Samnic Forest Management Ltd v Gisborne District Council
[2025] NZHC 2611
•9 September 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-1731
[2025] NZHC 2611
IN THE MATTER of an appeal under s 299 and 305 of the Resource Management Act 1991 BETWEEN
SAMNIC FOREST MANAGEMENT LIMITED
First Appellant
GAVIN FRANCIS FORTUNE
Second Appellant
SCOTT BARRY FUNNELL
Third AppellantRICHARD STEWART HAYES
Fourth AppellantContinued …
Hearing: On the papers Appearances:
F Pilditch KC and E R Harrison for Appellants A A Hopkinson and R C Zame for Respondent A C Limmer KC for First Section 301 Party
D M Fraundorfer for Second and Third Section 301 Parties
Judgment:
9 September 2025
JUDGMENT OF MACGILLIVRAY J
This judgment was delivered by me on 9 September 2025 at 10 am pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
………………
Solicitors:
Wynn Williams, Auckland ConneyLeesMorgan, Auckland Elvin & Co, Tauranga
SAMNIC FOREST MANAGEMENT LTD v FORTUNE [2025] NZHC 2611 [9 September 2025]
AND GISBORNE DISTRICT COUNCIL
Respondent
ANDMANA TAIAO TAIRĀWHITI INCORPORATED
First Section 301 Party
WOODLETT INVESTMENTS LIMITED
Second Section 301 Party
DUNCAN MACKENZIE WOODHOUSE
Third Section 301 Party
Introduction
[1] The appellants, Samnic Forest Management Ltd and its directors, Gavin Fortune, Scott Funnell, and Richard Hayes (together the Samnic parties) apply for a stay of enforcement orders made by the Environment Court on 7 July 20251 pending appeal.
[2] The enforcement orders were made following the Environment Court’s substantive decision on 18 June 2025.2
[3]The Samnic parties’ appeal is to be heard on 28 and 29 October 2025.
[4] The stay application is opposed by the respondent to the appeal, Gisborne District Council (GDC), and by Mana Taiao Tairāwhiti Inc, who have given notice of their intention to oppose under s 301 of the Resource Management Act 1991 (the RMA).
[5] The second and third parties who have applied to appear under s 301, Woodlett Investments Ltd and its director Duncan Woodhouse (together the Woodlett parties) abide the decision of the Court but generally support the GDC’s opposition.
[6]The application is declined for the reasons given below.
Background
[7] GDC applied to the Environment Court under ss 314 and 316 of the RMA for enforcement orders in relation to Samnic Forest, also known as Waingaromia Forest, which is a 940-hectare plantation pine forest located 45 kilometres north of Gisborne and 20 kilometres northwest of Tolaga Bay. The land is owned by Woodlett Investments Ltd.
[8] The Environment Court found that there were issues in the forest relating to woody debris, and water and sediment controls. These issues gave rise to adverse
1 Gisborne District Council v Woodlett Investments Ltd [2025] NZEnvC 230.
2 Gisborne District Council v Woodlett Investments Ltd [2025] NZEnvC 201.
effects on the environment which would continue without orders being made to address the problems. The orders were made jointly and severally against the Samnic parties and the Woodlett parties.
[9] The enforcement orders require the Samnic and the Woodlett parties to, among other things, cease discharging woody debris beyond the boundary of the Samnic Forest, and onto land where the debris could enter water. The orders also require Samnic and the Woodlett parties to engage a suitably qualified and experienced expert (approved in writing by GDC) to prepare a risk assessment methodology, risk assessment map and risk assessment report for Samnic Forest. The methodology, map and report were required to be provided to the GDC at later dates.
[10] The Environment Court found that Woodlett Investments Ltd, as landowner, consented to the applications for resource consent being made and to later variations. It knew or should have made itself aware of compliance issues and taken steps to ensure the issues were rectified. From late 2022, it was in sole charge of the forest and had direct maintenance responsibilities. The Environment Court found that Mr Woodhouse was aware, or should have been aware, of what was happening at the forest, as the sole director and alter ego of the company.
[11] The Environment Court found that Samnic was the manager of the forest from 2015 to the conclusion of harvest in May 2022. It held all previous and current resource consents authorising commercial forestry harvesting at the forest. The Court found that it had overall responsibility for commercial harvesting of pine trees at the forest and did not completely remediate the forest prior to relinquishing its management role in 2022.
[12] The Environment Court found that the directors of Samnic, Mr Fortune, Mr Funnell, and Mr Hayes, were all aware of or took part in decisions made in respect of the forest. The Court found that Samnic’s “hand back” of compartments or transfer of resource consents to Woodlett did not absolve it of responsibility for non-compliance with the resource consents. The Court also doubted that there was any legal basis to or transfer or partly transfer a land use consent as suggested by Samnic.
