Cardrona Water Supply Limited v Queenstown-Lakes District Council

Cardrona Water Supply Limited, a water supplier, sought judicial review of a condition imposed on a resource consent granted by the Queenstown-Lakes District Council (the Council) to Central Road Properties Limited. The condition required the owner of the lot to cease using a private water supply system and use the Council's water supply system once it became available. Cardrona Water Supply argued the condition was unlawful and commenced judicial review proceedings against the Council. The Council acknowledged the condition did not serve any resource management purpose and agreed to remove it. Following the Council's action, Cardrona Water Supply discontinued the proceedings. The parties could not agree on the allocation of costs. Cardrona Water Supply sought scale costs in respect of the original proceedings, discounted by 25 per cent, and scale costs for the costs application. The Council argued costs should lie where they fall. The Court found the Council acted reasonably and swiftly once the proceedings were filed and that the condition was indeed unlawful. However, Cardrona Water Supply did not attempt to resolve the issue informally before commencing the proceedings. The Court considered it appropriate to send a letter before action, and the failure to do so attracted a reduction in costs. The Court awarded reduced costs to Cardrona Water Supply and found the Council was entitled to costs for its costs application.

The Court ordered the Council to pay scale costs in respect of the original proceeding at category 2, discounted by 75 per cent, amounting to $2,868, and scale costs in respect of the costs application of 0.6 days at category 2, amounting to $1,434.