Southland Fish and Game Council v Southland Regional Council
[2023] NZHC 1741
•5 July 2023
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2022-425-61
[2023] NZHC 1741
BETWEEN SOUTHLAND FISH AND GAME COUNCIL
ApplicantROYAL FOREST AND BIRD PROTECTION SOCIETY OF NEW ZEALAND INC
ApplicantAND
SOUTHLAND REGIONAL COUNCIL
First Respondent
WAITUNA CONTROL ASSOCIATION INC
Second Respondent
Hearing: (Dealt with on the papers) Appearances:
S R Gepp and L S B Acland for Applicants M J Doesburg for First Respondent
P J Page and G P Griffin for Second Respondent
Judgment:
5 July 2023
JUDGMENT OF EATON J
[As to costs]
This judgment was delivered by me on 5 July 2023 at 4 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
SOUTHLAND FISH AND GAME COUNCIL v SOUTHLAND REGIONAL COUNCIL [2023] NZHC 1741 [5
July 2023]
Introduction
[1] On 21 September 2022, the applicants filed a statement of claim for judicial review of decisions made by the first respondent under ss 88 and 124 of the Resource Management Act 1991 (the Act).
[2] Statements of defence were filed by both respondents. Initial disclosure was provided by the parties, and the applicants filed replies to affirmative defences raised. Evidence was filed on behalf of the applicants and the first respondent. A case management conference was scheduled. Time tabling directions were made on the papers. On 17 March 2023, a notice of discontinuance was filed.
[3] The parties have been unable to agree as to costs. Costs memoranda have been filed. The applicants seek costs of $15,774 and disbursements of $10,874. The first respondent seeks costs of $11,472 and disbursements of $110. The second respondent seeks costs of $12,906 and disbursements of $110.
Background
[4] The Waituna Lagoon (the lagoon) is part of the Awarua Wetlands. Previously the lagoon has periodically been opened to the sea to drain farmland. The second respondent held a resource consent to open the lagoon at two locations. That consent expired on 14 February 2022. The second respondent applied for a replacement consent to enable drainage of farmland and manage water and fish (the application). The first respondent accepted the application, as pertaining to a non-complying activity, under s 88 of the Act and decided, under s 124(2)(e), to allow the second respondent to continue operating in reliance on the expired consent pending the determination of the new application.
[5] The applicants considered this decision to be unlawful in light of new regulations and, following an exchange of correspondence on the point and provision of a draft statement of claim, on 21 September 2022, filed the application for judicial review. The applicants alleged the decisions of the first respondent to accept the application for a replacement resource consent and to allow the second respondent to continue to operate in reliance on the expired consent were ultra vires as the
application was for a prohibited activity. The respondents’ position was that the lagoon was not a natural wetland for the purposes of the new regulations and that the activities were not “earthworks, land disturbance and diversion of water.”
[6] On 13 March 2023, the second respondent advised it had withdrawn the application following discussions held with Environment Southland, the Department of Conservation (DOC) and Te Rūnaka o Awarua regarding an application made by DOC/Te Rūnaka (the third party application) some three months prior to the application made by the second respondent. The second respondent had advised the applicants these talks were taking place and, two days prior to the proceedings being issued, asked that the proceedings be delayed while those discussions continued.
[7]The judicial review proceedings were discontinued on 17 March 2023.
Legal principles
[8]Rule 15.23 of the High Court Rules 2016 provides that:
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.
[9] Under this rule, the default position is that the applicant must pay the costs to a respondent upon discontinuance. An exception is if the respondents agree otherwise, or the Court orders otherwise. The respondents do not agree, and so the Court must determine whether the applicant has discharged the onus of persuading the Court to exercise its discretion in its favour.1 In exercising my discretion, I apply the principles as set out in McGechan on Procedure:2
HR15.23.01 Principles
The following emerge from 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]:
1 Earthquake Commission v Whiting [2015] NZCA 144, (2015) 23 PRNZ 411 at [68].
2 RA Osborne and others McGechan on Procedure (online ed, Westlaw NZ) at [HR15.23.01].
(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.
(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 [2016] NZHC 821 at [10].
(d)The court’s general discretion in r 14.1 as to costs can also override the general principles relating to discontinuance.
In FM Custodians Ltd v Pati [2012] NZHC 1902 at [11](c), Associate Judge Abbott (citing Australian authorities) added that pre-commencement conduct may be relevant (for example, if the defendant’s conduct precipitated the litigation). However, the law may be unsettled as to whether pre- commencement conduct may be taken into account – see [HR14.1.03 – 04].
The established principles also apply to proceedings in the Earthquake List:
Yarrall v Earthquake Commission [2016] NZCA 517, (2016) 23 PRNZ 765,at [12].
