Glenpanel Development Limited v Environmental Protection Authority

[2025] NZHC 2970

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2025-485-419

[2025] NZHC 2970

BETWEEN

GLENPANEL DEVELOPMENT LIMITED

Applicant

AND

ENVIRONMENTAL PROTECTION AUTHORITY

Respondent

On the papers:

Initial memoranda as to costs:

2 September 2025 (Applicant), 3 September 2025 (Respondent) Further memoranda as to costs:

10 September 2025 (Applicant), 15 September 2025 (Respondent)

Counsel:

V Heine KC and A McDonald for Applicant B McKinnon and J McGrath for Respondent

Judgment:

8 October 2025

JUDGMENT OF GENDALL J

[Costs]

Introduction and background

[1]    This judgment relates to costs sought by the respondent, the Environmental Protection Authority (the EPA) against the applicant Glenpanel Development Limited (Glenpanel) relating to Glenpanel’s judicial review proceeding.

[2]    Some brief background of events here is necessary. Glenpanel is a land developer which intends to undertake a major development project comprising about 370 residential unit sections and related works on a large property at Ladies Mile near Queenstown. That development undertaking is a referred project under sch 35 of the Covid-19 Recovery (Fast-track Consenting) Act 2020 (the 2020 Act).

GLENPANEL DEVELOPMENT LIMITED v ENVIRONMENTAL PROTECTION AUTHORITY (COSTS) [2025] NZHC 2970 [8 October 2025]

[3]    Glenpanel applied to judicially review a decision of the EPA. This decision was one to suspend the reconsideration of an earlier EPA decision to decline Glenpanel’s application for fast-track consent (the Suspension Decision). That earlier decision had been quashed by the Court of Appeal. The Suspension Decision was based on non-payment of $77,958.81 in costs claimed by the EPA, which were the subject of an unresolved dispute brought by Glenpanel under statutory dispute mechanisms.

[4]    The grounds advanced by Glenpanel in its broad application to judicially review the Suspension Decision were that the EPA had no power to suspend the reconsideration process under the appropriate statute, that the EPA’s costs recovery policy was unlawful as it was based on a misinterpretation of the 2020 Act and that the Suspension Decision was unlawful due to error of fact and law, procedural unfairness, failure to take into account mandatory considerations, breaching legitimate expectations, and exercising a wrongful and improper purpose.

[5]    These grounds advanced to maintain Glenpanel’s position that the Suspension Decision was unlawful were also based on numerous aspects including that the disputed costs amount of $77,958.91 did not provide a basis for suspension under the relevant legislation.

[6]    Glenpanel’s judicial review application was scheduled for a hearing before me in this Court starting at 10am on 20 August 2025. At the commencement of that hearing, I gave an indication to counsel present that this whole issue might better be resolved through an agreed resolution and the suggestion was made of payment of the disputed monies into Court in order that the reconsideration process could be recommenced by the EPA.

[7]    The hearing was then adjourned at 10.15am for a short period for discussions between counsel. A resolution was reached between counsel on the basis of a joint request to the Court for consent orders to be made to the effect that Glenpanel would pay the disputed sum into Court and the reconsideration process would recommence.

[8]    The Court then made those  consent  orders.  These  were  outlined  in  Minute (No.2) issued by me on 20 August 2025 as follows:

(a)Payment of the disputed costs amount of $77,958.91 shall be made by the applicant Glenpanel Development Ltd into this Court within 10 working days of today, and shall be held pending final determination of the costs objection by the Environment Court and disposal of any appeal/s in relation to that costs decision;

(b)The respondent, the Environmental Protection Authority, is to resume processing of the reconsideration of the applicant’s first application on confirmation of payment of this sum into Court;

(c)As to costs, counsel are to endeavour to reach agreement on costs within ten working days of today. Failing agreement being reached, each party may file written memoranda on costs (of not more than three pages each) and the issue of costs shall be determined by the Court.

[9] Counsel advise that the parties have been unable to reach any agreement on costs as provided for at [8](c) above. As a result various memoranda on costs have been filed which I have considered. I now give my decision on that costs issue.

Costs application

[10]   The EPA seeks an order that Glenpanel pays its costs of and incidental to the present proceedings on an indemnity basis (which it has assessed at a figure of

$124,761.82), or alternatively on an increased costs basis (category 2B costs are assessed at $20,972.25 and with a 50 per cent uplift would amount to $31,458.37), together with disbursements. Glenpanel’s position in response is that in all the circumstances involved here—where it says the controversy between the parties was not resolved after the hearing but instead settled by pragmatic resolution reached with the assistance of indications advanced by the Court—costs should simply lie where they fall. Alternatively, if the Court thought otherwise, Glenpanel maintains that there is no defensible basis whatever for any award of either indemnity or increased costs

to be made against it and if at all and at most, costs should only be determined here on a usual category 2B scale basis.

Indemnity costs claim

[11]Rule 14.6(4) of the High Court Rules addresses indemnity costs and states:

14.6     Increased costs and indemnity costs

…

(4)The court may order a party to pay indemnity costs if—

(a)the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or

(b)the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or

(c)costs are payable from a fund, the party claiming costs is a necessary party to the proceeding affecting the fund, and the party claiming costs has acted reasonably in the proceeding; or

(d)the person in whose favour the order of costs is made was not a party to the proceeding and has acted reasonably in relation to it; or

(e)the party claiming costs is entitled to indemnity costs under a contract or deed; or

(f)some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.

