BEFORE THE ENVIRONMENT COURT I MUA I TE KOOTI TAIAO 0 AOTEAROA Decision No. [2018] NZEnvC 19. IN THE MATTER of the Resource Management Act 1991

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1 BEFORE THE ENVIRONMENT COURT I MUA I TE KOOTI TAIAO 0 AOTEAROA Decision No. [2018] NZEnvC 19 IN THE MATTER of the Resource Management Act 1991 AND BETWEEN of an appeal pursuant to s 120 of the Act BRENT FALVEY (ENV-2016-CHC-034) Appellant AND CHRISTCHURCH CITY COUNCIL Respondent Court: Hearing: Environment Judge J E Borthwick In Chambers at Christchurch Date of Decision : 19 February 2018 Date of Issue: 19 February 2018 COSTS DECISION A: There is no order as to costs. Costs are to lie where they fall. REASONS Introduction [1] This proceeding concerns an appeal by Brent Falvey, against a decision of the Christchurch City Council declining an application to erect a dwelling and associated curtilage on the property at 9021 Rothesay Road, Christchurch. r--,:---;--" [2] This proceeding would have been a test case of the urban growth policies in the Canterbury Regional Policy Statement and the Christchurch District Plan (the Replacement Plan). Its outcome would have been of considerable importance not only /~<:- ~ ;,.fd. ',) F /' /G«'::';-:~~. tt!~<:\ to the parties but to the public as well. If the hearing had reached its conclusion, my i ~ i~jg~i~:~. i}lm'. l :(~~! \ 0\ inclination would have been to let costs lie where they fall, given the importance of the 1_ r'"~" " '<'" "" } \~\" ~4~~ii~r ~ij Falvey v CCC _ Costs Feb 2018 ~v;'---- ~«-"7 ~~/

2 2 interpretation issue. [3J Any grant of consent was contingent upon the road controlling authority approving the occupation by the applicant, Mr Falvey, of an unformed legal road, in particular to construct a driveway, footpath and fence, together with extensive landscaping on the road. [4J Prior to the hearing the parties did not raise for the court's attention any preliminary legal issue for direction or determination. The parties did, however, identify an issue for the substantive hearing concerning whether the planting and landscape treatment within the Council-owned road reserve could be relied on for visual mitigation.' The importance of this issue is not confined to whether approval of the road controlling authority would be given to occupy the road reserve. It is not unusual for resource consents to be granted in circumstances where an additional approval is required from other agencies. If the approval was not forthcoming, any grant of consent would not be able to be exercised. [5J In the Council's view, it was probably unlawful for a roading authority to give approval in perpetuity to a third party to occupy the road reserve in the way proposed 2 Critically, the parties agreed that the landscape plans before the court could be modified through the road controlling authority's own process'" Thus the exercise of any consent granted was not only contingent on the obtaining of an approval from another agency but the terms of the approval may bring about a different set of effects from those that the court was being asked to determine. [6J The applicant had initially considered this an acceptable outcome provided that the landscaping occurred "within the bounds of what the Court understood the access arrangement [to bej." On the other hand, his expert witnesses' opinions were contingent on the implementation of the landscape plan. Putting to one side the important policy issues raised on this appeal, the merits of the application for resource consent were so finely balanced that the grant of consent depended on the implementation of that plan., Joint Statement of Issues and Facts dated 30 August Pizzey, opening submissions at The Council considered any condition th at a consent holder maintain the landscaping would be ultra vires as it would require the consent of a third party, namely the Christchurch City Council. 3 Transcript (of resumed hearing dated 2 May 2017) at 7. Transcript (of resumed hearing dated 2 May 2017) at 7.

