Auckland Council v Loranger
[2022] NZHC 3241
•6 December 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-000926 CIV-2022-404-001060
[2022] NZHC 3241
BETWEEN AUCKLAND COUNCIL
First Appellant
CABLE BAY WINE LIMITED and MOTUKAHA INVESTMENTS LTD
Second AppellantsAND
JULIE LORANGER, LINDSAY NIEMANN, MICHAEL POLAND and CHRISTINE POLAND
Respondents
Hearing: 8 November 2022 Appearances:
S F Quinn for First Appellant
A G Webb and A E Gilbert for Second Appellants S J Simons and S T Macdonald for Respondents
Judgment:
6 December 2022
JUDGMENT OF WYLIE J
(Appeal against costs decision made by Environment Court)
This judgment was delivered by Justice Wylie On 6 December 2022 at 11.00 am
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
DLA Piper, Wellington
Russell McVeagh/A G Webb, Auckland Berry Simons, Auckland
AUCKLAND COUNCIL v LORANGER [2022] NZHC 3241 [6 December 2022]
Introduction
[1] Something has miscarried when, after a hearing spanning some two years in the Environment Court:
(a)the parties’ submissions (and the various attachments) in relation to costs exceed 500 pages;
(b)the Environment Court’s costs decision is delayed for some two years;
(c)the Environment Court’s costs decision is 19 pages long;
(d)two parties appeal;
(e)submissions filed in support of and in opposition to the appeals exceed 150 pages;
(f)the submissions on appeal refer to some 70 cases and are accompanied by eight spiral-bound volumes of materials (not including case law); and
(g)the appeal hearing takes almost a full day in Court.
This is the position the Court was faced with in the present case.
[2] More prosaically, Cable Bay Wine Ltd and Motukaha Investments Ltd (jointly Cable Bay) and Auckland Council (the Council) appeal a decision issued by the Environment Court on 27 May 2022 awarding the respondents, Lindsay Niemann, Julie Loranger and Michael and Christine Poland (jointly the s 274 parties), costs of
$495,324 and requiring that $412,770 be paid by Cable Bay and $82,554 by the Council.1 The s 274 parties oppose both appeals.
1 Cable Bay Wines Ltd v Auckland Council [2022] NZEnvC 90 (Alternate Environment Judge LJ Newhook).
Background
[3] The s 274 parties own land in the vicinity of the Cable Bay vineyard on Waiheke Island. They have resided in the area for some time. Indeed, two of the s 274 parties, Ms Loranger and Ms Niemann, leased the subject property to Cable Bay in 1998 for the purpose of developing a vineyard and then later sold the property to Cable Bay in 2000.
[4] In 2004, Cable Bay sought consent from its neighbours, as affected parties, so that it could establish a winery and associated restaurant on the property. The s 274 parties (and others) gave consent and a resource consent was subsequently granted by the Council in 2006. The vineyard and the restaurant were established and, in the ensuing years, the s 274 parties enjoyed an harmonious relationship with Cable Bay.
[5] In 2012 Cable Bay was sold to a new owner. The s 274 parties initially enjoyed a positive relationship with the new owner. However, in 2014, Cable Bay constructed a new building known as “the Verandah” which expanded the dining and function area and included a pizza kitchen. Cable Bay also expanded its activities elsewhere on the property. Extensive lawns were opened up for hospitality purposes with an outdoor bar; concrete pads were installed for outdoor dining; outdoor furniture to accommodate guests was placed on the lawns and concrete pads.
[6] No building or resource consents were sought or obtained for these works or for the expanded activities.
[7] From 2014 onwards, the s 274 parties began experiencing adverse effects – in particular, excessive noise. Their relationship with Cable Bay deteriorated. They lodged numerous complaints with Cable Bay and with the Council. They sought to persuade the Council to enforce compliance with the 2006 consent and with other regulatory provisions.
[8] In 2017 Cable Bay applied to the Council for retrospective consents for the Verandah and for the other activities that were occurring on the property. It also sought consent to construct a noise barrier on the northern boundary of the site.
[9] The Council appointed commissioners to consider the application. The activities the subject of the application were non-complying. If consents were to be granted, one or other of the gateway tests set out in s 104D of the Resource Management Act 1991 (the RMA) had to be satisfied. The commissioners found that Cable Bay’s activities could not satisfy either of the gateway tests. They considered that the activities were having more than minor adverse effects on the amenity values that could reasonably be expected in the vicinity and they were not convinced that conditions could adequately mitigate those adverse effects and render them minor or less than minor. They also found that the activities were contrary to the Council’s Operative Plan. As a result, Cable Bay’s application for the retrospective resource consents was declined.
[10] I take the summary of what occurred thereafter from the Environment Court’s costs decision (with some interpolation):2
…
(d)On 2 February 2018 Cable Bay filed a notice of appeal against the decision. Ms Loranger, Ms Niemann, [and] Mr and Mrs Poland … became parties under s 274 RMA in opposition to the appeal.
(e)On 28 February 2018 the Council filed a separate enforcement order application. The enforcement orders were to require Cable Bay to cease activities at the site including the use of the enclosed Verandah areas as the restaurant function facility, the use of outdoor seating bays, the use of the lawn area and provision of seating in the restaurant to more than 120 guests at a time. The s 274 parties also joined this proceeding. The matters were set down to be heard together.
