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High Court of New Zealand Decisions |
Last Updated: 19 July 2018
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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
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CIV-2017-409-381
[2018] NZHC 1708 |
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UNDER
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the Judicial Review Procedure Act 2016
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IN THE MATTER
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of an application for review
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BETWEEN
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ROCHDALE PRECINCT SOCIETY INCORPORATED
Applicant
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AND
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CHRISTCHURCH CITY COUNCIL
First Respondent
BELL, LAMB & TROTTER (2014) LIMITED
Second Respondent
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On the papers
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Counsel:
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P A Steven QC for Applicant
W J Palmer for First Respondent
J M Appleyard for Second Respondent
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Judgment:
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11 July 2018
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JUDGMENT OF THOMAS J
[1] Rochdale Precinct Society Inc (Rochdale) applies for costs following a largely successful application for judicial review of two resource consent decisions made by the Christchurch City Council (the Council). Rochdale had agreed with the Council that, as between them, costs would lie where they fell if Rochdale were successful. However, Rochdale now seeks costs against Bell, Lamb and Trotter (2014) Ltd (the Company), the recipient of the resource consent and second respondent to the
ROCHDALE PRECINCT SOCIETY INCORPORATED v CHRISTCHURCH CITY COUNCIL [2018] NZHC 1708 [11 July 2018]
judicial review, on the basis that Rochdale was successful and the Company raised unmeritorious arguments and departed from the case as pleaded.
Submissions
[2] As it was the successful party, Rochdale submits it is entitled to costs in the usual way. It also seeks to recover costs in obtaining the expert evidence, on the basis the evidence was necessary to enable the Court to deal with issues relating to Chapter 7 of the Christchurch City District Plan (the District Plan) which were key to the final outcome. It seeks costs of $31,443 calculated on a 2B basis, together with disbursements, bringing the total to $47,705.73.
[3] The Company submits Rochdale was unsuccessful on several grounds of its judicial review, some of which needlessly increased costs for the Company. Costs therefore ought to lie where they fall. Alternatively, if it is ordered to pay costs to Rochdale, the Company seeks an equivalent order of costs in its favour against the Council. It submits that, while abiding the Court’s decision might ordinarily reduce the likelihood of costs awarded against a party, the Council’s position in this case instead hindered the Court. The Council therefore ought not to benefit from that position in terms of costs.
[4] No issue is taken by any party as to the appropriate scale of costs. I consider scale 2B costs for all steps in the proceedings to be appropriate. The issues to be decided are the extent to which Rochdale was the successful party, quantum in terms of any reduction, and burden in terms of which party ought to be liable and to what extent.
Successful party and quantum
[5] While costs are at the discretion of the Court, the High Court Rules 2016 set out the principles applying to such determinations. Generally, costs should be
predictable and expeditious, they should follow the event, and parties ordered to pay costs are jointly and severally liable.1
[6] As noted by the Court of Appeal in Weaver v Auckland Council, whether a party is successful depends not on whether it obtained judgment for all grounds argued but on whether it achieved success overall:2
[26] ... the only party to have succeeded by any “realistic appraisal” were the appellants. It is true that they did not succeed to the full extent of their claim but only to roughly half that extent, yet success on more limited terms is still success. We do not therefore see a proper basis upon which the usual rule that the party who fails with respect to a proceeding should pay costs to the party who succeeds should not apply. ...
[7] When a party achieves only limited success, the correct approach is to recognise that limitation, where appropriate, by applying a reduction in costs or letting costs lie where they fall. That was emphasised by the Court of Appeal in Water Guard NZ Ltd v Midgen Enterprises Ltd:3
[13] The first of those general principles is that the party which fails should pay the costs of the successful party, formalising the paramount rule that costs should follow the event. WGL’s success on its defects claims was affirmed by Midgen’s later consent to judgment being entered against it for $67,527.97. We agree that Midgen qualified as the unsuccessful party – that is, the party which was adjudged liable to pay money to the other – and that accordingly WGL was the successful party. We disagree with the Judge that WGL lost that status because it failed on most of its claims which in turn occupied most of the trial. That factor can be properly recognised in other ways, such as reducing costs otherwise payable or ordering costs to lie where they fall. However, the final result must ordinarily be given primary weight when exercising the r 14.1 discretion.
Analysis
[8] Rochdale submits the fact it did not succeed on all grounds is no reason to depart from the ordinary rule that costs follow the event. In any event, Rochdale submits the majority of written and oral submissions were spent on Chapter 7 arguments, which were central to the matter on which the judicial review turned. In addition, Rochdale submits the fact the Council abided the Court’s decision cannot
1 High Court Rules 2016, rr 14.2 and 14.14.
2 Weaver v Auckland Council [2017] NZCA 330.
justify a departure where the Company has effectively stepped into the role of the Council in defending the proceedings.
