Clark v Taranaki Regional Council
[2015] NZHC 2676
•30 October 2015
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
CIV-2015-443-000016 [2015] NZHC 2676
IN THE MATTER OF an appeal against a decision of the District
Court pursuant to s 72, District Courts Act
1947BETWEEN
FIONA CLARK First Appellant
ROBERT TAYLOR Second Appellant
ANDREA MOORE Third Appellant
AND
TARANAKI REGIONAL COUNCIL Respondent
Hearing: 19 October 2015 Counsel:
J A Hope for appellants
J Shackleton for respondentJudgment:
30 October 2015
RESERVED JUDGMENT OF DOBSON J
Contents
Introduction ....................................................................................................................................... [1] Factual background .......................................................................................................................... [4] Grounds of appeal ........................................................................................................................... [30]
The incorporated society was their successor, and is the liable entity ......................................... [31]
Waiver request dealt with inappropriately.................................................................................... [58]
Costs in the District Court .............................................................................................................. [61] Costs in this Court........................................................................................................................... [65]
CLARK v TARANAKI REGIONAL COUNCIL [2015] NZHC 2676 [30 October 2015]
Introduction
[1] This is an appeal from a decision of Judge Ross delivered in the New Plymouth District Court on 18 March 2015 in which he upheld the appellants’ liability for certain statutory charges.1
[2] The charges comprised the additional costs for the respondent (TRC) to use independent commissioners to hear and determine resource consent applications, beyond the cost that would have been incurred if TRC councillors had performed that function. The appellants were objectors to the relevant resource consent applications, and had requested that independent commissioners should determine them.
[3] The liability in issue was $12,256.70, together with interest and court costs for the appellants’ unsuccessful defence of the claim in the District Court. Although the amount is relatively modest, I was advised by Mr Hope, counsel for the appellants, that two of the appellants are indigent and unable to make any meaningful contribution to the extent of the judgment, with the other appellant also being of very limited means. Accordingly, the appellants’ further challenge to the liability by pursuing the appeal is a matter of principle for them.
Factual background
[4] The appellants have long-standing concerns for the water quality in the Waitara River, and in particular the undesirable effects of sewage discharges into the river by the local authority. A Waitangi Tribunal report in 1983 found that the Waitara River contained traditional fishing grounds of the Te Atiawa people, and was
of prime importance as a source of food.2 The recommendations in that report
included the establishment of a regional planning and co-ordinating task force, which should direct its attention in the first instance to the replacement of the
1 Taranaki Regional Council v Clark [2015] NZDC 4189.
2 Waitangi Tribunal Motunui Waitara Report (WAI 6, 1983) at 20 and 2.
Waitara Borough outfall, and in the long term to the provision of land-based treatment plants.
[5] Mr Aila Taylor, the father of the present appellant Robert Taylor, was prominent among the witnesses for Te Atiawa at the Waitangi Tribunal’s 1983 proceedings. Ms Clark was also a witness for Te Atiawa.
[6] Waitara has continued to use the same sewage outfall system that attracted adverse findings by the Waitangi Tribunal in 1983. In July 2011, TRC publically advertised resource consent applications made by the New Plymouth District Council (NPDC) in respect of waste water discharges in Waitara and New Plymouth. Various aspects of the applications sought further 30 and 35 year terms to continue the discharges on conditions that were materially similar to those that applied at the time the applications were lodged.
[7] On 14 July 2011, the three appellants signed a TRC printed form for submission on a resource consent application, indicating that they wished TRC to refuse the consent on the terms on which it had been sought. The submitter’s details included as its full name “Friends of the Waitara River Group”. The appellants’ signatures were above an explanation that read:
(Person making submission, or person authorised to sign on behalf of person making submission)
[8] The submission referred to a petition containing 513 signatures that was attached to the form when it was submitted. That petition set out the qualified nature of the group’s opposition, including opposition to the terms of 35 and 30 years that were sought in various components of NPDC’s applications.