(f)Mediation was scheduled for 2 July 2018 and reconvened on 16 July 2018. Mediation was unsuccessful.
(g)An initial hearing took place over six days, from 7 to 9 November, and then 12 and 14 November 2018.
2 Cable Bay Wines Ltd v Auckland Council, above n 1, at [4] (footnotes omitted); and see Cable Bay Wine Ltd v Auckland Council [2021] NZHC 2596 at [5]–[26].
[11] At the initial hearing, the Environment Court offered the parties the opportunity to proceed by way of what was referred to as the Erskine approach.3 Such approach gives the parties the opportunity, with the guidance of the Court, to resolve their dispute. The Court can direct, supervise and control how the parties proceed. It is essentially an iterative approach. The parties did not object to the adoption of this approach and all subsequently engaged with it.
[12]I return to the Environment Court’s summary:4
(h)On 21 November 2018, a first interim decision was issued.5 This provided that consent was refused to some of the the outdoor hospitality activities, but there was an ongoing indication of possible consent to [t]he Verandah restaurant and kitchen, subject to satisfactory conditions of consent being finalised. The Court recorded that its intention was to move through a series of interim decisions to assist the parties to get appropriate controls in place and make sure they work[ed].
(i)On 28 November 2018, the Court issued interim enforcement orders restricting the activities on site, particularly outdoors.6
(j)Subsequent to this there was a significant exchange between the s 274 parties, Cable Bay and the Court regarding the location of a gate.
(k)On 5 February 2019 a joint memorandum was filed providing an update to the Court on noise monitoring and other expert conferencing.
(l)On 5 February 2019, following directions by the Court on 21 December 2018, the Council updated the Court as to the inspection undertaken over ten dates during the summer period to confirm compliance with the interim enforcement orders. The outcome was that there was general compliance with some compliance issues to be resolved.
(m)Further to this, the s 274 parties requested that an audit be completed as to the buildings on site. The Council was directed by the Court to complete this and it did so.
(n)On 22 February 2019 the second interim decision of the Environment Court was issued.7 In that decision the Court refused that part of the original application relating to outdoor
3 Named after the case in which it was first adopted – The Wellington Company Ltd v Save Erskine College Trust [2018] NZEnvC 6.
4 Cable Bay Wines Ltd v Auckland Council, above n 1, at [4].
5 Cable Bay Wines Ltd v Auckland Council [2018] NZEnvC 226.
6 Auckland Council v Cable Bay Wines Ltd [2018] NZEnvC 228.
7 Cable Bay Wines Ltd v Auckland Council [2019] NZEnvC 29.
hospitality, excepting the al fresco dining and the holding of outdoor wedding functions. The Court confirmed that conditions were still to be finalised for that part of the application which could (possibly) be granted. The Court also acknowledged that there was a number of matters remaining in dispute and observed that a further hearing of about a day might be needed. The Court required that a report be filed in advance.
(o)On 14 March 2019 the acoustic engineers’ report was filed. In addition, a joint memorandum of counsel was filed identifying matters which were not in agreement.
(p)On 28 March 2019 a judicial telephone conference was held. Subsequently a timetable was directed for a hearing in August 2019, including the filing of evidence in advance and response to the Court’s questions for the acoustic experts.
(q)On 29 August 2019 a further two-day hearing was held. Following this the Court directed that Cable Bay confirm what resource consents would remain active and what consents would be withdrawn. Cable Bay did so on 11 September 2019, and the Council and s 274 parties responded on 20 September 2019.
(r)On 15 October 2019, the Court issued its third interim decision.8 The Court addressed the final issues (in relation to landscape and noise together with some other interim issues) and issued a decision on these issues.
(s)On 4 November 2019 Cable Bay filed a memorandum with the Court proposing a timetable for completion of consent conditions. The Court declined to direct a timetable but suggested the parties work hard to adhere to the informal timetable. This process did not proceed smoothly, with delays and memoranda being filed with the Court on behalf of the parties.
(t)On 5 March 2020 the s 274 parties raised concerns with the areas of the building not authorised by resource consent and potentially with Building Act issues, and also provided evidence that there appeared to be a breach due to a wedding taking place in contravention of the Court’s enforcement order.
(u)On 18 March 2020 the Council went on site to undertake a thorough building consent investigation. Previously, the Council had advised the Court that it was not aware there were any outstanding building issues but had not done a full investigation. On 22 May 2020, a joint memorandum was filed by both the Council and Cable Bay confirming that any outstanding building consent issues had either been resolved or were in the process of being resolved.
8 Cable Bay Wines Ltd v Auckland Council [2019] NZEnvC 170.
(v)On 27 May 2020 the s 274 parties filed a memorandum suggesting that there was an absence of any detail and that they considered that the Council should provide a further response at the Court’s direction with more information on the outstanding Building Act issues. On 28 May 2020 Cable Bay opposed this application, although noted that if the Court required details they could be provided in relatively short order.
(w)On 10 June 2020 a fourth interim decision the Environment Court was issued.9 In that decision the Court noted that the Court received numerous memoranda and versions of conditions, all of which were considered.
