JD and Rd Wallace Limited Partnership v Waipa District Council
[2023] NZHC 1895
•20 July 2023
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2022-419-287
[2023] NZHC 1895
BETWEEN J D and R D WALLACE LIMITED PARTNERSHIP
First ApplicantMARY ELIZABETH WALLACE
Second ApplicantAND
WAIPA DISTRICT COUNCIL
Respondent
GDP ORCHARDS LIMITED
Consent Applicant
Hearing: On the papers Counsel:
P Lang for the Applicants
K Cornegé for the Respondent
Judgment:
20 July 2023
JUDGMENT OF ASSOCIATE JUDGE BRITTAIN
This judgment was delivered by me on 20 July 2023 at 12.00 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors/Counsel:
Harkness Henry & Co, Hamilton Tompkins Wake, Hamilton
Riverbank Chambers, Hamilton
Victoria Legal Chambers, Hamilton
WALLACE LIMITED PARTNERSHIP v WAIPA DISTRICT COUNCIL [2023] NZHC 1895 [20 July 2023]
Introduction
[1] JD and RD Wallace Limited Partnership and Mary Wallace (the applicants) own properties on Turkington Road, to the west of Cambridge. They took issue with an application made by the owner of an adjacent property (the consent applicant) for a resource consent required for the development of a kiwifruit orchard.
[2] On 16 August 2022, the Waipa District Council (the Council), by its Commissioner, decided that the application for resource consent did not require notification and granted the application for resource consent (the decisions).
[3] On 30 September 2022, the applicants filed a statement of claim commencing this proceeding, seeking judicial review of the decisions. The applicants discontinued this proceeding on 18 May 2023. The issue of costs remains to be resolved.
Background
[4] The application for resource consent was received by the Council on 1 July 2022. The applicants in this proceeding became aware of the application for resource consent and corresponded with the Council about it. The applicants engaged counsel to represent them.
[5] On 4 August 2022, the applicants’ counsel, Mr Lang, wrote to the Council, requesting an opportunity to make comments to the Commissioner before the Commissioner made his decision on whether the application for resource consent would be notified. The email signalled that there might be a judicial review if Mr Lang was denied an opportunity for input into the Commissioner’s decision.
[6] Mr Lang was afforded that opportunity, and on 9 August 2022 he wrote to the Council making submissions on the issue of notification. Despite Mr Lang’s submissions, the Council decided against notification and granted the application for resource consent.
[7] I have not been referred to any correspondence between the parties during the period commencing with the decisions on 16 August 2022 and ending with the applicants filing their proceeding on 30 September 2022.
[8]On 17 October 2022, Mr Lang wrote to the Council, stating:
This letter is sent as a follow up to the correspondence received from Council last week accepting the interpretation of the shelterbelt planting rule in the District Plan, as set out in my letter dated 5 October 2022.
[9]The letter went on to state:
In the absence of a resource consent for the shelterbelts, reliance on the existence of the shelterbelts in the proposed locations had no justification. That was a reviewable error in the process of making decisions on notification and making the decision to grant the resource consent. That ground of review is included at paragraph 22(d) of the Statement of Claim.
[10]The letter requested that the Council concede that the decisions were invalid.
[11] On 1 November 2022, the consent applicant lodged a second application for a replacement resource consent, which had some revisions to the proposal and included an application for consent for the shelterbelts.
[12] On 2 November 2022, the Council’s solicitors, Tompkins Wake, wrote to Mr Lang. The letter confirmed that the Council had received an amended application for resource consent, including an application for consent to plant the proposed shelterbelts. The letter stated:
Given that the amended application will supersede the application subject to review, we propose that the current proceeding be stayed until a notification decision has been made. If the outcome of the decision is the same or similar and your clients still wish to challenge it, that can be accommodated by an amended pleading and updated evidence. If the outcome of the decision is to notify or not to grant consent, the application for review can be discontinued with the question of costs determined at that point. If your clients agree with this proposal, we will prepare a joint memorandum for your consideration.
We do not agree that it makes sense to discontinue the proceeding, determine costs and then (potentially) have the proceeding recommenced after a decision has been made.
[13] Mr Lang’s reply does not appear to be in evidence, but counsel for the Council advised me that the applicants did not agree to the proposed stay, and gave notice that they intended to oppose an application for a stay. The Council did not apply for a stay.
[14] On 22 November 2022, the Council filed a defence, and the proceeding was subsequently timetabled through to a trial, scheduled for May 2023.
[15] On 27 April 2023, the Council decided not to notify the second application for resource consent, and that resource consent was granted on 12 May 2023. The consent applicant surrendered the first resource consent. The plaintiffs immediately discontinued this proceeding.
Legal principles
[16] The principles governing the Court’s discretion to award costs are well settled. The discretion is not unfettered. It is qualified by the specific rules as to costs set out in rr 14.2–14.10 of the High Court Rules 2016 (HCR), and is exercisable only in situations that are not contemplated by those specific rules, or which are not fairly recognised by them.1
[17] The costs regime is of a regulatory character, and it is important that its integrity is maintained. There is a strong implication that the Court is to apply the regime in the absence of some reason to the contrary.2 Any departure must be a considered and particularised exercise of the discretion.3
[18]Rule 15.23 of the HCR provides:
Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.
