Official Bay Heritage Protection Society Incorporated v Auckland City Council HC Auckland CIV 2006-404-5947

[2007] NZHC 2088

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2006-404-005947

BETWEEN  OFFICIAL BAY HERITAGE PROTECTION SOCIETY INCORPORATED

Plaintiff

ANDAUCKLAND CITY COUNCIL First Defendant

ANDPERRON CENTRAL LIMITED Second Defendant

Hearing:         On the papers

Counsel:         DA Kirkpatrick for Plaintiff

DA Nolan for Second Defendant

Judgment:      31 August 2007 at 10.00 a.m.

JUDGMENT OF RODNEY HANSEN J As to costs

This judgment was delivered by me on 31 August 2007 at 10.00 a.m., pursuant to Rule 540(4) of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors:           Holmes Dangen & Associates, P O Box 3600, Auckland for Plaintiff

Russell McVeagh, P O Box 8, Auckland for Second Defendant

OFFICIAL BAY HERITAGE PROTECTION SOCIETY INCORPORATED V AUCKLAND CITY COUNCIL AND ANOR HC AK CIV 2006-404-005947  31 August 2007

[1]      In a judgment delivered on 16 July 2007, I dismissed the application by the plaintiff (the Society) to review the decision of the first defendant (the Council) consenting to the construction of an apartment building by the second defendant (Perron) in central Auckland.  I invited the parties to file memoranda as to costs.

[2]      Perron  have  sought  an  award  of  costs  in  the  sum  of  $100,000,  expert witnesses’ expenses of $14,880.36 and disbursements of $1,557.01.   The Council does not seek an order for costs.

[3]      The Society acknowledges liability for scale costs on a Category 2 Band B basis, although it takes issue with the amount claimed by Perron.  It also takes issue with Perron’s claim for witnesses’ expenses and the quantum of disbursements.

[4]      Having regard to the approach to a determination of increased costs mandated in Holdfast NZ Limited v Selleys Pty Limited (2005) 17 PRNZ 897, the following issues arise for consideration:

a)        The amount of scale costs.

b)       Whether there is a case for increased costs. c)  Whether expert witness fees are payable.

d)       The amount of disbursements.

Scale costs

[5]      There is agreement that the applicable scale is Category 2 Band B.  Subject to a consideration of the public interest element in the litigation (which I will consider separately), the Society agrees to scale costs at the 2B level totalling $21,440.   It disputes Perron’s claim of $1,600 for second counsel.

[6]      Perron submits that the attendance of second counsel was necessary and appropriate because the Society did not confine its case to narrow legal issues but put in issue whether the Council had  given  adequate  consideration  to  the  Society’s concerns.

[7]      Notwithstanding  that  considerable  affidavit  evidence  was  filed,  I  do  not accept that the presence of second counsel at the hearing was necessary.  There was no cross-examination.   The entire hearing was taken up by submissions of senior counsel.  The Society’s counsel appeared without a junior.  Much and all as it might have been convenient for second counsel to appear, it was not necessary.  It is not a cost the Society should be required to meet.

Increased costs

[8]      Perron rely on four matters as justifying an award of increased costs:

a)       The Society’s case lacked merit from the outset.  There is reliance on the observation in my judgment at [40] that:

Within  the  constraints  imposed  by  the  Operative  District Plan, the Council did everything it reasonably could to enquire into and have regard to the concerns of the Society.

b)       The Society’s case had no prospect of success.

c)       All  attempts  by  Perron  to  settle  differences  between  the  parties amicably have been rebuffed by the Society.

d)Perron has incurred legal costs substantially in excess of scale as well as holding and other costs as a result of the delay in commencing construction of the building.

[9]      None of the matters relied on by Perron provide grounds for an award of increased costs.  I do not accept that the case lacked merit.  The observation I made in [40] of my judgment was not directed to the primary grounds of review.  The case turned on whether the Council had complied with the Operative District Plan.  While

I found against the Society on the two issues of interpretation relied on by the

Society, I did not find the arguments devoid of merit.

[10]     I was given no information which would permit me to find that, in terms of r 48C(3)(b)(v), the Society failed, without reasonable justification, to accept an offer of settlement.  The fourth ground relied on - the costs actually incurred by Perron - is irrelevant save for the purpose of ensuring that an award does not exceed costs actually incurred – Glaister v Amalgamated Dairies Limited [2004] 2 NZLR 606; (2004) 16 PRNZ 1047 at [14].