(x)The Court directed that the Council provide an updated version of draft conditions, and that the Council submit an updated draft enforcement order.
(y)On 1 July 2020 the Council provided a memorandum to the Court updating the Court that brief comments were provided by Cable Bay … and more substantial comments were provided by the remainder of the s 274 parties. Council observed that some substantial changes and additions were proposed which were beyond the directions of the Court for review. The Council also confirmed that the enforcement orders were no longer required.
(z)On 17 September 2020 the final decision of the Court (on the resource consent matter) was issued.10 [The Court granted consent to some of the activities and imposed 71 conditions].
(aa) On 30 October 2020 the Court issued its final decision in terms of the enforcement order.11 The interim orders were rescinded, and the substantive application was declined because the regulatory situation [was] covered by the conditions of consent imposed in the Court’s final decision in the other proceedings.
[13] Cable Bay appealed against and sought judicial review of the Environment Court’s decision of 17 September 2020 imposing conditions. It argued that some of the conditions were unlawful; it did not challenge the limited grant of consent nor the Court’s refusal to grant consent for some of its proposed activities. The appeal was dismissed and the application for judicial review was declined by Campbell J on 30 September 2021.12 Cable Bay then sought leave to appeal to the Court of Appeal. At the same time, it sought to appeal the High Court’s decision declining its application
9 Cable Bay Wine Ltd v Auckland Council [2020] NZEnvC 75.
10 Cable Bay Wine Ltd v Auckland Council [2020] NZEnvC 154.
11 Auckland Council v Cable Bay Wine Ltd [2020] NZEnvC 182.
12 Cable Bay Wine Ltd v Auckland Council, above n 2.
for judicial review. On 17 May 2022, the Court of Appeal declined Cable Bay’s application for leave to appeal the High Court’s decision.13 The appeal against the High Court’s decision declining judicial review was withdrawn shortly thereafter.
The costs applications
[14]Following the Environment Court’s final decision, relevantly:
(a)the s 274 parties sought indemnity costs of $825,540.75 (comprising
$778,261.13 in respect of the appeal proceeding and $47,279.62 in respect of the enforcement order proceeding);
(b)Cable Bay sought a contribution from the Council and the s 274 parties jointly of 50 per cent of its legal and expert witness costs of
$594,562.07;
(c)the Council did not seek costs. It considered that costs should lie where they had fallen.
The Environment Court’s costs decision
[15] The Court recorded the background to the proceedings and the costs awards sought by the parties. It set out a timeline of relevant events, as recorded above. It discussed the various principles relevant to awards of costs in the Environment Court.14 It referred to s 285 of the RMA, acknowledged that costs are not awarded as a penalty but rather to compensate a successful party for the costs it has reasonably incurred if that is appropriate, and recorded that typically the Court undertakes a two-step analysis – first, determining whether an award of costs should be made and then, if an award should be made, determining the quantum. The Court also recorded that in practice, costs awarded in the Environment Court have tended to fall into three bands – standard costs (comprising 25 to 30 per cent of actual and reasonable costs claimed), higher than normal costs (where there are aggravating factors) and indemnity costs (which are awarded rarely and only in exceptional circumstances). It
13 Cable Bay Wine Ltd v Auckland Council [2022] NZCA 189.
14 Cable Bay Wine Ltd v Auckland Council, above n 1, at [5]–[10].
also noted that the Court does not generally award costs against the public body whose decision is the subject of the appeal unless it has neglected its duties or has acted in a way that is unreasonable.
[16] The Court went on to record that Cable Bay’s appeal and the Council’s enforcement order proceedings had been heard together and that all evidence essentially related to both. It recorded that the enforcement orders had been rescinded because the new consents had been put in place and not because the orders sought were unmeritorious. Accordingly, it held that it was impossible to separate out the efforts of the parties in each proceeding and that any costs awarded should relate to the entirety of the matter.15
[17] The Court then went on to consider the application for costs by the s 274 parties. It recorded their submissions and those filed in opposition by both the Council and Cable Bay.
[18] The Court concluded that an award of costs was appropriate in favour of the s 274 parties and against Cable Bay for a number of reasons:
(a)There were “impacts on the extent of involvement needed by the [s 274] parties arising from Cable Bay’s activities”.16 The Court rejected Cable Bay’s submission that the quality of the lay evidence from the s 274 parties was “bad and irrelevant”.17
(b)Cable Bay had considerably widened the application for resource consent beyond simply seeking retrospective approval for the Verandah.
(c)The s 274 parties had retained an acoustic consultant, Jon Styles. While the acoustic witnesses for all parties had constructively assisted the Court, it had relied particularly on Mr Styles’ evidence. It had preferred his more conservative suggested conditions of consent.
15 Cable Bay Wine Ltd v Auckland Council, above n 1, at [11]–[12].
16 At [20(a)].
17 At [20(a)].
(d)While there was “limited force” in the argument that the s 274 parties had acted improperly in some respects, their actions could not be classified “as a loss of objectivity and abuse of process”.18 Rather, the Court considered that the s 274 parties’ actions were born out of “intense frustration with the continuing volatile situation on the ground caused largely by Cable Bay ‘pushing out the boat’ at almost every turn”.19
(e)The planning witnesses for Cable Bay were unhelpful and did not provide written evidence of substance.
