Viaduct Harbour Holdings Limited v Auckland Council [2018] NZHC 1772 (17 July 2018)

Last Updated: 5 September 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-002276 [2018] NZHC 1772

BETWEEN	VIADUCT HARBOUR HOLDINGS LIMITED Appellant
AND	AUCKLAND COUNCIL Respondent
AND	BODY CORPORATES 199318 (THE POINT), 313748(VIADUCT POINT), 197236 AND 192317 (LATITUDE 37), 378969, 383524, 338459, 336640, 321390, 321391, 321389, 321939 AND 323876 (THE PARC), 326496 (NORTH), 343562 (STRATIS) 358939 (HALSEY), 384911 (SOFITEL) AND THE LIGHTER QUAY RESIDENTS SOCIETY INCORPORATED Section 301 Parties

Hearing:	On the papers
Counsel:	D M Salmon & R Schultz for the Appellant W S Loutit & S J Mitchell for the Respondent B J Tree for Section 301 Parties
Judgment:	17 July 2018

COSTS JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 17 July 2018 at 4:00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Lee Salmon Long, Auckland Simpson Grierson, Auckland

Minter Ellison Rudd Watts, Auckland

VIADUCT HARBOUR HOLDINGS LTD v AUCKLAND COUNCIL COSTS JUDGMENT [2018] NZHC 1772 [17 July 2018]

Introduction

[1] In an appeal on questions of law,¹ Viaduct Harbour Holdings Ltd challenged three decisions of the Auckland Council in relation to changes to the proposed Auckland Unitary Plan. It was successful in demonstrating that one of these decisions amounted to an error of law, but was unsuccessful in respect of the remaining two. In my judgment of 15 February 2018, I invited the parties to file memoranda as to costs.²

[2] Viaduct now seeks costs, claiming it was the successful party and that the appeal was of significant public interest. It recognises, however, that its costs should be reduced to reflect its limited success, and seeks 30 per cent of 2B costs.

[3] The Auckland Council, on the other hand, contends that it was the successful party. It says that a significant portion of counsels’ argument was directed at the issues on which Viaduct was unsuccessful. The Auckland Council therefore seeks costs, although it accepts that these should be reduced to 75 per cent of 2B costs.

[4] A group of 17 body corporates and one incorporated society (“the Body Corporates”) joined the appeal as parties under s 301 of the Resource Management Act 1991. The Body Corporates represented the owners of property located in the Viaduct Harbour Precinct. They supported some of the Council’s arguments on appeal, providing further submissions on particular points, and abided the decision of the Court on others. The Body Corporates now contend that they should be awarded costs on a 2B basis.

Legal principles

[5] Although costs are at the discretion of the Court,³ it is a fundamental principle that the successful party is entitled to recover costs.⁴ Where parties have succeeded on some issues and failed on others, it is necessary to make a “realistic appraisal” as to who was the successful party overall in the proceedings.⁵ The Court may take into

¹ Under s 158 of the Local Government (Auckland Transitional Provisions) Act 2010.

² Viaduct Harbour Holdings Ltd v Auckland Council [2018] NZHC 154 at [112].

³ High Court Rules 2016, r 14.1.

4. High Court Rules, r 14.2(a); Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [8].

⁵ Weaver v Auckland Council [2017] NZCA 330 at [23] and [26].

account the fact that a significant portion of counsels’ argument was directed towards particular issues, while other issues made up only a small part of the proceedings.⁶

[6] Costs may be reduced to reflect the fact that the winning party was not wholly successful.⁷ It will often be necessary to take a broad-brush approach in assessing the appropriate quantum of such a reduction.⁸

Was Viaduct Harbour Holdings Ltd or the Auckland Council the successful party?

[7] The first decision challenged by Viaduct was the creation of an exclusively residential enclave in the Viaduct Harbour Precinct, identified as “Sub-precinct C”. The second was the decision not to include a two-metre roof bonus applicable to buildings within Sub-precinct C. The third was the inclusion of the Lighter Quay premises in Sub-precinct C. Viaduct contended that the Auckland Unitary Plan Independent Hearings Panel and the Council failed to give sufficient reasons for the decisions and that the decisions were unreasonable having regard to the evidence and context in which they were made.

[8] In my judgment, I set out the law regarding the obligations of the Panel and the Council to give reasons for their decisions.⁹ I held that the Panel had given adequate reasons for the creation of Sub-precinct C, and that the Council was not obliged to give reasons where it simply accepted the Panel’s recommendation. I further held that the creation of Sub-precinct C and the decision to include the Lighter Quay premises within Sub-precinct C were not unreasonable decisions in light of the evidence. Viaduct therefore failed on these issues.

