Kapiti High Voltage Coalition Incorporated v Kapiti Coast District Council

[2014] NZHC 1281

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2008-485-2723 [2014] NZHC 1281

BETWEEN

KAPITI HIGH VOLTAGE COALITION

INCORPORATED First Plaintiff

MICHAEL PHILIP ALEXANDER, BRANDON ROBERT HINDRY, JUERGEN GERHARD JENKNER Second Plaintiffs

AND

KAPITI COAST DISTRICT COUNCIL First Defendant

TRANSPOWER NEW ZEALAND LIMITED

Second Defendant

On the papers
Counsel:	G D S Taylor, L S Beecroft and R Taylor for Plaintiffs P J Reardon for First Defendant J A Knight, N S Wood and H S J Pedler for Second Defendant
Judgment:	6 June 2014

JUDGMENT OF WILLIAMS J (COSTS)

Background

[1]      I issued a judgment in this proceeding in November 2012.1    The plaintiffs’ proceeding was in public law – challenging consents and existing use rights for the second defendants, Mangahao to Paekakariki lines – and in private law, alleging that

the lines visited trespass and injurious affection on various of the plaintiffs.

1 Kapiti High Voltage Coalition Inc v Kapiti Coast District Council [2012] NZHC 2058.

KAPITI HIGH VOLTAGE COALITION INCORPORATED v KAPITI COAST DISTRICT COUNCIL [2014] NZHC 1281 [6 June 2014]

[2]      The plaintiffs succeeded to a large extent in the public law aspects of the proceeding.  I held (against the plaintiffs) that the southern part of the lines enjoyed existing use rights under the Resource Management Act 1991 (RMA) but (either by consent or after a contest) consents and compliance certificates issued by Kapiti Coast District Council (KCDC) in relation to the lines were invalid.  I further held that the portion of the line north of Waikanae enjoy existing use rights.  I left open the question  of whether  2009  electricity regulations  made the lines  a permitted activity for the purposes of the RMA because there was insufficient information for me to make such a finding.

[3]      In its trespass and injurious affection aspects, the plaintiffs’ claims largely failed.  I found there was a trespass and injurious affection at one property, but the claims were otherwise dismissed.

[4]      The plaintiffs appealed and the defendants cross-appealed to the Court of Appeal.  Those appeals have now been withdrawn, the parties having settled their differences in all matters save costs in this Court.  There was agreement between the plaintiffs and Transpower that costs in the Court of Appeal would lie where they fall.

[5]      Transpower has  decided  to  pull  up  its  lines  and  move them  to  the new Transmission Gully alignment. Transpower has agreed to remove the section of lines between Paekakariki and Paraparaumu by 30 June 2016.   Transpower has further agreed to remove most of the remainder within two years of commissioning a new substation at Paraparaumu.   This decision by Transpower rendered the plaintiffs’ appeal and its own cross-appeals moot.

[6]      The plaintiffs say this means they have won and they seek costs accordingly. The second defendant says at best the spoils were shared and costs should lie where they fall.

[7]      I have received no submission from KCDC and it does not appear that the plaintiffs seek an award of costs against that defendant.

[8]      Had matters remained as they were at the conclusion of the trial, I would have been minded to let costs lie where they fall in this Court too, because in my view the costs were roughly evenly shared.   I would have applied the dictum of Tipping J in Packing In Ltd (in liquidation) v Chilcott:2

In a case such as the present, where in broad terms each party has had similar success, we do not consider it helpful to focus too closely on the question of which party has failed and which has succeeded.  Costs in a case such as this should rather be based on the premise that approximately equal success and failure attended the efforts of both sides.  To that starting point should be added issues such as how much time was spent on each transaction or group of transactions at issue, and any other matters which can reasonably be said to bare on the Court’s ultimate discretion on the subject of costs.  In the end, as in all costs matters, a Court must endeavour to do justice to both sides, bearing in mind that all material features of the case.

[9]      So the sole question is whether Transpower’s capitulation in the appeal – apparently made for broader strategic reasons unrelated to this litigation – is relevant in making an award.  If it is, then the plaintiffs will be entitled to an award of costs at some level.   If it is not, and I am bound to approach costs on the basis of my judgment alone, then costs will necessarily be left to lie where they fall.

