Environmental Defence Society Incorporated v The New Zealand King Salmon Company Ltd

JurisdictionNew Zealand
CourtSupreme Court
JudgeElias CJ,Arnold J
Judgment Date19 November 2014
Neutral Citation[2014] NZSC 167
Docket NumberSC 82/2013
Date19 November 2014

[2014] NZSC 167

IN THE SUPREME COURT OF NEW ZEALAND

Court:

Elias CJ, McGrath, William Young, Glazebrook and Arnold JJ

SC 82/2013

SC 84/2013

BETWEEN
Environmental Defence Society Incorporated
Appellant
and
The New Zealand King Salmon Company Limited
First Respondent
Sustain Our Sounds Incorporated
Second Respondent
Marlborough District Council
Third Respondent
Minister Of Conservation And Director-General Of Ministry For Primary Industries
Fourth Respondents
Between
Sustain Our Sounds Incorporated
Appellant
and
The New Zealand King Salmon Company Limited
First Respondent
Environmental Defence Society Incorporated
Second Respondent
Marlborough District Council
Third Respondent
Minister Of Conservation And Director-General Of Ministry For Primary Industries
Fourth Respondents
Counsel:

R B Enright and N M de Wit for Appellant SC 82/2013

M S R Palmer and K R M Littlejohn for Appellant SC 84/2013

D A Nolan and J D K Gardner-Hopkins for New Zealand King Salmon Company Ltd

S J Ritchie for Fourth Respondents

Application by appellant and by respondent for costs in two interrelated appeals relating to resource consents for salmon farming — public interest litigants v commercial interests litigants — appeals raised important issues under the Resource Management Act 1991 — in second appeal the public interest litigant had succeeded on its argument but failed on the facts — whether the rule that costs would normally follow the event was displaced by the importance of the issue and the fact the appeal was pursued in the public interest — whether the fact that the respondent was acting in its own commercial interests was relevant.

The issues were: whether costs should be awarded in either appeal.

Held (per majority, Elias CJ and William Young J dissenting): Costs would normally follow the event. The Supreme Court (SC) would, like the High Court and the Court of Appeal, generally make an award which was a reasonable contribution to the costs actually incurred, although the Court retained a discretion to make a higher award if it considered that to be just ( Prebble v Awatere Huata (No 2)).

Given the leave criteria which the SC had to apply, most (if not all) civil appeals would raise a point of general or public importance. That was the nature of the SC's work. Moreover, because the Court would normally have the benefit of a decision of the Court of Appeal, the issues which it had to resolve would generally be reasonably well focussed, which facilitated the parties' preparation. These factors, particularly the first, meant that some considerations bearing on the fixing of costs in other courts had less relevance to fixing costs in the SC.

King Salmon's argued that if an award was made in favour of EDS in the EDS appeal, then an award should be made against SOS in its favour in the SOS appeal. While that symmetry of treatment had some attraction given the interrelationship of the two appeals, it was not a decisive consideration. The general rule was that costs followed the event but ultimately, however, the SC had to do what it considered just in the circumstances, and this did not necessarily mean that the costs result would be the same in each appeal. The considerations at play, and the weight to be attached to them, might differ

The EDS appeal was the first occasion on which an appellate court had been asked to consider the overall scheme and operation of the Resource Management Act 1991 (RMA) and the issues raised could fairly be described as fundamental to its operation. The EDS did not pursue the appeal from any motive of personal gain. Rather, it considered that the accepted approach, applied by the Board of Inquiry in the decision at issue, was inconsistent with the RMA's requirements. EDS was successful, and the Court's decision would have a significant impact on the future operation of the RMA

By contrast, King Salmon's interest was in securing the use of a public resource for its commercial purposes. That was entirely legitimate, and, like EDS, it had to grapple with the large questions raised by the appeal. Moreover it was required to explain and defend the Board's position. But nevertheless, as a company seeking to further its commercial objectives, it was in a different position to EDS and that had some relevance in this context. There was no reason to displace the general rule that costs should follow the event in this instance.

The submissions SOS made in the EDS appeal were of assistance to the SC and were reflected in the Court's analysis. The SOS appeal in relation to the three remaining salmon farms raised, as King Salmon acknowledged, issues of “major resource management significance”. The Court's analysis would have a significant impact on decision-making under the RMA in the future. Although SOS did not succeed on the facts, it did have a measure of success given the analysis adopted by the Court. Accordingly, it would not be right to apply the usual rule that costs follow the event. Costs should lie where they fell.