[9] The Company submits that its success on two of four broad issues indicates costs ought to lie where they fall. Rochdale succeeded on the issues of whether the Commissioner erred in considering only Chapter 14 issues in the notification decision and failing to address properly Chapter 7 considerations. However, the Company succeeded in rebutting the challenges to categorising the activity as a home occupation for Chapter 14 purposes and the Commissioner’s finding on the permitted baseline. The majority of written and oral argument concentrated on the correct categorisation for Chapter 7 purposes, an issue which the Court expressly declined to determine. The requested relief on this issue was refused and therefore Rochdale cannot claim success in relation to it. Thus, the Company submits, Rochdale succeeded on a narrow point of law and cannot claim success as broadly as it does.
[10] Given the authorities outlined above, it is clear that Rochdale ought to be considered the successful party. The suggestion that Rochdale’s lack of success on particular grounds precludes it from seeking costs in relation to those grounds is misconceived. Lack of success on all grounds argued is no reason alone to depart from the ordinary rule that costs follow the event, although it may justify a reduction in costs.4 I consider this an appropriate case to consider whether a reduction is warranted.
[11] Rochdale contends the Company pursued arguments which had little merit and introduced matters in supplementary submissions which were outside those raised in the Company’s pleadings. It submits the Court’s difficulty in interpreting the District Plan rules to the extent supplementary submissions were required is irrelevant to the costs determination. Even if relevant, the Company put that matter at issue by not pleading them in the first instance.
[12] Rochdale suggests the technical difficulties of reading transport planning rules justified evidence from experts, such as their traffic planner, Mr Penny. Rochdale submits the evidence was only necessary because of the unmeritorious arguments pursued by the Company and that the District Plan itself is not unduly complex or
4 High Court Rules 2016, r 14.7.
problematic. It says the Company undertook a collateral attack on the merits of the District Plan in an inappropriate forum. The Company should instead have made submissions on the District Plan as it was being developed, but did not.
[13] For its part, the Company submits Rochdale also pursued arguments without merit, specifically that the categorisation of the activity as a home occupation was in error. This argument, the Company submits, was in the nature of an appeal rather than a judicial review. In addition, Rochdale’s argument regarding the permitted baseline was ill-conceived on a plain reading of the Commissioner’s decision. The Company submits costs associated with these matters should be set off against any costs order in favour of Rochdale. It takes specific issue with item 20 (list of documents on discovery), saying the Company received no list of documents from Rochdale; and with the claimed costs for expert evidence, saying this cannot be claimed because it related to an argument on which Rochdale was unsuccessful.
[14] While I agree that some of the arguments the Company advanced to avoid the need to provide compliant carparking were insupportable, they did not require significant time or resources in oral or written submissions, or in the judgment itself. I am not persuaded that Rochdale’s approach can be similarly assessed.
[15] Regarding the notification decision, Rochdale spent considerable time in argument on the appropriate category for the activity in terms of Chapter 14 and Chapter 7. With respect to Chapter 14, its argument that the home occupation category was wrongly applied was misconceived and resolved by reference to a simple interpretation exercise. With respect to Chapter 7, many of its arguments bordered on being in the nature of an appeal. They were to a degree unnecessary given the result turned on whether the Commissioner had considered Chapter 7, not whether Chapter 7 rules had been breached due to an incorrect classification. Regarding the substantive resource consent decision, Rochdale’s argument that the permitted baseline was incorrectly identified was, as the Company suggests, ill-conceived and unnecessary.
[16] Although the Company certainly pursued points which perhaps it should not have, I do not consider that approach led to a significant increase in costs for Rochdale. Rochdale’s similar strategy led to relatively more wasted time and resources and, on
matters where it was not successful, certainly led to significantly increased costs on the part of the Company. On balance, however, I am not persuaded a significant reduction in costs is warranted, particularly in light of the need to have regard to Rochdale’s overall success. A 20 per cent reduction is appropriate, to be applied after item 20 is removed.5
[17] Rochdale’s expert expenses may be reduced if they are “disproportionate in the circumstances of the proceeding”.6 While I accept expert evidence is common in cases concerning technical interpretations of District Plans, I do not consider the expenses claimed to be entirely proportionate in the circumstances. The evidence related largely to issues more suited to an appeal than judicial review and were, in any event, left undetermined by the Court. Had the grounds for judicial review been more appropriately focused, much of it would have been unnecessary. It also failed to address matters relevant to how Chapters 7 and 14 of the District Plan related to each other, something which is crucial to almost any assessment of complex planning instruments. I consider a reduction of the expert evidence expenses of 30 per cent is warranted.
Costs as between unsuccessful parties
[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. ...
6 High Court Rules 2016, r 14.12(3).
7 Beach Road Preservation Society Inc v Whangarei District Council [2001] NZHC 811; (2001) 16 PRNZ 13 (HC).
...
[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 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:
9 Barrett v Wellington City Council HC Wellington CP 31/00, 25 July 2000.
[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 chose to abide the decision of the Court whereas the second respondent chose to resist the judicial review application. Because the second respondent 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
10 Sutton v Canterbury Regional Council [2015] NZHC 1000.
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 on the 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.
