Auckland Council v Mawhinney

[2014] NZHC 906

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4227 [2014] NZHC 906

BETWEEN

AUCKLAND COUNCIL

Judgment Creditor / Respondent

AND

PETER WILLIAM MAWHINNEY Judgment Debtor / Applicant

Hearing:	16 April 2014
Appearances:	Mr P W Mawhinney in person Mr M C Frogley for Auckland Council
Judgment:	7 May 2014

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on

07.05.14 at 4 p.m, pursuant to

Rule 11.5  of the High Court Rules.

Registrar/Deputy Registrar

Date……………

AUCKLAND COUNCIL v MAWHINNEY [2014] NZHC 906 [7 May 2014]

[1]      I gave judgment in this proceeding on 27 February 2014.  The proceeding in question was an originating application to set aside a bankruptcy notice which the judgment  creditor,  the  Auckland  Council  had  served  on  Mr  Mawhinney.    Of relevance to today’s hearing is the ground set out at paragraph 2(d) of the application which stated:

(d)       The  judgment  creditor  has  set-offs,  counter-claims  and  cross- demands that exceed the amount of the relevant judgment which he was unable to use as a defence in the action in which the relevant judgment was given that are based on the unlawful omission of the judgment creditor processing resource consent applications and requests for certificates of compliance in the time periods and by the procedures set down in the Resource Management Act 1991.

[2]      The debt which was the subject matter of the bankruptcy notice arose from a costs order of $427,189 which Mr Mawhinney was ordered to pay by decision of the Environment Court dated 14 June 2012.

[3]      In the judgment which I gave I determined the issue about counter-claims, setoffs and cross-demands adversely to Mr Mawhinney.

[4]      The essential features of the claim which Mr Mawhinney brought were that the Council, through not processing a subdivision application, had caused him and what we will describe as the “Mawhinney interests” loss.   In the course of my judgment  I referred  to  an  earlier  decision  of  the  High  Court1   where  the  Judge concluded  that  the  Resource  Management  Act  1991  (“RMA”)  which  was  the statutory backdrop to Mr Mawhinney’s claims left intact alternative remedies in the

form of statutory rights of appeal and judicial review and that these were the only available remedies for persons who considered that a territorial authority had failed to exercise its powers and duties.2     In turn, the Judge in that case referred with

approval to what Fogarty J said in the early round of litigation between the parties in

Mawhinney v Waitakere City Council.3

The Judge said there was no policy vacuum

within which there was a need to identify a common law liability for damages in that

case against the territorial authority which Mr Mawhinney had sued.4    The Judge pointed out that if the territorial authority does not exercise their statutory duty, which was essentially the thrust of Mr Mawhinney’s claim, then judicial review could be sought.5

[5]      In my judgment I noted that Mr Mawhinney had now advanced an alternative basis upon which he might obtain damages which could be the basis for a set-off or counter-claim against the Council and that was by, in effect, seeking damages as part of a judicial review proceeding in which, Mr Mawhinney claimed, was a course contemplated by r 30.3 HCR.  I declined to accept that r 30.3 had any such effect.  I should note that when invited to identify any other basis upon which a damages claim could be brought, that was the only candidate which Mr Mawhinney put forward.

[6]      The latest step in this proceeding is that Mr Mawhinney has now filed an application for recall of my judgment.   He relies upon the following well known passage from the decision in Horowhenua County v Nash (No 2):6

Generally speaking,  a judgment  once  delivered  must  stand for  better  or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled – first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

[7]      In his application Mr Mawhinney says that the grounds for recall are based on the second category identified in Horowhenua County.  He relied upon that part of the Horowhenua judgment where the second ground for recall was identified as one where:

[C]ounsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance;

[8]      In this case the oversight was said to have resulted in s 314 of the RMA being overlooked as a source of rights giving rise to a claim for damages or compensation that Mr Mawhinney was entitled to bring.  Mr Mawhinney illustrated the point by setting out a redacted version of s 314 which explains how he says the section comes to have the effect for which he contends:

314      Scope of enforcement order

(1)       An enforcement order is an order made under section 319 by the Environment Court that may do any 1 or more of the following:

(a)       ………………. (b)       ………………. (c)       ……………….

