Frost v Queenstown Lakes District Council
[2021] NZHC 2368
•10 September 2021
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2021-425-000005
[2021] NZHC 2368
BETWEEN MURRAY NEIL FROST
First Applicant
AND
WILLIAM ALAN NICHOLAS BROWN
Second Applicant
AND
JENNIFER DIXON MUNNS
Third Applicant
AND
QUEENSTOWN LAKES DISTRICT COUNCIL
First Respondent
AND
DAVID CLARKE AND PAULA CLARKE AND PKF GOLDSMITH FOX TRUSTEES #3 LIMITED
Second Respondents
Hearing: On the papers Appearances:
P J Page for Applicants
L F de Latour and J S J Aimer for First Respondent
M R Walker and B B Gresson for Second RespondentsJudgment:
10 September 2021
JUDGMENT OF DUNNINGHAM J
Re: Costs Judgment
This judgment was delivered by me on 10 September 2021 at 11 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
FROST v QUEENSTOWN LAKES DISTRICT COUNCIL [2021] NZHC 2368 [10 September 2021]
[1] In my decision dated 21 June 2021, I allowed the application for judicial review in respect of the Council’s decision to grant land use consent and cancel a separate consent notice on a non-notified basis. However, although the applicants were not successful on all issues raised.1 I also indicated that my preliminary view was the applicants were entitled to costs on a 2B basis, but allowed the parties to file memoranda if they were unable to agree on costs.2
[2] The parties agree that the applicants were successful and are entitled to costs, but disagree on:
(a)whether scale costs should be reduced;
(b)the entitlement to claim certain expert evidence as a disbursement; and
(c)how costs should be borne between the first and second respondents.
Background
[3] The applicants sought judicial review of the Council’s decision to grant land use consent and to cancel a consent notice, on a non-notified basis, in relation to two adjacent sections in Penrith Park, Wanaka.
[4] I found the decision to grant land use consent on a non-notified basis was made in error because the Council used the wrong legal test in assessing the effects of vegetation removal.3 The requisite statutory test was that the effects were less than minor but the Council found the effects were no more than minor. However, in the special circumstances, I declined to grant the relief sought.4
[5] I also found the decision to cancel the consent notice was made in error. The conclusion that the consent notice was equivalent to the site standard in the relevant district plan and therefore could be cancelled, was incorrect.5 The consent notice
1 Frost v Queenstown Lakes District Council [2021] NZHC 1474.
2 At [120].
3 At [55]-[59].
4 At [117].
5 At [93]-[96].
required compliance with the conditions relating to vegetation screening, whereas a departure from the site standards relating to vegetation screening did not preclude the granting of resource consent. Consequently, I ordered the reinstatement of the consent notice.6
[6] The applicants seek scale costs of $23,168 and disbursements for expert witness fees of $9,631.27. The Council seeks a 25 per cent reduction in scale costs, a 50 per cent reduction in expert witness fees and asks the Court not to deviate from the normal position that both respondents are jointly and severally liable for the total costs award. The Clarkes reject the claim for disbursements for expert witness fees and ask the Court to exercise its discretion and hold them liable for only 25 per cent of the total costs award.
Reduction in scale costs
[7] Rule 14.7 High Court Rules 2016 allows the court to reduce the costs otherwise payable if the party that has succeeded overall, has failed in relation to a cause of action or issue which significantly increased the costs of the losing party,7 or took or pursued an unnecessary argument which lacked merit.8
Council’s submissions
[8] Ms de Latour, for the Council, seeks a 25 per cent discount on scale costs on the basis the respondents incurred significant additional cost responding to the unsuccessful and in some cases meritless arguments. The applicants succeeded on two grounds; the first successful ground was raised two weeks before the hearing and the second successful ground was one of six errors of law initially pleaded. Neither ground was raised in correspondence before litigation commenced. If the submissions had been refined to those two grounds, the respondents’ costs would have been significantly reduced.
6 At [118].
7 High Court Rules 2016, r 14.7(d).
8 Rule 14.7(f)(ii).
[9] Ms de Latour, submits the court has reduced costs on numerous occasions where, as in this case, the applicant was successful on a core ground but failed on many others.9 For example in Ballantyne Barker Holdings Ltd v Queenstown Lakes District Council a 25 per cent reduction was allowed as the applicant was successful on one of eleven grounds.10 In Mills v Far North District Council the applicant was successful on two of its six judicial review grounds, a 50 per cent reduction was allowed to account for the time spent on the unsuccessful arguments, the irrelevant evidence provided, and the fact the expert briefs extended to the merits of the decision.11 In Rochdale Precinct Society Inc v Christchurch City Council12 the applicants succeeded on their two main grounds but failed on two other grounds, a 20 per cent reduction was allowed.13 In Weaver v Auckland Council the appellants were successful on half their claim “the time and resources necessary for the respondents to meet ultimately unsuccessful arguments significantly increased its costs. …[It required] a doubling of effort and time.”14 The court allowed a discount of 50 per cent.
