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Love Te Arai Society Incorporated v Auckland Council [2024] NZHC 1184 (13 May 2024)

Last Updated: 14 November 2024

JUDGMENT OF FITZGERALD J

[As to costs]

This judgment was delivered by me on 13 May 2024 at 1.00pm, pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

.....................................

Solicitors: Lindsay & Francis, Auckland

DLA Piper, Auckland

North Harbour Law, Auckland

To: L Farmer, Auckland M Savage, Auckland

LOVE TE ARAI SOCIETY INCORPORATED v AUCKLAND COUNCIL [2024] NZHC 1184

Introduction

• [1] In these proceedings, Love Te Arai Society Incorporated (the Society) applied for judicial review of Auckland Council’s (the Council) decision to grant a resource consent to O’Callaghan Holdings Ltd (OHL) to operate a contractors’ yard at a site on Lake Road, Te Arai (the Consent Decision). The Society also applied for review of the Council’s decision to process OHL’s application on a non-notified basis (the Notification Decision).

• [2] In a judgment delivered on 8 February 2024, I granted the Society’s application for judicial review of the Notification Decision and set aside that decision.¹ As a consequence, I also set aside the Consent Decision. I noted that, had the Notification Decision not been set aside, the application for judicial review of the Consent Decision would have been dismissed.²

• [3] I invited the parties’ submissions on costs. In my judgment, I noted that there appeared to be no reason why the Society should not be awarded costs on a scale 2B basis, though observed that there may be scope for some reduction to any costs award, given the Society had not been successful on all its grounds of review.

• [4] The parties have not been able to agree on costs. This judgment accordingly determines the matters in dispute concerning costs.

The Society’s submissions

• [5] The Society seeks costs of $19,693.60, plus disbursements of $3,676.25. The Society seeks an order that the Council and OHL are jointly and severally liable to pay these amounts.

• [6] The Society notes that the default position in proceedings with multiple defendants is that liability for costs is joint and several.³ Counsel notes that the default position is subject to the Court’s overriding discretion, however submits that it is only

¹ Love Te Arai Society Inc v Auckland Council [2024] NZHC 108.

² At [128].

³ High Court Rules 2016, r 14.14.

to be departed from where a particular case is out of the ordinary in some significant way.⁴ Counsel submits that there is no particular reason to depart from the default position in this case.

• [7] Finally, the Society accepts that a discount to the costs award is appropriate given it did not succeed in its application for judicial review of the Consent Decision. The Society proposes a reduction of 20 per cent, reflecting that it was nevertheless successful in its overall claim, and that many of the steps taken in the proceedings would still have been required to be taken, irrespective of the Court not accepting some of the arguments advanced.

The Council’s submissions

• [8] The Council accepts that the Society is entitled to an award of costs and accepts the Society’s cost calculations, as well as the proposed discount.

• [9] However, the Council opposes the proposed joint and several liability of it and OHL for the costs. The Council seeks an order that the costs award in favour of the Society be apportioned equally between it and OHL.

• [10] The Council acknowledges the default position under r 14.14 of the High Court Rules 2016. It nevertheless submits that the following reasons justify a departure from the default position:

(a) Both the Council and the second respondent took an active role in the proceeding. Both parties opposed the judicial review.

(b) The Council’s decision-making was consistent with, and made in reliance on, the position and information presented to it by OHL.

(c) The Council could not bring the judicial review proceedings to an end, though OHL could by surrendering its resource consent.

⁴ Referring to Hong v Deliu [2016] NZCA 75, [2016] NZAR 667 at [24]; Hsu v Mahoney [2022]

NZHC 372 at [50]–[52].

(d) A 50/50 split is an appropriate apportionment, given the Council and OHL had equal involvement in the judicial review proceedings. In light of this, the Council submits that it would not be appropriate that it may be required to pay 100 per cent of the costs.

• [11] The Council refers to observations of the Court of Appeal in Hong v Deliu to the effect that circumstances in which a defendant has taken a reduced part in opposing judgment by abiding the outcome or admitting the cause of action, have been considered a reason to depart from the r 14.14 default position.⁵ The Council submits that this must also be the case in the opposite circumstances, and that, given OHL took an equal role in the proceedings, an equal 50/50 split is appropriate.

OHL’s submissions

• [12] OHL also does not dispute that a costs award ought to be made in the Society’s favour, or the proposed 20 per cent reduction. It does, however, oppose the Council’s proposal that costs be split evenly between it and the Council.

• [13] OHL notes that the Society did not originally seek costs against OHL on the basis that OHL did not make the decision under review, no relief was sought against OHL, and OHL played only a minor part in the proceedings. OHL notes that the Society’s proposals now before the Court are contrary to that earlier indication.

