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Court of Appeal of New Zealand |
Last Updated: 15 November 2017
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IN THE COURT OF APPEAL OF NEW ZEALAND
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BETWEEN
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Applicants |
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AND
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Respondents |
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Hearing: |
30 October 2017 |
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Court: |
French, Winkelmann and Brown JJ |
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Counsel: |
D C Walmsley in person for Applicants
AFD Cameron and M J Slyfield for Respondents |
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Judgment: |
JUDGMENT OF THE COURT
____________________________________________________________________
REASONS OF THE COURT
(Given by Winkelmann J)
[1] The applicants, Mr David and Mrs Heather Walmsley,[1] seek leave to bring a second appeal against an order of Judge Dwyer in the Environment Court requiring them to pay the respondents, Mr Peter and Ms Sylvia Aitchison, a costs award of $72,500.[2] That order for costs was confirmed on appeal by Clark J.[3] The Walmsleys wish to argue on a further appeal that Clark J was wrong to uphold the costs award made in the Environment Court.
[2] The relevant leave provision is s 303 of the Criminal Procedure Act 2011.[4] Together with ss 299 and 308 of the Resource Management Act 1991, it allows for a second appeal on a question of law, but provides the Court must not give leave for such an appeal unless satisfied that:
- (a) the appeal involves a matter of general or public importance; or
- (b) a miscarriage of justice may have occurred, or may occur unless the appeal is heard.
Background
Declaratory order proceedings
[3] Mr Walmsley and his mother own a residential property through their company, Walmsley Enterprises Ltd. The Aitchisons own the residential property directly above the Walmsley property — they share a common boundary. The Walmsleys erected a four-metre high, 22-metre long structure on that boundary, comprising a solid wall with a walkway and play structure attached.
[4] The Aitchisons issued proceedings against Walmsley Enterprises and the Wellington City Council, seeking declarations under s 310(c) of the Resource Management Act that the structure contravened that Act. We refer to these proceedings as the Declaratory Order proceedings. The Aitchisons argued that the Council was wrong to view the structure as a permitted activity and therefore as not requiring a resource consent. On 17 September 2015 the Environment Court declared that the structure was not a permitted activity, it therefore did require resource consent and, for these reasons, the use of the land for the structure contravened s 9 of the Resource Management Act.[5] That decision was then appealed to the High Court, which ultimately upheld the Environment Court’s decision.[6]
Enforcement order proceedings
[5] Before the appeal in the High Court was determined, the Aitchisons brought proceedings in the Environment Court seeking enforcement orders under ss 17 and 319 of the Resource Management Act requiring the Walmsleys to remove the structure. These enforcement proceedings were brought on the basis that, even if the structure complied with the District Plan, the Walmsleys had failed to mitigate the adverse effects of that structure as required by s 17 of the Resource Management Act.
[6] The Environment Court upheld that argument, finding significant and severe adverse effects on the residential amenities of the Aitchison’s property because the structure:[7]
- (a) Was overbearing and dominant from within the Aitchison property.
- (b) Caused profound loss of sunshine and a reduction in natural light.
- (c) Caused loss of sweeping views of the sea which was described as significant and severe.
- (d) Caused loss of privacy with those on the top of the walkway being able to see from close up into the internal spaces of the Aitchisons’ home.
[7] The Court found that enforcement orders should be issued requiring the removal of substantial parts of the play structure and fence. That decision has not been appealed. The structure has now been removed.
Costs decision
[8] The Aitchisons sought indemnity costs for the enforcement proceedings in excess of $100,000. On 10 June 2016 Judge Dwyer awarded costs of $72,500 under s 285(1) of the Resource Management Act, which provides:
285 Awarding costs
(1) The Environment Court may order any party to proceedings before it to pay to any other party the costs and expenses (including witness expenses) incurred by the other party that the court considers reasonable.
...
[9] Judge Dwyer said:[8]
[28] The factors which I have identified above as to the significant and severe adverse effects of the structure on the Aitchisons’ amenity, when combined with the Walmsleys’ knowledge that there would be adverse effects on the Aitchisons who would just have to put up with it, lead me to the view that it is reasonable that there should be a very substantial costs award in this case. ...