Submissions
Applicants
[10]The applicants submit the presumption in r 15.23 is displaced because:
(a)they have achieved the outcome sought by the application for judicial review;
(b)they acted reasonably in commencing the proceeding;
(c)the disbursements are reasonable and properly incurred in response to the defences raised; and
(d)the proceedings were properly discontinued once the decision at issue became moot.
[11] The applicants submit that the presumption against costs may be displaced where there are circumstances making it just and equitable to do so. It is submitted this includes the scenario where the respondents in a proceeding implement a change or otherwise act in a manner that renders the proceedings unnecessary.3
[12] Ms Gepp, on behalf of the applicants, contends the applicants achieved their desired outcome with the second respondent’s application being withdrawn. That application would have permitted drainage at a lower level than would have occurred if drainage was only for wetland restoration. The third party application has the primary purpose of wetland restoration. While acknowledging that the merits of the case are not so one-sided as to influence the Court’s assessment, Ms Gepp refers to the issues raised in the proceedings with a view to justifying the engagement of expert evidence. She points to the lack of evidence offered by the second respondent and argues some of the positive defences pleaded by the respondents were “entirely misplaced”, necessitating a reply and incurring cost. Ms Gepp submits the merits of the case favoured the applicants.
[13] The applicants do not accept the reasons advanced by the second respondent for withdrawing its application and criticise the second respondent for allowing the applicants to incur the significant costs of the proceeding while it was negotiating with the third parties to ensure its own goals could be incorporated within that application.
3 Citing Carmel College Auckland Ltd v North Shore City Council HC Auckland CIV-2007-404- 5894, 20 January 2009 at [19]; and Earthquake Commission v Whiting, above n 1, at [73].
[14] Ms Gepp does not accept it was more appropriate for these issues to be resolved at either Council or Environment Court hearings. She says the applicants were not kept abreast of the second respondent’s discussions with other parties between September 2022 and March 2023 and were not aware that those discussions could lead to the withdrawal of the second respondent’s application. She submits the failure to communicate openly was a contributing factor to the level of costs incurred.
The first respondent
[15] Mr Doesburg, on behalf of the first respondent, submits this is not a case where costs are appropriately awarded to a discontinuing party. He highlights this is not a case where a decision was made by the respondent Council which rendered the claim moot, or, where the respondent Council’s decision was tantamount to an admission of fault. Rather, Mr Doesburg submits the applicants have not succeeded on the substance of their claim as the second respondent’s withdrawal of the application was independent of the judicial review proceedings. He says the first respondent did not take action that caused the claim to be moot. He denies the first respondent’s decisions were in error. Mr Doesburg contends that it was reasonable for the first respondent to defend the application and that the applicants had appropriate and lawful remedies through the Environment Court. He queries the decision of the applicants to brief extensive expert evidence, given that judicial review proceedings ought to typically proceed on the basis of material that was available to the decision-maker.4
Second respondent
[16] The second respondent submits the presumption of r 15.23 is not displaced and Mr Page, on its behalf, denies that the application was withdrawn due to the judicial review proceedings. Rather, he says it became unnecessary following discussions with the third parties. Mr Page submits the applicants have not succeeded as the decision of the first respondent has not been quashed.
[17] Mr Page acknowledges no evidence was filed on behalf of the second respondent but submits that was because the second respondent took the view the
4 Citing Taylor v Chief Executive of the Department of Corrections [2015] NZCA 477, [2015] NZAR 1648 at [33].
applicants’ case could not succeed as a matter of law. He submits the resort to extensive expert evidence by the applicants demonstrates the judicial review was focussed on the merits of the decision under review, rather than the process engaged in the decision-making. Mr Page highlights that the resource consent application was publicly notified and that the applicants had rights of appeal through the Environment Court and High Court. He submits those avenues were the more appropriate remedy, as indicated by s 296 of the Act. He contends that an appeal process was more appropriate to respond to the more than 1,000 pages of evidence filed by the applicants on the judicial review proceedings.
[18] Finally, Mr Page submits that the second respondent’s conduct was reasonable. It informed the applicants of the discussions with the third parties, subject to confidentiality. He says it was reasonable for the second respondent to maintain its defence of the proceedings, given the longstanding relationship the second respondent has had with the lagoon. He stresses that the second respondent had intended to run the defence case with minimal cost and complexity.
Analysis
[19] From the submissions (including reply submissions) I discern three primary issues as relevant to a costs determination:
(a)does the withdrawal of the resource consent application by the second respondent, rendering the judicial review proceedings moot, rebut the r 15.23 presumption;
(b)should the merits of the dispute be considered and, if so, do the merits rebut the presumption; and
(c)have the parties acted reasonably throughout the proceedings?
