Federated Farmers Southland Incorporated v Southland Regional Council
[2024] NZHC 2023
•24 July 2024
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2023-409-24
[2024] NZHC 2023
UNDER the Resource Management Act 1991 IN THE MATTER
of appeals under s 299 of the RMA
BETWEEN
FEDERATED FARMERS SOUTHLAND INCORPORATED
Appellant
AND
SOUTHLAND REGIONAL COUNCIL
Respondent
AND
SOUTHLAND FISH & GAME COUNCIL
Interested Party
Parties continued over
Hearing: On the papers Appearances:
B S Carruthers KC and H D Jopp for Appellant (CIV-2023-409- 24)
D J Minhinnick, A E V Gilbert for Appellants (CIV-2023-409-25) P A C Maw for Appellant (CIV-2023-409-44)
S R Gepp KC and M C Wright for Interested Parties (Southland Fish & Game Council and Royal Forest & Bird Protection Society of New Zealand Inc)Judgment:
24 July 2024
JUDGMENT OF DUNNINGHAM J
RE: Costs
This judgment was delivered by me on 24 July 2024 at 10.30 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
FEDERATED FARMERS SOUTHLAND INCORPORATED v SOUTHLAND REGIONAL COUNCIL [2024] NZHC 2023 [24 July 2024]
ROYAL FOREST & BIRD PROTECTION SOCIETY OF
NEW ZEALAND INCORPORATED
Interested Party
FONTERRA CO-OPERATIVE GROUP LIMITED
Interested Party
DAIRYNZ LIMITED
Interested Party
CIV-2023-409-25
BETWEENFONTERRA CO-OPERATIVE GROUP LIMITED
Appellant
DAIRYNZ LIMITED
Appellant
AND SOUTHLAND REGIONAL COUNCIL
Respondent
SOUTHLAND FISH & GAME COUNCIL
Interested Party
ROYAL FOREST & BIRD PROTECTION SOCIETY OF
NEW ZEALAND INCORPORATED
Interested PartyFEDERATED FARMERS SOUTHLAND INCORPORATED
Interested Party
CIV-2023-409-44
BETWEEN SOUTHLAND REGIONAL COUNCIL
Appellant
ANDSOUTHLAND FISH & GAME COUNCIL
Interested Party
ROYAL FOREST & BIRD PROTECTION SOCIETY OF
NEW ZEALAND INCORPORATED
Interested PartyFEDERATED FARMERS SOUTHLAND INCORPORATED
Interested PartyFONTERRA CO-OPERATIVE GROUP LIMITED
Interested Party
DAIRYNZ LIMITED
Interested Party
Introduction
[1] The Royal Forest and Bird Protection Society of New Zealand Inc (Forest & Bird) and Southland Fish & Game Council (Fish & Game) (the s 301 Parties) seek costs following a partially successful outcome in appeals lodged by Federated Farmers Southland Inc (Federated Farmers), Fonterra Co-operative Group Ltd and DairyNZ Ltd (the Dairy Interests) and the Southland Regional Council (the Council) against the Environment Court’s decision in relation to Rule 24 of the proposed Southland Water and Land Plan (pSWLP).1
[2] At the conclusion of the judgment, I observed that the parties had had mixed success and an application for costs was not encouraged.2 However, costs were reserved and are now sought.
Background
[3] On 23 December 2022, the Environment Court issued a fifth interim decision on the pSWLP which included certain decisions relating to Rule 24 (the Rule) which
1 Federated Farmers Southland Incorporated v Southland Regional Council [2024] NZHC 726.
2 At [92]–[93].
permitted incidental contaminant discharges from specified farming activities as long as they met certain criteria listed in the Rule.3
[4] On 31 January 2023, Federated Farmers appealed the Environment Court’s decision on three grounds covering:
(a)Whether s 70 of the RMA applies to both point source and diffuse discharges (s 70 Appeal);
(b)Whether the Court could require evidence that such discharges were not causing significant adverse effects notwithstanding the Rule specified that they must not as a condition of the discharge (Adverse Effects Appeal); and
(c)Whether the Court failed to have regard to the scope of the appeals on the Rule and erred when it recorded whether it was being asked to confirm the Rule (Scope Appeal).