Proposed appeal
[10] Mr Walmsley wishes to argue on appeal that Clark J was wrong to uphold the Environment Court award of costs because:
- (a) The proceedings were a test case, clarifying an important issue of law, so no award of costs should have been made.
- (b) The Walmsleys behaved reasonably in relying upon the Council’s advice. The Council knew of the effect of the structure because they inspected it as it was going up, and the Council told the Walmsleys that resource consent was not required. It was against that background that the Walmsleys believed no further mitigation of the effect of the structure was required.
- (c) The manner in which the proceedings were conducted was unfair to the Walmsleys. The Aitchisons should have awaited the decision of the High Court in the Declaratory Proceedings. That decision would have made the enforcement proceedings unnecessary. The enforcement proceedings moreover involved a re-litigation of issues from the earlier proceedings.
- (d) The Aitchisons’ request for costs was made out of time.
- (e) The costs order was punitive.
[11] We have concluded that leave to bring a second appeal should not be granted. The proposed grounds of appeal raise largely factual issues rather than questions of law, focusing as they do upon the weight given to matters in the decision to award costs. Moreover, many of these arguments were made before Clark J and were fully addressed by her. We see no error in her approach and we therefore assess the proposed appeal as being without merit.
Analysis
Test case and Council knowledge of the adverse effects
[12] It is convenient to deal with these two proposed grounds together because, in reality, the issues are the same. The Walmsleys say that the case was a test case because it clarified for the first time that the Environment Court would make enforcement orders even though the Council had knowledge of the effects of the relevant structure. Section 319(2)(b), in relevant terms, prohibits the Environment Court from making an enforcement order if the adverse effects at issue were expressly recognised by the Council when the rules in the District Plan were made.
[13] Clark J said on her reading of the enforcement decision, the Environment Court was engaged in a consideration of the application of s 319(2)(b) to the facts, rather than any resolution of legislative uncertainty.[9] She said whilst there was undoubted public attention and a level of curiosity about the dispute between the neighbours, the Environment Court itself was engaged in an orthodox application of statutory provisions to particular facts.[10]
[14] We agree this proceeding did not involve a novel issue, and nor was it a test case. The Environment Court and the High Court addressed the Walmsleys’ arguments, with a straightforward application of the legislation to the facts. As to the Walmsleys’ reliance upon the Council’s issue of a certificate of compliance in relation to the structure, a council officer gave evidence that the certificate was for a structure with a length of 7.7 metres. The structure as completed was over 20 metres in length with a play structure and walkway attached. It was therefore entirely different to that addressed under the certificate of compliance.
[15] The Walmsleys also argue that because the effect of the District Plan was to allow the structure as a permitted activity, s 319(2) applied to prohibit the issue of an enforcement order. The Environment Court found nothing in the evidence which implied the Council expressly recognised the type and group of effects experienced in this case. The Environment Court said it “is difficult to see how this combination of factors could have been foreseen and expressly recognised when bringing down the rules and standards we are discussing”.[11]
Unfairness in conduct of proceeding
[16] The Walmsleys wish to argue that the costs decision should have reflected that it was unfair of the Aitchisons to commence the enforcement proceedings whilst the Declaratory Order proceedings were subject to appeal. Mr Walmsley says that this amounted to a re-litigation of issues already argued in the Declaratory Order proceedings and so was an abuse of process, adding unnecessary cost.
[17] This particular point does not appear to have been raised in either the Environment Court or the High Court in relation to the issue of costs. It is in any case without merit.
[18] In our view the Aitchisons’ pursuit of enforcement proceedings was entirely reasonable. Although the Aitchisons successfully advanced an argument before the Environment Court in the Declaratory Proceedings that the construction was not a permitted activity, the Walmsleys’ appeal to the High Court removed any immediate prospect of resolution for the Aitchisons. Moreover, even if the Aitchisons succeeded on appeal they would have achieved declaratory relief only, and then would have had to seek enforcement orders unless the Walmsleys voluntarily took steps to remove the structure. The Aitchisons were therefore entitled to bring the proceedings seeking enforcement orders. The commencement of those proceedings was the fastest route to resolution.