[9] The printed form included a section headed “Request for independent commissioner/s”, with space for those lodging the submission to request that TRC delegate the hearing and determination of the application to one or more hearing commissioners, under s 100A of the Resource Management Act 1991 (RMA). The prospect of such a request was endorsed with the following note:
Such a request may be made [in writing] up to 5 working days after close of submissions. If you do make a request under s 100A of the Resource Management Act 1991, you will be liable to meet or contribute to the costs of the hearings commissioner or commissioners.
The appellants ticked the appropriate place to request the appointment of commissioners.
[10] Section 100A of the RMA provides:
100A Hearing by commissioner if requested by applicant or submitter
(1) This section applies in relation to an application for a resource consent if—
(a) the application is notified; and
(b) in accordance with section 100, a hearing of the application is to be held.
(2) The applicant, or a person who makes a submission on the application, may request in writing that a local authority delegate its functions, powers, and duties required to hear and decide the application in accordance with subsection (4).
(3) The request must be made no later than 5 working days after the closing date for submissions on the application.
(4) If the local authority receives a request under subsection (2), it must delegate, under section 34A(1), its functions, powers, and duties required to hear and decide the application to 1 or more hearings commissioners who are not members of the local authority.
[11] In addressing, among other things, the costs incurred by local authorities in dealing with resource consent applications, the RMA provides:
36 Administrative charges
(1) A local authority may from time to time, subject to subsection (2), fix charges of all or any of the following kinds:
(a) charges payable by applicants for the preparation or change of a policy statement or plan, for the carrying out by the local authority of its functions in relation to such applications:
(aa) charges payable by an applicant who makes a request under section 100A in relation to an application for a resource consent, even if 1 or more submitters also make a request, for the cost of the application being heard and decided in accordance with the request:
(ab) charges payable if 1 or more submitters make a request under section 100A in relation to an application for a resource consent, but the applicant does not also make a request, as follows:
(i) charges payable by the applicant for the amount that the local authority estimates it would cost for the application to be heard and decided if the request had not been made; and
(ii) charges payable by the submitters who made a request for equal shares of any amount by which the cost of the application being heard and decided in accordance with the request exceeds the amount payable by the applicant under subparagraph (i):
…
Charges fixed under this subsection shall be either specific amounts or determined by reference to scales of charges or other formulae fixed by the local authority.
(2) Charges may be fixed under subsection (1) only—
(a) in the manner set out in section 150 of the Local
Government Act 2002; and
(b) after using the special consultative procedure set out in section 83 of the Local Government Act 2002; and
(c) in accordance with subsection (4).
(3) Where a charge fixed in accordance with subsection (1) is, in any particular case, inadequate to enable a local authority to recover its actual and reasonable costs in respect of the matter concerned, the local authority may require the person who is liable to pay the charge, to also pay an additional charge to the local authority.
(3A) A local authority must, upon request by any person liable to pay a charge under this section, provide an estimate of any additional charge likely to be imposed under subsection (3).
(4) When fixing charges referred to in this section, a local authority shall have regard to the following criteria:
(a) the sole purpose of a charge is to recover the reasonable costs incurred by the local authority in respect of the activity to which the charge relates:
(b) a particular person or persons should only be required to pay a charge—
(i) to the extent that the benefit of the local authority’s
actions to which the charge relates is obtained by
those persons as distinct from the community of the local authority as a whole; or
(ii) where the need for the local authority’s actions to which the charge relates is occasioned by the actions of those persons; or
(iii) in a case where the charge is in respect of the local
authority’s monitoring functions under section
35(2)(a) (which relates to monitoring the state of the whole or part of the environment), to the extent that the monitoring relates to the likely effects on the environment of those persons’ activities, or to the extent that the likely benefit to those persons of the monitoring exceeds the likely benefit of the monitoring to the community of the local authority as a whole,—
and the local authority may fix different charges for different costs it incurs in the performance of its various functions, powers, and duties under this Act—
(c) in relation to different areas or different classes of applicant, consent holder, requiring authority, or heritage protection authority; or
(d) where any activity undertaken by the persons liable to pay any charge reduces the cost to the local authority of carrying out any of its functions, powers, and duties.
(5) A local authority may, in any particular case and in its absolute discretion, remit the whole or any part of any charge of a kind referred to in this section which would otherwise be payable.
