Greymouth Petroleum Ltd v Heritage New Zealand Pouhere Taonga

JurisdictionNew Zealand
CourtEnvironment Court
JudgeB P Dwyer,Environment Judge
Judgment Date10 May 2016
Neutral Citation[2016] NZEnvC 84
Docket NumberENV-2014-WLG-000062
Date10 May 2016

Decision No. [2016] NZEnvC 84

BEFORE THE ENVIRONMENT COURT

Court:

Environment Judge B P Dwyer sitting alone under s 279 of the Resource Management Act 1991

ENV-2014-WLG-000062

In the Matter of an appeal pursuant to section 58 of the Heritage New Zealand Pouhere Taonga Act 2014

Between
Greymouth Petroleum Limited
Appellant
and
Heritage New Zealand Pouhere Taonga
Respondent

Application for costs against Heritage New Zealand Pouhere Taonga (HNZ) — the applicant sought an authority under s44(a) Heritage New Zealand Pouhere Taonga Act 2014 to modify or destroy an archaeological site — HNZ agreed that there was a low possibility of locating archaeological material but declined an authority based on wider Maori cultural values associated with the wider area, namely the alleged burial site of Wiremu Kingi in the vicinity — HNZ had delayed its decision in order to influence a local hapu into opposing the application — it did not advise the applicant of any of these actions or give it an opportunity to comment on factual contentions advanced by others — application of paragraph 6.6(c) and (d) Environment Court Practice Note 2014 — whether HNZ was to be treated as a first instance decision maker so that costs should not be awarded against it — whether HNZ had failed to perform its duties properly or had acted unreasonably — whether indemnity costs should be awarded — whether it was appropriate to use the District or High Court Scale costs as a reference when assessing costs in the Environment Court.

Held: Section 285 RMA was couched in broad terms and bestowed a wide discretion on the Court. It was well-recognised that the discretion must be exercised on a principled basis. Ultimately in any costs decision under s285, the question of what costs should be awarded came down to a determination of what was reasonable.

The imposition of costs against HNZ was to be considered on the same basis as a costs application against a consent authority undertaking its functions pursuant to RMA. HNZ was acting as a first instance approving authority pursuant to the HNPTA in a manner akin to an RMA consenting authority. That approach immediately brought into play the provisions of para 6.6(c) of the Practice Note. The Court would not normally award costs against the public body whose decision was the subject of the appeal unless it had failed to perform its duties properly or had acted unreasonably. The provisions of the Practice Note were not rules of law but set out the Court's common practices which could be varied or departed from for any number of valid reasons in any given instance.

In order to approve an authority under s44(a) HNPTA, HNZ was required undertake a judicial or quasi-judicial function. In exercising that function, HNZ was obliged to act in accordance with the rules of natural justice. HNZ failed to meet its obligations in that regard in the most basic way.

A fundamental requirement for the exercise of a judicial function was that of impartiality, both as a matter of fact and as a matter of reasonable appearance. HNZ had acted directly counter to the requirement of impartiality (as well as the audi alteram partem rule) by:

  • • allowed time to influence the position of Pukerangiora Hapu without advising Greymouth;

  • • determined the application on broad, novel grounds without giving Greymouth the opportunity to comment;

  • • determined the application on the basis of factual contentions without giving Greymouth the opportunity to address those contentions;

  • • had regard to the ability of Greymouth and the inability of Otaraua to fund an appeal as a relevant consideration in determining the application, again without giving Greymouth the opportunity to comment on that consideration.

HNZ's failures, even on the most favourable interpretation, gave rise to at least the appearance (if not the fact) of partiality in the mind of a fair-minded and properly informed observer.

HNZ's failures had a direct costs consequence for Greymouth in that it was forced to bring an appeal to the Court to address the factual and legal bases upon which its application was declined.

The issue to be considered under s285 RMA was what costs it was reasonable to require HNZ to pay in this instance. The identified failings of HNZ were so fundamental as to make this case one where it was appropriate that greater than comfort zone costs be awarded against it.

HNZ drew comparison between the costs sought by Greymouth and those payable by reference to the District Courts Scale which had on occasions been used as a yardstick for the comparative assessment of costs in the EnvC. There were reservations about the appropriateness of that comparison as a matter of general principle. There was a significant difference between costs awards in the EnvC and those in other courts such as the District and High Courts.