[5] Appeals were also filed by the Council, and by the Dairy Interests, relating to these issues.
[6] Several parties joined Federated Farmers’ appeal as interested parties under s 301 of the RMA, including the Council, the Dairy Interests, Forest & Bird and Fish & Game. Likewise, on the other appeals, these parties joined as interested parties if they were not the named appellant or respondent.
[7] On 1 March 2023, the parties filed a joint memorandum for the case management conference with agreement on proposed timetable directions. The s 301 Parties filed an interlocutory application for a priority fixture, which had no opposition, and was granted.
[8] On 25 August 2023, and before parties had taken any formal steps, Federated Farmers filed an amended appeal which withdrew two grounds of its appeal.
3 Aratiatia Livestock v Southland Regional Council [2022] NZEnvC 265.
[9] At the hearing of the High Court appeal, the appellants co-ordinated the presentation of their cases with each appellant focusing their submissions on a specific appeal. The Dairy Interests advanced the s 70 Appeal, Federated Farmers advanced the Scope Appeal and the Council focused primarily on the Adverse Effects Appeal.
[10]The outcome on the various appeals was as follows:
(a)The s 70 appeal was unsuccessful as I upheld the Environment Court’s finding that s 70 applied to both point source discharges and diffuse discharges.4 However, I noted that the Environment Court was wrong to refer to the intention of the Regional Plan’s author when interpreting s 70.5
(b)In terms of the Scope Appeal, that was successful insofar as I confirmed the Environment Court had expressed its jurisdiction on appeal in a way which went beyond the scope of the appeals before it.6
(c)In terms of the Adverse Effects Appeal, the outcome was more complex. I accepted the s 301 Parties’ view that the Regional Council had to be satisfied, before it includes a rule permitting a discharge in a regional plan, that none of the effects in s 70(1)(c)–(g) are likely to arise in the receiving waters.7 I was not in a position to decide whether or not that had been done in this case and I held that the Environment Court “must equally be satisfied that there is jurisdiction under s 70 to support a particular version of the rule” and that entitled it to seek evidence in the particular case.8 That said, I acknowledged the limited scope the Environment Court had to amend the rule, given my conclusion on the Scope Appeal.
4 Federated Farmers Southland Incorporated v Southland Regional Council, above n 1, at [75].
5 At [74].
6 At [57].
7 At [83].
8 At [87].
Issues
The issues for resolution on this application for costs are:
(a)Which parties were successful in the proceedings?
(b)Whether the interests of justice require a departure from the general rule that costs follow the event?
(c)Whether costs should be awarded for work completed before Federated Farmers appeal was amended?
(d)Whether costs should be awarded on the costs proceedings?
Which parties were successful in the proceedings?
Legal principles applying
[12] Where parties have succeeded on some issues and failed on others, it is necessary to make a “realistic appraisal” as to who was the successful party overall in the proceedings.9 In Middeldorp v Avondale Jockey Club Inc, the Court of Appeal upheld a costs award made against an applicant in a judicial review application who had succeeded on one cause of action but failed on several others.10 The respondent was awarded costs on a 2B basis with a 25 per cent discount to reflect the partial success of the applicant.
[13] This approach was applied in a planning decision under the RMA in Viaduct Harbour Holdings Ltd v Auckland Council.11 Similarly in Horticulture New Zealand v Manawatu-Wanganui Regional Council, the interested parties’ costs and disbursements were met by the appellants equally, despite one of the appellants having had modest success on a minor aspect of its case.12
9 Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [23] and [26].
10 Middeldorp v Avondale Jockey Club Inc [2021] NZCA 238; upholding the decision in Middeldorp v Avondale Jockey Club Inc [2020] NZHC 1748 at [24].