(f)Some of the arguments raised by Cable Bay were unmeritorious.
[19] The Court also held that costs should be awarded against the Council. It considered that:
(a)the uncontrolled activities and unconsented building works at Cable Bay “were probably exacerbated by lack of sufficiently early action by the Council”.20 The Council’s belated enforcement action had contributed to spiralling relationships and problems and added time and cost to the proceedings;
(b)the conditions proposed by Cable Bay and the Council fell well short of adequately addressing relevant matters. The conditions were developed in a piecemeal way, over time, with poor overall presentation, inconsistent formatting, inconsistent terminology, inconsistent references and a lack of clarity. The Council had failed to provide a set of conditions to the standard expected and again this contributed to the parties incurring further costs.21
18 Cable Bay Wines Ltd v Auckland Council, above n 1, at [20(d)].
19 At [20(d)].
20 At [21] quoting Cable Bay Wines Ltd v Auckland Council, above n 10, at [12].
21 Cable Bay Wines Ltd v Auckland Council, above n 1, at [22], [23] and [25].
The Court commented that the Council had not adequately assisted it and had failed in its duties.
[20] The Court then turned to consider quantum. It did not consider that there should be an award of indemnity costs but noted that there were aggravating factors which justified an award of higher than normal costs. The Court rejected methods of calculation suggested by the Council and commented that it was not “a de facto Law Society revision committee”.22 In the face of a submission by the Council challenging the reasonableness of the costs incurred by the parties, it observed that the indemnity costs sought by the s 274 parties seemed “huge” but that it had found nothing in the invoices filed in support suggesting that the costs were “gold-plated”.23 It commented that the case demanded the engagement of senior and experienced counsel and the necessary acoustic and planning witnesses, to meet “the intense approach by Cable Bay” and “the adverse effects on the ground”.24 It recorded that it had particular regard to the costs principles it had set out earlier in its decision and to all other facts and factors discussed throughout its decision. For these various reasons it considered that the appropriate award of costs was 60 per cent of the s 274 parties’ total claim (with Cable Bay paying 50 per cent of the claimed amount and the Council paying the remaining 10 per cent).25
[21] The Court then turned to the application for costs by Cable Bay. It refused to make any award in Cable Bay’s favour either against the s 274 parties or the Council.
The appeal
[22] The appeal is brought pursuant to s 299 of the RMA. Relevantly, that section provides as follows:
299 Appeal to High Court on question of law
(1)A party to a proceeding before the Environment Court under this Act or any other enactment may appeal on a question of law to the High Court against any decision, … of the Environment Court made in the proceeding.
22 Cable Bay Wines Ltd v Auckland Council, above n 1, at [29].
23 At [29].
24 At [29].
25 At [29]–[30].
…
[23] The leading authority as to what constitutes a question of law in this context is the decision of a full bench of this Court in Countdown Properties (Northlands) Ltd v Dunedin City Council.26 The Court there observed that this Court would intervene only where the Environment Court:27
(a)applies a wrong legal test;
(b)comes to a conclusion without evidence or one to which, on the evidence, it could not reasonably have come;
(c)takes into account matters which it should not have taken into account; or
(d)fails to take into account matters which it should have taken into account.
[24] The Supreme Court has more recently observed in Bryson v Three Foot Six Ltd that there will be an error of law where there is a misdirection on or a misinterpretation of the law, or where the conclusion reached by the decision maker is untenable or insupportable on the evidence.28 It commented that the latter situation will arise only in rare cases; a party seeking to argue that there is no evidence to support a finding in the Court below faces “a very high hurdle”.29 Blanchard J for the Court noted as follows:
(a)an appeal cannot be said to be on a question of law where the fact-finding Court has merely applied law which it has correctly understood to the facts of an individual case. Provided the Court has not overlooked any relevant matter, or taken account of some matter
26 Countdown Properties (Northlands) Ltd v Dunedin City Council [1994] NZRMA 145 (HC).
27 At 153.
28 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [24] and [26]–[27].
29 At [27].
which is irrelevant to the proper application of the law, the conclusion is a matter for the fact-finding Court, unless clearly insupportable;30
(b)the ultimate conclusion of the fact-finding Court can sometimes be so insupportable – so clearly untenable – as to amount to an error of law.31 This will occur when proper application of the law requires a different answer. Such cases will rarely arise; for example, in cases in which there is no evidence to support the determination, in cases in which the evidence is inconsistent with and contradictory of the determination, or in cases in which the true and only reasonable conclusion contradicts the determination;
(c)it does not matter whether an appellate Court would have reached a different conclusion on the evidence. The issue is whether the decision under appeal was a permissible option;32 and
(d)an error concerning a particular fact which is only one element in an overall factual finding cannot be said to give rise to a finding of “no evidence” where there is support for the overall finding in other parts of the evidence.33 It could nonetheless lead or contribute to an outcome which is insupportable.
