocations in the HCR for interlocutory applications. The parties agreed that the application to hear the preliminary issue was to be put before the Court as an interlocutory application and, accordingly, the application filed on 29 June 2018 was framed as an application for interlocutory orders.

1. The second respondent submits that, by claiming items for trial and/or an originating application, the applicant is trying to eat its cake and have it too. Allowing only for items coming under the heading of “Interlocutory application”, the second respondent has calculated costs that the applicant would have been entitled to on a 3B basis, arriving at a sum of

$14,685.00, noting that this figure is less than the amount the applicant now claims on a 2B basis. It is argued that, had the respondents succeeded, it seems unlikely that the applicant would have agreed that the respondents should receive more than 2B costs.

1. The first respondent accepts that the matter was not necessarily a “normal” interlocutory application and that an uplift in relation to several steps may be appropriate, but submits that, given that the matter was initiated as an interlocutory application, and no substantive evidence was filed in relation to the preliminary matter, the “hybrid” costs the applicant is seeking unreasonably and unduly increases the costs payable.

1. In response, the applicant submits that this “form over substance” approach does not adequately reflect the substantive nature of the questions determined by the Court, nor would it do justice in allowing the applicant adequate recovery of costs, bearing in mind the unequivocal nature of its win. Although framed as an interlocutory application, the questions were, in nature, more substantive, the applicant having to engage in argument arising out of the affirmative defence filed by the second respondent rather than leaving those questions until the hearing of the judicial review application.

1. I accept that this hearing was an interlocutory application and that this was accepted by the applicants when determining security for costs. However, the hearing went for almost two days and would, accordingly, have required more preparation than might ordinarily be the case for a preliminary matter. The questions were of a substantive nature. However, rather than adopting the proposed “hybrid” approach, I will instead allocate for Band C where appropriate.

Quantum

1. The first items to deal with are steps 11-13 which all concern the case management conferences. The third respondent allowed for all of these steps in its proposed schedule. The first respondent, meanwhile, provided for steps 12 and 13 but omitted step 11, giving no reason for doing so, from which I inferred that its omission was merely an oversight. The second respondent, however, submits that no costs should be allocated for any of these steps as they form part of the substantive proceeding, not the interlocutory application. While it is true that these steps do not come under the heading of “Interlocutory applications”, it is my view that it is appropriate that costs for them are awarded at this stage of the proceedings.

1. The next item at issue on the applicant’s cost schedule is step 37, “Filing application and supporting affidavits”, which is allocated two days in sch 3 of the HCR. The respondents all say this aspect of the proceedings should instead be categorised as step 22, which deals with filing an interlocutory application. The first respondent, however, concedes that two days can be allocated as claimed, responsibly acknowledging that the interlocutory application was more detailed than usual and that it was also accompanied by an affidavit, although it notes that the affidavit was primarily for the purpose of putting documents on the record. Rather than categorising this aspect of the proceeding as step 37, the first respondent proposes uplifting step 22 from band B to band C, which would also result in an allocation of two days. This appears to be a sensible approach in the circumstances and, accordingly, I will certify for step 22, band C.

1. Also at issue is step 31, “Plaintiff’s preparation of list of issues, authorities and common bundle”, which comes under the heading of “Trial preparation and appearance” and would be allocated two and a half days on a band B basis. The applicant, however, is only seeking an allocation of two days. The third respondent does not provide for this step of the proceeding in any form, arguing that it is not an appropriate inclusion. The first and second respondents

both argue this should instead be classified as step 25, “Preparation by applicant of bundle for hearing” under the heading of “Interlocutory applications”. The first respondent states, though, that it should be uplifted from band B to band C, which would provide for one day, noting that the bundle was prepared for an interlocutory proceeding and not a full civil trial for which the bundle would have included numerous witnesses briefs of evidence. I accept the first respondent’s submissions on this point and will include this aspect of this proceeding as step 25, band C.

1. Finally, also under the heading of “Trial preparation and appearance”, is step 33, “Preparation for hearing”, which would be allocated three days on a band B basis. This is the step that will have the most impact on the costs awarded to the applicant. The applicant states that the time allowance of four and a half days for the preparation of legal submissions and preparation for the hearing amounts to a recovery of approximately 50 per cent of the time spent by counsel. The applicant’s written submissions are noted to have comprised 34 pages, with the respondents’ collective submissions comprising 47 pages. Had the application truly been in the nature of an interlocutory application, r 7.39 of the HCR would have limited the written synopsis of submissions to a maximum of 10 pages required to be filed at least three working days before the hearing, with respondents’ filing and serving theirs at least one working day before the hearing. However, by agreement in the Joint Memorandum of Counsel in Relation to Timetable for Hearing of Preliminary Questions dated 19 July 2018, the parties agreed that, given the nature of the issues, the timeframes under r 7.39 were not appropriate and an alternative timetable agreed. The applicant therefore submits that this implicitly amounted to acceptance that the issues were more substantive, deserving more attention than is implicitly contemplated by the HCR.