11 Viaduct Harbour Holdings Ltd v Auckland Council [2018] NZHC 1772.
12 Horticulture New Zealand v Manawatu-Wanganui Regional Council [2013] NZHC 2853.
Forest & Bird and Fish & Game submissions
[14] The s 301 Parties seek costs. While acknowledging the Court indicated the parties had mixed success, it submitted on a “realistic appraisal” they were the overall successful party. The s 301 Parties submit that the Council here was wholly unsuccessful on the issues raised in its appeal and that the Dairy Interests were wholly unsuccessful on the issue they pursued at hearing. The only appeal with modest success was submitted to be the Scope Appeal argued by Federated Farmers. Even on this ground, the s 301 Parties submit success was limited to the High Court’s finding that the Environment Court had expressed its jurisdiction on appeal in a way which went beyond the scope of the appeals before it.
[15] The s 301 Parties submit that their advocacy in the proceedings were largely focused on issues pursued by the Council and the Dairy Interests, and issues on which Federated Farmers did not succeed. Therefore, they submit they were, on a realistic appraisal, the overall successful parties.
Federated Farmers submissions
[16] Federated Famers considers it appropriate that costs lie where they fall. Primarily, this is because Federated Farmers was the successful party on the Scope Appeal. Federated Farmers submits that a costs award against the successful party would conflict with both r 14.2(a) and 14.2(g), which state that costs follow the event and that costs determinations should be predictable and expeditious.13
The Dairy Interests’ submissions
[17] The Dairy Interests submit that the costs application overstates the s 301 Parties success and understates the success of other parties. They agree with the High Court that the parties enjoyed mixed success. They claim the application appears to focus on the parties’ presentations at the hearing, rather than what the parties’ notices of appeal addressed. In particular, the presentations at hearing were split for efficiency and the application fails to recognise that their notice of appeal also dealt with scope, in which they were entirely successful.
13 High Court Rules 2016.
Discussion
[18] The primary issue which motivated the appellants was the concern that the Environment Court had misunderstood its scope on appeal suggesting it had the power to approve the Rule or not, or amend the activity status of the discharges governed by the Rule. I found those concerns were valid, effectively allowing the Scope Appeal. Federated Farmers pursued this appeal, supported by the Dairy Interests, those parties were successful appellants. While, as it transpired, the 301 Parties did not actively oppose this aspect of the appeal, that does not detract from the fact the appeal was successful.
[19] While the Dairy Interests were unsuccessful on their s 70 Appeal, they were correct in asserting that one of the grounds for the Environment Court’s decision on this issue was in error.
[20] While the Council was not successful in its argument that the rule precluded the adverse effects of concern under s 70, so there was no basis for the Court to require such evidence, I held the Court could call for that evidence for the limited purpose of ensuring it had jurisdiction to confirm the permitted activity rule, either in the version proposed by the Council, or the version proposed by the s 301 Parties.
[21] I accept, therefore, that the s 301 Parties successfully opposed one aspect of the Dairy Interest’s appeal and the Council’s primary appeal, but equally, it could be said that Federated Farmers was entirely successful on its appeal on the issue of scope. However, in the case of Federated Farmers’ appeal, it is not clear which party would pay costs to them as the successful appellant when, in practical terms, that issue was not actively opposed, even by the s 301 Parties. Similarly, the position of the Dairy Interests is complicated by the fact that they supported the successful Scope Appeal and were vindicated on one of the grounds raised on the s 70 appeal, albeit they were unsuccessful on it.
[22] It is for these reasons that my initial reaction was that the parties had had mixed success and no party was so obviously the winner or loser, that they should be paid, or required to pay, costs. In saying this it is important to note that the parties ran the appeals very efficiently with each appellant advancing the submissions on just one of
the appeals, even where they supported other appeals, to ensure no duplication. The success or otherwise of a party is not determined simply by the issue they made oral submissions on.
[23] That said, acknowledging that Federated Farmers and the s 301 Parties were the most successful parties, I turn to whether the interests of justice should play a role in the determination of costs.
Should the interests of justice require a departure from the general rule that costs follow the event?
