Environmental Law Initiative v Canterbury Regional Council

[2024] NZHC 2019

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-309

[2024] NZHC 2019

BETWEEN

ENVIRONMENTAL LAW INITIATIVE

Applicant

AND

CANTERBURY REGIONAL COUNCIL

First Respondent

ASHBURTON LYNDHURST IRRIGATION LIMITED

Second Respondent

Hearing:

On the Papers

Appearances:

D A C Bullock and A W McDonald for Applicant P A C Maw for First Respondent

B G Williams and R E Robilliard for Second Respondent

Judgment:

23 July 2024

JUDGMENT OF MANDER J

This judgment was delivered by me on 23 July 2024 at 4 pm pursuant to Rule 11.5 of the High Court Rules 2016

Registrar/Deputy Registrar Date:     .

ENVIRONMENTAL LAW INITIATIVE v CANTERBURY REGIONAL COUNCIL [2024] NZHC 2019 [23 July 2024]

[1]    The Environmental Law Initiative (ELI) challenged, by way of judicial review, the Canterbury Regional Council’s (the Council) decision to grant Ashburton Lyndhurst Irrigation Ltd (ALI) a resource consent to discharge nutrients onto or into land from farming activities in a designated area of mid-Canterbury. ELI also challenged the Council’s decision regarding its notification of the application for resource consent.1

[2]    ELI was successful in challenging the grant of the discharge consent. That decision was quashed on the basis the Independent Hearings Commissioner acting under delegated authority of the Council made a material error of law in her approach to the application of s 107 of the Resource Management Act 1991 (RMA) and failed to consider mandatory statutory considerations. However, I found no error in the Council’s notification decision, and that part of the judicial review application was dismissed.

[3]    The parties have been unable to agree costs as between them. They are in dispute in respect of a number of issues, the most fundamental of which is whether ELI succeeded in the proceeding and is entitled to costs as the successful party.

Identification and apportionment of success

[4]    ELI maintains it was successful as the consent was quashed. As the successful party, it maintains it is entitled to costs which should follow in the ordinary way.2 The Council and ALI argue this stance represents an oversimplified approach to the outcome of the application for judicial review which challenged two distinct decisions, namely the notification decision and the decision to grant resource consent. They argue the challenge to the notification decision was successfully defended and that, as the application for judicial review was only partially successful, costs should lie where they fall.

1      Environmental Law Initiative v Canterbury Regional Council [2024] NZHC 612.

2      High Court Rules 2016, r 14.2(1)(a).

[5]    I consider a realistic appraisal of the outcome deems ELI the successful party.3 The validity of the notification decision was secondary to the challenge to the consent and essentially represented a third cause of action advanced by ELI in support of that challenge. However, while the outcome of the challenge to the notification decision did not substantively affect ELI’s success, it did represent a discrete aspect of the proceedings. It raised issues and traversed material that would not otherwise have been required to have been addressed by the parties.

[6]    A somewhat crude but telling indicator of the extent to which this aspect of the proceeding occupied the parties is that, of my 217 paragraph judgment, 65 paragraphs were entirely concerned with the challenge to the notification decision. In the circumstances, therefore, I consider the challenge to the notification decision brought by ELI significantly widened the scope of the litigation and, to the same degree, increased the Council and ALI’s costs in having to defend that part of the proceeding. However, the respondents success in resisting this challenge to the notification decision was largely eclipsed by ELI successfully setting aside the substantive decision granting the discharge consent.

[7]    Having regard to the overall outcome of the proceeding, but also to the extensive nature of the challenge to the notification decision, multiple aspects of which were put in issue, I consider a 20 per cent reduction should be applied to mark the significant costs that would not have been incurred by the parties had the notification decision not been the subject of challenge.

Whether there should be a modest increase of costs in favour of ELI

[8]    ELI seek a 15 per cent uplift in costs in relation to steps taken in preparation of evidence and for the hearing. It submits it was unnecessarily required to respond to the evidence of both respondents and to prepare for hearing on the basis of having to address lengthy sets of written submissions from two parties. ELI submits that, as a consequence, there was a resulting duplication of costs.

