St Heliers Capital Ltd v Kapiti Coast District Council
[2015] NZHC 596
•27 March 2015
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2014-485-010237 [2015] NZHC 596
UNDER the Resource Management Act 1991 IN THE MATTER
of an appeal from a decision of the
Environment Court pursuant to Section
299 of the ActBETWEEN
ST HELIERS CAPITAL LIMITED Appellant
AND
KAPITI COAST DISTRICT COUNCIL First Respondent
COASTLANDS SHOPPINGTOWN LIMITED
Second Respondent
Hearing: 24 March 2015 Counsel:
D A Allan for Appellant
M G Conway and H P Harwood for First Respondent
M F McClelland QC and P D Tancock for Second RespondentJudgment:
27 March 2015
JUDGMENT OF COLLINS J
Introduction
[1] I am allowing one aspect of an appeal brought by St Heliers Capital Ltd (St Heliers) from a costs decision made by Environment Court Judge B P Dwyer (costs decision).1 I am amending the amount of costs awarded to accurately reflect the clear intentions of Judge Dwyer when he explained the basis upon which he was ordering the payment of costs. All other aspects of the costs decision are correct and
contain no appealable errors of law.
1 St Heliers Capital Limited v Kapiti Coast District Council [2014] NZEnvC 162.
[2] In his costs decision Judge Dwyer ordered St Heliers pay a total of $260,000 costs, half of which was to be paid to Kapiti Coast District Council (the Council) and the other half paid to Coastlands Shoppingtown Ltd (Coastlands).
[3] The costs decision was made under s 285 of the Resource Management Act
1991 (the Act).
Background
[4] The costs decision was the sequel to a substantive decision concerning an appeal which St Heliers unsuccessfully pursued against a decision of the Council in relation to Proposed Plan Change 72A (the proposed plan change) to the Kapiti Coast District Plan (the District Plan).2
[5] The proposed plan change was notified by the Council in May 2007 and sought to re-zone approximately 12 hectares in Paraparaumu as a commercial/retail area. The land that was to be re-zoned was identified in the District Plan as the Wharemauku Precinct. The proposed plan change envisaged commercial/retail activities would be undertaken in the Wharemauku Precinct in a manner that would complement the existing commercial/retail zone in the centre of Paraparaumu.
[6] In November 2007 an independent commissioner recommended the Council approve the proposed plan change. This was done by the Council in May 2011. St Heliers filed its appeal soon thereafter.
[7] In April 2013 a Board of Inquiry established under Part 6AA of the Act approved the construction of the proposed Kapiti Expressway (the proposed Expressway), which will traverse Paraparaumu and run alongside the land owned by St Heliers.
[8] St Heliers’ appeal was heard by the Environment Court in October 2013. Rather than challenge the merits of the Council’s decision St Heliers based its appeal on the proposition that the proposed Expressway fundamentally altered the future
strategic planning of Paraparaumu to such an extent that the proposed plan change
2 St Heliers Capital Limited v Kapiti Coast District Council [2014] NZEnvC 52.
was no longer appropriate. St Heliers submitted to the Environment Court that the proposed plan change should either be dismissed or put on hold pending resolution of a new District Plan.
[9] St Heliers advanced its appeal on the basis that its land was a more appropriate site for the proposed commercial/retail re-zoning than the land in the Wharemauku Precinct.
[10] In a decision delivered on 13 March 2014 the Environment Court dismissed St Heliers’ appeal and upheld the Council’s decision concerning the proposed plan change (substantive decision).
[11] In paragraph [125] of its substantive decision the Environment Court said that although the general practice is that costs are not awarded on plan change appeals, there were aspects of the proceedings which may make it appropriate for the Court to consider a departure from that practice. Leave was therefore given to the Council and Coastlands to make costs applications should they wish to do so.
Costs decision
[12] In his costs decision Judge Dwyer referred to an Environment Court Practice
Note (the Practice Note) issued in 2011 which states:3
Where an appeal against a Proposed Plan, or a Plan Change under the First Schedule to the [Resource Management Act 1991] has proceeded to a hearing, costs will not normally be awarded to any party.
[13] Judge Dwyer observed that the Practice Note was “not a rule of law but reflects longstanding common practice”4, and that the Practice Note recognises that plan change processes are often complex and can involve issues of significant public interest.