Appeals against Environment Court’s decision
[13] The issues on appeal focus on who should be responsible for meeting the cost of the remedial work, rather than whether there was a breach of the relevant provisions of the consents and RMA.
[14] The Samnic parties’ grounds of appeal are directed at whether the enforcement orders were properly made against the Samnic parties. In summary, the grounds of appeal are:
(a)whether the Environment Court wrongly rejected Samnic’s argument that it had effectively transferred the relevant resource consents to Woodlett Investments Ltd so that it should not have been subjected to orders under s 314;
(b)whether the Environment Court erred in deciding under s 319 that it was appropriate to make enforcement orders against Samnic;
(c)whether the decision to impose enforcement orders on Samnic, in circumstances where GDC had already prosecuted Samnic after it ceased harvesting activities at the forest, contravened the natural justice requirements of New Zealand Bill of Rights Act 1990; and
(d)whether the Environment Court wrongly exercised its discretion under s 319(1) to hold Samnic’s directors personally liable.
[15] Samnic’s appeal does not challenge the Environment Court’s findings on the existence of environment issues, the need for remedial work, or the nature and scope of remedial work required.
[16] The Woodlett parties’ cross-appeal is similarly limited to challenging the Environment Court’s conclusion that the respondents had the same level of responsibility for compliance issues at the forest. The Woodlett parties say the Environment Court erred by failing to apportion liability between the respondents.
Approach to applications for stay pending appeal
[17] In determining whether to grant a stay pending appeal, the Court must weigh the interests of the party or parties seeking to enforce orders against the applicant’s interest in preserving its position in case its appeal is successful. Factors to be taken into account include:3
(a)whether the appeal may be rendered nugatory by the lack of a stay;
(b)the bona fides of the applicant as to the prosecution of the appeal;
(c)whether the successful party will be injuriously affected by the stay;
(d)the effect on third parties;
(e)the novelty and importance of questions involved;
(f)the public interest in the proceeding; and
(g)the overall balance of convenience.
[18]The apparent strength of the appeal can also be relevant.4
Discussion
Will the Samnic parties’ appeal rights be rendered nugatory?
[19] The Samnic parties submit that if a stay is not granted, they will be forced to contribute to the “huge cost” of compliance pending their appeal. They say this is likely to result in the bankruptcy of the directors. Further, unlike other forms of civil litigation, they submit there is no pathway (other than what is described as a “theoretical” pathway under s 314 RMA) for them to recover contributions to the cost of compliance from the Woodlett parties if their appeal is successful.
3 Keung v GBR Investment Ltd [2010] NZCA 396, [2012] NZAR 17 at [11]; and Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [24]–[28].
4 Keung v GBR Investment Ltd, above n 3, at [11].
[20] The appellants’ evidence on this issue is slim, to say the least. Mr Funnell’s affidavit makes the bare assertion that compliance with the enforcement orders would result in bankruptcy for the Samnic directors. The Samnic parties have provided no evidence of the financial position of Samnic and its three directors. Nor have they provided any other evidence to show that having to contribute to the cost of complying with the orders pending appeal is likely to result in bankruptcy.
[21] The only evidence relating to the cost of complying with the initial steps under the enforcement order is in the affidavit of Kevin Ford filed in support of the GDC’s opposition. Mr Ford obtained a cost estimate for undertaking the risk assessment methodology, map and report. The estimate is provided by Matthew McCloy, an independent forestry engineering consultant who was engaged by the GDC to provide expert evidence in relation to the Samnic Forest enforcement order proceedings. Mr McCloy has provided the Council with a risk assessment report and risk assessment map for another plantation pine forest that was the subject of a similar enforcement order application. Mr McCloy’s estimate, which is attached to Mr Ford’s affidavit, is that the combined cost of completing the methodology, map and report is
$52,800 plus GST. That is $8,800 plus GST between each of the six liable parties.
[22] I note that the enforcement orders do not require remediation work to be carried out between now and the hearing of the appeal. Moreover, the Woodlett parties have already obtained the risk assessment methodology required. This has been submitted and approved by GDC. The only step that needs to be completed by a specified date is the submission of the risk assessment report and risk assessment map to GDC by 15 October 2025.
[23] In reply submissions, the Samnic parties say that they should not be forced to use Mr McCloy’s services. While that is undoubtedly correct, the submission misses the point. Mr McCloy’s cost estimate tends to undermine Mr Funnell’s claim that a huge outlay will be involved in complying with the enforcement orders pending the determination of the appeal. No evidence has been filed by the Samnic parties challenging the estimate or to otherwise support its contention that a “huge cost outlay” will be involved if no stay is granted.