1. None of the respondents include an item on their proposed schedules that corresponds with this step. The second respondent explains this by saying that step 33 is for trial preparation. The third respondent argues that the hearing of the separate questions did not involve evidence or witnesses which is what step 33 is designed to deal with. The first respondent contends that, in claiming this amount, the applicant appears to be “double-dipping” by claiming for steps under two different parts of the scale. It notes that the applicant is seeking time for hearing preparation from step 33 and also one and a half days for “Preparation of legal submissions” under step 40. The first respondent submits that the applicant can only appropriately claim steps for hearing preparation under the appropriate part of the scale for

interlocutory applications. Alternatively, if the Court considers that the interlocutory steps should not apply, an allocation for both preparation of the hearing and legal submissions should not be made.

1. This does appear to be double-dipping. As to preparation of submissions, it was my initial thought that as step 40 and step 24 both deal with “Preparation of written submissions” and both allocate one and a half days, this would be an aspect that I would not need to consider. However, I accept the applicant’s submissions that the preparation of written submissions were more time-consuming than might normally be the case and much of their time preparing for the hearing would have been consumed in this part of the process. Therefore, I will not provide for step 33 and 40, but will instead put step 24 on a band C basis, allocating three days.

Apportionment of costs

1. The applicant submits that the first respondent should bear the burden for at least 50 per cent of the costs as it is the consent authority charged with the statutory function of administering the resource consents it issues. It is said to be of relevance that Council officers had initially taken the stance that the subject resource consents lacked requisite scope to be used for commercial water bottling, and had required the second and third respondents to obtain new consents to enable water to be taken for that new use. The applicant had therefore anticipated that the first respondent would support the position of its officers, thus supporting the applicant in arguing that the pre-existing consents lacked requisite scope. It was not until the first respondent’s notice of opposition was received that the applicant came to understand that the Council had reversed its original position.

1. Counsel for the first respondent states that it has been unable to locate any authority that supports the proposition that a consent authority should bear the burden of the costs in a judicial review setting that challenges a decision of the consent authority. As to the applicant being surprised by the first respondent’s stance in the interlocutory application, it argues that it is unclear why this was the case as, in the Joint Memorandum of Counsel regarding the preliminary issues, the parties had agreed the first respondent would file its submission before the second and third respondent so as to avoid duplication. It is submitted that the original position of the Council officers, as evidenced by conduct prior to the proceedings, is irrelevant

as costs are to reflect how parties acted during litigation, not before it.2 In any event, the Court accepted that the Council officers’ view that water bottling was not within the scope of the consent did not bind the Council in any way in the interlocutory proceeding,3 so the Council’s stance in deciding to oppose the interlocutory application should not affect the allocation of costs between the three respondents. Furthermore, the interlocutory application came about as a result of the affirmative defence raised by the third respondent in its statement of defence, counsel for the applicant proposing that this affirmative defence be dealt with by way of preliminary declaration.

1. It is my view that the first respondent, despite being the consent authority charged with administering the resource consents it issues, should not bear more of the burden for these costs. Its stance on the consents prior to these proceedings is irrelevant in terms of considering costs. Accordingly, it is appropriate that the costs should be shared equally by the respondents.

Conclusion

1. Accordingly, costs and disbursements in the order of $22,958.11 (as per the attached schedule) are awarded in favour of the applicant, such costs to be apportioned equally amongst the respondents.

Churchman J

Solicitors:

Linwood Law, Christchurch for Applicant

Wynn Williams Lawyers, Christchurch for First Respondent Carson Fox Legal, Auckland for Second Respondent

Tavendale and Partners, Christchurch for Third Respondent

1. Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188, (2006) 11 TCLR 544 (CA) at [160].

2. Aotearoa Water Action Inc v Canterbury Regional Council, above n 1, at [53].

Schedule

Scale costs: Schedule 2B - daily rate is $2,230

Step	Description	Time Allocation	Amount
10	Preparation for first case conference	0.4 day	$892.00
11	Filing memoranda for case management conferences (x 2)	0.8 day	$1784.00
13	Appearance at case management conference	0.3 day	$669.00
22	Filing interlocutory application	(Band C) 2 days	$4,460.00
24	Preparation of written submissions	(Band C) 3 days	$6,690.00
25	Preparation by application of bundle for hearing	(Band C) 1 day	$2,230
26	Appearance at hearing for principal counsel	1.75 days	$3,902.50
Total time	9.25 days	$20,627.50
Disbursements
Filing fee	$200.00
Hearing fee	$1,920.00
Common bundle expenses	$210.61
Total disbursements	$2,330.61
Total costs and disbursements			$22,958.11