[14] Judge Dwyer observed that there is nothing in s 285 of the Act which precludes the Court from awarding costs and that St Heliers appeared to accept that
3 St Heliers Capital Ltd v Kapiti Coast District Council, above n 1, at [15].
4 At [15].
costs might be awarded where factors identified in DFC NZ Ltd v Bielby were present.5
[15] In Bielby, Thomas J noted that a decision to depart from the High Court’s
scale of costs might be justified where:
(1) a party advanced arguments which lacked substance; (2) the processes of the Court had been abused;
(3) there had been a failure to comply with procedural requirements; (4) a party’s case was poorly pleaded or presented;
(5)there was a failure to explore the possibility of settlement in circumstances where settlement or compromise could reasonably be expected;
(6)a party was found to have taken an unsuccessful technical or unmeritorious point;
(7) the proceedings could have been more appropriately dealt with in the
District Court. (the Bielby factors)
[16] The Council argued that two of the Bielby factors were present, namely that St Heliers had advanced arguments that were without substance and had taken unmeritorious points and failed. The Council explained that it had incurred legal and witness costs of $262,258.66 in defending the appeal. However, importantly, the Council sought 100 per cent of its expert witness costs ($122,510.44) and only 50 per cent of its legal fees ($69,874.11) meaning the total costs claimed by the Council
were $192,384.55.
5 DFC NZ Ltd v Bielby [1991] 1 NZLR 587 (HC).
[17] Coastlands adopted the Bielby factors arguments advanced by the Council and also suggested the processes of the Environment Court may have been abused and that St Heliers’ case had been poorly pleaded. Coastlands explained it had incurred legal and witness costs of $259,187.52 in opposing St Heliers’ appeal. Coastlands sought a costs award that reflected either 50 per cent of its legal fees and
100 per cent of its witness costs ($222,157.39), or alternatively 75 per cent of its
combined legal and experts’ costs. This produced a costs claim of $194,390.64.
[18] Judge Dwyer concluded that two of the Bielby factors were engaged, namely that St Heliers had advanced arguments which lacked substance and that it had also made unmeritorious claims. Judge Dwyer referred to the normal range of costs that were awarded in the Environment Court as being in the vicinity of 25 to 33 per cent of the successful parties’ claimed costs. He referred to this range as being the “comfort zone”.
[19] Judge Dwyer reasoned that the case advanced by St Heliers “was lacking at a fundamental level”.6 In particular, Judge Dwyer criticised St Heliers’ approach to the appeal saying:7
[I]t should have been apparent … that the Expressway did not constitute the
game changer which it might possibly have been.
[20] Judge Dwyer recorded that St Heliers’ appeal had “failed by a most decisive margin” and that the proposed Expressway strengthened the case for the proposed plan change.8 He also said St Heliers had fallen “well short of establishing” its proposition that the proposed Expressway was a “game changer”.9
[21] Judge Dwyer also said St Heliers had advanced arguments that lacked merit because:10
…[I]t was promoting the development of two separate commercial/retail
areas which were too far apart to be seen or to function as one.
6 St Heliers Capital Ltd v Kapiti Coast District Council, above n 1, at [82].
7 At [82].
8 At [12].
9 At [66].
10 At [83].
Development on St Heliers’ land would compete with rather than
complement the Town Centre.
[22] Judge Dwyer recorded that what St Heliers sought was a further inquiry as to whether commercial/retail development should happen on its land as opposed to the Wharemauku Precinct and that by adopting that course St Heliers was advancing its own rather than any public interest.
[23] Judge Dwyer had some sympathy for St Heliers in relation to the quantum of costs incurred by the Council and Coastlands but he said that he was not in a position to assess the reasonableness of the charges incurred by the Council and Coastlands. He said, however, that he would endeavour to balance that factor in the awards which he would make.
[24] Judge Dwyer concluded by saying he would make an award “above the comfort 25 to 33 per cent level” but at a lower rate than the level sought by the Council and Coastlands. He said the awards which he would make would be in the vicinity of 50 per cent of the total costs claimed.
Appeal principles
[25] Section 299 of the Act governs appeals to the High Court from the
Environment Court. Appeals may only be brought in relation to questions of law.
[26] In Bryson v Three Foot Six Ltd, the Supreme Court discussed what amounts to a question of law for appeal purposes.11 The Supreme Court has revisited this topic on other occasions such as in R v Gwaze12 and Vodafone New Zealand Ltd v Telecom New Zealand Ltd.13 From these and other authorities, and for present purposes, the Environment Court may have made an error of law if it:
(1) applied the wrong legal test;14
11 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [24]-[27].