[25] In the present case, these observations must be applied having regard to the nature of an appeal against a decision on costs. Costs decisions are quintessentially discretionary.34 Appeals against costs awards, particularly those involving assessments of fact and degree, seldom succeed because the trial Court is uniquely placed to make the costs assessment. An appellate Court cannot hope to capture the ephemeral but significant impressions which inform the assessments and discretions
30 Bryson v Three Foot Six Ltd, above n 28, at [26].
31 At [26].
32 At [27].
33 At [28].
34 Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council [2013] NZHC 2468 at [26].
exercised by the trial Court.35 Appellate Courts will not interfere unless satisfied that the trial Court acted in one of the ways noted above.36
Submissions
[26] The submissions were lengthy, replete with factual disagreements and with tendentious arguments about who was or was not the successful party. In very many respects the parties endeavoured to relitigate matters already decided by the Environment Court.
[27] The Council (whose primary submissions ran to some 38 pages and whose submissions in reply ran to a further 15 pages) submitted that the Environment Court:
(a)provided insufficient reasons for its costs awards;
(b)erred when it found that the Council had neglected duties it owed to the Court; and
(c)erred in the exercise of its discretion and awarded costs which were neither fair nor reasonable.
[28] Cable Bay (whose primary submissions ran to 30 pages and whose submissions in reply ran to a further 14 pages) submitted that the Environment Court:
(a)failed to give sufficient reasons for its costs awards with the result that its conclusions on the evidence were “unsupportable”;
(b)failed to consider relevant matters;
(c)applied a wrong legal test; and
(d)awarded costs which were manifestly unreasonable.
35 R v Reid [2007] NZSC 90, [2008] 1 NZLR 575 (SC) at [23].
36 Kinney v Pardington [2021] NZCA 174 at [1].
[29] The s 274 parties (whose submissions ran to 58 pages) argued that the decision made by the Environment Court was considered, took into account all relevant matters, provided sufficient reasoning and was both fair and reasonable.
Analysis
Relevant costs principles
[30] The Environment Court’s power to award costs is found in s 285 of the RMA. Relevantly, it provides as follows:
285 Awarding costs
(1)The Environment Court may order any party to proceedings before it to pay to any other party the costs and expenses (including witness expenses) incurred by the other party that the court considers reasonable.
…
[31] The section confers a broad discretion on the Environment Court. The only qualification is that the quantum of costs awarded must be reasonable. Notably, there is no statutory requirement that costs be awarded. Nor is there a presumption that the successful party should be awarded costs.
[32]It was nevertheless common ground between counsel that:
(a)the discretion – whilst broad – must be exercised on a principled basis. In this regard, all counsel referred to the Environment Court’s Practice Note in relation to costs issued in 2014.37 It was acknowledged that the Practice Note is not prescriptive; rather it is a guide;
(b)a two-stage approach is customarily taken by the Environment Court – should costs be awarded and if so, in what sum?;
(c)in considering a costs award, what are known as the Bielby factors can be relevant. These factors derive from a decision of this Court –
37 Environment Court of New Zealand Practice Note 2014.
Development Finance Corporation of New Zealand Ltd v Bielby.38 The Court there identified various factors which can be relevant in awarding costs. They are as follows:39
(i)whether arguments were advanced that were without substance;
(ii)whether the process of the Court has been abused;
(iii)whether the parties have failed to comply with the rules or Court orders in respect of procedural matters;
(iv)whether a case has been poorly pleaded or presented. This includes conducting a case in such a manner as to unnecessarily lengthen the hearing;
(v)whether a party has failed to explore the possibility of settlement where a compromise could have been reasonably expected to ensue, or where a party has unreasonably or obdurately resisted a settlement;
(vi)whether a party has taken a technical or unmeritorious point or defence and failed;
(d)where the Environment Court considers that an award of costs is appropriate, in determining quantum, it often adopts, de facto, a three-band approach:40
(i)standard costs (normally between 25 and 33 per cent of the reasonable costs sought);
38 Development Finance Corporation of New Zealand Ltd v Bielby [1991] 1 NZLR 587 (HC) at 594– 595.
39 There is an additional factor. It is not relevant for present purposes.
40 Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council, above n 34; and Aitchison v Wellington City Council [2018] NZHC 1674, [2018] NZRMA 507 at [33].
(ii)higher than standard costs (appropriate where aggravating or adverse factors, such as the Bielby factors, are present); and
(iii)indemnity costs (awarded rarely and only in exceptional circumstances); and
(e)as a matter of general principle, it is rare for the Environment Court to make a costs award against the consent authority whose decision is subject to appeal. There are exceptions to this principle. Costs awards may, for example, be appropriate where the consent authority has neglected its duties, where the decision appealed against would have imposed an unreasonable restriction on the appellant’s rights and the restriction was not upheld, or where the consent authority has acted in a way that was patently unfair, unreasonable or untenable. It has been succinctly observed that costs will not generally be awarded against the consent authority unless its actions are in some way “blameworthy”.41 This Court however has queried whether this is an accurate encapsulation of the relevant principle. It preferred to say that costs should not be awarded against the statutory decision maker in the absence of special circumstances.42 The role required of and taken by the consent authority is likely to be a relevant factor in considering a costs award against a consent authority.43
[33] In the present case, the Environment Court’s discussion of the relevant costs principles was succinct but no party suggested that the Court made any significant error in its summary or that it omitted any material principle. Rather, it was the application of the principles that was challenged.