[…]
[12] To provide for such administrative charges that might be levied, schedule 1 of appendix 1 of TRC’s 2011-2012 annual plan set out a scale of charges for staff time for processing resource consents. Schedule 8 of that appendix set out the basis for cost recoveries from those requesting hearing commissioners in the following terms:
CHARGES FOR THOSE REQUESTING HEARING COMMISSIONERS Applicants or submitters making a request, under s 100A of the Resource
Management Act 1991, shall be required to pay the additional costs as reasonably determined by the Council using costs set out in Schedules 1 and
2.
EXPLANATION:
For a notified resource consent application an applicant or a submitter may request that the Council delegate its functions, powers and duties required to
hear and decide the application to one or more independent hearing commissioners. Sections 36(1)(aa) and 36(1)(ab) of the Resource Management Act 1991 allow the Council to estimate the additional costs as if the request had not been made and recover these costs from the requestor(s). Schedule 1 sets out the Council’s scale of charges for staff time and schedule 2 sets out the fixed minimum cost of processing resource consent applications and includes hearing costs.
[13] On 25 July 2011, TRC wrote to the Friends of Waitara River Group acknowledging the group’s request for the appointment of independent commissioners, which TRC would have to provide unless the request was withdrawn. Reference was made to the provision in TRC’s annual plan for recovery of the additional costs incurred when TRC was requested to appoint independent hearing commissioners. The letter continued:
When you ticked the box on the form you will have seen the adjacent note advising that, by making the request, you would have to pay the additional cost of the independent commissioners. At the time I suspect you were unaware that these costs could be very high. The purpose of this letter is to let you know the estimated cost and give you an opportunity to review your decision and potentially withdraw your request.
We estimate the additional cost of dealing with these requests and having the applications heard by independent commissioners instead of Councillors is
$30,000 [including GST], it will be shared by the submitters that made the requests. This significantly higher cost occurs for two main reasons. Firstly,
the amount charged for Councillors time is fixed by the Government at $80 per hour, and $100 per hour for the chairman. Commissioners typically
charge $200 - $250 per hour.
[14] The letter added that commissioners were entitled to charge for time on a wider basis than would be the case for councillors. It asked the group to advise TRC by 4 August 2011 if it still wished the applications to be heard by independent commissioners.
[15] A letter in the same terms was separately sent to Ms Clark who had completed a submission form on her own behalf.
[16] On 8 August 2011, TRC extended the deadline for submitters to reconsider their request for independent commissioners to 24 August 2011.
[17] By 25 August 2011, two other submitters who had not wished to be heard had withdrawn their request for independent hearing commissioners.3
[18] The appellants then requested TRC to use its discretionary power under s 36(5) of the RMA4 to waive the charges that would be incurred in appointing independent commissioners. The request cited what the submitters perceived as a conflict of interest for TRC, given its ownership of land in the area affected and a statement on TRC’s website that if conflicts of interest exist, then independent commissioners will be appointed.
[19] TRC officers prepared an analysis of considerations applying to the request for waiver, expressing the view that the additional $30,000 then projected for independent commissioners would not result in benefit to the community at large because the matters could be appropriately determined at a lower cost by elected councillors. Further, that it would be unreasonable for ratepayers to meet the additional costs so the request for the charges to be waived or remitted should be
declined.5
[20] TRC promptly rejected any suggestion of a conflict of interest, and after considering the matters reviewed by its officers on 30 August 2011 declined the request for waiver of the charges. The submitters were then granted a further extension of the time in which to reconsider their request for independent commissioners.
[21] The Friends of Waitara River Group met on 11 September 2011, and decided to apply to become an incorporated society. The form of application, including the requisite 15 names and signatures required, was dated 11 September 2011. Formal incorporation of Friends of the Waitara River Ngaa Hoa Piri O Te Muriwai O Waitara Inc occurred on 26 October 2011.
[22] The resource consent applications were heard and determined by independent commissioners on 31 October, 1 and 2 November 2011. The commissioners’
3 (CoA 504)
4 Set out at [11] above.
5 (CoA 521, 522.)
decision granting the applications, subject to a series of conditions, was released on
15 November 2011.
[23] After the hearing had concluded, TRC calculated the costs in relation to the appointment of independent commissioners, in accordance with s 36(1)(ab) of the RMA and the relevant schedules in its 2011-2012 annual plan. The result was to reduce the initial estimate of approximately $30,000, to very close to the amount subsequently sought in the District Court proceedings of $12,256.70. Invoices for that amount were issued to the appellants on 9 February 2012.