12 R v Gwaze [2010] NZSC 52, [2010] 3 NZLR 734 at [50].
13 Vodafone New Zealand Ltd v Telecom New Zealand Ltd [2011] NZSC 138, [2012] 3 NZLR 153 at [51].
14 Bryson v Three Foot Six Ltd, above n 11, at [24].
(2)reached a factual finding that was “so insupportable – so clearly untenable – as to amount to an error law”;15
(3)came to a conclusion that it could not reasonably have reached on the evidence before it;16
(4) taken into account irrelevant matters; and
(5) failed to take into account matters that it should have considered.
Grounds of appeal
[27] St Heliers has advanced five grounds of appeal.
[28] First, St Heliers alleges Judge Dwyer failed to take into consideration that “the Environment Court hearing on appeal was addressing matters and circumstances that had not previously been considered by a decision-maker (ie the appeal was in effect a first instance hearing) and failed to temper or reduce its award of costs in light of this factor”.
[29] St Heliers’ second, third and fourth grounds of appeal were helpfully refined and developed by Mr Allan, counsel for St Heliers, in a supplementary submission in which he explained the second, third and fourth errors of law allege:
(1)“a failure [by Judge Dwyer] to take into account a relevant consideration, being a distinction between costs regimes applying to public plan changes (such as [the proposed plan change]) in comparison with resource consent or private plan change appeals”;
(2)“a consequential reliance on an irrelevant consideration, being the 25 per cent to 33 per cent ‘comfort zone’ for costs awards in respect of resource consent or private plan change appeals, when determining
the usual award of costs that would be exceeded in this case”;
15 Bryson v Three Foot Six Ltd, above n 11, at [26].
16 Countdown Properties (Northlands) Ltd v Dunedin City Council [1994] NZRMA 145 (HC); May v May (1982) 1 NZFLR 165 (CA).
(3)“a consequential failure to take account of a relevant consideration in respect of costs on public plan change appeals (being the award of between 10 per cent and 30 per cent of costs incurred in those rare circumstances in which costs award are made in public plan change appeals)”; and
(4)“a consequential failure to give reasons for departing from those usual awards in respect of costs on public plan change appeals”.
[30] The fifth ground of appeal is that Judge Dwyer, in fixing costs awards of
$130,000 in favour of each of the respondents made awards that were inconsistent with and in excess of its determination to make awards of costs in the vicinity of 50 per cent of total costs claimed.
[31] Mr Allan explained that primary weight was placed upon the second, third and fourth alleged errors of law.
First ground of appeal
[32] The essence of the first ground of appeal is that the proposed Expressway introduced a new factor which had the effect of making the appeal a first instance hearing.
[33] The difficulty with this ground of appeal is that the Environment Court clearly found that the proposed Expressway was not a “game changer”. Furthermore, the Environment Court concluded St Heliers should have realised the proposed Expressway made the proposed plan change more appropriate.
[34] Even if there is some merit to Mr Allan’s argument that costs applications in first instance hearings should be treated differently from costs application in relation to appeals, the reality is the Environment Court was hearing and determining an appeal by St Heliers which the Environment Court found lacked substance and merit.
[35] St Heliers’ first ground of appeal therefore does not involve any arguable
error of law.
Second, third and fourth grounds of appeal
[36] Consistent with Mr Allan’s helpful approach, I will deal with the second,
third and fourth grounds of appeal in unison.
[37] The essence of the second, third and fourth grounds of appeal is that Judge Dwyer failed to draw an appropriate distinction between public plan change appeals, private plan change appeals and resource consent appeals.
[38] Mr Allan submitted that having concluded he would make an award above the “comfort zone” of 25 to 33 per cent, but at a lower rate sought by the Council and Coastlands, Judge Dwyer should have:
(1)identified what the normal level of award was in public plan change cases;
(2) not simply adopted the 25 to 33 per cent “comfort zone” that applies
to resource consent and private plan change cases; and
(3) adopted a different and lower “norm” for public change appeals.
[39] Mr Allan drew support for this aspect of his client’s case from cases involving awards of costs in public plan change cases. In particular he referred to Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council in which an 11 per cent costs award was made in relation to a public plan change appeal.17 Mr Allan also drew attention to other cases which he said lent support for the proposition that public plan change appeals might normally attract costs awards in the vicinity of 10 to 30 per cent.