[9] However, I concluded that Viaduct had shown that the Panel made an error of law in failing to accept and act upon the agreed position of the parties as recorded in a mediation joint statement regarding the creation of a two-metre roof bonus applicable to Sub-precinct C. Consequently, the Council also erred in law in accepting the Panel’s recommendation. Viaduct was successful on this point.

⁶ Flujo Holdings Pty Ltd v Merisant Co [2017] NZHC 2069 at [17].

⁷ High Court Rules, r 14.7(d).

⁸ Body Corporate S73368 v Otway [2018] NZHC 1095 at [8].

⁹ At [54]–[64] and [80]–[85].

[10] I accept the Council’s submission that the roof bonus issue formed only a limited portion of the arguments. A more significant portion of counsel’s arguments was directed at the decision to create Sub-precinct C and to include the Lighter Quay apartments within it, and the adequacy of the reasons given by the Panel and the Council. On a realistic appraisal, I consider that the Council was the successful party on the appeal. It is entitled to costs on a 2B basis. I further accept that the nature and complexity of the proceedings was such that an allowance for second counsel is justified.¹⁰

[11] As the Council itself acknowledges, however, its costs should be reduced to reflect its lack of success on the roof bonus issue. The time and resources necessary for Viaduct to meet ultimately unsuccessful arguments significantly increased its costs. I consider that a reduction of 25 per cent is appropriate.

[12] Viaduct submits that the appeal concerned a matter of public interest. While I note that a proceeding brought in the public interest can justify a reduction in costs,¹¹ I do not consider that the present appeal concerned matters of public interest such as to warrant a further reduction in costs.¹² As I noted in Belgiorno-Nettis v Auckland Council:¹³

For the “public interest” exception to apply, the proceeding must concern a matter of genuine public interest, have merit and be of general importance beyond the interests of the particular unsuccessful litigant. A matter that arises out of a private interest does not become a matter of public interest simply because the public benefits generally from its determination, such as settling the correct interpretation of a piece of legislation.

(footnotes omitted)

[13] Viaduct Harbour Holdings Ltd, as a property holding and development company that is the owner of land within Sub-precinct C, brought the proceedings in its own private interest. The public interest exception cannot be invoked simply because the proceedings concerned the proposed Auckland Unitary Plan.

¹⁰ Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [21].

¹¹ High Court Rules 2016, r 14.7(e).

¹² See High Court Rules, r 14.6(e).

¹³ Belgiorno-Nettis v Auckland Council [2018] NZHC 926 at [16].

The Body Corporates’ costs

[14] The Body Corporates were entitled to join the appeal, and it is well established that the courts have jurisdiction to grant costs in favour of a s 301 party.¹⁴ However, as Kós J has pointed out:¹⁵

The High Court ... retains a discretion to ensure that the level of costs payable does not get out of hand. Costs awards seek to ensure that parties with common interests cooperate, that arguments are not needlessly duplicated and that costs are not unnecessarily compiled.

[15] In the present case, I consider that the Body Corporates did not unnecessarily duplicate the submissions of the Council; they simply adopted them where appropriate. Further, the Body Corporates presented a valuable additional perspective to that of the Council. They made helpful submissions identifying the Panel’s reasons for the creation of Sub-precinct C and explaining why the Panel’s decision was not unreasonable with regard to the evidence. I also note that by joining the appeal, the Body Corporates themselves became vulnerable to an award of costs against them.

[16] I therefore consider that the Body Corporates are entitled to costs on a 2B basis. There are no grounds for reducing their costs, because unlike the Council they simply abided the decision of the Court on the roof bonus issue, on which Viaduct was ultimately successful.

Result

[17] Viaduct Harbour Holdings Ltd is to pay the costs of the Auckland Council on a 2B basis reduced by 25 per cent. As quantified in the Schedule to the Council’s costs memorandum, this figure comes to $9,031.50. The Council does not seek disbursements.

14. See Horticulture New Zealand v Manawatu-Wanganui Regional Council [2013] NZHC 2853 at [4]; Man O War Station Ltd v Auckland Council [2015] NZHC 1409 at [21]–[22].

¹⁵ Horticulture New Zealand v Manawatu-Wanganui Regional Council [2013] NZHC 2853 at [5].

[18] Viaduct Harbour Holdings Ltd is also to pay the costs and disbursements of the s 301 parties (the Body Corporates) on a 2B basis, which comes to $10,368.00 as calculated in Appendix B to the Body Corporates’ costs memorandum.



Paul Davison J