[23] The Company takes issue with Rochdale not seeking costs against the Council and seeking the entirety of costs from the Company. It suggests that, where costs are not sought against one party, it does not follow that the other party is liable for the whole of the costs,11 and where the circumstances of a case is out of the ordinary, the Court can alter the burden of joint and several liability.12 While ordinarily abiding the Court’s decision assists by reducing Court time and expense, here the Company submits the Council’s choice prolonged the hearing. The Council filed a statement of defence and its election to pursue only certain aspects of the appeal only became apparent later, which forced the Company to fill the shoes of the Council in defending
12 Hong v Deliu [2016] NZCA 75.
the decision, thereby incurring extra cost. The Company submits the burden therefore ought to be altered such that the Council is liable for the full amount of any costs order.
[24] Rochdale submits this case is similar to Sutton.13 It suggests indemnity ought not to apply and the fact of the agreement between Rochdale and the Council regarding costs ought not to be taken into account.
[25] The Council submits early notice was given of its intention to abide the Court’s decision, which was tantamount to an admission that the Commissioner failed to consider Chapter 7 in the notification analysis. That early notice meant the Council did not put the Company to added expense nor could it have prolonged the hearing. The Company could have chosen the same path but, in not doing so, risked the prospect of an adverse costs award. The Council rejects suggestions that, because it filed a memorandum and affidavit after the hearing, it did not truly abide the Court’s decision. The memorandum and affidavit were in response to the Court’s request and all parties were required to respond. Therefore, the Council could not have put the Company to extra cost. The Council submits indemnity would be unjust and unfair and the Company should carry the burden of any costs award.
[26] I agree with the Council that it ought not to shoulder the burden of the full costs award but I am not persuaded the Company ought to be liable for the full amount either. The Council’s position is similar to that in Kawerau and Sutton, in that it is responsible for the error in the decision not to notify the consent.14 It is distinguishable by the fact that, in the present case, the Council’s election to abide the Court’s decision hindered rather than assisted the proceeding.
[27] The Council’s election was particularly unhelpful given the fact the proceeding concerned a new District Plan and given the nature of the District Plan provisions and decisions under review. It was also unhelpful coming as it did after filing a statement of defence. The election led to the Court requesting, after the hearing, further submissions generally, but specifically from the Council. The Council was in a
13 Sutton v Canterbury Regional Council, above n 10.
superior position to answer the specific questions put to it in the Court’s request. When received, those submissions required response from the Company, in circumstances where that information ought to have been before the Court at the beginning of the process.
[28] In those circumstances, abiding the Court’s decision cannot absolve the Council of its reasonable and fair share of the costs burden. The corollary is that the Company ought not to be liable for the full amount. Following Kawerau and Sutton, some recognition of the fact the Council was responsible for the error is appropriate, along with a recognition of the additional matters raised above. That would result in a capping of the Council’s nominal liability for the total award at something above the level of 20 per cent as applied in those earlier cases.
[29] My task with costs, as I have noted, is to “make an assessment of overall justice as between the particular parties, in the particular circumstances”.15 I consider this an appropriate case to impose specific caps to liability for each party. In my assessment, for the reasons outlined above, the Council ought to have been liable for 40 per cent of any costs award and the Company 60 per cent. That also applies to disbursements.
[30] Given Rochdale has only sought costs against the Company, I limit my order on those terms. Failure to do so would potentially leave the Company liable for the full scale costs and would not do overall justice as between the parties in the particular circumstances.
Conclusion
[31] Rochdale is entitled to costs on a scale 2B basis, not including item 20 and reduced by 20 per cent, together with disbursements, less 30 per cent of the expert evidence expenses. I order that the Company’s liability is limited to 60 per cent of that total.
[32] The following chart particularises the costs award.
15 Kawarau, above n 8, at [18].
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Item
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Description
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Days
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Costs
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1
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Commencement of proceeding
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$6,690.00
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11
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Filing memorandum for first or subsequent CMC
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$892.00
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24
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Preparation of written submissions
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$3,345.00
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30
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Preparation of affidavits
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$5,575.00
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31
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Preparation of authorities and common bundle
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$2,230.00
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33
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Preparation for hearing
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$6,690.00
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34
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Appearance at hearing
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$2,230.00
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36
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Other steps: supplementary submissions
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$2,230.00
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SUBTOTAL
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$29,882.00
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Less 20 per cent
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$23,905.60
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Disbursements (filing, scheduling and hearing fees)
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$3,100.00
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Expert evidence of Mr Penny less 30 per cent
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$9,213.90
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TOTAL
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$36,219.50
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60 per cent Bell Lamb and Trotter liability
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$21,731.70
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Thomas J
White Fox and Jones, Christchurch for Applicant Buddle Findlay, Christchurch for First Respondent
Chapman Tripp, Christchurch for Second Respondent
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