• [14] Further, OHL disputes the points advanced by the Council in support of a 50/50 split. It submits that, as an applicant for consent, its position is markedly different to that of the Council exercising its statutory role as a consent authority deciding applications for consent, including whether the application is to be considered on a notified or non-notified basis. OHL submits that, as the holder of a consent, it is reliant on the Council correctly deciding applications and makes significant investment and business decisions based on that reliance.

• [15] OHL acknowledges that it took some role in the proceeding, opposing the applications for judicial review. However, it submits that, in light of the Council’s role

⁵ Hong v Deliu, above n 4, at [24].

as decision-maker and the secondary role OHL took in the proceedings, a split of 80/20 in its favour would be more appropriate.

Discussion

• [16] Several High Court authorities considering the approach to costs in similar cases to this were addressed by Thomas J in Rochdale Precinct Society Inc v Christchurch City Council.⁶ I can do no better than respectfully adopt her Honour’s summary of those earlier authorities:
  • [18] In Beach Road Preservation Society Inc v Whangarei District Council, Chambers J determined costs between two unsuccessful respondents: the council and a resource consent applicant, Mr Wilkinson.⁷ The respondents raised various objections with respect to costs, one of which was that Mr Wilkinson ought not to be liable because the council was responsible for the error on which the judicial review turned. Chambers J rejected that submission and ordered costs, jointly and severally between the two:
    • [19] Mr Bell submitted that the council alone should have to meet any costs order. He made that submission on three bases. First, the error in granting the resource consent was the council’s error, not Mr Wilkinson’s. ...

...

[21] With respect, both sets of submissions are off point. On a costs application we are not concerned with how the original decision under attack came to be made. What we are concerned with is the litigation itself. The society brought a claim correctly identifying the council and Mr Wilkinson as respondents. On being served with the notice of proceeding and statement of claim, the council and Mr Wilkinson had an election: to defend the proceeding or not. Both chose to defend the proceeding. I concluded that the proceeding was well brought. The society is entitled to costs. Both respondents must share responsibility for those costs because, and only because, each decided to defend the proceeding, wrongly, as it turned out. That is why they must pay costs to the society. It is irrelevant how the land came to be zoned as it was or how the resource consent decision came to be made. Parties pay costs because they have elected to bring or defend proceedings and have adopted a stance in those proceedings which a court has found to be unjustified.

• [19] Similar circumstances arose in Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council, where the council’s liability was capped at 20 per cent.⁸ In that case, the council abided the Court’s decision, but the second defendant, a private entity, sought to resist the judicial review application. The council was responsible for the error (a decision to process a

⁶ Rochdale Precinct Society Inc v Christchurch City Council [2018] NZHC 1708.

⁷ Beach Road Preservation Society Inc v Whangarei District Council [2001] NZHC 811; (2001) 16 PRNZ 13 (HC).

8. Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council HC Invercargill CIV-2008-425-518, 19 May 2009.

resource consent on a non-notified basis) which led to a successful review. After citing the passage from Beach Road above, French J stated:

[18] In so far as these comments could be interpreted as meaning that a person who abides the decision of the Court can never be liable for any costs, I must respectfully disagree. That would be too absolute a proposition. Ultimately, the task of the Court is to make an assessment of overall justice as between the particular parties. On the facts of this case, where the Council made a very fundamental and serious error which necessitated the issuing of proceedings, I consider the council should make a contribution. However, because it responsibly did not defend the proceeding, its liability should be limited to 20% of the costs and disbursements, excluding the costs of the experts.

• [20] Chisholm J took a different approach in Barrett v Wellington City Council.⁹ In that case, the council, which had resisted the review, was primarily responsible for the established error and the other defendants were in some senses as “innocent” as the plaintiff. The council was ordered to pay not only the costs of the plaintiff but also the other defendants because it was up to the council to comply with notification provisions:

[5] ... As I see it, responsibility for that outcome must rest squarely with the first defendant. The second/third defendants were parties to the review process because they were parties affected, not because they carried responsibility in some way or other for the Council’s decision not to notify.

...

[9] ... I am not persuaded that this is a situation where costs should rest where they fall. My reasons can be summarised. First, the fact that the second/third defendants sought to uphold the Council’s decision should not count against them. Given their expenditure on the complex running into many millions of dollars, it is not at all surprising that they attempted to support the Council’s decision. Secondly, while the first defendant now claims that if it had been aware that it might have to pay the second/third defendants’ costs it would have more actively discouraged the second/third defendants from incurring significant costs; the reality was that it was always vulnerable to an order for costs in favour of the second/third defendants. Thirdly, I do not accept that shortcomings in the developer’s assessment of effects has any direct bearing on the Council’s decision not to notify. Fourthly, the fact that the second defendant might be an experienced property manager cannot alter the fact that it was the Council’s decision which gave rise to this proceeding. Fifthly, the first defendant’s claim that the second/third defendants benefited from the Court’s judgment (by avoiding public scrutiny of the project) needs to be balanced against the allegation by the second/third defendants that if they had been aware of the problem they would simply have repositioned the eastern wing to ensure that it was a permitted activity.