[24] There has been no suggestion, in the context of the demand for the appellants to meet the additional costs, that the appellants’ concerns were other than bona fide, or that their long-term interest in, and concern over, the subject matter of the resource consents were unreasonable.
[25] District Court proceedings for recovery of the debt were commenced in March 2013, with the defended hearing occurring in December 2014 and the Judge’s decision being delivered in March 2015. TRC’s claim to recover the extent of the statutory charges as a debt was defended on three grounds.
[26] First, the appellants argued that the incorporated society was their successor for the purposes of standing as a submitter in the resource management process, so that it was the incorporated society that was liable to meet the costs, and not the appellants in their individual capacity.
[27] Secondly, the appellants complained of deficiencies in TRC’s processes when considering requests that it waive the charge for additional costs. As well as the initial request for waiver, which had been made before the hearing, a second request had been made by the appellants between the conclusion of the hearing in the District Court and delivery of the reserved judgment.
[28] Thirdly, the appellants challenged the manner in which the costs had been calculated. They argued that the quantum ought to have been reduced to reflect the alternative cost if TRC councillors had determined the applications, and that the
costs of only two, rather than three, commissioners should have been charged to the appellants.
[29] The Judge concluded that the individual submitters who made the request for independent commissioners remained liable, and that the incorporated society did not become liable for the debts of its predecessor. On the second defence, the Judge treated the manner in which TRC considered any request to remit the costs as a statutory discretion conferred on TRC by s 36 of the RMA, which was not able to be challenged in the District Court debt recovery proceeding. On the third defence, the Judge also declined to assume any role in reviewing the appropriateness of TRC’s calculations.
Grounds of appeal
[30] The appeal amounted to a challenge to the District Court Judge’s rejection of
the appellants’ grounds for denying liability.
The incorporated society was their successor, and is the liable entity
[31] The appellants argued that the charge for additional costs involved in retaining commissioners could not accrue until the amount was able to be quantified, after the hearing had occurred and the commissioners’ charges were known. By that time, the individual submitters had been succeeded by the incorporated society in the way provided for in the RMA. This argument relied on the terms of s 2A of the RMA, which includes the following:
2A Successors
(1) In this Act, unless the context otherwise requires, any reference to a person, however described or referred to (including applicant and consent holder), includes the successor of that person.
(2) For the purposes of this Act, where the person is a body of persons which is unincorporate, the successor shall include a body of persons which is corporate and composed of substantially the same members.
[32] The appellants argued that the commonality of personnel between the unincorporated Friends of Waitara River Group and the initial members of the
incorporated society brought them within s 2A(2). Further, that because the submissions to the hearing were made on behalf of the incorporated society, it had by then become the successor of those who made the original request, so the incorporated society was liable once the extent of the costs were able to be quantified.
[33] The appellants argued that comments by the Hon Simon Upton, Minister for the Environment, on introduction of s 2A of the RMA demonstrated that Parliament had intended the provision to apply in just the circumstances that pertain here. The Minister commented during the second reading of the Bill as follows:6
The [Planning and Development] Committee agreed with submissions that expressed concern that where a community group entered into a statutory process then incorporated to protect individuals from cost, that group was not seen as the same legal entity at later stages in the process. Clause 2A overcomes this difficulty. Similarly, it clarifies that successors can continue actions and are seen as the same person – an important clarification when statutory processes can take many years.
[34] TRC supports the District Court finding, essentially on the basis that the liability attached when the submitters made the request that obliged TRC to retain independent commissioners. Further, that the creation of an incorporated society before the resource consent hearing could not have retrospective effect so as to absolve the submitters, who had committed themselves to the additional costs when they made the request, from liability for the amount subsequently quantified. TRC also disputed that the incorporated society was a successor of the original submitters, because on the facts it was not comprised of substantially the same members.
