New Zealand Motor Caravan Association Incorporated v Queenstown Lakes District Council

[2022] NZHC 425

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2021-425-18

[2022] NZHC 425

UNDER

the Judicial Review Procedure Act 2016

IN THE MATTER

of an application for review of a decision to adopt the Freedom Camping Bylaw 2019

BETWEEN

NEW ZEALAND MOTOR CARAVAN ASSOCIATION INCORPORATED

Applicant

AND

QUEENSTOWN LAKES DISTRICT COUNCIL

Respondent

Appearances:

P J Page for Applicant (respondent on costs)

A H Balme and J K Stringer for Respondent (applicant for costs)

Judgment:

10 March 2022

(Determined on the papers)

JUDGMENT OF OSBORNE J

(costs)

This judgment was delivered by me on 10 March 2022 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

NEW ZEALAND MOTOR CARAVAN ASSOCIATION INCORPORATED v QUEENSTOWN LAKES DISTRICT COUNCIL [2022] NZHC 425 [10 March 2022]

[1]                 The respondent, Queenstown Lakes District Council (QLDC), seeks the costs and disbursements of this proceeding after the applicant, New Zealand Motor Caravan Association Inc (the Association), discontinued this judicial review proceeding.

[2]                 The parties accepted that the costs and disbursements of the proceeding, if amended, should be fixed on a 2B1 basis.

[3]                 The issue for determination in this judgment is whether there should be an order that such costs be paid and paid now. An alternative, suggested by the Association, would be that the incidence of costs be reserved to be determined in a fresh proceeding which the Association may file.

Costs — the principles

[4]All matters relating to costs are at the discretion of the Court.2

[5]                 Rule 15.23 High Court Rules 2016, a particular costs rule for discontinued proceedings, provides:

15.23   Costs

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.

[6]                 Principles relevant to r 15.23 have been established in a number of leading cases.3 The commentary in McGechan on Procedure accurately summarises the principles which emerge from the case law.4

(a)The r 15.23 presumption obviates any requirement for the defendant to demonstrate that the plaintiff acted unreasonably in commencing and then discontinuing the proceeding. The defendant has the advantage of the presumption even where there has not been such unreasonableness.

1      High Court Rules 2016, Category 2 under r 14.3(1) and band B under r 14.5(2).

2      High Court Rules, r 14.1.

3      Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973; FM Custodians Ltd v Pati [2012] NZHC 1902 at [10]–[12]; and Opus International Consultants Ltd v Colac Bay Vision Ltd [2015] NZHC 1782, [2015] NZCCLR 19 at [20]–[24].

4      Andrew Beck and others (eds) McGechan on Procedure (online ed, Thomson Reuters) at [HR15.23.01].

(b)Although the r 15.23 presumption is designed to give a certain and predictable outcome upon discontinuance, it may be displaced if the court finds there are circumstances which make it just and equitable that it should not apply.

(c)Although the court is not limited in the factors it may take into account when considering whether the presumption is displaced, generally:

(i)The court will not consider the merits of the respective cases, unless they are so obvious that they should influence the costs outcome.

(ii)The court will consider the reasonableness of the stance of both parties up to the point of discontinuance: whether it was reasonable for the plaintiff to bring and continue the proceeding; and for the defendant to oppose the proceeding. The plaintiff will not be able to avoid the presumption by showing that at one point it had reasonable grounds for believing it would be successful in the proceeding.

(iii)The reason for discontinuing may be relevant, for example a change of circumstances rendering the proceeding unnecessary. However, it must be clear that the plaintiff would have succeeded had the circumstances (in this case new legislation) not changed: The Star Trust v Hamilton City Council.5

…

The discontinued proceeding

[7]                 The Association attacked a decision of QLDC made in December 2019 (the decision) by which QLDC adopted a bylaw (the 2019 bylaw) purportedly pursuant to the Freedom Camping Act 2011 (the Act). By the Association’s statement of claim, it asserted four causes of action (ultra vires, repugnancy, failure to consider relevant matters and consideration of irrelevant matters).

[8]                 In its particularised grounds, the Association alleged numerous failures and errors, including a failure to undertake site assessments. In that regard, the Association made repeated reference to threshold requirements under s 11(2) of the Act, which it asserted QLDC had failed to comply with.

[9]                 Subsequently, in December 2021, in New Zealand Motor Caravan Association Inc v Marlborough District Council (the Marlborough District Council case), the High

5      The Star Trust v Hamilton City Council [2016] NZHC 821 at [10].

Court upheld the Association’s application for review of a freedom camping bylaw adopted by the Marlborough District Council in 2020.6 Amongst other findings, the Court was not satisfied that the Marlborough District Council considered all areas of the district as required under s 11(2) of the Act.7 The Court considered the appropriate relief was to set aside of the decision leading to the adoption of the 2020 bylaw.8

[10]             In the course of the case management of this proceeding, counsel for the Association referred to the Marlborough District Council case as awaiting a hearing, the outcome of which might provide relevant guidance on freedom camping bylaws.