3      Middeldorp v Avondale Jockey Club Inc [2021] NZCA 238 at [22], citing Packing In Ltd v Chilcott

(2003) 16 PRNZ 869 at [6].

[9]    ELI was critical of the approach taken by the Council to the judicial review. It maintained that where there is a substantive contradictor, in this case ALI, it was inappropriate for the decisionmaker to actively defend its own decision. ELI raised this concern with the Council prior to the hearing. It put the Council on notice that it did not consider the Council, as the responsible public decisionmaker, should take an active role in the matter and that it considered its approach to the proceeding was relevant to the issue of costs. It was argued the Council had chosen to take an adversarial role in defending its own decision, alongside ALI, and that the respondents had advanced different arguments based on different evidence, which increased the work required to be undertaken by the applicant. It was submitted that, with the Council having declined to simply put the record before the Court and abide by its decision, it was appropriate a modest award of increased costs be made.4

[10]   Both respondents opposed any uplift in costs. They maintained the Council taking an active role in defending its decisions did not justify an uplift of any costs award. Both the Council and ALI submitted there was considerable overlap between their written submissions which would not have required ELI to expend additional time on preparation. Both counsel claim to have coordinated their oral submissions to ensure there was no duplication or repetition of submissions presented at the hearing.

Role and conduct of the Council

[11]   There is a well established convention that a decisionmaker ought not enter the fray in an appeal or review from its own decision.5 However, it is apparent that the role of consent authorities in respect of challenges to notification and substantive consent decisions under the RMA has varied.

4      High Court Rules, r 14.6(3)(b) and (3)(d).

5      Goodman Fielder Ltd v Commerce Commission [1987] 2 NZLR 10 (CA) at [20]; Secretary for Internal Affairs v Pub Charity [2013] NZCA 627, [2014] NZAR 177 at [27]; Fonterra Co- Operative Group Ltd v The Grate Kiwi Cheese Company Ltd (2009) 19 PRNZ 824 (HC) at [12]. Although a decisionmaker in an appeal in the High Court has a right under r 20.17 to be represented and heard, the Supreme Court has observed that should be exercised sparingly: Environment Defence Society Inc v New Zealand King Salmon Co [2014] NZSC 41, [2014] 1 NZLR 717 at fn 12; Fraser v Central Hawke’s Bay District Council [2021] NZHC 2981, [2022] NZRMA 90 at [16].

[12]   In its letter to respondent counsel dated 16 November 2022, ELI placed reliance on the approach taken by Palmer J in Fraser v Central Hawke’s Bay District Council, in which he confirmed the view that in judicial reviews and appeals the decisionmaker should not enter the fray outside exceptional circumstances but, rather, abide the Court’s decision.6 It was observed that “the decisionmaker is impartial, speaks through its decision, and does not seek to justify it further”.7 It was noted that such an approach has obvious benefits where the decisionmaker may be required to reconsider their decision.8 The Council argued there were good policy reasons for allowing the consent authority to participate in proceedings such as the present.

[13]   The Council submitted judicial review applications made in respect of consent authority decisions pursuant to the RMA engage issues that are often broader than those simply between the parties, and that local authorities, particularly in respect of planning documents such as regional policy statements and plans, have functions under the RMA which require them to establish, implement and review objectives, policies and methods in order to achieve the objectives of the legislation within their region. It was observed that councils have a particular interest in ensuring policy statements and plans are workable and are applied consistently. While they do not have the ultimate say as to their interpretation, and must defer to the views of the Court, it is necessary for local authorities to be afforded the opportunity to participate in proceedings to a greater extent than would otherwise be considered usual for a decisionmaker when such policies and plans are subject to judicial review.

[14]   In respect of the current proceeding, the Council submitted the application for judicial review raised significant issues regarding decision-making as it related to fresh water, and that the outcome of the case had ramifications beyond the interests of ALI. It was submitted that, because the Council has a broader function to control the use of land to maintain and enhance the quality of water and water bodies,9 and its responsibility for planning documents for that purpose, the decision had potential consequences beyond this case. In that regard, an analogy was sought to be drawn with the applicant’s description of its advancement of its judicial review application,

6      Fraser v Central Hawke’s Bay District Council, above n 5, at [16].

7      At [16]–[25].

8 At [16].

9      Resource Management Act 1991, s 30(1)(c)(ii).

“in the public interest”, and that this was indicative of the wider implications of the proceeding.