Costs awards in the EnvC looked directly at the merits of the parties' cases in determining whether or not it was reasonable that costs were awarded. There was no presumption that costs should be awarded in favour of successful parties. In determining whether or not to award costs, close attention was paid to the merits of the case advanced by unsuccessful parties and matters such as the Bielby factors.

As a general observation, an unsuccessful party who had reasonably conducted proceedings and advanced a case supported by soundly based substantive evidence was unlikely to be subject to an award of costs in the EnvC. In the situation where a successful party had no guarantee of receiving a costs award at all (and frequently did not), it seemed inappropriate that costs awards should in some way be limited or capped by reference to the District or High Court Scales which applied based on outcome and without reference to merits. Although such a comparison could be of use on occasions, HNZ's contention that the reasonableness of any costs award in this case might be assessed by reference to the District Court Scale was rejected.

HNZ also sought to draw comparison between the costs charged by its legal advisers and those charged by Greymouth's advisors to support its submissions as to the appropriate level of costs. The obvious difference between the level of costs charged to the respective parties was the fact that Greymouth employed the services of a Queen's Counsel. The question was not whether or not counsel's costs were reasonable but rather what costs was it reasonable to require the unsuccessful party to pay. Parties should not be penalised for another party choosing gold plated representation. Conversely it also had to be accepted that, in light of the obvious importance of this case to Greymouth, it might reasonably have been expected to instruct senior counsel. These were all matters to be assessed in determining what costs it might reasonably award.

The fundamental failings on the part of HNZ in determining Greymouth's application when combined with the substantial merits of Greymouth's case were such as would reasonably support a claim at least in the order of 75 per cent of costs incurred and possibly even indemnity.

A reasonable award would be 75 per cent of witness and hearing costs and disbursements plus 50 per cent of legal costs.

HNZ was ordered to pay to Greymouth Petroleum Ltd costs of $118,000.

COSTS DECISION

A: Costs awarded
Introduction
1

On 26 January 2016 the Court issued a decision 1 (the Decision) allowing an appeal by Greymouth Petroleum Limited (Greymouth) against a decision of Heritage New Zealand Pouhere Taonga (HNZ) declining an application by Greymouth pursuant to s 44(a) of the Heritage New Zealand Pouhere Taonga 2014 (the Act) for an authority to modify or destroy an archaeological site situated in the Waitara Valley, Taranaki.

2

In allowing the appeal the Court reserved costs in favour of Greymouth which has now applied for costs. HNZ opposes the application.

3

The Act does not contain any provisions for the award of costs on appeals. This application for costs is accordingly considered under the provisions of s 285 of the Resource Management Act 1991 (RMA).

Background
4

The archaeological site Greymouth sought to modify or destroy was an area of farmland containing approximately 1.5ha on which it proposed to establish drilling structures for oil and gas extraction. The well site was referred to by Greymouth as Kowhai D.

5

Greymouth's application was made on a precautionary basis because archaeological investigation and assessment undertaken on behalf of both it and HNZ established that the possibility of locating archaeological material on Kowhai D was low. 2 Notwithstanding the agreed low possibility of there being archaeological material on Kowhai D, Greymouth's application was declined by HNZ. The grounds for doing so were summarised in the following paragraphs of its decision, which record as follows:

It is the decision of Heritage New Zealand Pouhere Taonga that your application be declined. Heritage New Zealand Pouhere Taonga and tangata whenua are in agreement that the area has significant Maori values that warrant protection. It is not considered possible to adequately offset the adverse effects of the proposal.

Otaraua have informed Heritage New Zealand that Wiremu Kingi Te Rangitake 3, a significant ancestor of Te Atiawa, is buried in the Waitara Valley. Although the proposed development will not directly impact on the burial site, the values associated with this site are considered so important that any development in the area will impact on the integrity of the cultural values.

The Otaraua referred to is Otaraua Hapu (Otaraua) and a representative of that hapu (Mr D E Doorbar) appeared as a witness for HNZ at the appeal hearing. A further witness for HNZ at the hearing was Mrs R Belton, a representative of Pukerangiora Hapu within whose rohe Kowhai D is situated.

6

It will be apparent from consideration of that part of the HNZ...

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