The decision on the SOS appeal did not mean that whenever a group claiming to be acting in the public interest brought an appeal to the SC, it would be insulated from paying costs if unsuccessful. Rather, the outcome would be determined by the particular circumstances of the case. Here, it was the fact that SOS did have some success in the appeals that persuaded the Court that costs should lie where they fell, although it was also relevant that the appeals concerned matters of public interest, that SOS was not pursuing a commercial benefit and that it acted reasonably in its conduct of the appeal.

A reasonable total contribution to EDS' costs was $34,900. Deducting the $11,250 paid by the Crown parties from the total of $34,900 left $23,650 to be paid by King Salmon.

  • A In SC 82/2013:

    • (a) By consent, the Minister of Conservation and the Director General of Primary Industries must each pay the Environmental Defence Society Inc $5,625 by way of costs.

    • (b) The New Zealand King Salmon Company Ltd must pay the Environmental Defence Society Inc $23,650 by way of costs, together with disbursements of $4,764.

  • B In SC 84/2013:

    • (a) There is no order for costs. Costs will lie where they fall.

JUDGMENT OF THE COURT AS TO COSTS
REASONS

Para No

Elias CJ and William Young J

[1]

McGrath, Glazebrook and Arnold JJ

[31]

ELIAS CJ and WILLIAM YOUNG J

(Given by Elias CJ)

1

The Environmental Defence Society in SC 82/2013 and The New Zealand King Salmon Co Ltd in SC 84/2013 apply pursuant to leave reserved in the judgment of this Court of 17 April 2014 for costs in the respective appeals in which they were successful. 1

2

EDS, a public interest litigant, was successful as appellant in SC 82/2013 in which King Salmon, an applicant for resource consents to set up salmon farms in the Marlborough Sounds, the Minister of Conservation and the Director-General of the Ministry for Primary Industries were respondents. It seeks to recover $46,550 plus disbursements in total against all respondents. EDS has reached agreement with the two Crown respondents that they will pay costs and disbursements of $11,250. The Court is asked to make consent orders apportioning this amount equally between the Minister of Conservation and the Director-General of the Ministry for Primary Industries. With that deduction, the amount of costs EDS seeks from King Salmon is $35,300 together with disbursements. EDS has advised the Court that it has to date incurred legal costs of $20,000 plus disbursements but says it has entered into “a contingency arrangement” which “allows for a further fee to be rendered in the event of a successful outcome on the appeal and costs”.

3

King Salmon was successful as respondent in the appeal brought by Sustain Our Sounds Inc, another public interest litigant, in SC 84/2013. King Salmon does not seek costs against SOS unless costs are awarded against it in favour of EDS in SC 82/2013. If costs are awarded to EDS, however, King Salmon contends that costs should also follow the event in the unsuccessful SOS appeal. SOS argues that it should not be ordered to pay costs and disputes the quantum claimed.

Costs in the Supreme Court
4

Rule 44(1) of the Supreme Court Rules 2004 permits the Court to make “any orders that seem just concerning the whole or any part of the costs and disbursements of a civil appeal or an application to bring such an appeal”. In seeking costs from New Zealand King Salmon, EDS invokes the principle, applied in this Court in Prebble v Awatere Huata (No 2), that a reasonable contribution to costs will normally be awarded to a successful party to an appeal to the Supreme Court. 2 That is the principle also relied upon by King Salmon in seeking costs from SOS in the appeal in which it was successful, with the indication that it does not seek such costs if costs are to lie where they fall in the EDS appeal.

5

The Supreme Court in Prebble adopted the approach which had been followed in New Zealand courts before its establishment that costs generally follow the event. 3 In that case, it was argued that no award of costs should be made due to the public interest in the interpretation and application of the legislation at issue. 4 The Court took the view that, in fulfilling its obligation under r 44 to make such orders as are just, it would seldom be just to require a successful party to bear the full costs of its case. 5 It also rejected the suggestion that distinctions should be drawn for the purposes of costs in the Supreme Court according to the type of case, and declined to make distinctions between “public law and family cases and commercial litigation”. 6 The Court pointed out that, in the Supreme Court, “[a]ll cases, because of the nature of the leave criteria, are likely to raise substantial issues of principle” and their resolution by the Court may therefore be expected to...

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