[15]   In Fraser, Palmer J accepted that the general principle that a judicial decisionmaker “abides an appeal or a review” has not generally been applied to local authorities’ consenting function under the RMA.10 It was also acknowledged that councils have a central role in RMA decision-making, and an ongoing interest in the workability and enforcement of resource management regimes and the layers of planning instruments involved.11 It was observed that those considerations may mean the active involvement of a council in a judicial review, notwithstanding their role as the decisionmaker, will often assist the Court. However, despite that acknowledgement, the participation of local authorities was still viewed as being the exception to the general rule that the decisionmaker should not become a protagonist and enter the fray, but abide the Court’s decision.12

[16]   Palmer J considered that when judicial review is sought of a council’s decision under the RMA, and the Court has the benefit of full argument about the issues from a contradictor, the local authority should seek the leave of the Court if it wished to be formally heard. In that case, the Council abided the Court’s decision on one issue but entered the fray in relation to another. Aspects of the Council’s submissions were described as helpful, to which the Court had regard, but it was ventured that, in future, leave should be sought in order to file written submissions and make oral submissions in a judicial review of its decision on an RMA issue.13

[17]   The position is not at all clear. There are many cases where decision-making councils under the RMA have taken an active role in judicial review proceedings notwithstanding the presence of two contradicting parties.14 Since Fraser, local

10 Fraser v Central Hawke’s Bay District Council, above n 6, at [22].

11 At [23].

12 At [16], citing Goodman Fielder Ltd v Commerce Commission, above n 5, at [13]; Secretary for Internal Affairs v Pub Charity,above n 5, at [27]; and see Fonterra Co-operative Group Ltd v The Grate Kiwi Cheese Company Ltd, above n 5, at [24].

13 At [25].

14 Frost v Queenstown Lakes District Council [2021] NZHC 1474, (2021) 22 ELRNZ 844; Enterprise Miramar Peninsula Inc v Wellington City Council [2021] NZHC 549, (2021) 22 ELRNZ 524; Lysaght v Whakatane District Council [2021] NZHC 68, (2021) 22 ELRNZ 383; NZ Southern Rivers Society Inc v Gore District Council [2020] NZHC 1996, (2020) 22 ELRNZ 26; and O’Keefe v New Plymouth District Council [2020] NZHC 3099, (2020) 22 ELRNZ 181.

authorities have continued to actively participate in judicial review proceedings notwithstanding the involvement of another party as a contradictor.15 It is not apparent whether they have done so after seeking leave to appear in that capacity.

[18]   I am not satisfied that, by dint of the Council actively participating in opposition to the judicial review application, ELI is entitled to an uplift in costs. The role that a consent authority should take in such proceedings will likely depend on the circumstances and issues of each case. Insofar as the present case is concerned, I do not consider the Council can be criticised for adopting the role it did. I also do not consider the Council’s participation contributed unnecessarily to the time or expense of the proceeding. There was no undue duplication of argument presented by the two respondents, who clearly coordinated the presentation of their opposition, at least for the purposes of the oral hearing, and largely addressed different grounds. The case has potential ramifications for other irrigation schemes in the Canterbury region and the Council’s participation was of assistance to the Court.

[19]   In the circumstances, I do not consider ELI has established a proper basis to support increased costs. I am not satisfied the Council’s active involvement in the proceeding contributed unnecessarily to the time or expense of the proceeding, or that the nature and extent of its participation would justify the making of such an order.

Disbursement for expert witness fee

[20]   ELI claims as a disbursement an expert witness fee in the sum of $13,745, although that item is not explicitly addressed in its memorandum on costs. A disbursement such as an expert witness’s expenses can be allowed if claimed and verified, to the extent that witness’s evidence was considered to be reasonably necessary for the conduct of the proceeding.16 This witness’s expert planning evidence was filed in response to affidavits, prepared on behalf of the Council, that were submitted to be in explanation of the Council’s decisions and the wider planning context in which they were made.