3 3 [7J After the hearing commenced, the applicant requested an adjournment of the hearing. This was to allow the applicant the opportunity to seek the approvals required from the road controlling authority. The request was made after the Council's planner filed a supplementary brief of evidence attaching a recent opinion from an in-house lawyer. The lawyer's opinion was that the occupation "could not" be authorised, nor could the authority grant a licence in perpetuity to landscape the road reserve. [8J The applicant says this legal opinion represented a material shift in the Council's stance. Having conferred with the Council prior to the hearing, the applicant says he was led to believe that if resource consent was granted the required approval would be forthcoming. Indeed, there is a flavour of this in the evidence given by the Council planner who advised that Council officers had indicated to him approval would be forthcoming, but that this would not be formally considered until resource and building consents were obtained. In which case, approval would likely be given for the planting proposed, although it was the view of the Council officers that the plantings could be removed by the Council at any time. 5 The Council resisted any criticism of its processes pointing out that the Council's officers could not bind the road controlling authority. [9J At the time the court was critical of the Council for the timing of the supplementary evidence and the fact that it was filed without the prior leave of the court'" That said, the adjournment was granted and the applicant unsuccessfully made an application for approval to occupy the road reserve. The application having been declined by the road controlling authority, the applicant withdrew the appeal. 7 Following the withdrawal the court received an application for costs from the applicant and the City Council, which are the subject of this decision. Application for costs by the applicant [10J The applicant seeks $67,470.57, being 65% of the costs incurred. It is submitted that while the circumstances do not coincide neatly with those identified in Bielby, if the court determined that the Council had a duty to advise of the existence of a preliminary issue, that would justify an award higher than the usual or standard costs'" 5 Walsh, EiC at [195)-[199). 6 Minute dated 4 May Memorandum dated 16 December Falvey application for costs dated 4 December 2017 at [30).

4 4 [11] The total costs are comprised of: Expert costs: Legal costs: $70, $33, Total: $103, [12] The grounds for the application are as follows: the Council's legal position on the access arrangement, that had been part of the resource consent application from the outset, should have been disclosed to the applicant and the court sooner. As the court observed, it clearly raised a preliminary issue ;9 had the issue been raised at the appropriate time, the applicant would have sought an adjournment of the appeal to enable the application for access to be pursued;10 (c) the Council had a duty to advise the applicant and the court as to its position on access so that it could be dealt with as a preliminary issue;" (d) as a result of the Council's inaction, the parties proceeded with the appeal and incurred all of the costs as a consequence. Those costs must now be considered unnecessary; and (e) had the matter proceeded, it is arguable that given the circumstances of the case (involving consideration of a new planning instrument and policy framework along with other legal issues) it may have been viewed as a test case in which costs could have laid where they fell. However, the matter did not proceed ' 2 Council's reply [13] The Council opposes the application for costs, submitting there has been no breach of duty, on the grounds: the applicant has not been put to unnecessary cost. The applicant spent resources on an appeal that it knew could have been successful with no 9 Falvey application for costs daled 4 December 2017 at [8[. 10 Falvey applicalion for cosls dated 4 December 2017 at [9]. 11 Falvey application for costs dated 4 December 2017 at [11]. 12 Falvey application for costs dated 4 December 2017 at [20].

5 5 costs recovery. If the appeal was successful there was another approval process to follow which may have been unsuccessful and, once again, no costs recovery;13 the legal opinion regarding the landowner approval process expressed in the memorandum attached to Mr Ward's supplementary evidence was not a change in position by the Council. The decision on use of the unformed road was one for elected members after an engagement process;" (c) the legal opinion did not create the inevitability of result contended in the applicant's application for costs. There was no inevitability that the elected member decision-making process would follow that advice.'s There are many variables that could have influenced that result, including the content of the application for approval, any other legal opinions provided to the Council, views of Council officers, the Community Board/Council decision making process;'6 and (d) the applicant made the decision to pursue the appeal. The Council is not culpable for any error or mistake which could be considered an error of duty and so no costs are warranted." [14] The Council acknowledges that the parties should have highlighted to the court prior to the hearing that there was another decision-making process to be undertaken by the Council under the LGA. '8 Application for costs by the Council [15] The Council has incurred $51, costs, which includes expert and legal costs. It seeks approximately 33% of that total, being $17, [16] The application is made on the following grounds: where an appeal is withdrawn after being set down for hearing the court will normally award costs against the appellant and in favour of the other parties;'9 13 Christchurch City Council reply dated 22 December at [5J. 14 Christchurch City Council reply dated 22 December at [8J. 1S Christchurch City Council reply dated 22 December 2017 at [9J. 16 Christchurch City Council reply dated 22 December at [10J. 17 Christchurch City Council reply dated 22 December at [2 5J. 18 Christchurch City Council reply dated 22 December 2017 at [1 3J. 19 Environment Court Practice Note 2014 ; Kakanui Riverwatch Soc Inc v Waitaki District Council C