[19] In the event, the Walmsleys abandoned their appeal to the High Court in the declaration proceedings, but the Council was given permission to pursue the appeal so that the interpretation issue could be resolved.
Application for costs out of time?
[20] Mr Walmsley also wishes to argue that the Aitchisons’ request for costs was made out of time, in reliance upon the Environment Court Practice Note.[12] But the application was not late, as the Environment Court had reserved the issue of costs until the conclusion of the Declaratory Proceedings in the High Court, at which time the parties were to file a memorandum with a proposed timetable as to costs. We were told by Mr Cameron, counsel for the Aitchisons, that the application for costs was filed in accordance with the timetable agreed between counsel. In any case, even if the application had been filed late, without more that could not give rise to an issue of general or public importance, or a miscarriage of justice.
Punitive element
[21] Finally, Mr Walmsley argues that there was a punitive element in the award of costs. This is based upon Judge Dwyer’s reference to Mr Walmsleys’ knowledge that there would be adverse effects for the Aitchisons who would “just have to put up with it”.[13] That argument was advanced before Clark J and rejected by her.[14] She said Judge Dwyer identified the correct principles in connection with costs and applied them correctly, and that the Walmsleys’ knowledge was relevant when assessing the reasonableness of the costs. We see no basis for challenging her analysis.
[22] Judge Dwyer correctly identified the relevant principles as follows:
[19] Section 285 is couched in broad terms and bestows a wide discretion on the Court. It is well recognised that the discretion must be exercised on a principled basis and that the purpose of costs awards is not to punish unsuccessful parties but to reimburse successful parties for expenses which they have incurred, particularly when they have been put to unnecessary expense. Ultimately a decision as to whether or not to award costs under s 285 comes down to a determination of what is reasonable.
(Footnote omitted.)
[23] We agree with Clark J that the Walmsleys’ knowledge of the adverse effects was identified by Judge Dwyer as relevant not because it indicated a need for a punitive response, but because it was the context against which their decision to defend the proceedings fell to be considered. We note that Judge Dwyer went on to observe “it must be recognised that the evidence as to adverse effects of the structure was largely either uncontested or contested only as to the degree of effect”.[15] Again then, this proposed ground of appeal has no prospect of success.
Result on application
[24] For these reasons we are satisfied that the application for leave to bring a second appeal should be declined. As noted earlier, none of the proposed grounds of appeal has a prospect of success. It follows that the s 303 threshold for leave has not been met.
Costs on this appeal
[25] Mr Cameron sought indemnity costs on this application for leave to bring a second appeal on the grounds that it is without merit. We do not consider that the fact the application has failed on this ground alone is sufficient reason to grant indemnity costs in this case. In our view, the application was not so hopeless as to warrant an award of indemnity costs. The applicants must pay the respondents costs for a standard application on a band A basis and usual disbursements.
Result
[26] The application for leave to bring a second appeal is declined.
[27] The applicants must pay the respondents costs for a standard application on a band A basis and usual disbursements.
Solicitors:
Brookfields, Wellington for Respondent
[1] Son and mother respectively.
[2] Aitchison v Walmsley [2016] NZEnvC 114 [EC Costs decision].
[3] Walmsley Enterprises Ltd v Aitchison [2017] NZHC 1504 [HC decision].
[4] See Resource Management Act 1991, ss 299 and 308.
[5] Aitchison v Wellington City Council [2015] NZEnvC 163 [EC Declaratory decision].
[6] Wellington City Council v Aitchison [2017] NZHC 1264.
[7] Aitchison v Walmsley [2016] EnvC 13 [EC Enforcement decision].
[8] EC Costs decision, above n 2.
[9] HC decision, above n 3, at [42].
[10] At [45].
[11] EC Enforcement decision, above n 7, at [61].
[12] Environment Court of New Zealand Practice Note 2014, r 6.6(f).
[13] EC Costs decision, above n 2, at [28].
[14] HC decision, above n 3, at [50]–[51].
[15] EC Costs decision, above n 2, at [26].
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