15   Love Te Arai Society Inc v Auckland Council [2024] NZHC 108, (2024) 25 ELRNZ 661; Petersen v Kāpiti Coast District Council [2023] NZHC 2994, (2023) 25 ELRNZ 328; and Point Chevalier Social Enterprise Trust v Auckland Council [2023] NZHC 1926, (2023) 25 ELRNZ 7.

16 High Court Rules, r 14.12.

[21]   The Council argued the evidence it adduced was required in accordance with its “duty of candour”, when decisions are challenged to explain the decision-making process, as articulated by the Supreme Court in Ririnui v Land Corp Farming Ltd. In that case it was held that, because of the fact-dependent nature of judicial review, those whose decisions are challenged have a duty to explain the decision-making process, the relevant circumstances, and the reasons for the decision. This was described as a “responsibility attaching to public decision-making” and that, in the absence of such evidence being provided, a court may well draw adverse inferences.17

[22]   The Council submitted that, because of the wider importance of the current proceeding to future consent decisions and relevant planning and policy documents, in respect of which the Council has obligations, it was appropriate for it to explain the decision in the wider context and adduce such evidence. It argued that ELI’s expert witness’s evidence in reply was not reasonably necessary and that the matters covered by that witness’s evidence were capable of being adequately addressed by submission.

[23]   To the extent this witness’s evidence sought to supplement the information that was placed before the decisionmaker, and bore on the substance of the consent decision, I do not consider it was of much utility. The challenge to that decision was required to be determined on the basis of the material that was before the decisionmaker at that time. However, the expert’s evidence was filed in response to the Council’s affidavits relating to the statutory framework and the context in which the decision-making process was discharged. I do not consider such evidence in reply was beyond that which ELI was entitled to adduce in response to the Council’s evidence. To the extent, therefore, that this evidence addressed those topics, it was legitimately adduced by ELI.

[24]   Subject to the disbursement being verified and fixed by the registrar by way of an appropriate supporting invoice, I would allow 60 per cent of the expert witness’s fee.

17     Ririnui v Land Corp Farming Ltd [2016] NZSC 62, [2016] NZLR 1056 at [105].

Costs on costs

[25]   ELI maintained it had made a reasonable proposal to resolve the issue of costs and that the respondents had adopted an unreasonable position in response by taking the view that costs should lie where they fall. It submitted that the respondents’ stance has put it, as a charitable trust, to unnecessary further expense.

[26]   I accept the respondents’ stance, that the parties had shared an equal measure of success and that costs should lie where they fall, was an unrealistic assessment. However, there was no failure to engage in the question of costs and, as is apparent from the rulings I have made, there were various costs issues which were not entirely clear. The Court has traditionally been reluctant to make awards of costs on costs applications, and I do not consider such an award is warranted in the circumstances.18

Costs order

[27]   Scale costs on a category 2B basis and disbursements are ordered in favour of ELI.

[28]   ELI is directed to file and serve a revised schedule of costs and disbursements, and verification of the expert witness’s fee, which is to be fixed by the registrar.

[29]   By my calculation, ELI is entitled to an award of costs in the sum of $23,613.20 (being 80 per cent of the scale costs claimed without uplift) and disbursements, including the stipulated witness fee (60 per cent and subject to verification) in the sum of $13,542.37.

Solicitors:

Lee Salmon Long, Auckland Wynn Williams, Christchurch Chapman Tripp, Christchurch

18 Samson Corporation Ltd v Thermocash Commercial Ltd [2024] NZHC 51 at [12]; Legler v Formannoij [2022] NZHC 1804 at [12]; Norrie v Crown Range Holdings Ltd [2022] NZHC 898 at [28]; Singh v Buttar [2023] NZHC 1401 at [13]; and Little Republic New Zealand Ltd v Kum Fu Stainless Kitchen Equipment Ltd [2021] NZHC 1836 at [31].