Expert witnesses

[11]     Perron seeks to recover the costs of adducing the evidence of three expert witnesses who swore affidavits in opposition to the application.  They were:

a)       Alexandra Findlay, a planning consultant.  She had been retained by Perron  to  advise on  planning issues  when  the  initial  consent  was obtained.   Her affidavit outlined the consent process, explained the matters she took into account in assessing the proposal on behalf of Perron and expressed her opinion on the interpretation of the key plan provisions from the town planning perspective.   She reiterated her view that the development is an appropriate response to the local environment and no parties will be adversely affected by it.

b)David  Pearson,  a  registered  architect  specialising  in  the  field  of heritage architecture.  He had also been retained by Perron during the planning process to advise on heritage issues and submitted a report to counsel.    In  his  affidavit  he  reviewed  the  evidence  available  to counsel, commented on the Society’s contentions and concluded that the development would have no more than  a minor effect on the heritage values in the vicinity.

c)       Andrew  Patterson,  the  architect  who  designed  the  building.    He explained how throughout the design process he made a deliberate

attempt to respond to the heritage aspects of buildings in the locality. He  agreed  with  Mr  Pearson  that  there  is  little,  if  any,  heritage character to the immediate surroundings of the site and no adverse effects that needed to be mitigated.  He maintained, however, that his design was respectful to neighbouring buildings and fitted within its surroundings “without belying its place in true history”.

[12]     The expert evidence had only peripheral relevance to the key issues I was ultimately asked to determine.  As Mr Kirkpatrick says, an examination of the way in which a statutory power of decision has been exercised, must be carried out by reference to the information available to the decisionmaker.   Additional evidence, particularly evidence which merely repeats what is in the record, is unlikely to be helpful.

[13]     The Society, nevertheless, itself filed an affidavit by an architect specialising in heritage assessment, Graeme Burgess.  He carried out a detailed evaluation of the heritage effects of the proposed building.  He said that the proposed development did not respect its heritage neighbours and would irreversibly change the physical conditions by deeply shading them.  This would cause deterioration and an increased need for maintenance.

[14]     Mr Kirkpatrick says the Society filed the affidavit by Mr Burgess to show there was a factual basis for its allegations.  I am not sure that I fully understand this submission and, as Perron must have been in some doubt as to how the evidence was to be used, I think it was entitled to file evidence in response.   I consider the evidence of Ms Findlay and Mr Pearson sufficed for that purpose.  I am prepared to accept, in terms of r 48H(2), that their evidence was specific to and necessary for the conduct of the proceeding and, in the absence of any suggestion to the contrary, the costs reasonable.

[15]     The evidence of Mr Patterson is in a different category.  As the designer of the building he could hardly qualify as an independent expert.  He did not profess particular expertise in heritage issues.   The costs of adducing his evidence was, moreover, very high by comparison to the costs of Ms Findlay and Mr Pearson

($10,642.50 compared to the fees of Ms Findlay and Mr Pearson of $1,987.86 and

$2,250 respectively).   In my opinion, Mr Patterson’s evidence does not satisfy the criteria in r 48H(2).

[16]     The actual costs of expert witnesses are recoverably provided they satisfy the criteria in r 48H(2): Air New Zealand Limited v Qantas [2007] 2 NZLR 494 (CA) at [64]. The fees of Ms Findlay and Mr Pearson are recoverable in full.

Disbursements

[17]     Perron claims Court filing fees of $890, photocopying costs of $550 and courier expenses of $115.  The Society accepts that filing fees are recoverable but complains that Perron has not substantiated expenses claimed under the other two heads.

[18]     I award filing fees of $890 and photocopying costs and courier expenses to be fixed by the Registrar in the event that the parties cannot agree on quantum.

Discretion

[19]     Mr Kirkpatrick, for the Society, asks me to take into account in the exercise of my discretion when fixing costs that the Society did not make the application for personal  gain  but  as  a  special  interest  group  protective  of  a  wider  community interest.    In  a  judgment  I gave  fixing  security  for  costs  (26  February 2007),  I accepted that there was a public interest to be served in the proceeding.   I said at [20]:

I accept that there is a public interest element in the litigation deriving both from the laudable goal of preserving (or at least not detracting from) heritage buildings  and  localities  in  Auckland  and  in  ensuring  that  the  Council correctly applies its District Plan and discharges its obligations under the Resource Management Act.

[20]     I then went on to say:

[21]     On the other hand, there are also private interests served by the litigation.     The  Society’s  membership  comprises  property  owners  or residents who have a pecuniary or other personal interest in the outcome of the litigation.   They see the proposed development as detrimental to their neighbourhood and their ultimate goal, I infer, is to achieve something which is more sympathetic to the built environment in the area.   This weighs in favour of requiring members to contribute more than a nominal amount to the costs of Perron if their challenge is successful.

[21]     In the circumstances, where the private interests of members of the Society are at least incidentally advanced by the litigation, I do not see the element of public interest as a sufficient reason to depart from the general principles that the party who fails should pay costs to the party who succeeds and that, so far as possible, the determination of costs should be predictable and expeditious: r 47(a) and (g).  I am satisfied that an award of scale costs accords with the spirit and intent of the Rules.

Result

[22]     The Society must pay costs of $21,440, witnesses’ expenses of $4,237.86 and disbursements in accordance with [18] of this judgment.