[11]             From November 2020, QLDC indicated to the Association that the 2019 bylaw would likely be replaced through a 2021 bylaw review (but without a firm indication as to the likelihood of the 2019 bylaw being revoked). The 2021 bylaw review was subsequently conducted, culminating in a QLDC decision in December 2021 to revoke the 2019 bylaw and replace it with a new (2021) bylaw.

[12]             In the meantime this proceeding was scheduled for a hearing in February 2022 and the completion of evidence was directed. QLDC filed its extensive evidence in September 2021.

[13]             By October 2021, the Association had to come to the view that it would be futile to proceed with the February 2022 hearing if the 2019 bylaw were revoked and replaced by a new bylaw, which seemed likely to be considered at a QLDC meeting in December 2021 (as it transpired was the case).

[14]             The Court declined to vacate the fixture, leaving the Association to decide whether to discontinue the proceeding once QLDC’s December 2021 decision was known. The Court subsequently, once QLDC’s December 2021 decision was made, refused the Association leave to amend its statement of claim in this proceeding (so as to encompass the new 2021 bylaw), leaving the Association to commence a fresh review proceeding if it wished to do so.

6      New Zealand Motor Caravan Association Inc v Marlborough District Council [2021] NZHC 3157.

7 At [190].

8 At [204].

[15]To date no proceeding has been commenced in relation to the 2021 bylaw.

Discussion

[16]             The event that most significantly affects the appropriate costs outcome in this case is the 16 December 2021 replacement of QLDC’s 2019 bylaw by the 2021 bylaw.

[17]             Counsel for QLDC place substantial reliance on the general rule that the Court, in considering costs on a discontinuance, does not consider the merits of the respective cases (unless they are so obvious that they should influence the costs outcome).9 Here, the extent of issues raised in the Association’s statement of claim means it is not possible to comprehensively test the merits of the discontinued proceeding. But there are two particular matters which properly inform the decision on costs and guide the assessment of what is just and equitable.

[18]             First, this proceeding was rendered nugatory as a byproduct of QLDC’s decision to pursue and pass a replacement bylaw.10 That occurred on 16 December 2021 when QLDC made its 2021 bylaw decision, nine months after the Association commenced this proceeding in March 2021.

[19]             Secondly, even in the absence of a substantive consideration of the Association’s application, it is clear the process adopted by QLDC in its preparation of a replacement bylaw was designed in part to address the need for site assessments to inform a bylaw. This was one of the very matters (by reference to s 11(2) of the Act) identified by the Association in its statement of claim and subsequently recognised in the Marlborough District Council case as a statutory requirement (that is, as evidence the Council had turned its mind to and satisfied the requirements under s 11(2)). It can be said, at the very least, the failure to carry out site assessments in relation to the 2019 bylaw was a very strong ground of review.

[20]             On this basis, I am satisfied it would be just and equitable to depart from the default rule under r 15.23 High Court Rules.

9      FM Custodians Ltd v Pati, above n 3, at [11].

10     See Olive Francis Retirement Home Ltd v Director-General of Health HC Auckland CIV-2005- 404-1367, 13 July 2005 at [17].

[21]             For QLDC, it was submitted that the Court should nevertheless take into account the fact the Association decided to maintain its challenge to the 2019 bylaw despite knowing since November 2020 that the bylaw “would likely be replaced”. As a result of that decision, QLDC was required to prepare a substantial volume of evidence that will no longer be relevant in any fresh litigation in relation to the new bylaw, beyond providing mere background.

[22]             For the Association, Mr Page emphasised that the outcome of QLDC’s bylaw review remained fluid throughout 2021. Indeed, in the Agenda Report for the 16 December 2021 QLDC meeting, two of the four identified options involved retaining the challenged 2019 bylaw unchanged.

[23]             The Association’s members were affected by (and required to strictly observe) the requirements of the 2019 bylaw while it remained in force. That would have continued to be the case through into 2022 had QLDC decided in December 2021 to retain the 2019 bylaw.

[24]             In these circumstances, it does not count against the Association in a costs context that it insisted on a case management of this proceeding that would have had the proceeding ready for its allocated hearing date of 21 February 2022 (had the 2019 bylaw remained in force).

[25]             It would be unjust to require the Association to pay QLDC’s costs and disbursements.

Order

[26]There is no order as to the costs and disbursements of this proceeding.

Osborne J

Solicitors:

Gallaway Cook Allan, Dunedin

Wynn Williams, Christchurch