Legal principles applying
[24] Costs on an appeal to the High Court are dealt with in accordance with Part 14 of the High Court Rules 2016 (the Rules).14
[25] The starting point is that the party who fails, with respect to a proceeding, should pay costs to the party who succeeds.15 However, it is well established that this rule, and all others relating to the determination of costs, are subject to the overriding consideration that matters of costs are at the discretion of the Court.16
[26] Regardless of the degree of success achieved, each party also relied on the interests of justice to support their submissions on whether costs should be awarded, with particular focus on the extent to which they were acting in the public interest.
Forest & Bird and Fish & Game submissions
[27] The s 301 Parties submit that an award of costs would be in the interests of justice as they progressed the public interest by applying for, and obtaining a judgment directing a priority fixture for the appeals and they undertook the role of contradictor where the Council did not.
14 Resource Management Act 1991, s 299.
15 High Court Rules 2016, r 14.2(1)(a).
16 Rule 14.1.
[28] The three appeals challenged the Environment Court’s fifth interim decision on significant matters of law. As a regulatory appeal, the Council was named as respondent, which is common practice to ensure that the adversarial system does not lose balance, and that the Court does not lose assistance with one side of an issue, in the absence of a contradictor.17 Here, the s 301 Parties submit that while the Council was named as a respondent, it was an appellant and did not take steps to defend any of the appeals, therefore the burden of defending the appeals rested entirely on the s 301 Parties. Further, there would have been no priority fixture, which was prepared by the s 301 Parties and granted as the public interest weighed in favour of it.
[29] Courts have jurisdiction to grant costs in favour of a s 301 party, such as where the parties provide a “valuable additional perspective”,18 or are “helpful” or “of considerable assistance”.19
[30] The s 301 Parties submit that the High Court judgment draws extensively on their submissions, and as they took on the sole role of the contradictor in these appeals, it is not in the interests of justice for them to bear their own costs of participating in the appeals.
The Dairy Interests’ submissions
[31] While the s 301 Parties’ application for costs stated that their participation advanced the public interest, this was submitted to conflate the involvement of the s 301 Parties with the substance of the appeals themselves. The Dairy Interests submit that it was the content and subject matter of the appeals that justified the public interest and that the involvement of the s 301 Parties did not change that.
Council’s submissions
[32] The Council opposes the costs application and seeks an order that costs lie where they fall, particularly as the Council brought the appeal in the public interest.
17 Shand v Legal Complaints Review Officer [2019] NZHC 3105 at [12]–[14].
18 Viaduct Harbour Holdings Ltd v Auckland Council, above n 11 at [15].
19 Horticulture NZ v Manawatu-Wanganui Regional Council, above n 12, at [8].
[33] The High Court noted that scope was a primary reason for the appellant’s appeal and that this error exacerbated the concerns raised by the Council. The Council did not duplicate the argument on scope to ensure the proceedings were conducted effectively and efficiently. The Council submits that the context of the appeal being brought informs the conclusion as to success in the proceeding and that while the Council may have been unsuccessful on the particular points it argued, its presence as an appellant was justified.
[34] Using the same reasoning as the s 301 Parties, that their participation furthered the public interest by countering the appellant’s submissions, the Council submits they also represent a public interest, albeit a different one.
[35] The Council submits its participation was important as it sought clarity on the limitations and discussions of the process of making rules governing discharges in regional plans, which is fundamental to the creation of future-proofed plans and robust resource management decision-making, which benefit the public. It further claims that this was an important test case for s 70 of the RMA.
[36] The Council acknowledges its role in this proceeding was not solely as statutory decision-maker, but as an appellant. However, it still represents a valid aspect of public interest. The High Court has previously been reluctant to award costs in those circumstances.
[37] In Auckland Regional Council v Rodney District Council, Auckland Regional Council unsuccessfully sought the quashing of the Rodney District Council’s grant of a consent, but despite its failure, the Court found costs should not be awarded against the Auckland Regional Council as its challenge was legitimate and raised public law issues of general importance.20 The Court found that Auckland Regional Council was:21
[A]cting as a representative of the public interest and in pursuit of its statutory responsibilities under the Resource Management Act 1991 for setting and
20 Auckland Regional Council v Rodney District Council HC Auckland CIV-2007-404-3464, 18 December 2007 at [17] and [20].
21 At [18].
upholding the integrity of planning and other controls to protect the environment from inappropriate development.