(d)       require a person to pay money to or reimburse any other person for any actual and reasonable costs and expenses which that other person has incurred or is likely to incur in avoiding, remedying, or mitigating any adverse effect on the environment, where the person  against  whom the  order  is  sought  fails  to comply with –

(i)        ……………… (ii)    ……………… (iii)      ………………

(iv)     any of that person’s other obligations under this Act:

[9]      The  effect  of  the  argument  is  that  s 314  means  that  where  a  territorial authority breaches its obligations to process a sub-divisional application then that amounts to a contravention of the Act.  In such a case an enforcement order might require a person to pay money to or reimburse any other person:

[F]or any actual and reasonable costs and expenses which that other person has incurred or is likely to incur in avoiding, remedying, or mitigating any adverse effect on the environment.

[10]     Mr Mawhinney referred to the definition of “environment” in s 2 of the RMA

which is in the following terms:

Environment includes -

(a)       Ecosystems   and  their   constituent  parts,  including  people  and communities;

…

[11]     Mr Mawhinney argues that when the section is read in conjunction with the definition in s 2, damage of the kind the Mawhinney interests have suffered can be the subject of a compensation direction as part of an enforcement order.   I shall return to this particular argument subsequently.

[12]     Mr Frogley who appeared for the Council first submitted that the power to recall that was recognised in the Horowhenua County judgment does not extend to a party recasting arguments previously given and representing them in a new form.  It does not extend to putting forward further arguments, either, he submitted that could have been raised at the earlier hearing but were not.  He referred to the authorities of

Erwood v Mexted7 and Spurr v Farmlands Fuel Ltd.8

[13]     Mr   Frogley   reminded   me,   as   I   have   noted   above,   that   I   invited Mr Mawhinney to provide specifics of the additional claim for damages that he had not yet had an opportunity to turn his mind to at the time when the application to set aside the bankruptcy notice was heard.  Mr Frogley submitted that Mr Mawhinney was now advancing an argument which could have been made at the earlier hearing. He drew to my attention in addition to the decision of Fogarty J in Mawhinney v

Waitakere City Council9  that the question of liability of a Council for common law

damages had also been considered in the case of Bella Vista Resort Ltd v Western Bay of Plenty District Council10 which Mr Frogley said was binding authority that a local authority making decisions on a resource management application does not

owe any duty of care to the land owner.

[14]     I  now  consider  the  issue  of  whether  my  judgment  ought  to  be  recalled

because  s 314  was  not  drawn  to  my attention  at  the  hearing  of  the  originating

7      Erwood v Mexted [2010] NZCA 93, (2010) 20 PRNZ 466.

8      Spurr v Farmlands Fuel Ltd [2014] NZCA 48.

9      Mawhinney v Waitakere City Council, above n 3.

10     Bella Vista Resort Ltd v Western Bay of Plenty District Council [2007] NZCA 33, [2007] 3

NZLR 429.

application to set aside the bankruptcy notice.  Before I consider that I should also make  mention  of  a  further  authority  which  is  that  of  Spurr  v  Farmlands  Fuel Limited.  In that case, the applicant, Mr Spurr, had sought the recall of the decision in question on the grounds that a relevant decision, that of Commissioner of Inland Revenue  v  Redcliffe  Forestry  Venture  Limited11   had  not  been  referred  to  at  the hearing leading up to the judgment.   In his judgment for the Court of Appeal, Stevens J said:12

There is no operative failure to direct the Court’s attention to this decision by either party, because that decision is not relevant.

[15]     In my view there was no failure to bring the Court’s attention to authorities and statutory provisions which were relevant to the matter which I was required to decide in my judgment.   Section 314 was not relevant in the sense of having the potential to make a difference to the outcome of the decision.  The argument which Mr Mawhinney says ought to have been considered which is based on s 314 is misconceived and the section was of no relevance whatsoever to the matters that the court was required to consider.

[16]     Section 314 is concerned with actions that have or are likely to have an adverse affect on the environment.  It authorises the Court imposing a requirement on a person to pay money to reimburse actual and reasonable costs and expenses

which that other person has incurred or is likely to incur in avoiding, remedying, or

mitigating any adverse effect on the environment.13

The section cannot reasonably

be  interpreted  as  making  provision  for  the  payment  of  damages  for  breach  of economic  interests  of  those  who  claim  to  have  been  harmed  by  negligent

administrative action on the part of a council.

[17]     In  my  view  the  application  for  recall  should  be  dismissed.     I  order

accordingly.

11     Commissioner of Inland Revenue v Redcliffe Forestry Venture Limited [2012] NZSC 94, [2013]

1 NZLR 804.

12 At [8].

13     RMA, s 314(1)(d).

[18]     The parties should confer on the question of costs and if they are not able to agree, they are to file memoranda not exceeding five pages on each side within 10

working days of the date of this judgment.

J.P. Doogue

Associate Judge