Auckland Council v 184 Maraetai Road Limited

[2015] NZHC 2615

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-1340 [2015] NZHC 2615

UNDER	the Resource Management Act 1991
IN THE MATTER OF	an appeal from a decision of the Environment Court pursuant to s 299 of the Resource Management Act 1991
BETWEEN	AUCKLAND COUNCIL Appellant
AND	184 MARAETAI ROAD LIMITED Respondent

Hearing:	On the Papers
Counsel:	W S Loutit and S J Mitchell for the Appellant S J Simons and K A Mulcahy for the Respondent
Judgment:	23 October 2015

JUDGMENT OF EDWARDS J [re Costs]

This judgment was delivered by Justice Edwards on 23 October 2015 at 10.30 am, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date

Solicitors:

Simpson Grierson, Auckland

Berry Simons, Auckland

AUCKLAND COUNCIL v 184 MARAETAI ROAD LIMITED [2015] NZHC 2615 [23 October 2015]

Introduction

[1]      The appellant seeks costs and disbursements in the sum of $19,243 following its successful appeal from a decision of the Environment Court.

[2]      The respondent opposes costs or seeks a reduction in the quantum of costs on the grounds that it would not be equitable or appropriate for such an award to be made.

Judgment

[3]     By judgment dated 17 September 2015, I allowed an appeal from the Environment Court and remitted the proceeding back to that Court for reconsideration.1

[4]      The issue in the proceeding was whether a concept development consent had been “given effect to” pursuant to s 125 of the Resource Management Act 1991 (RMA).  The Environment Court found that the consent had been given effect to and granted a declaration to that effect.

[5]      The appeal proceeded on a question of law in accordance with s 299 of the RMA.   I found that the Environment Court had applied the wrong legal test by considering the consequences which would flow if the consent was held to lapse, rather than the steps taken to give effect to the consent before its expiry date.  I also found that in adopting this approach, the Environment Court had failed to take into account relevant factors.  In both cases I found that the errors of law were material to the Environment Court’s decision.

[6]      The appellant had invited this Court to substitute its own decision for that of the Environment Court in the event an error of law was found.  I declined to grant that relief, finding that the Environment Court, as a specialist tribunal, was in a better position than this Court to weigh the necessary evidence in accordance with the correct legal approach.  The decision was remitted back to the Environment Court

for reconsideration.

1      Auckland Council v 184 Maraetai Road Ltd [2015] NZHC 2254.

[7]      I invited counsel to submit memoranda on the question of costs if they could not be agreed.   Memoranda were received from both parties. The appellant seeks costs of $18,063 calculated on a category 2B basis and disbursements in the sum of

$1,180.  The respondent opposes any award being made at this stage, or alternatively submits that a reduced costs award should be made.

Relevant costs principles

[8]      The principles applicable to the determination of costs are not in dispute. Heath J summarised them as follows:2

Costs are in the discretion of the Court.  Guidance as to the way in which the discretion might be exercised are set out in the High Court Rules. The Rules are designed to create a framework for the determination of costs that is both “predictable and expeditious”.

(Footnotes omitted.)

[9]      A primary principle is that the unsuccessful party should pay costs to the successful party.3   However, that principle is subject always to the Court’s overriding discretion as to costs as provided for in r 14.1.

[10]     Rule 14.7 provides that the Court may refuse to make an order for costs or may reduce the costs otherwise payable in the circumstances listed in that rule.  The respondent relies in this case on r 14.7(e) which permits the Court to refuse or reduce costs if the proceeding concerned a matter of public interest and the party opposing costs acted reasonably in the conduct of the proceeding.  The principles relevant to that  rule  were  reviewed  by  Heath  J  in  New  Health  NZ  Inc  v  South  Taranaki

District Council.4    In essence, the Court needs to be satisfied that the unsuccessful

litigant has acted reasonably in the conduct of the proceeding and that a private interest is not being dressed up as a public one.5

2      New Health New Zealand Inc v South Taranaki District Council [2014] NZHC 993, (2014) 21

PRNZ 766 at [6].

3      High Court Rules, r 14.2(a).

4      New Health New Zealand Inc v South Taranaki District Council, above n 2 at [8]-[10].

5      At [10] and citing Taylor v District Court at North Shore HC Auckland CIV 2009-404-2350,

13 October 2010 at [9].

[11]     Test cases and cases involving novel points or principles of law may be treated differently in terms of costs.  In some cases there may be no order as to costs in the proceeding.6     The essence of a test case is that it raises a novel point or principle of law with ramifications going beyond the particular case.   If a case involves only the application of settled law to a particular set of facts, it is not a test case.7

Decision

[12]     The starting point is that the appellant is entitled to an award of costs, having been the successful party on appeal.  The respondent says the circumstances of this case justify a departure from that primary principle.  I have considered each of the respondent’s arguments made in support of that submission below.