[10]     Transpower  argues  that  if  I  had  dealt  with  costs  immediately  after  my judgment, the only relevant consideration would have been the conduct of the parties and outcome at trial.  Transpower cites the commentary in McGechan on Procedure in relation to r 14.1.   This Transpower argues, supports its submission that post- judgment events are irrelevant except where the post-judgment event is a judgment of a superior court. The commentary is as follows:

Costs are to reflect how parties acted during litigation, not before it:  Paper

Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188, (2006) 11

TCLR 544 (CA) at [160]. Similarly, costs are not to reflect events that have occurred as a consequence of orders made in the proceeding: Diagnostic

Medlab  Ltd  v Auckland  District  Health  Board  HC Auckland  CIV-2006-

4040-4724, 13 June 2007 at [12] per Asher J.

[11]     On careful inspection neither of the cases cited addresses the point I must resolve.   In particular, the cited principle in Diagnostic Medlab relates to parties drawn into public law litigation because they have benefitted from a decision but are

not true contestants.  It relates to an entirely different point.

2 Packing In Ltd (in liquidation) v Chilcott (2003) 16 PRNZ 869 (CA) at [5].

[12]     Nor are the principles in relation to discontinuances under r 15.23 relevant. The authorities make it clear that the discontinuance rule applies only to unilateral withdrawals not settlements.3

[13]     The commentary to r 14.2 in Sim’s Court Practice is, as Mr Taylor submitted, more informative.  It provides:4

Where a claim is settled or otherwise resolved (but without agreement as to costs) the Court may consider the degree of success in deciding whether to award costs and if so, on what basis.  While the usual rule is that a plaintiff who discontinues should pay costs (r 15.23) where this follows a settlement in which the plaintiff was the successful party, costs should be decided under the usual principles.

[14]     Morris Crock Ltd v Cycletreads Ltd is an example of Associate Judge Abbott applying that principle in allocating costs in a case that settled before judgment.5

But neither the cases nor the commentaries deal with the circumstances in which the parties find themselves here – viz, the settlement of an appeal on terms different and more favourable to one party than the first instance judgment had allowed.  Counsel have not cited any authorities that provide direct assistance on that question.

[15]     Mr Taylor referred me to the decision of the Court of Appeal in Minister for Canterbury  Earthquake  Recovery  v  Fowler  Developments  in  which  the  Court allowed an unsuccessful respondent its costs because the High Court’s legality conclusions had been upheld.  I think the circumstances in that case are rather too different to be directly useful here.6

[16]    The matter must therefore fall to be resolved on a first principle basis. Considerations in favour of an award of costs are that the plaintiffs have in substance succeeded in their litigation aims in the only sense that really matters: that is if Transpower had made the decision to pull the lines in 2012, the proceedings would not have continued.  On the other hand, there is an argument that the courts should

be slow to penalise a party that decides for reasons unrelated to the litigation, to

3 Uttinger v Basecity New Zealand Ltd [2008] NZCA 330 at [11] and Peters v Peters [2013] NZHC 1060 at [11].

4 Sim’s Court Practice HCR 14.2.6.

5 Morris Crock Ltd v Cycletreads Ltd HC Auckland CIV-2004-404-4764, 5 December 2005.

6 Minister for Canterbury Earthquake Recovery v Fowler Developments [2013] NZCA 588.

settle.   There will sometimes be commercial reasons for this, perhaps reasons of public pressure or, as in this case, the fact that a better alternative has arisen as a result of other circumstances.

[17]     Such settlements will avoid unnecessary expense and conflict for all parties. The courts should be relatively slow to disincentivise them.   On the contrary, the value of certainty and predictability now built into the costs regime favours reliance on the last judicial statement.

[18]     Stepping back and looking at the matter as a whole, it is my view there is some merit in both sides here.  The fact is, Transpower has conceded the case and that should be reflected in costs in some way.   On the other hand, the reasons for settlement  can  hardly be ignored  anymore than  can  the  extant  judgment.    It  is therefore appropriate to make an order for costs, but substantially reduced.

[19]     I start from the proposition that costs would have been left to lay where they fell but for the later settlement.   The settlement renders irrelevant potentially diminishing factors such as the 2010 Calderbank offer and the fact that the plaintiffs pursued causes of action upon which they did not and (in the case of the plaintiff Jenkner) could not have succeeded in. The fact is, in the settlement, the plaintiffs did succeed.

[20]     I allow the plaintiffs 25 per cent of scale costs on a Band B basis, together with  25 per  cent  of  disbursements.    That  is,  adopting  Mr  Wood’s  arithmetic,

25 per cent of the product of $52,264 and $34,966.62.

Williams J