Clarke v Auckland City Council HC Auckland CIV-2010-404-006196

[2011] NZHC 1561

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-006196

BETWEEN  JOHN STEVEN CLARKE & PATRICIA MARGARET BLAIR

Applicants

ANDAUCKLAND CITY COUNCIL First Respondent

ANDGARRATT ROAD LIMITED Second Respondent

Hearing:         On the papers

Counsel:         J C Campbell for the Applicants

P H Mulligan for the First Respondent
S J Ryan for the Second Respondent

Judgment:      28 June 2011

JUDGMENT OF WOOLFORD J (As to costs)

This judgment was delivered by me on Tuesday, 28 June 2011 at 3:00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Cowper Campbell (Auckland) for Applicants

Buddle Findlay (Auckland) for First Respondent

Counsel:

S J Ryan (Auckland) for Second Respondent

CLARKE & BLAIR V AUCKLAND CITY COUNCIL HC AK CIV-2010-404-006196 28 June 2011

Introduction

[1]      The applicants seek costs on a 2B basis following the dismissal of these proceedings by consent on 9 March 2011.

[2]      The  proceedings  had  been  set  down  for  a  two  day  fixture  commencing

23 March 2011.  They concerned a challenge by the applicants to the non-notified grant of a resource consent by the first respondent, Auckland City Council, to the second respondent, Garratt Road Ltd, authorising land use consent for development of a residential dwelling at 35 Garratt Road, Waiheke Island.

[3]      Garratt  Road  Ltd  as  the  consent  holder  gave  notice  of  surrender  of  the resource consent by notice to Auckland Council (the successor to the Auckland City Council) on 3 March 2011.   The surrender of consent followed the discovery by Council of a discrepancy in the resource consent application and its height in relation to boundary calculations vis-a-vis the boundary between the land owned by the applicants and the subject site at 35 Garratt Road owned by the second respondent.

[4]      The proceedings were dismissed subject to the issue of costs.  The applicants have settled the issue of costs with the first respondent.  There has been, however, no settlement with the second respondent and memoranda have been filed seeking a determination by this Court on the question of costs.

Applicants’ submissions

[5]      The applicants note that on 28 October 2010 by consent memorandum the parties agreed that the proceedings should be categorised on a 2B basis.  The daily recovery rate for category 2 proceedings is specified at $1880 per day in Schedule 2 to the High Court Rules.  Determination of reasonable time with reference to Band B is calculated with reference to general civil proceedings as per Schedule 3 to the High Court Rules at a total of 5.7 days.  In addition, disbursements of $5845.14 are claimed which includes an expert’s fee of $4704.94.

[6]      The applicants therefore seek a total sum of $16,561.14 being 5.7 days at

$1880 per day together with disbursements of $5845.14.  The applicants record that for the purposes of r 14.2(f), which states that an award of costs should not exceed the costs incurred by the party claiming costs, the applicants’ legal fees up to but not including making the application for costs total $18,271.94, inclusive of all disbursements except for the expert’s fee.   Counsel confirms that the applicants’ confidential  settlement  with  the Auckland  Council  will  not  alter  the  applicants’ compliance with r 14.2(f) if the full costs sought are awarded.

[7]      The applicants refer to the general principle in r 14.2(a) that the party who fails with respect to a proceeding ... should pay costs to the party who succeeds. They submit that although the second respondent has not failed in terms of having the Court reach a determination against it, the scrutiny that the proceedings have focused on the resource consent brought the second respondent’s error to light and forced the second respondent to surrender its consent.   In practical terms, the applicants sought to have the resource consent rescinded and they have succeeded.

[8]      The applicants submit that the second respondent’s error in relation to the proposal’s height to boundary infringement undoubtedly encouraged the Auckland City Council to grant it a non-notified resource consent on false grounds.  That error may never have come to light if the applicants had not filed a judicial review.

[9]      Finally, the applicants submit that the second respondent did not surrender its resource consent until the applicants had been put to the ultimately unnecessary expense of engaging an expert witness to prepare evidence.

Second respondent’s submissions

[10]     In its submissions, the second respondent acknowledges that the applicants are entitled to an award of costs and that the question is “how much”.  It submits that the quantum sought by the applicants is not reasonable and in the circumstances it is open to the Court to exercise its discretion to reduce costs pursuant to r 14.7, and having regard to its overall discretion.

[11]     In addition, the second respondent contests that the expert witness fee sought as a disbursement is properly justifiable under r 14.12(2) being not “reasonably necessary for the conduct of the proceedings.”

[12]     The second respondent submits that there is a public interest in encouraging parties to judicial review proceedings to re-evaluate their stance to proceedings upon discovery of any discrepancy, as was the case here.  The second respondent acted promptly to save the applicants incurring further expense.

[13]     While the second respondent acknowledges that the applicants are entitled to settle any question of costs with the first respondent, a consequence here is that the burden in respect of costs then falls disproportionately, and it is submitted unreasonably, on the second respondent.

[14]     Further, the second respondent notes that the affidavit of the expert planner retained by the applicants deposes as to whether or not, in his opinion, the Council’s decision was correct on its merits.   In judicial review proceedings the question is whether there was any error of law.   Accordingly, it submits that questions as to whether the Council’s decision was substantively correct are irrelevant to the issue before the Court.  The Court on review is not concerned with the substantive merits of the Council’s decision.

[15]     It is therefore submitted that the evidence of the expert planner was not reasonably  necessary  for  the  conduct  of  the  proceeding  within  the  meaning  of r 14.12(2)(c).

Discussion

[16]     Turning first to the issue of the cost of the expert witness, it is my opinion that this was reasonably necessary for the proceeding.   The issue in the judicial review proceeding was whether it was unreasonable for the Council not to notify the resource consent application.   That required the Court to determine whether the effect of the resource consent would be “less than minor” or de minimis, as well as whether the first respondent had sufficient geotechnical information before it to

enable it reasonably to grant the non-notified resource consent.  In my opinion, the Court  would  have  been  assisted  on  both  of  these  issues  by  evidence  of  an experienced town planner.  It is not uncommon for expert witnesses to be called in judicial review proceedings concerning non-notified resource consents.

[17]     The second respondent does not challenge the amount of the expert’s fee

under rr 14.12(2)(d) and (5).

[18]     The  second  issue  is  whether  the  overall  quantum  of  costs  claimed  is excessive.  The second respondent submits that because the applicants and the first respondent settled their costs, the second respondent is at a disadvantage because it will not be liable for costs on a joint and several basis with the first respondent.

[19]     In  my  view,  that  is  not  a  valid  basis  for  reducing  costs  under  r  14.7. Settlement of costs is something to be encouraged.  It would send the wrong signal to allow a respondent a reduction in costs because a co-respondent opted to settle while they did not.  The justifications for reducing costs under r 14.7 focus on the circumstances of the substantive proceedings.  In this case no issue has been taken by the second respondents to the applicants’ calculation of their costs on a 2B basis.

[20]     I also have regard to the principle that the determination of costs should be predictable and expeditious.  It is not generally appropriate to take into account the settlement with one party in deciding a question of costs concerning a different party. Further, the applicants have deposed that a full award of costs will not exceed the actual costs incurred.  On that basis I do not consider the quantum of costs sought by the applicants is unreasonable such that the Court should exercise its discretion to reduce the award of costs.

Result/Orders

[21]     I therefore award the applicants court costs of $10,716 and disbursements of

$5845.14 against the second respondent.

Woolford J