[38] This case also cited New Zealand Māori Council v Attorney-General, where the Court found it was not appropriate to award costs where the New Zealand Māori Council sought to clarify a confused and important area of law, and where the appellants were not bringing the proceedings out of any motive of personal gain, even where it was unsuccessful.22
[39] While special circumstances exist where these principles may not apply, such as where litigation is unnecessarily prolonged or steps were taken outside the statutory decision-maker’s public role, these circumstances did not arise on these facts. The Council worked efficiently and presented a focused case and there is nothing to suggest it went beyond its public interest role.
[40] As advancement of the public interest can be found on both sides, the Council supports the proposition that costs should lie where they fall.
Discussion
[41] The subject matter of these appeals was clearly of public interest. The parties bringing the appeals, and those acting as ‘contradictor’ to defend the appeals and provide alternative arguments to aid the Court’s understanding, all supported the public interest.
[42] While the s 301 Parties acted in the public interest in bringing the priority fixture I note that all parties co-operated in this application and no party opposed it, so it is difficult to see why they should pay costs to the s 301 Parties in respect of this step. I also accept the s 301 Parties acted as the contradictor in these proceedings, a role which is clearly in the public interest. However, I accept the Council equally acted in the public interest by bringing its appeal to seek clarity on the process of making rules governing discharges in regional plans, also furthering the public interest.
22 New Zealand Māori Council v Attorney-General [1994] 1 NZLR 513 (PC).
[43] Therefore, in the absence of any unnecessarily prolonged litigation or steps taken outside the Council’s public interest role, I am satisfied that it, too, acted in the public interest and this points against a costs order.
Should costs be awarded for costs incurred prior to the filing of the amended appeal by Federated Farmers?
Forest & Bird and Fish & Game submissions
[44] While the s 301 Parties did not raise an issue to costs when the amended appeal was filed, they now apply for costs incurred prior to the filing of the amended appeal by Federated Farmers.
[45] The s 301 Parties submit that as Federated Farmers withdrew part of their appeal, subsequent to the s 301 Parties incurring costs in respect of the withdrawn grounds, that this be accounted for in their costs, including an allocation of time for preparing the common bundle.
Federated Farmers submissions
[46] Federated Farmers submits that these “additional costs” could only relate to the Adverse Effects Appeal prior to the preparation and finalisation of the common bundle. Federated Farmers’ position is that its amended appeal was filed promptly, and any costs associated with identifying documents to be included in the common bundle are de minimis.
[47] The Rules set out a framework to address matters such as filing amended documents. If the party filing the amended appeal is successful, there is the ability to reduce the costs they are entitled to under r 14.7(f)(ii) if they contributed unnecessarily to the time or expense by pursing an argument that lacks merit.
[48] However, as Federated Farmers was successful on appeal, this does not apply on these facts. The framework does not allow for a reverse liability. This would only provide for the ability to reduce Federated Farmers’ costs entitlement had costs been sought.
[49] While r 15.21 provides a presumption that the discontinuing party pays costs, Federated Farmers did not discontinue their appeal. They amended it.
Discussion
[50] It is difficult to see why the amendment to Federated Farmers’ appeal to remove grounds of appeal would warrant a costs award in the s 301 Parties’ favour. The grounds of appeal which were removed were, in substance, pursued by the Dairy Interests and the Council so the s 301 Parties incurred no wasted costs. They still had to address these issues in the appeal hearing.
Costs on costs
[51] The Court has the discretion to award costs in respect of costs applications.23 Both Federated Farmers and the s 301 Parties sought costs on these proceedings.
Forest & Bird and Fish & Game submissions
[52] The s 301 Parties submit that if they are awarded costs on the substantive proceedings, they should also be awarded costs on this costs application.