[12]   McGechan on Procedure at HR14.6.03(1)(a) in dealing with the threshold for an order of indemnity costs relevantly states:

…Indemnity costs are awarded where a party has behaved either badly or very unreasonably, for example a breach of confidence…Misconduct, to justify indemnity costs, must be flagrant…But, where indemnity costs are sought in a “hopeless case” situation, it is not necessary that there be flagrant misconduct…

(citations omitted)

[13]   It follows that indemnity costs orders are generally issued only in exceptional circumstances.1

[14]McGechan on Procedure also goes on to confirm at HR 14.6.03(1)(c) that:

… imprudent refusal of an offer or compromise, falls under r 14.6(3)(b)(v).

That r 14.6.(3)(b)(v), as I note below at [18], addresses the Court’s ability to order a party to pay only increased costs (for unreasonable failure to accept a settlement offer), rather than indemnity costs.

[15]   In this case, a major plank of the EPA’s argument for an award of indemnity costs, is its claim that here Glenpanel had earlier refused EPA’s compromise offer imprudently and therefore this proceeding was entirely unnecessary.

[16]    Whilst I accept there is something in that argument, in my view, that is a matter usually and properly addressed in all the circumstances of this case as a possible justification for increased costs rather than indemnity costs.

[17]    And otherwise, overall I am satisfied but perhaps only be a reasonably fine margin, that the high bar for indemnity costs has not been met here. There is a strong dispute between counsel as to whether EPA’s offers to settle this matter were so unreasonable for Glenpanel to reject that the circumstances crossed the threshold for indemnity costs. Full resolution of that issue on the material currently before the Court is difficult here.

Increased costs claim

[18]Rule 14.6(3) addresses increased costs. It provides:

14.6     Increased costs and indemnity costs

…

(3)The court may order a party to pay increased costs if—

1      See generally, D Bullock and T Mullins The Law of Costs in New Zealand (Lexus Nexus, Wellington, 2022) at [3.16]–[3.19].

(a)the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or

(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)failing to comply with these rules or with a direction of the court; or

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

(iv)failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or

(v)failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

(c)the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or

(d)some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

[19]   As to EPA’s claim for increased costs largely this relies on r 14.6(3)(b)(v) which, as I have noted, allows a Court to order increased costs if GPL has contributed unnecessarily to the time or expense of this proceeding by:

…

(v) failing, without reasonable justification, to accept  an  offer  of  settlement whether in the form of an offer under r 14.10 or some other offer to settle or dispose of the proceeding.

[20] EPA contends that proper settlement offers were made by it over the direct issue here at least on 2 July 2025 and 7 July 2025. Instead, EPA says GDL simply issued these proceedings. EPA maintains the final outcome in this matter, noted in the consent orders outlined at [8] above, was substantially the same as its earlier settlement

offers, with the only real difference being that the $77,958.91 costs amount was to be paid into Court rather into a solicitor’s trust account. All these offers were declined at the time by GDL.

[21]   In response, GDL’s position on this is that the final agreed resolution with the consent orders reached on 20 August 2025 has settled but significant differences from the earlier offers made by EPA.

[22]   Counsel for GDL noted in her 2 September 2025 submissions on costs that “trust between the parties is low”. She went on to argue that the earlier settlement offers did not give GDL any assurance that EPA would actually resume the reconsideration of its earlier declining decision and not simply make another suspension decision on the basis of other unpaid and disputed costs amounts said to be owing by GPL. In all the circumstances, counsel maintains it was reasonable for GDL to reject those earlier settlement offers.

[23]   On balance, largely I do not accept these arguments advanced for GDL here. The settlement offers from EPA as far as I can tell, appeared to provide a pragmatic solution to the impasse between the parties that would have avoided the current litigation, and achieved GDL’s stated aim of progressing reconsideration of its application. The EPA is a statutory entity which, as I see it, made reasonable offers to fairly resolve an impasse. The distinction between what has been achieved with the consent orders and the earlier settlement offers from EPA, in my view, are at most minor and of little difference to the parties from a practical viewpoint.

[24]   As I see the position, this is a clear case where increased costs are appropriate in terms of r 14.6(3)(b)(v). It is certainly not an appropriate case for costs to simply lie where they fall as GDL originally suggested. An award of increased costs is to follow.

Quantum

[25]   It is clearly established that the correct approach to the calculation of an award of increased costs under the High Court Rules is for the Court to make an uplift from

scale, rather than awarding a percentage of actual costs. That uplift is to relate to each step in the proceeding.

[26]McGechan on Procedure at HR14.6.02 in dealing with increased costs notes:

…any increase above 50 per cent on the (scale costs) produced…is unlikely, given that the daily recovery rate is two-thirds of the daily rate considered reasonable for the particular proceeding.

[27]As I have noted, EPA’s calculation of category 2B costs reached a figure of

$20,972.25. Largely, it seems there is no dispute as to this figure on the part of GDL.

[28]   Here, I am satisfied that an uplift of 50 per cent for all steps in this proceeding is justified.

[29]   Accordingly, an award of increased costs amounting to $31,458.37 plus disbursements of $296.00 is to be made.

Result

[30]   The application by EPA for an award of increased costs and disbursements here succeeds. Indemnity costs however, for the reasons outlined above, are refused.

[31]   An order is made that GDL is to pay to EPA increased costs on this proceeding on a category 2B scale basis plus 50 per cent totalling a final costs figure of

$31,458.37, together with disbursements of $296.00.

Gendall J

Solicitors:

LeeSalmonLong, Auckland for Applicant Buddle Findlay, Wellington for Respondent