[35] The purpose of s 2A is to provide for continuity of a defined interest in environmental issues. Community and interest groups wishing to take part in proceedings such as resource consent applications are likely to formalise their structure in incorporated form part way through their involvement in such issues. Standing to participate in later stages of environmental processes depends on the interest group having had standing at the outset, and the extended definition of “person” creates the entitlement for an incorporated interest group to step into the
shoes of those who commenced participation as individuals. The entitlement to such
6 (22 August 1996) 557 NZPD 14313–14314.
continuity depends on the membership of the incorporated entity being substantially the same as those who identified with the interest initially advanced by individuals.
[36] I do not find anything in the terms of s 2A that could enable an incorporated entity to be treated as the successor of, and substituted for, such individuals on a retrospective basis. The concern to preserve continuity focuses on the position prospectively. More would be needed in the definition if it was to apply retrospectively so that the original persons are treated as substituted from the outset of their involvement by their incorporated successor.
[37] Mr Hope cited the decision of Smellie J in Kaitiaki Tarawera Inc v Rotorua District Court for recognition of the retrospective effect of s 2A.7 The issue in that case involved the continuity of standing of participants in resource consent hearings and appeals. As in the present case, between lodging submissions and presenting their evidence, the submitters had incorporated themselves. No point was taken as to any difference at that stage. However, when the incorporated entity lodged an appeal
with the Environment Court, the respondent council sought to strike it out on grounds including that the appellant did not have standing because it had not filed a submission in the original process.
[38] The amendment to the Resource Management Act introducing s 2A came into effect within a week of the council’s strike out application. The issue before the High Court was therefore whether the continuity of standing recognised by s 2A applied to the conduct of the incorporated entity where it had “succeeded” the individuals before s 2A came into effect. Smellie J was satisfied that retrospectivity should apply in that context.
[39] That is a different form of retrospectivity from recharacterising the identity of a step taken earlier in a resource management process by individuals on behalf of an unincorporated group. There is nothing in the reasoning in Kaitiaki that supports the
appellants’ argument in the present case.
7 Kaitiaki Tarawera Inc v Rotorua District Court [1997] NZRMA 372, (1997) 10 PRNZ 698 (HC).
[40] Mr Hope also invited analogy with Environment Court decisions that appear to treat the succession by an incorporated entity of the standing created originally by a group of individuals, as a transition that occurs by operation of law.8 In Gold Mine Action Inc, the Environment Court observed:9
… The RMA seems to include the rather remarkable legal fiction that a successor is or is deemed to be the original party (but under a different name). An application to be substituted as a party is not, in my view, necessary for a successor within the meaning of the Act.
[41] Again, status as a successor of the original party is for the purposes of inheriting the standing enjoyed by the original party, and does not contemplate retrospective substitution.
[42] Mr Hope’s arguments for the appellants could accommodate the interpretation I have adopted, so long as he was correct in his argument that no liability accrued until it could be quantified, after the hearing process had concluded.
[43] Under s 36(1)(ab), the relevant costs become payable when the submitters make a request. The local authority has no discretion to reject the request, so an assessment such as of the creditworthiness of the requesting submitter has no relevance. Submitters are on notice when they make the request that it will trigger a liability that is to be quantified in terms of the formula set out in s 36(1)(ab).
[44] Mr Hope relied on the Environment Court decision in Aviation Activities Ltd v Mackenzie District Council for the proposition that costs levied could not be “actual” if the local authority reserved its entitlement to increase them.10 In that case, the local authority required an applicant for resource consent to pay charges levied under the then form of s 36 of the RMA in advance of the resource consent application being determined. In addition, the local authority had subsequently imposed an additional charge when its actual costs exceeded those that had been
projected, relying on s 36(3).11
8 Gold Mine Action Inc v Otago Regional Council (2002) 8 ELRNZ 129 (EC); Land Air Water
Association v Waikato Regional Council (2000) 6 ELRNZ 287 (EC).