Federated Farmers submissions
[53] The Court of Appeal has said that it is unusual to award costs on a costs application.24 However, there may be principled grounds to make a costs award on a costs application if a memorandum responds to an unnecessary application.25
[54] Federated Farmers seeks costs on a 2B basis against the s 301 Parties for preparing the costs memorandum (being $1,195). They submit it is inappropriate for the s 301 Parties to seek costs against Federated Farmers because:
(a)The High Court decision stated that the parties had mixed success and that an application for costs was not encouraged;
23 Body Corporate Administration Ltd v Mehta (No 4) [2013] NZHC 213 at [85].
24 Hojsgaard v Chief Executive of Land Information New Zealand [2019] NZCA 84, [2019] 2 NZLR 864 at [130].
25 Prestige Motors Ltd v My Trustee Company (Nikolas and Petra) Ltd [2021] NZHC 1540 at [11].
(b)Federated Farmers was the successful party on appeal;
(c)The s 301 Parties incorrectly seek to conflate a discontinuance (pursuant to r 15.21) with filing an amended appeal; and
(d)The schedule of costs proposed by the s 301 Parties is based on two factual errors — that Federated Farmers discontinued its appeal instead of filing an amended appeal and that the s 301 Parties did not continue to oppose Federated Farmers’ appeal.
[55] The schedule of costs provided by the s 301 Parties contained several inaccuracies. Federated Farmers says this supports its argument that costs be ordered for filing its costs memorandum which should have been unnecessary. These inaccuracies included:
(a)Seeking three time allocations for preparing three responses to appeals, when the parties were not respondents but were interested parties under s 301 of the RMA. Filing s 301 notices do not have time allocations under the Rules to reflect the fact the filing time is minimal (being that notices are proforma containing one sentence) compared to preparing a response to an appeal.
(b)Seeking costs for filing an interlocutory application for a priority fixture, despite the application being unopposed. Federated Farmers submits that no time allocation should be provided for this application given Federated Farmers was willing to seek reasonable directions by consent before filing.
(c)Seeking time allocations for preparing three joint memoranda and the common bundle, despite their limited role.
[56] The Dairy Interests also endorse the submissions from Federated Farmers in relation to the inaccuracies in the costs schedule to support their own submission that costs should lie where they fall.
Discussion
[57] While there is some authority that an application for costs should be treated, for costs purposes, as no different from an ordinary interlocutory application,26 other authority provides that awards of costs on costs require ‘special’ or ‘exceptional circumstances’.27
[58] While Federated Farmers submits that this may be an instance where they should be awarded costs due to having to respond to an unnecessary costs application, largely on the basis of inaccuracies of the s 301 Parties’ schedule of costs and their incorrect conflation of a discontinuance with the amended appeal, I am satisfied the submissions of the s 301 Parties on their participation assisting the public interest count against this argument. There was merit in their argument that they were a largely successful party, albeit I have found, in the circumstances, that this did not justify an award of costs, when the other parties also had some measure of success and all were acting in the public interest. In short, given the overall role the s 301 Parties played, I do not consider they should be penalised for making a costs application that was ultimately unsuccessful.
[59] Following the finding of mixed success and that costs on the High Court appeals are to lie where they fall, costs on these cost applications are also to lie where they fall.
Outcome
[60]Costs are to lie where they fall on the High Court appeals.
[61]Costs are to lie where they fall on these costs applications.
Solicitors:
Russell McVeagh, Auckland Wynn Williams, Christchurch Rout Milner Fitchett, Nelson
26 Body Corporate Administration Ltd v Mehta (No 4), above n 23, at [85].
27 Wenzhou Hongliang Trading Co Ltd v MSUT Trustee Ltd [2020] NZHC 2322 at [16]; and Khurana Trustee Ltd v Castle Backpacker K Road Ltd [2021] NZHC 1315 at [61].
Copy to:
B S Carruthers KC, Barrister, Auckland S Gepp KC, Barrister, Nelson
1
12
1