• [21] Preferring the approach in Kawarau, Gendall J made essentially the same decision in Sutton v Canterbury Regional Council.¹⁰ In that case, the council choseto abide the decision of the Court whereas the second respondent chose to resist the judicial review application. Because the second respondent

⁹ Barrett v Wellington City Council HC Wellington CP 31/00, 25 July 2000.

¹⁰ Sutton v Canterbury Regional Council  [2015] NZHC 1000. 

was the real protagonist, Gendall J considered it was unjust to make the council jointly and severally liable. The council was nevertheless liable for 20 per cent of the applicant’s costs (including disbursements) because it was the council’s error which led to the success of the review:

• [41] Infinity, as the unsuccessful party who actively resisted the applicants’ judicial review application here and argued their position in full, must be the primary party liable for the applicants’ costs. And because the Council elected not to oppose and participate in these proceedings, it would be unjust, in my view, to make it jointly and severally liable for the full amount of the applicants’ costs.

• [42] The Council however clearly made mistakes in its original decision and must be seen as responsible in part for the outcome here. Therefore, to achieve overall justice between the parties in the circumstances of this case, I consider it necessary to apportion the applicants’ costs here in the same way as did French J in Kawarau Jet Services Holdings. In this case, as in the proceedings before French J, the Council made “a very fundamental and serious error which necessitated the issuing of proceedings”. Accordingly, and despite the comments of Chambers J onthe basis of shared responsibility for costs in Beach Road Preservation Society, as I see it the Council should contribute in some way to the applicants’ costs.

• [43] As to quantum, I must note and weigh into the consideration here the Council’s responsible decision not to oppose the application in this proceeding, and their apparent reliance earlier on the erroneous AEE which Infinity had compiled and provided to the Council. As with Kawarau Jet Services Holdings, I consider here the Council’s liability should be limited and a contribution of 20 per cent in my view would be appropriate. But, unlike the decision in Kawarau Jet Services Holdings I do include the expert evidence fees and expenses ($5,111.41), together with the other disbursements in the Council’s proportionate liability here. Noting matters raised by French J in Kawarau Jet Services Holdings, the real protagonist in these present proceedings I find was Infinity. But clearly the expert Ms Johnston’s report and her overall contribution here assisted in correcting the earlier errors made by the Council and establishing the proper position. As such, in assessing the overall justice in this case, the Council should meet a part of this disbursement.

• [22] In summary, unsuccessful parties are prima facie jointly and severally liable. That rule may be varied because the ultimate task of the Court is to make an assessment of overall justice as between the particular parties, in the particular circumstances. Relevant considerations include whether and in what manner the parties participated in the proceedings, the extent to which one party was in error,and what measure of reliance was placed on the error by the other party.

• [17] These authorities demonstrate that there are a variety of positions which respond to the variety of cases that come before the Court.

• [18] In the context of this case, in which both defendants actively opposed the judicial review applications, my view is that the costs award in favour of the Society ought to be made against both defendants on a joint and several basis, in the ordinary

way. In this context, I prefer the reasoning of Chambers J in Beach Road Preservation Society Inc v Whangarei District Council. In the present case, both defendants actively, and ultimately wrongly, defended the application for judicial review of the Notification Decision. Both parties filed statements of defence and substantive written submissions in opposition to the application for review (though OHL admittedly did so in more of a “supporting” role, adopting many aspects of the Council’s submissions). Be that as it may, OHL was nevertheless an unsuccessful and active defendant in these proceedings.

• [19] For these reasons, I am not persuaded that there is a proper basis to depart from the general approach in r 14.14, and I would not describe the manner in which this proceeding was conducted to be out of the ordinary for costs purposes. This is consistent with the Court of Appeal’s observation in Hong v Deliu that cases in which defendants make a choice to substantively defend a claim are not “out of the ordinary”.¹¹ It is also consistent with the Court’s observation that in cases of multiple defendants, the case would need to be “out of the ordinary in some significant way” before consideration ought to be given to altering the r 14.14 approach.¹²

• [20] This of course says nothing as to how the Council and OHL might arrange matters between themselves in relation to the costs award, reflecting the Council’s position as statutory decision-maker.

Result

• [21] There is accordingly an order that the defendants are jointly and severally liable to pay the Society $19,693.60 in costs, plus $3,676.25 by way of disbursements, being a total of $23,369.85.

Fitzgerald J

¹¹ Hong v Deliu, above n 4, at [23].

¹² At [24].