Court’s general discretion

[13]     The respondent submits that the purpose of the Court’s discretion to award costs is to ensure that justice is achieved between the parties.  It says that justice will not be achieved in this case if costs are awarded against the respondent at this stage. In this respect, the respondent submits:

2.4The  originating  proceeding  in  the  Environment  Court  was  a declaration proceeding under section 311 of the RMA, the purpose of which was to seek clarification of a matter relating to the proper administration and application of the RMA.  This was not an appeal on   a   resource   consent   application   by   184   Maraetai.      The Environment Court found in its favour and 184 Maraetai was compelled to participate in the proceeding in this Honourable Court to defend the Environment Court’s reasoning.

2.5      This Honourable Court’s finding that the Environment Court erred in

its  application  of  the  correct  legal  test  does  not  mean  that

184 Maraetai’s declaration application was misfounded, or that it has

been unsuccessful in terms of the substantive matter at issue.

[14]     I   respectfully   disagree   with   the   respondent’s   characterisation   of   its

application for a declaration as a proceeding seeking to clarify the proper administration and application of the RMA.  The declaration application involved an

6      Securities Commission v Kiwi Co-Operative Dairies Ltd [1995] 3 NZLR 26 (CA).

7      Birkdale Service Station Ltd v Commissioner of Inland Revenue [2001] 1 NZLR 293 (CA) at

[81] and [85].

enquiry into whether or not the consent had been given effect to pursuant to s 125 of the RMA.  It involved the application of a statutory test to a particular set of facts. The legal principles relevant to the application of that statutory test were well settled and not in dispute.  The issue on appeal was simply whether or not the Environment Court had erred in applying the correct legal test to the facts before it.

[15]     I accept there are differences between an application for a declaration (as in this case) and an appeal from a decision on a resource consent.   But, I do not consider those differences to justify a departure from the standard approach in this case.  The declaratory proceeding was commenced in the Environment Court by the respondent following the Council’s decline of its application for subdivision consent on the grounds that the concept development consent had lapsed.  It therefore had, and still has, a substantial private interest in the outcome of the case before the Environment Court and the decision on appeal.

[16]     Finally, I do not consider that the respondent was “compelled” to participate in  the  appeal  such  that  a  departure  from  the  normal  costs  principles  would  be justified.   A respondent to an appeal is not compelled to defend a decision in its favour.  If it elects to do so then it must contribute to the costs of that appeal should it be unsuccessful in its defence of the lower court’s decision.

[17]     Overall, I am not persuaded that the grounds put forward by the respondent under this head warrant a departure from the key principles that costs should be predictable and expeditious, and that the successful party is entitled to a contribution to its costs.

Costs should follow the event

[18]     The respondent acknowledges that costs should follow the event but says that the “event” in question has yet to be determined with the Environment Court still to decide the substantive issue.  The respondent submits that the appropriate point for costs to be considered is upon final resolution of the matter.

[19]     The effect of s 299 of the RMA is that appeals may only be brought on questions of law.  The appellant successfully argued that the Environment Court had

erred in law and accordingly the appeal was allowed on that basis.   Costs should follow the event in that respect.  Any costs determinations flowing from the final substantive decision made by the Environment Court on reconsideration will be for that Court to determine upon the rehearing and in accordance with the principles applicable in that jurisdiction.

Appellant only partially successful

[20]     The respondent submits that the appellant was only partially successful in that it did not succeed in persuading this Court to substitute its own decision for that of the Environment Court.  The respondent says that the appellant “has succeeded in respect of a technical matter relating to the way in which the Environment Court expressed its reasoning but it has not succeeded in achieving its substantive goal”.

[21]     Partial success in some cases can warrant a reduction in the quantum of costs awarded, or justify an order that no costs be awarded at all.  I accept that the Council did not succeed in obtaining the relief it sought.   However, the appellant was successful on its primary ground of appeal and it is that head of argument which absorbed the majority of the Court’s time.   I do not consider that there are any reasons to reduce scale costs in this case on the basis of “partial success”.

Public interest

[22]     The respondent characterises the appeal as a matter of public interest and specifically relies on r 14.7(e) in opposing a costs award.   It says the declaration proceeding was  not  one  previously considered  by any court  and  it  has  broader implications  for  the  operation  of  other  resource  consents,  and  in  particular, framework plans which are an important and legally contentious element of the proposed Auckland Unitary Plan.   It further submits that the proceeding is in the nature of a “test case” and accordingly costs should lie where they fall.

[23]     I do not agree that the matter in this proceeding was one of public interest within the meaning of r 14.7(e), nor do I consider it to be a “test case”.  The case involved the application of settled law to a novel set of facts.  It did not raise a novel point or a principle of law with ramifications going beyond the particular case in

issue in the proceeding.   The fact that the Court had not previously considered whether or not a concept development consent had been given effect to within the meaning of s 125 of the RMA does not make it a test case, and does not mean a matter of public interest was involved.  I do not consider the nature of the appeal or the issues involved warrant a departure from the standard approach to costs.

Quantum

[24]     The respondent correctly notes that the schedule set out by the appellant includes a claim for a full day of hearing time when the hearing only took half a day. That change affects the appearance time claimed for both the principal and second counsel and results in costs in the sum of $16,390.50 calculated on a schedule 2B basis.

Result

[25]     Costs are awarded to the appellant in the sum of $16,390.50 on a schedule 2B

basis, plus disbursements in the sum of $1,180.

Edwards J