[34]I turn to consider the matters raised by the Council and Cable Bay.
41 See for example Brown v Rodney District Council EnvC Wellington W105/99, 7 October 1999 at [3]; Emma Jane Ltd v Christchurch City Council EnvC Auckland C020/09, 1 April 2009 at [19]; and Woolworths New Zealand Ltd v Christchurch City Council [2022] NZEnvC 79 at [40].
42 Environmental Protection Authority v BW Offshore Singapore Pte Ltd [2021] NZHC 2577 at [17].
43 Aitchison v Wellington City Council, above n 40, at [25]; and Auckland Regional Council v Waiheke Island Airpark Resort Ltd (2010) 16 ELRNZ 182 (HC) at [42].
The duty to give reasons
[35] Both the Council and Cable Bay alleged that the reasons given by the Environment Court were inadequate. Both pointed to the quantum of the award. Mr Webb, for Cable Bay, advised me that, insofar as he was aware, it is the largest costs award made by the Environment Court. Both the Council and Cable Bay pointed out that the Erskine approach adopted by the Tribunal has only been used on one other occasion and both noted that there was no analysis in the Environment Court’s decision of whether or how the approach affected the costs ultimately awarded.
[36] While the RMA does not expressly require the Environment Court to give reasons for the decisions it makes, it is good judicial practice to provide a reasoned decision. Without reasons, it may not be possible to understand why a particular decision has been made.44 The giving of reasons is an important aspect of the principle of open justice. If no reasons are given, the parties cannot be sure why they have won or lost and the party who lost will be left wondering about the efficacy of participating in a process where, if you lose, you do not know why.45 When something out of the ordinary is being done, some explanation, which can be brief, should be given.46 It is however trite law that there is no obligation on a Court or Tribunal to record every part of its reasoning process, either on the facts or on the law. Conclusions reached may involve unarticulated rejections of the contentions advanced by witnesses or the submissions for the parties on the law.47
[37] Here, the Environment Court approached the exercise of its discretion in the traditional way. It asked itself whether a costs award should be made and it then addressed quantum. The Court explained why it considered that an award of costs should be made against both Cable Bay and the Council. It set out six reasons why it considered that an award should be made against Cable Bay (see above at [18]) and one overarching reason (and two matters going to that reason) why it considered that an award of costs should be made against the Council (see above at [19]). The Council
44 Lewis v Wilson & Horton Ltd [2000] 3 NZLR 546 (CA) at [79].
45 Belgiorno-Nettis v Auckland Unitary Plan Independent Hearings Panel [2019] NZCA 175, [2019] NZRMA 535 at [47].
46 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [16].
47 Contact Energy Ltd v Waikato Regional Council (2007) 14 ELRNZ 128 (HC) at [65].
and Cable Bay take issue with the reasons identified by the Court but neither can say that reasons were not given. They were – it is simply that the parties disagree with those reasons and with the Court’s ultimate conclusion that costs should be awarded against them.
[38] When it came to quantum, the Court recorded that some Bielby factors were engaged; indeed, it commented that these factors were engaged “strongly”.48 It considered the reasonableness of the costs sought by the s 274 parties. It recorded that it had had regard to the various cost principles it had identified and to the other matters referred to in its decision and it made a costs award in favour of the s 274 parties.
[39] While the reasoning was succinct, I am not persuaded that the Court failed to give adequate reasons for the costs award made. In particular:
(a)the costs award was large but this does not require the giving of lengthy reasons. Succinct but correct reasons can lead to significant awards; and
(b)while the Court did not expressly discuss the effect of the Erskine approach adopted by it, it was clearly aware of the context in which costs were sought. It referred to Erskine and to the way in which the hearing had unfolded as a consequence of adopting that approach. It was critical of the approach taken by both the Council and Cable Bay to the formulation of the conditions if consent was to be given for some of the activities the subject of Cable Bay’s application. There was no need for the Environment Court to go on and further discuss the impact the Erskine approach had on the costs award. While it may have been helpful if it had done so, I am not persuaded that the Environment Court’s omission was a material error of law.
This ground of appeal fails.
48 Cable Bay Wines Ltd v Auckland Council, above n 1, at [27].
Did the Council neglect duties it owed to the Court?
[40] Mr Quinn, for the Council, submitted that the Court’s conclusion that the Council had breached duties it owed to the Court was manifestly unreasonable. He also argued that the Court’s finding that the Council’s belated bringing of enforcement proceedings had contributed to spiralling relationships and problems and added time and cost to the proceeding was an irrelevant consideration.
[41] I agree with Mr Quinn that there is nothing in the language of s 285 to suggest that the discretionary power to award costs permits the Environment Court to have regard to how the parties to an appeal conducted themselves prior to the matter coming before the Environment Court.49 On this basis, I accept that the Environment Court made an error of law in taking into account an irrelevant consideration – namely the Council’s belated bringing of enforcement proceedings – in finding that the Council had breached duties it owed to the Court.