1 Smith v Smith [2020] NZCA 556 at [66].
2 Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 (CA) at [27].
3 Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [28].
[19] In Earthquake Commission v Whiting,4 the Court of Appeal set out the principles to be applied when considering costs following discontinuance of a proceeding by a plaintiff:
[68] It is accepted that there is an onus on the plaintiff to persuade the Court to exercise its discretion. In deciding whether it is just and equitable to exercise the discretion, the Court may consider the parties' conduct in the matter and the reasonableness of the parties' respective stances, including the reasons why the plaintiff brought and continued the proceeding and the defendant opposed it.
[69]Courts have been persuaded to exercise the discretion when:
(a)the defendant's acts or omissions have caused the litigation and then rendered it unnecessary; and
(b)an intervening governmental or third party decision has rendered the proceeding redundant.
(footnotes omitted)
[20] This Court has previously been prepared to exercise its discretion on costs in favour of a plaintiff seeking judicial review in cases where the plaintiff had discontinued after a party surrendered a resource consent,5 and where a Council changed its development contribution policy in a way that achieved the same outcome as sought in judicial review proceedings.6 Each case turns on its own facts.
[21] Both parties now submit that they are entitled to costs. The applicants seek costs as the successful parties, including an uplift because of the Council’s conduct. The Council submits that it is the successful party because the applicants discontinued their claim.
[22] Rule 14.6 of the HCR sets out the grounds for an award of increased costs or indemnity costs. Grounds for an award of increased costs include situations where:
(a)a party has failed, without reasonable justification, to accept a legal argument;7
4 Earthquake Commission v Whiting [2015] NZCA 144, (2015) 23 PRNZ 411 at [68].
5 Eagles View Queenstown Ltd v Queenstown Lakes District Council [2020] NZHC 2282.
6 Carmel College Auckland Ltd v North Shore City Council HC Auckland CIV-2007-404-5894, 20 January 2009.
7 Rule 14.6(3)(b)(iii).
(b)a party has failed, without reasonable justification, to accept an offer of settlement;8 or
(c)where 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.9
[23]Grounds that may support an award of indemnity costs include where:
(a)a party has acted improperly or unnecessarily in defending a proceeding;10 or
(b)where 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.11
[24] Rule 14.7 sets out the grounds for a refusal of, or reduction in, costs, including where:
(a)a party has contributed unnecessarily to the time or expense of the proceeding by failing, without reasonable justification, to accept an offer of settlement;12 or
(b)where some other reason exists which justifies the Court making an order for reduced costs despite the principle that the determination of costs should be predictable and expeditious.13
8 Rule 14.6(3)(b)(v).
9 Rule 14.6(3)(d).
10 Rule 14.6(4)(a).
11 Rule 14.6(4)(f).
12 Rule 14.7(f)(v).
13 Rule 14.7(g).
Discussion
[25] The statement of claim alleged 22 errors made by the Council in making the decisions. It is not practical nor appropriate to consider the merits of all the alleged errors in the context of an application for costs.
[26] Counsel for the applicants submitted that the absence of a resource consent for the shelterbelts was the clearest and most important of the errors. Council has not conceded its decisions were amenable to judicial review. However, the fact that the consent applicant made an amended application which included an application for consent for the shelterbelts, as well as the fact that this application was subsequently granted, invites the inference that the failure to address this issue in the first application for resource consent was an error.
[27] When the Council accepted and granted the second application for resource consent, it effectively gave the applicants the relief they were seeking in their statement of claim: the decisions were effectively set aside.
[28] I find that the applicants are prima facie entitled to costs as the successful parties. The issue is whether the costs award should be increased under r 14.6 or reduced under r 14.7?
[29] I have not been made aware of any evidence that the Council took any steps before the applicants issued their proceeding on 5 October 2022 which would justify a finding that it was unreasonable for the plaintiffs to commence the proceeding.
[30] The exchange of correspondence between the parties’ lawyers on 17 October 2022 and 2 November 2022 is significant when assessing the reasonableness of both parties’ decision to continue with the litigation after 17 October 2023.
[31] From 17 October 2022, the Council was well aware of the applicants’ argument that the council had failed to recognise and take into account the fact that the consent applicants required a resource consent for the shelterbelts.
[32] The Council responded suggesting a stay of the proceeding until the second application for resource was determined, including a tacit acknowledgement that the applicants might be entitled to costs for steps in the proceeding up to that date.
[33] In my view, the parties share equal responsibility for the continuation of the litigation beyond 2 November 2022. It was open to the Council to expressly acknowledge that an error had been made when the decisions were made. It was open to the applicants to agree to a stay of the proceeding until the second application for resource consent was determined. Costs after 17 October 2022 should lie where they fall.
[34] Accordingly, the applicants are entitled to costs at the category 2B daily rate of $2,390 for the following steps in the proceeding up until 2 November 2022:
(a)commencing the proceeding (three days);
(b)50 per cent of the allowance for preparing affidavits, as claimed (one day); and
(c)preparing for the first case management conference (0.4 days).
Result
[35] The respondent shall pay the applicants’ costs of $10,516, plus disbursements of $440.
Associate Judge Brittain
Solicitors:
3
1