Withdrawal of resource consent application/proceedings rendered moot
[20] I accept the presumption in r 15.23 might be displaced if the proceeding was discontinued because it serves no practical purpose in light of a subsequent decision made by the respondents.
[21] The proceedings were issued to challenge a resource consent application and the interim use of that consent. The subsequent withdrawal of the consent application obviated the need for the judicial review to proceed. However, this is not a case where the discontinuance of the judicial review proceeding of itself is indicative of the merits of the competing case. Neither does it signal an admission by the respondents of error or fault.5 The second respondent says the application was withdrawn as a consequence of fruitful discussions with third parties.
[22] On the material available, I am not persuaded that explanation lacks credibility as alleged by the applicants. Those discussions had been initiated prior to the issuing of the judicial review proceedings and, whilst I think it inevitable that the fact of the proceeding was a consideration in the decision to withdraw the application, I am not persuaded that decision justifies a finding the judicial review proceedings were successful. I am nevertheless mindful the applicants achieved the outcome desired in the proceedings. I find the issue of “success” relevant in displacing the r15.23 costs presumption, but neutral in terms of an award of costs.
Merit
[23] In considering a costs award, the Court will not consider the merits of the respective cases unless they are so obvious that they rightly influence the assessment of what is just and equitable.6 I have not found the merit in the respective cases to fall within that category. Whilst I am inclined to the view the judicial review application had merit, it is notable that the applicants saw fit to file extensive expert evidence that was not available to the decision-maker to support the application for review. On a
5 Royal Forest & Bird Protection Society of New Zealand Inc v Northland Regional Council [2019] NZHC 449, [2019] NZAR 587; Cardrona Water Supply Ltd v Queenstown-Lakes District Council [2022] NZHC 2770; and Earthquake Commission v Whiting, above n 1.
6 FM Custodians Ltd v Pati [2012] NZHC 1902.
costs determination, I do not consider it appropriate that the Court engage in a detailed review of extensive expert evidence.
[24]I consider the question of merits to be neutral in the costs determination.
Reasonableness
[25] On 19 September 2022, two days before the applicants filed the application for judicial review, the solicitors acting for the second respondent emailed the applicants explaining that the third parties had responded to a proposal the second respondents had put to them. It was further explained that while more details could not be provided at the time due to the without prejudice nature of the ongoing discussions, there was a process that had been agreed regarding the consent applications and working towards a mutually agreed outcome. The correspondence assured the applicants they would be kept informed of progress and that the second respondent would not raise any issue of prejudice if the applicants were to delay an application for judicial review.
[26] The applicants, nevertheless, resolved to file the proceedings. They were concerned that the second respondent had been granted interim permission to operate as if a consent was in place. From that point in time, the applicants were not kept up to date.
[27] In my view, the second respondent had provided sufficient information to indicate to the applicants there was a promising avenue for resolving the dispute short of legal proceedings. The applicants took no steps to further enquire of the second respondent as to the likelihood of a satisfactory resolution, what that outcome might mean for the disputed application, or of the time that might be required to complete the discussions. Given the indication from the second respondent, it would have been appropriate for the applicants to make further enquiries prior to issuing proceedings. That shortcoming factors against a costs award in favour of the applicants.
[28] In a similar vein, having been disclosed a draft statement of claim, the respondents must have known the applicants would issue proceedings absent a positive indication the disputed application might be withdrawn.
[29] The respondents submit the applicants should not have been engaging in judicial review proceedings. The parties take conflicting positions as to the application of s 296 of the Act. This provision has a privative effect if there is a right to bring proceedings or an appeal to the Environment Court. The applicants contend the ss 88 and 124 decisions were administrative in nature and, therefore, judicial review was the appropriate course to pursue their claims. The respondents argue those decisions engaged substantive resource management merits and ought, therefore, be determined by way of appeal to the Environment Court. In the absence of full argument, I do not consider this costs determination to be an appropriate forum to determine the appropriate pathway for a dispute of the nature in this proceeding. I accept that this is nevertheless a genuine issue worthy of consideration in an appropriate case.
[30] Standing back, I am not persuaded that the “reasonableness” factor weighs heavily in the costs determination.
Conclusion
[31] On balance, and by a fine margin, I am persuaded the applicants have discharged the r 15.23 presumption. I make that finding primarily because the applicants achieved success in securing their intended outcome. I accept the argument advanced on behalf of the respondents that they ought not be liable for the expert costs incurred by the applicants. This Court has repeatedly discouraged the filing of expert evidence in judicial review proceedings.
[32] My view as to the competing arguments leads me to conclude it is just and equitable that each party bear its own costs. I decline to make a costs award.
...................................................
Eaton J
Solicitors:
Rout Milner Fitchett, Nelson Wynn Williams, Auckland Gallaway Cook Allan, Dunedin
Copy to:
Sally Gepp, Barrister, Nelson
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