[24] The Samnic parties also say that splitting costs six ways is “fraught” and fails to take account of the complex internal relationships between the Samnic parties themselves and a joint venture they are involved in.5 This is irrelevant to the issues I need to consider on this application. It certainly does not affect whether the appeal will be rendered nugatory or not.
[25] Further, I do not accept the appellants’ submission that unlike other forms of civil litigation, there is no pathway (other than what is described as a theoretical pathway under s 314) for the Samnic parties to seek recovery from the Woodlett parties for costs incurred in complying with the enforcement orders. Equitable contribution (including indemnity) is an available civil remedy where parties are under a joint liability to discharge a common obligation.6
[26] The fact that there may be some financial detriment or burden to the Samnic parties is not sufficient to support the conclusion that their appeal will be rendered nugatory if a stay is not granted. Remedial work under the enforcement orders cannot be scheduled and take place until after GDC has considered and approved the risk assessment map and plan, which are to be submitted by 15 October 2025. This means the bulk of the cost of compliance is likely to be incurred after the appeal is heard and determined. If their appeal is successful, the Samnic parties will be relieved of the burden of contributing to the cost of that future work.
[27] At a practical level, it is reasonable to expect parties who are jointly and severally liable to reach an agreement as to how their shared responsibility is to be discharged. In the present case, it is reasonable to expect that the Samnic and Woodlett parties would endeavour to reach an agreement on cost-sharing in relation to any steps that need to be taken before determination of the appeals. One would also expect that any agreement would provide for adjustments to cost-sharing if Samnic’s appeal succeeds. There is no evidence that the Samnic parties have attempted to reach an agreed position.
5 See Samnic Forest Management Ltd v Samnic Forest Waingaromia (No. 1) Ltd [2025] NZHC 253.
6 Hotchin v New Zealand Guardian Trust Co Ltd [2016] NZSC 24, [2016] 1 NZLR 906 at [94].
The interests of parties seeking enforcement
[28] In the context of most applications for a stay of enforcement, an important countervailing factor is the right of the respondent to have the fruits of a judgment. The Samnic parties and GDC/ Mana Taiao Tairāwhiti made competing submissions as to whether the remedial work was pressing or not.
[29] However, as the Samnic parties’ submissions recognise, a stay will not impact the timing of remediation as the Woodlett parties do not challenge their liability under enforcement orders, or the need for remediation. They simply seek an apportionment of the cost of that liability between them and the Samnic parties.
The interests of third parties
[30] The potential unfairness to the Woodlett parties is a strong factor against granting a stay.
[31] The effect of granting a stay of enforcement against the Samnic parties is that the Woodlett parties would be forced to bear the burden of compliance alone until the appeal is determined. Samnic offers no security to protect the Woodlett parties if the Samnic appeal is unsuccessful. Mr Funnell has raised an issue as to the financial means of the Samnic parties. The Samnic forest joint venture has recently been placed into receivership, on the application of the first appellant, in order to distribute a
$600,000 surplus from the Samnic forest venture.
[32] Further, if I accept the Samnic parties’ submission that there is no pathway to recover the costs of complying with the orders if their appeal succeeds, then that must also mean Woodlett could not recover from the Samnic parties if a stay is granted and the Samnic appeal fails.
[33] A possible way around this issue would be to stay the enforcement orders against both the Samnic and Woodlett parties. However, I do not consider that to be an appropriate or just course of action. The remedial work must be carried out regardless of the outcome of the appeals. Woodlett agrees with GDC and Mana Taiao Tairāwhiti that the issues in the Samnic forest should be addressed without delay to
eliminate environmental risks. There is no sufficient basis to delay progressing inevitable work simply to avoid the need for Samnic to contribute to the initial cost of doing so.
The novelty and importance of the issues involved
[34] The Samnic parties submit that the issues they raise on appeal are novel and important issues, particularly the issue of whether a consent holder can transfer consents to an underlying landowner and the impact of doing so on liability under the RMA. GDC submits that the Environment Court’s decision rests largely on factual findings as to Samnic’s non-compliance and level of responsibility rather than on findings of law.
[35] The issue of the novelty or importance of issues on appeal may weigh heavily in the balance where there is a danger that an appeal will not proceed or will be rendered nugatory if a stay is not granted. For the reasons already given, I am not persuaded that the Samnic appeal will be rendered nugatory without a stay.
Result
[36] The application for a stay is declined. If the parties cannot agree on costs, any party seeking costs should file its submissions limited to three pages (excluding schedules) within 15 working days. Memoranda in response are to be filed within a further 10 working days. The Court will then determine costs on the papers.
MacGillivray J
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