[42] Nevertheless, there was another factor leading to the Environment Court’s finding that the Council failed in its duties owed to the Court. The Court also considered that the Council did not adequately assist it when it came to the drafting of conditions to regulate Cable Bay’s activities. It set out its reasoning for this conclusion. It was the Council’s duty to assist the Court by drafting consent conditions to an acceptable standard and the Court concluded that the Council failed to do so. This contributed to the fact that the proceedings were drawn out and to the costs incurred by all parties. This factual finding was open to the Court and of itself it does not raise a question of law.
[43] Consequently, while I accept the Environment Court took into account an irrelevant consideration in finding that the Council failed in its duties owed to the Court, I am not persuaded that this finding should be set aside. To adopt the observations by Blanchard J in Bryson, there is support for the Court’s overall finding that the Council breached duties it owed to the Court in other parts of the evidence.
[44]This ground of appeal cannot succeed either.
49 Auckland Regional Council v Waiheke Island Airpark Resort Ltd, above n 43, at [33].
Were the Environment Court’s conclusions leading to an award of costs against Cable Bay insupportable?
[45] Mr Webb argued that the Environment Court erred in law because the reasons that were given to support the making of the costs award against Cable Bay were not supported by evidence and were not conclusions that the Environment Court could reasonably have reached. He took me through each of the reasons identified in the Environment Court’s decision, taking issue with the Environment Court’s findings in relation to each.
[46] I accept that some of the reasons given by the Environment Court are not well worded and that there are passages in some of the Environment Court’s interim decisions and in its final decisions which, read out of context, can be said to contradict some of the findings made in the costs decision. Nevertheless, the Environment Court identified six reasons why costs should be awarded against Cable Bay. Each of those reasons involved a factual determination by the Environment Court. It cannot be said that those determinations are so clearly untenable as to amount to an error of law. By way of example, it was for the Environment Court to determine what it thought of the quality of the evidence adduced by the s 274 parties; it was for the Environment Court to determine what weight to give to the acoustic evidence of the parties’ experts and whose evidence it preferred; it was for the Environment Court to determine whether the planning evidence called by Cable Bay was helpful or not. These are all matters of impression resulting in factual findings. There is no error of law in the Court’s findings. This ground of appeal also fails.
Did the Environment Court fail to consider relevant matters as alleged by Cable Bay?
[47] Mr Webb argued that the Environment Court imposed the Erskine approach on the parties and that this had the result of significantly increasing the costs involved. It was argued that:
Some account of an unorthodox approach was a relevant matter to consider in relation to costs: what impact it had had; did it require any adjustments to the starting point; or did it affect whether increased costs should be awarded?
It was submitted that a principled exercise of the discretion ought to have expressly included consideration of any impact from this factor.
[48] I have already commented on this issue above at [39(b)]. As I there noted, it would have been helpful if the Environment Court had considered the effect that the adoption of the Erskine approach had on costs, but it was not required to do so. The parties agreed to the adoption of the Erskine approach and it was Cable Bay that benefited from that approach. But for the guidance and assistance given by the Environment Court in putting in place a workable set of conditions, it is likely that the application for retrospective resource consent would have been declined in its totality. A large part of the Environment Court’s costs decision was dedicated to carefully recording the process undertaken by it, the various hearings and the decisions progressively made. The Court commented in numerous places in its decision about the increased costs and workload involved. It was clearly aware that the approach was relatively novel. It commented that, as a result, it was not comfortable with the sort of broad calculations suggested by the Council and with the adoption of an “unduly formulaic approach … in such a complex case”.50 In short, it did not fail to take into account the impact the adoption of the Erskine approach had on the hearing and the resulting costs award.
[49] Cable Bay suggested that what had occurred involved what was only, in effect, a seven-day hearing. It was asserted that the Environment Court failed to take this into account. I agree with the submissions made by Ms Simons for the s 274 parties that this comment is “divorced from the reality of the proceedings”. While there were only seven days of hearing, there was some two years’ work leading up to the final decisions given in September and October 2020.
[50] Further, it was argued by Mr Webb that the Environment Court failed to take into account whether the award of costs against Cable Bay was reasonable. He argued that the Court simply commented that the indemnity costs sought by the s 274 parties seemed huge, but that, after considering the various invoices filed with the costs submissions, it could find nothing in the invoices to suggest that they were “gold-plated”.51 He argued that the Court’s function was not to decide whether the costs incurred by a party were reasonable and that the proper enquiry should have been
50 Cable Bay Wines Ltd v Auckland Council, above n 1, at [28].
51 At [29].
what, in all the circumstances, was a reasonable award of costs on a party and party basis.
[51] I do not accept this submission. In determining what is an appropriate costs award between the parties to litigation, a Court is required to consider the amount sought by the party seeking costs. Here, the Environment Court expressly did so. It recorded the amount being sought by the s 274 parties and commented that that sum seemed huge. It perused the invoices and recorded that it could find nothing in them to suggest that the costs sought were gold plated. It commented on the appropriateness of engaging senior and experienced counsel and reputable expert witnesses. It concluded, in effect, that the costs being sought by the s 274 parties were not unreasonable but it declined to award costs in the amount sought. In doing so, it recorded that it had paid particular regard to the principles applicable to the exercise of costs which it had expressly identified in its decision and also to the other matters it had discussed in its award of costs. It awarded 60 per cent of the claimed sum. While this was higher than standard costs normally awarded by the Environment Court, the Court expressly recorded that some Bielby factors were engaged, indeed strongly. It had already identified those factors earlier in its decision where it had been critical of Cable Bay, the steps taken by it in the course of the proceedings and the evidence and submissions it had advanced.