9 At [26].
10 Aviation Activities Ltd v Mackenzie District Council [1998] NZRMA 337 (EC).
11 Which was in the same terms as the present form of s 36(3), cited at [11] above.
[45] The Environment Court acknowledged that charges become actual when they are fixed, but that actual costs do not have to await the event. A local authority may fix fees for processing such applications at an estimated total relevant to the staff time involved. The application of that formula can produce an “actual” cost before the total time and cost involved is apparent after the process is complete. In Aviation Activities, the Judge criticised the local authority for producing an estimate that it treated as “actual” at the same time as reserving its entitlement to levy an additional charge, depending on the time subsequently involved. The Judge reasoned that costs are not “actual” for the purposes of s 36(3) if they may change. The Judge recognised that if a local authority wishes to demand payment in advance, it has to estimate a reasonable amount and fix the fee at that figure. The Judge found that a local authority is not permitted to have its money and to charge more later.
[46] The analysis in the Aviation Activities fact situation does not support Mr Hope’s submission that a liability is not incurred until its extent can be quantified. It is implicit in the recognition of a local authority’s entitlement to demand advance of an administrative charge levied under s 36 that a liability arises before the local authority’s costs can be determined precisely.
[47] I am not persuaded that the creation of the liability is deferred until it can be quantified. Depending on the context, a liability can be incurred in numerous circumstances before its precise extent is known or can be quantified. In addition to the statutory formula, TRC made more detailed provision for the manner in which it would calculate such liability in schedules to its annual plan. The statutory scheme provides that the local authority will recover all the identified categories of cost incurred in processing resource consent applications. Primarily, the RMA contemplates that the charges will be borne by the applicants for such consents. The exception is where the less expensive internal process undertaken by the local authority is replaced, at the request of a submitter, by hearing and determination by independent commissioners. In that event, the submitters requiring the more expensive process are liable for the additional costs of doing so.
[48] I was not referred to any instances where local authorities have responded to requests for the appointment of independent commissioners, and the hearing process
has subsequently not occurred but some costs have been incurred by independent commissioners taking preparatory steps. If the structure contemplated by s 36(1)(ab) is to operate, the differential in costs incurred by the local authority in such circumstances should be the liability of the submitters who caused the local authority to incur that expenditure. That is consistent with the liability to meet the additional costs arising when the submitter commits the local authority to the alternative process.
[49] A further point not raised in argument is the variables that would arise on apportioning liability where more than one submitter requested the involvement of independent commissioners. Each request would trigger the local authority’s obligation to retain independent commissioners and (as happened in this case) some of those who made requests may then withdraw them before the resource consent hearing occurs. That introduces an additional uncertainty as to the quantum of the liability to be shared between each of those making the request. Such uncertainty as to quantum could comprise further support for Mr Hope’s argument that liability could not attach until the final amount was ascertainable.
[50] However, I am not persuaded that this additional prospect of uncertainty makes any difference. The liability arises as a result of the request which commits the local authority to incurring the additional expense. As the form signed by the submitters in this case makes clear, the costs will be recovered from those who cause the expenditure to be incurred. If some requesters withdraw before the local authority incurs the additional costs, then the costs will fall on those who persist with the requirement that independent commissioners be involved.
[51] That is the legal structure. It does afford a discretion to local authorities to vary that mode of cost recovery, but the existence of such a discretion does not alter the statutory scheme for attributing liability.
[52] It follows that in this case the liability was incurred by the individuals who lodged the submission on behalf of a then unincorporated group. The imposition of liability in that way renders it unnecessary to determine whether the incorporated society qualified as the successor, on the basis that it was “composed of substantially
the same members”. If I was wrong in the point in time at which the liability arose, I would find that the incorporated society in this case was composed of substantially the same members for the purposes of the definition in s 2A.
[53] Mr Shackleton referred to an Environment Court decision where an issue did arise as to whether there was sufficient commonality of personnel in the pre- incorporation group, and those who were members of the incorporated society purporting to be the successor.12 In Gold Mine Action Inc, Judge Jackson observed:
[38] For an incorporated body to be the successor of an unincorporated body, under section 2A(2) of the Act the successor must be composed of substantially the same members as the predecessor. ‘Substantially’ certainly means more than 50% and may mean over 75% of the members of the preceding unincorporated body. I also hold that the qualifying counting membership of the predecessor must be calculated at the date on which the last action is taken under the RMA (e.g. the lodging of a submission) which qualities the predecessor to exercise further rights or functions under the Act.