[40] The key difficulty I have with this aspect of St Heliers’ appeal is that the Environment Court found, as a matter of fact, that St Heliers’ appeal did not seek to advance a matter of wider public interest. Instead, St Heliers sought a further inquiry into whether commercial/retail development should occur on its land as
opposed to the Wharemauku Precinct. In doing so the Environment Court clearly
17 Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council [2013] NZHC 2468.
found that St Heliers was advancing its own, rather than public interest considerations.
[41] Even if there was a public dimension to the appeal brought by St Heliers, in my assessment, the approach taken by Judge Dwyer cannot be impeached.
[42] The approach taken by Judge Dwyer appropriately involved three steps.
[43] First, Judge Dwyer correctly started from the proposition that s 285 of the Act is couched in broad terms. It enables the Environment Court to order any party to proceedings to pay to any other party such costs and expenses as the Court considers reasonable.
[44] Judge Dwyer reasoned the wide discretion inherent in s 285 of the Act must be exercised on a principled basis. Thus, a costs award should not be punitive, but may be a mechanism to compensate when it is reasonable to do so, particularly when the successful party has been put to unnecessary expense.
[45] Second, Judge Dwyer correctly recognised the Practice Note is not a rule of law and acknowledges that costs may be awarded in cases that concern appeals from a proposed plan or a plan change, although normally costs are not awarded in such cases.
[46] Third, Judge Dwyer correctly recorded that the Bielby factors might warrant an award of costs above what might otherwise be expected. In the present case, Judge Dwyer was very satisfied that St Heliers had advanced arguments that lacked substance and argued unmeritorious points which failed.
[47] It is clear from the substantive and the costs decisions that St Heliers’ case was doomed to fail and that by pursuing its unmeritorious claims St Heliers put the Council and Coastlands to considerable unnecessary expense. Having reached that conclusion, Judge Dwyer was justified in exercising his discretion to make substantial costs orders. Even if Judge Dwyer had used as a starting base an award of between 10 to 30 per cent of costs claimed by the Council and Coastlands, he
would have been justified in concluding that the Bielby factors warranted an award in the vicinity of 50 per cent of the costs claimed by the successful parties.
[48] I am therefore drawn to the conclusion that the second, third and fourth grounds of appeal must also fail.
Fifth ground of appeal
[49] Mr Allan is on firmer ground in relation to the fifth ground of appeal. Judge Dwyer made it clear in his decision that he was intending to award costs in the vicinity of 50 per cent of the amount claimed by the Council and Coastlands. What Judge Dwyer appears to have done, however, is award costs in the vicinity of 50 per cent of the total costs incurred by the Council and Coastlands. For Judge Dwyer to have adhered to his intention to award approximately 50 per cent of the costs claimed then he should have made an award in the vicinity of $96,000 to the Council and $97,000 to Coastlands. Those sums are significantly lower than the two awards of $130,000 made by Judge Dwyer.
[50] Counsel for the Council and Coastlands suggested the difference between approximately 50 per cent of costs incurred, and costs claimed, involved a matter of semantics. However, as I have explained in paragraph [49] of this judgment, the difference between costs incurred and costs claimed in this case is significant.
[51] Judge Dwyer appears to have made an arithmetical error in calculating the costs that should be paid by St Heliers. A simple arithmetical error may not in itself be an error of law. However, in this case the Judge’s error conflicts with his clear intentions when explaining the basis upon which he would award costs. Judge Dwyer’s failure to give effect to his clear intentions meant that the costs he ordered could not reasonably have been made on the basis of the evidence before him or on the basis of his own reasoning Therefore that failure constituted a material error of law.
Conclusion
[52] I had considered remitting the case back to Judge Dwyer for him to further consider the amount of costs that he has ordered against St Heliers. However, I do not believe it is necessary to prolong matters and cause the parties to incur further expense. Accordingly, I will allow St Heliers’ appeal by substituting the costs orders made by Judge Dwyer with orders that St Heliers pay the Council and Coastlands
$96,000 meaning the total costs award will be $192,000.
[53] St Heliers has partially succeeded in its appeal but failed on most of its grounds. In my assessment, this is a case in which the costs should lie where they
fall in relation to this appeal.
D B Collins J
Solicitors:
Ellis Gould, Auckland for Appellant
Simpson Grierson, Wellington for First Respondent
D’Ath Partners, Wellington for Second Respondent
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