[52] The Court clearly took into account whether or not the costs award made by it was reasonable.
[53] Mr Webb criticised the Environment Court for not testing the costs award by reference to the scale costs which can be awarded under the District and High Court Rules. He referred to a judgment of this Court – Environmental Protection Authority v BW Offshore Singapore Pte Ltd.52 In that case, Cooke J acknowledged that the costs schedules in the High Court Rules 2016 are not binding on the Environment Court. The Judge nevertheless expressed the view that the costs scales in both the High Court and the District Court Rules provide helpful guidance for costs decisions.
52 Environmental Protection Authority v BW Offshore Singapore Pte Ltd, above n 42, at [19].
[54] While I broadly agree with Cooke J, I do not consider that the costs scales applicable under the High Court and District Court Rules constrain the Environment Court’s discretion to award costs. The Environment Court exercises a specialist jurisdiction. It has been given a very broad discretion as to costs and that discretion is not circumscribed by rules or scales of the kind set out in the High Court and District Court Rules. The Environment Court could have drawn a comparison between the costs award proposed by it and the awards (for increased costs) that might have been made in the District or High Courts, but it was not obliged to do so. Further, even if it had made the comparison, that would not have precluded it from fixing reasonable costs in the circumstances of the case before it. In short, while the Environment Court did not take this factor into account, it was not obliged to do so.
[55] Mr Webb argued that the Environment Court failed to distinguish between the appeal proceedings and the enforcement proceedings. He argued that the Court should have considered whether costs should have been apportioned between the hearings and whether, because of set-off or other reasons, any award of costs was justified.
[56] I disagree. The Environment Court set out its reasons for adopting a global approach. I have referred to them above (see [16]). In my judgment, that reasoning cannot be faulted.
[57] Finally, in this regard, Mr Webb argued that the Court failed to consider the success of the parties.
[58] In my view, this submission overlooks two issues. First, the Environment Court is not constrained to awarding costs only in favour of a successful party. As noted above at [31], there is no such presumption in s 285 of the Act. Secondly, and in any event, looked at in the round, I have no doubt that broadly the s 274 parties were the successful parties. Many of the activities being undertaken by Cable Bay were required to cease. The Verandah ultimately received consent but only subject to some 71 conditions, all intended to mitigate and render minor the adverse effects of the activities that Cable Bay had been carrying out illegally for some years.
[59] I do not consider that the Environment Court failed to take into account relevant factors and this ground of appeal must fail.
Did the Environment Court apply a wrong legal test?
[60] Mr Webb submitted that the Environment Court erred in law, by failing to exercise its discretion in a principled way.
[61] I have already dealt with this submission in the foregoing analysis. It is rejected.
Were the costs ordered fair and reasonable?
[62] Both Mr Quinn and Mr Webb submitted that the costs awarded by the Environment Court were neither fair nor reasonable. They argued that it was unfair and unreasonable to award costs in excess of the usual Environment Court “comfort zone” assessment of 25 to 33 per cent of actual and reasonable costs claimed. They asserted that the Court did not identify the presence of any particular Bielby factors that would justify an award of increased costs above this “comfort zone” and that the Court erred when it awarded 60 per cent of the costs incurred by the s 274 parties.
[63] Again, and for the reasons I have already set out, I am not persuaded that there was an error by the Environment Court as asserted. The costs award was large. The Environment Court did however expressly consider whether or not the costs sought by the s 274 parties were reasonable. It set out, albeit succinctly, why it considered that an award of increased costs was appropriate. It identified various of the Bielby factors when discussing whether costs should be awarded against Cable Bay or the Council. It concluded that it was appropriate to allow to the s 274 parties 60 per cent of the costs they had reasonably incurred and it apportioned the resulting award between the Council and Cable Bay. Its conclusions as to quantum and apportionment called for the exercise of the discretion conferred on the Court, in a principled manner and according to law. The resulting award was high, but this of itself does not indicate that any error of law was made. Except as noted above, there is nothing else to suggest that the Environment Court erred in principle or that it made an error of law.
Result
[64] The Council and Cable Bay have not identified any material error of law in the Environment Court’s costs decision. Accordingly, the appeals are dismissed.
Costs
[65] The s 274 parties have been successful in opposing the appeals. They are entitled to their reasonable costs and disbursements. It is my preliminary view that costs should be fixed on a 2B basis. If the parties accept this, then they should be able to reach agreement on quantum. If they do not accept my preliminary view or are unable to reach agreement on quantum, then I direct as follows:
(a)any application for costs is to be filed and served by way of memorandum on or before 19 December 2022;
(b)any memoranda in response are to be filed and served on or before 31 January 2023;
(c)memoranda are not to exceed five pages.
I will then deal with the issue of costs and disbursements on the papers unless I require the assistance of counsel.
Wylie J
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