6 6 the Council has been put to unnecessary costs as a result of matters that led to the withdrawal of the appeal, which were known to the applicant and his advisers;20 and (c) Council staff costs ought to be included. 21 Applicant's reply [17] The Council's application for costs is opposed on the following basis: while it is incumbent on all parties to identify preliminary issues, the applicant was not aware that access would be fundamentally opposed by the Council until it received the Council's legal opinion ;22 the appeal sought to clarify the Council's interpretation of certain provisions of its new District Plan and had many of the attributes of a test case. The Council's decision on access made the appeal futile, as even if consent were granted it would not be able to be given effect to without access to the site. That is what distinguishes this proceeding from others which were withdrawn late and where costs were warranted ;23 and (c) the Council chose to reveal a fundamental objection to the proposed access arrangement at a point when the hearing was almost completed. The applicant had no control over that timing and had no choice but to deal with the access application. 24 [18] If the court were to find that an award is justified, it is submitted that 25% would be more appropriate although it was maintained that the applicant should not be penalised given the untested plan provisions and the fact he had no choice but to withdraw once the Council's position on access was clear.25 The law [19] Section 285 of the Act confers a broad discretion upon the Environment Court to order costs, with the sole qualification being that the quantum be reasonable. Costs are 20 Christchurch City Council reply dated 22 December at 121]. 21 Wan aka Firewood Limited v Queenstown Lakes District Council C at 126]. 22 Applicant's reply, dated 22 December 2017, at [7]-[11]. 23 Applicant's re ply, dated 22 December 2017, at [15]. 24 Applicant's reply, dated 22 December 201 7, at [2 3]. 25 Applicant's reply, dated 22 December 201 7, at [28].

7 7 ordered in the interests of "compensation where that is jus!".' As with the exercise of any judicial discretion, costs' applications are to be dealt with in a principled manner with no presumption that costs will follow a successful outcome. It is essential that the costs sought are in relation to the Environment Court proceeding. [20] As for the amount or quantum of costs awarded, while the Environment Court has declined to set a scale of costs, for consent appeals (at least), costs ordered have tended to fall within three bands. Justice Heath in Thurlow Consulting Engineers & Surveyors Ltd v Auckland Councif27 noted these bands are not dissimilar to the standard, increased and indemnity costs regime applied by the High Court. Thus: standard costs [I interpose "standard costs" refers to the range of costs where they are ordered. Generally orders have been made within the range of a 25-33% of costs actually incurred. This range is sometimes referred to in the Environment Court's decisions as the "comfort zone"]; higher than standard costs where Bielbyfactors are present; and (c) indemnity costs, which are awarded rarely and in exceptional circumstances. [21] Where the court has awarded higher than standard costs it is usually because there are aggravating factors present such as those identified in OFC NZ Ltd v Bielby' as follows:" (c) (d) (e) whether arguments are advanced which are without substance; where the process of the court is abused; where the case is poorly pleaded or presented, including conducting a case in such a manner as to unnecessarily lengthen a hearing; where it becomes apparent that a party has failed to explore the possibility of settlement where compromise could have been reasonably expected; and where a party takes a technical or unmeritorious point of defence. 26 Foodstuffs (Otago Southland) Properties Limited v Dunedin City Council 2 ELRNZ Thurlow Consulting Engineers & SU/veyors Ltd v Auckland Council [2013] NZHC B DFC NZ Ltd v Bielby [1991]1 NZLR 587. '9 See also Clause 6.6(d) of the Environment Court's Practice Note 2014.

8 8 [22) As acknowledged by the Council, costs are often awarded when a proceeding is withdrawn once a hearing is underway, although it does depend on the circumstances. 3D Costs are less likely to be awarded where the proceeding involves a test case as there is a need to clarify the law. 31 Costs are not normally awarded against consent authorities unless it is able to be shown that it has neglected a dutyn Consideration [23) While I have noted the parties' claims and counter-claims concerning the timing of the Council's legal advice regarding the approvals required in relation to the roadreserve, I have decided not to exercise my discretion and decline to make an order for costs on a different basis. (24) It is an unedifying prospect for a court to decide an appeal, particularly one that is a test case, where its reasoning may be rendered nugatory through the processes of another agency. I am not referring to the exercise of the consent being subject to an approval being given by another agency, there is nothing unusual in that. The applicant's request to adjourn the hearing was a levelheaded response, when none of the parties could give the court an assurance that a decision could be made on the basis of an assumed set of facts and effects; namely the structures and landscaping would be formed in accordance with the plans produced in evidence. (25) It appears to the court that the parties did not consider or gave inadequate consideration to whether the road controlling authority's approval may bring about a materially different environment than the one that the court was being asked to evaluate. Outcome [26) There is no order as to costs. Costs are to lie where they fall. J Borthwick E vironment Judge 3D Environment Court Practice Note 2014 at 6.6(c). 31 Just One Life Limited v Queenstown Lakes District Councit C142/ Brown v Rodney District Counci/ W 105/99; Environment Court Practice Note 2014 at 6.6.