[54] The proportion of common personnel might fluctuate a little depending on the circumstances in which a transition has occurred. I agree that 75 per cent of the same individuals belonging to the pre-incorporated group and becoming initial members of an incorporated society is a reasonable yardstick. Provided there has not been a substantial alteration in the purpose of the incorporated society, or the motivation of those committing to it as members, I doubt that the addition of a substantial number of new members after its initial incorporation should disqualify the incorporated society from making out the necessary commonality for the purposes of inheriting standing.
[55] In this case, there were minor variations between the recollections of the appellants as to how many members who belonged to the pre-incorporated “Friends” group were among the initial members on incorporation. The latter list was reflected in those subscribing to the application form. Mr Shackleton submitted that the evidence was either insufficient to make out requisite commonality, or alternatively should be treated as not making it out where there were varying recollections of 11
or 13 or 15 out of the 15 original subscribers to the application for incorporation who
12 Gold Mine Action Inc v Otago Regional Council, above n 8.
identified as members of the pre-incorporated group. I am satisfied that the evidence is sufficient, and does make out the requisite commonality.
[56] My analysis of the legal position also renders irrelevant questions of whether TRC recognised the incorporated society as the submitter by the time the hearing occurred. Those pursuing the objection appear to have made reference to incorporated form, at least spasmodically, from September 2011. Mr Hope emphasised that Ms Clark introduced herself at the outset of the hearing as representing the incorporated society. In addition, a letter from TRC to the group dated 29 September 2011 was addressed to Ms Clark as “Spokesman, Friends of the Waitara River Inc”, which was the description Ms Clark had given herself in the letter to which TRC was responding. As Mr Hope put it, at the very least, TRC “knew that something was up” in relation to the Friends of the Waitara River forming an incorporated body.
[57] On my analysis of the relevant provisions, nothing turns on the date from which TRC was on notice that the submitters had stopped representing an unincorporated group, and instead acted as spokespersons for an incorporated society. The liability was incurred by the submitters at the point they made the request, and the change in status could only have legal effect prospectively from the date of its incorporation.
Waiver request dealt with inappropriately
[58] Mr Hope made a number of criticisms of the way TRC dealt with requests for waiver of the charges. One component is that a liability could not be made out until TRC had lawfully determined any requests for waiver of the liability. Essentially for the reasons set out at [47] to [52] above, I do not accept that an outstanding request for waiver of the charges can defer the creation of the liability for them to be paid in the first place.
[59] The next criticism in terms of dealing with waiver requests was that the initial request and TRC decision conveyed at the end of August 2011 could not have been a lawful determination. At that time the projection of additional costs was $30,000, when the quantified liability was subsequently some $12,200. TRC’s process for
dealing with that request was reflected in a paper to councillors, in which TRC officers raised a range of considerations for TRC to evaluate. I am not persuaded that the difference between the then projected estimate, and the subsequent liability, in any way tainted the lawfulness of TRC’s consideration of the request.
[60] I understood Mr Hope to also criticise the lawfulness of TRC’s consideration of a second request for waiver which was made on the second day of the District Court hearing. On the basis that the Court proceedings were underway, TRC refused to consider the waiver request until the outcome was known. I can see nothing unlawful in that response. Further, challenges of this type are matters for judicial review, and challenges to the exercise of TRC’s discretion under s 36(5) would require the appellants to make out unreasonableness, or reliance on irrelevant consideration or failure to have regard to relevant considerations. No tenable bases for such grounds of challenge were raised.
Costs in the District Court
[61] The District Court judgment ordered costs in favour on TRC on a 2B basis, together with disbursements. They have subsequently been quantified at costs of
$9,222.50 and disbursements of $1,119.20. Apparently at an earlier stage in the proceedings, there had been agreement between the parties that costs should be on a
2B basis. Mr Hope acknowledged that no submissions against an award of costs were made. In particular, he raised in his appeal submissions the prospect that an application for a protective costs order may well have been appropriate, but no such initiative was pursued.
[62] Despite that history, the appellants challenge the costs order made against them in the District Court, on the basis that the appellants were pursuing a matter of substantial public interest in the Taranaki region, where there was no personal gain for them in doing so and where they considered themselves under cultural obligations to pursue the opposition to the resource consent on the terms they did.