[10] Ms de Latour submits the primary focus of the applicants’ case was the assessment of effects of the dwelling on views to the north and west of the subject site and on this ground the applicants were unsuccessful. The applicants were also unsuccessful in their arguments regarding the building height rule,15 and assessment of the Queenstown Lakes District Plan.16 Their legal submissions were predominantly dedicated to these unsuccessful legal claims. This warrants a decrease in scale costs of 25 per cent.
9 Ballantyne Barker Holdings Ltd v Queenstown Lakes District Council [2020] NZHC 49; Mills v Far North District Council [2018] NZHC 3091; Rochdale Precinct Society Inc v Christchurch City Council [2018] NZHC 1708; Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379.
10 Ballantyne Barker Holdings Ltd v Queenstown Lakes District Council, above n 9, at [27].
11 Mills v Far North District Council, above n 9, at [29].
12 Rochdale Precinct Society Inc v Christchurch City Council, above n 9.
13 At [16].
14 Weaver v Auckland Council, above n 9, at [26].
15 Frost v Queenstown Lakes District Council, above n 1, at [68].
16 At [77].
Applicants’ submissions
[11] Mr Page, for the applicants, rejects any reduction to scale costs. He submits that plaintiffs are often granted relief in different terms to those sought and this does not invalidate their success.17 Although the applicants were not successful on every ground Mr Page does not accept their claims were without merit.
[12] He distinguishes all the cases cited by Ms de Latour. Mr Page submits Fitzgerald J’s decision not to grant relief in Mills was relevant to her decision to reduce scale costs but here the applicants were successful in obtaining relief.18 Unlike Rochdale, the applicants’ claims were not more suited to appeal than judicial review,19 and each ground was fully aired at this hearing unlike in Ballantyne Barker.20 The nature of the relief also distinguishes the case from Ballantyne Barker where success was on a distinct element of quantifiable loss, which simplified the costs. Here the applicants achieved their objective by demonstrating the Council failed to adequately consider the effects of consent. This element also distinguishes the case from Weaver because the applicants here did not unreasonably reject a settlement offer.21 Mr Page submits the cases do not support a reduction of scale costs in these circumstances.
Analysis
[13] It is clear, and all counsel have accepted, that the applicants were the successful party and are entitled to costs. The applicants were successful on two of the five grounds of review. However, I accept that one of their successful grounds was only raised through legal submissions filed shortly before hearing.
[14] In my view, this last factor distinguishes it from the normal run of cases relied on by the applicants where a party succeeds, albeit not on all grounds raised. In my view, a reduction in scale costs of 25 per cent is appropriate to acknowledge the late introduction of one ground of challenge, and the significant time and focus spent on the unsuccessful challenges to three aspects of the Council’s decision.
17 Tower Insurance Ltd v Kilduff [2019] NZCA 82 at [24].
18 Mills v Far North District Council, above n 9, at [8].
19 As in Rochdale Precinct Society Inc v Christchurch City Council, above n 9, at [15] and [17].
20 Ballantyne Barker Ltd v Queenstown Lakes District Council, above n 9, at [20].
21 Weaver v Auckland City Council, above n 9.
Disbursements
[15] Rule 14.12 High Court Rules allows the successful party to claim disbursements which are specific to the conduct of the proceedings, reasonably necessary for the conduct of the proceedings, and reasonable in amount.22
Applicants’ submissions
[16] The applicants seek disbursements for the expert planning evidence of Scott Edgar of $9,631.27. Mr Page submits Mr Edgar’s evidence was necessary for the conduct of the proceedings and was reasonable. Mr Edgar analysed council records and identified information the Council should have taken into account, and what information was available to it. Mr Edgar’s initial affidavit was served with the statement of claim and provided the Council a meaningful opportunity to consider the errors and inform settlement discussions. The second affidavit responded to planning matters raised by the respondents’ experts. These affidavits were critical in forming the applicants’ claim and I found a reviewable error on reasoning developed by Mr Edgar’s evidence.23
Council’s submissions
[17] The Council seeks a 50 per cent reduction in Mr Edgar’s expert costs. Ms de Latour submits Mr Edgar’s evidence could have been more concise if it focused on the successful grounds of appeal and very few pages of his affidavits addressed removing the consent notice. Ms de Latour states both alleged errors were not legal errors requiring planning evidence and the affidavit was not referred to by the Court.
Clarkes’ submissions
[18] The Clarkes reject that Mr Edgar’s evidence was necessary. Mr Walker, for the Clarkes, submits Mr Edgar’s analysis of council records could have been completed by counsel and included as scale costs. The fact the respondents addressed his evidence does not indicate it was necessary.
22 High Court Rules, r 14.12.
23 Frost v Queenstown Lakes District Council, above n 1, at [96].
Applicants’ reply submission
[19] In response, Mr Page cites Sim’s Court Practice that “[c]laimable disbursements are not limited only to issues on which a party succeeded. The proper question is whether the disbursement was reasonably necessary…” and for “expert witnesses the question is…whether [the evidence] was properly before the Court.”24 He submits the planning evidence was necessary and did not need to be referred to or relied on by the Court to be claimable. The successful argument about the Council’s decision on the consent notice was developed in Mr Edgar’s affidavit, the evidence was therefore relevant, properly before the Court, and decisive.