[63] For TRC, Mr Shackleton disputed that there was any issue of general public interest that would justify deviating from the usual rules as to costs, and supported the Judge’s determination in accordance with the usual approach to an award of
costs. Mr Shackleton argued that the District Court Rules do not acknowledge a public interest ground for refusing or reducing costs sought by a successful party, treating the limited circumstances in which the District Court may do so as narrower than those applying under the High Court Rules. He argued that an unsuccessful defendant opposing costs was obliged to make out one of the defined criteria in r 4.7
of the District Court Rules 2009, the residual one of which is where:13
Some other reason exists that justifies the Court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.
[64] Given that the appellants did not advance any grounds in opposition to a costs order following the event in the usual way, it is extremely difficult for the appellants to now contend that the Judge erred in determining costs as he did. The matter before the District Court was essentially a debt collecting exercise where the local authority sought recovery of a statutory charge, and the defendants sought unsuccessfully to avoid personal liability. Given the onus the defendants had to discharge to obtain relief from the usual costs outcome, I cannot find an error in the Judge’s decision in respect of costs. That aspect of the appeal is accordingly also dismissed.
Costs in this Court
[65] Mr Shackleton sought costs on a 2B basis, plus disbursements, in the event that the appeal was unsuccessful.
[66] Mr Hope argued for a protective costs order to limit or eliminate his clients’ liability to costs. If unsuccessful in that regard, he sought to have costs reserved, with a view to persuading me that costs ought to lie where they fall.
[67] This Court’s power to deviate from the presumptive position that costs follow the event is arguably on a wider basis than available to the District Court. Relevantly, there is a specific recognition that costs may be refused or reduced where
the proceeding concerned a matter of public interest and the party opposing costs has
13 District Court Rules 2009, r 4.7(f).
acted reasonably in the conduct of the proceeding.14 In New Health New Zealand Inc v South Taranaki District Council, the Court has observed that the proceeding had to have merit and involve a matter of genuine public interest and importance beyond the interests of the particular unsuccessful litigant.15
[68] Perhaps understandably, on this point Mr Hope conflated the importance attributed by the Friends of Waitara River to responsible controls on the local authority’s discharges into the river, with the cost consequences for individuals who required the consenting authority to adopt a more expensive procedure for determining the resource consent applications than would otherwise have occurred. I am not persuaded that the seriousness and legitimacy of the appellants’ concern for the environment in and around the Waitara River can add materially to the assessment of the importance of the issues raised by the District Court proceeding.
[69] In assessing the relative importance of the issue, it raises whether individuals who pursue opposition to resource consent applications should be able to avoid the liability they assume for requesting the use of independent commissioners. Here, that avoidance was attempted by subsequently advancing their environmental concerns via an incorporated entity. As a matter of statutory interpretation, I am satisfied that Parliament did not intend that to occur.
[70] However, that point was novel, and it is likely to be of some general importance. A point of principle has been pursued notwithstanding all three appellants’ apparent inability to meet the extent of the judgment. In proportional terms, I note that the District Court costs and disbursements amount to more than
80 per cent of the debt claimed by TRC. I was not given details of interest charged, but given the period that has elapsed between the issue of invoices in February 2012, and any resolution in light of this judgment, interest is likely to amount to a substantial portion of the final liability.
[71] Given the 2B scale costs, it is highly likely that the total costs incurred by the local authority in pursuing the District Court proceedings would have substantially
14 High Court Rules, r 14.7(e).
15 New Health New Zealand Inc v South Taranaki District Council [2014] NZHC 993 at [8]–[10].
exceeded the sum in issue. TRC may justify pursuit of the claim as a matter of principle, just as the appellants contend that they have appealed as a matter of principle. Neither side can relevantly be criticised when considering costs in this Court, but in the end I am persuaded that a measure of relief for the appellants is now appropriate. I accordingly decline to order costs on TRC’s successful opposition to the appeal, and instead direct that they are to lie where they fall.
Dobson J
Solicitors:
Micah Tawhara, Kaitaia for appellants
Simpson Grierson, Wellington for respondent
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