Analysis
[20] I am satisfied Mr Edgar’s evidence was reasonably necessary for the proceeding and is properly claimable for the reasons outlined in the applicants’ submissions. A costs decision should not require a detailed assessment of the extent to which an expert’s brief was of direct utility to the final decision as long as it was reasonably directed to the issues raised in the proceeding. Furthermore, I also note that, responsibly, the applicants have not sought the costs for their expert landscape evidence. This distinction was appropriate and the applicants are entitled to claim Mr Edgar’s costs as a disbursement.
Joint and several liability for costs
[21] The liability of each of the respondents is joint and several unless the court directs.25 Costs are shared equally unless something out of the ordinary warrants an uneven apportionment.26 The ultimate aim is to assess the overall justice between the parties in each case.27
24 Matthew Casey (ed) Sim’s Court Practice (NZ) (online ed, LexisNexis) at [HCR14.12.3].
25 High Court Rules, r 14.14.
26 Hong v Deliu [2016] NZCA 75, [2016] NZAR 667 at [24].
27 Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council HC Invercargill CIV-2008-425-518, 19 May 2009 at [18].
Council’s submissions
[22] Ms de Latour, submits this case requires sharing costs equally. In Beach Road Preservation Society Inc v Whangarei District Council both respondents chose to defend the proceedings and the Court found they should share costs equally as “[o]n a costs application we are not concerned with how the original decision under attack came to be made…we are concerned with the litigation itself.”28
[23] The Clarkes could have admitted a cause of action and potentially settled with the applicants, abided the outcome of the Court, or defended the proceedings. They chose to defend and took an active role in filing affidavits and fulsome submissions and attending the hearing. Costs should be shared because both parties fully defended the proceedings and it is inappropriate to punish the Council for the original decision making.29
Clarkes’ submissions
[24] The Clarkes submit the Court should exercise its discretion and hold them liable for 25 per cent of the total costs award. Mr Walker notes there is conflicting authority on whether liability for judicial review in this context should be joint and several. Chambers J held it irrelevant how the resource consent was decided, if both defendants adopted a stance and chose to defend the hearings, they should be jointly liable for the costs.30 Conversely other Judges have held the council solely liable for the plaintiff’s costs,31 and in some cases also the second defendant’s costs as the council carried the responsibility for the erroneous decision.32
[25] Based on these authorities Mr Walker submits the Court has discretion as to apportionment of costs. He submits the Council must bear the responsibility for its errors, and the Clarkes participation in the review should not be held against them, given the financial effect of a judgment deeming the consent invalid. Throughout the
28 Beach Road Preservation Society Inc v Whangarei District Council (2001) 16 PRNZ 13 (CHC) at [21].
29 Sutton v Canterbury Regional Council [2015] NZHC 1000 at [46].
30 Beach Road Preservation Society Inc v Whangarei District Council, above n 28, at [21].
31 Green v Auckland Council [2013] NZHC 3422.
32 Barrett v Wellington City Council HC Wellington CP 31/00, 25 July 2000 at [9].
Clarkes have acted reasonably, and in good faith,33 the successful grounds of challenge were not put to them before the proceedings were filed, and one of the two successful grounds was solely an error of the Council’s decision. All of these factors support an apportionment of 75 per cent of costs to the Council and 25 per cent costs to the Clarkes.
Analysis
[26] As noted by Thomas J in Rochdale Precinct Society Inc v Christchurch City Council:34
unsuccessful parties are prima facie jointly and severally liable. That rule may be varied because the ultimate task of the Court is to make an assessment of overall justice as between the particular parties, in the particular circumstances. Relevant considerations include whether and in what manner the parties participated in the proceedings, the extent to which one party was in error, and what measure of reliance was placed on the error by the other party.
[27] In the present case, both respondents actively participated in the hearing, and both opposed the grounds on which the applicants were ultimately successful. Thus, as in the Beach Road Preservation Society decision, I consider the extent to which the Council was responsible for the original decisions is of less importance than the decision both respondents made to defend them in the proceeding.35
Costs on this application
[28] Costs can be awarded, according to scale for an interlocutory application, for an application for costs.36 The applicants seek costs of $1,434 on this costs application.
[29] However, the applicants and respondents have had mixed success and I consider it appropriate for costs to lie where they fall on this application.
33 Frost v Queenstown Lakes District Council, above n 1, at [110].
34 Rochdale Precinct Society Inc v Christchurch City Council, above n 9, at [22].
35 Beach Road Preservation Society Inc, above n 28, at [21].
36 Body Corporate Administration Ltd v Mehta [2013] NZHC 213 at [85].
Result
[30] The applicants are awarded costs of $17,376 (being 2B costs less 25 per cent) and disbursements of $9,631.27. For the avoidance of doubt, the respondents’ liability for these costs is joint and several.
[31]Costs on this application are to lie where they fall.
Solicitors:
Gallaway Cook Allan Lawyers, Dunedin Todd & Walker Law, Queenstown
Copy To:
L F de Latour, Queenstown Lakes District Council
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