Mainpower NZ Ltd v Hurunui District Council
Decision No.  NZEnvC 56
BEFORE THE ENVIRONMENT COURT
Environment Judge J E Borthwick
In the Matter of the Resource Management Act 1991 (the Act) and of an appeal pursuant to section 120 of the Act
In the Matter of a direct referral under section 87 of the Act
Costs decision — substantive proceedings concerned application by appellant to construct wind farm — original application declined — application modified and directly referred to Environment Court at appellant's request under s87D Resource Management Act 1993 — appellant successful — whether either party entitled to costs — whether s36 (local authority can recover administrative costs) should guide the application of s285 (awarding of costs) — whether respondent had unnecessarily lengthened the proceeding by calling evidence and not reaching a settlement — what was role of a consent authority on a direct referral.
A: Hurunui District Council's application for costs is granted and MainPower NZ Limited is ordered to pay the Council $136,394.
B: MainPower NZ Limited's application for costs is declined.
These proceedings concern a proposal by MainPower NZ Limited to establish and operate a wind farm at Mt Cass, Waipara. The proceedings comprise an appeal by MainPower against a decision by the Hurunui District Council to decline consent for the wind farm and secondly, an application directly referred to the Environment Court for consent for a modified wind farm proposal. The proceedings were joined and the Environment Court issued two decisions first granting consent 1 and then approving the conditions of consent. 2 Costs were reserved.
MainPower and Hurunui District Council have each filed an application for costs against the other. MainPower seeks an order of costs of $90,000 and the Council an order in the range of $194,519–$208,414.
Each party opposes the other's application.
On or about 21 June 2008 Hurunui District Council publicly notified MainPower's application for land use consent to establish and operate a wind farm on the ridge of Mt Cass, Waipara.
In a decision dated 2 April 2009 the independent commissioners appointed to decide the application declined consent. MainPower subsequently appealed the Council's decision.
Following court facilitated mediation and conferencing of expert witnesses, on 17 May 2010 MainPower applied to the Hurunui District Council for an additional land use consent; the additional consent was needed to authorise a revised layout for the wind farm that had been agreed at mediation.
MainPower requested that application be directly referred to the Environment Court for determination (section 87D). On 27 May 2010 the Council determined that the application for direct referral should be heard by the Environment Court. Following service of the section 87F reports, on 11 August 2010 MainPower lodged a notice of motion with the Environment Court that the new land use consent application be processed and heard at the same time as the appeal (section 87G). This was necessary because the changes were outside the scope of the original application (on appeal) and it was intended that there be a single overall revised proposal. 3 On 20 August 2010 the Environment Court made an administrative decision that it had jurisdiction to determine the direct referral application. On 1 December 2010 the court issued a procedural decision ordering that the appeal and direct referral be heard together. 4
I summarise next the submissions made in support of the applications. These were lengthy and I have identified issues for determination to provide a structure to consider the competing applications.
On 17 January 2012 the Council applied for costs against MainPower pursuant to section 285 of the Act. The Council seeks a fair and reasonable contribution towards its costs relating to the direct referral proceedings (ENV-2010-CHC-200) and in particular those costs incurred subsequent to the filing of reports under section 87F. 5 The Council's costs application excludes costs for salaried Council officers and for negotiation or settlement discussions. 6 The Council's costs are itemised and supported by copies of invoice statements.
The Council incurred $277,885.22 costs since the filing of the section 87F reports. The Council submits that a fair and reasonable contribution would be 70–75% of its costs which it quantifies as between $194,519 and $208,414. 7
In support of its application the Council submits that had the matter not been referred to the Environment Court, and heard instead by the Council, it would be entitled under section 36 of the Act to recover its actual and reasonable costs. Section 36 should guide the court in its application of section 285 bearing in mind:
(a) the Act's user pay regime;
(b) the substantial benefits to applicants in direct referrals; and
(c) Council's conduct in this case — it “maintained a neutral role and called evidence in support of its section 87F report”. 8
It notes that significant changes were made to the original application that was considered and ultimately declined by the Council in 2009.
In these proceedings it likened its role to that of amicus curiae. It maintained a neutral role in relation to the application. The Council called evidence in support of, and to expand upon the reports prepared under, section 87F of the Act. 9
As the Council is not clear whether section 36 is available to recover its costs on a direct referral application, it makes this application to the court. The Council notes that the advantages to the applicant in the direct referral process are substantial in terms of shortening the timeframe to a decision and avoiding costs of a council hearing.
In a subsequent memorandum dated 17 February 2012, the Council advised that it is difficult to apportion its costs against the appeal and the direct referral proceedings — it refers to the proceedings as a blended proposal. It notes that the direct referralapplication resulted in additional work (including site visits) and considering submissions following notification. 10 However, it estimates 50% of its costs are attributable to the direct referral (being $136,394) and on that basis a reasonable contribution is sought.
On 17 February 2012 MainPower filed a memorandum opposing the Council's costs and seeking a contribution towards its costs.
MainPower seeks a fair and reasonable contribution from the Council towards its costs associated with the “appeal”. This is quantified at $90,000 being 30% of its actual and reasonable costs incurred since the exchange of rebuttal evidence on 27 May 2011. 11 MainPower states that its costs since the exchange of rebuttal evidence are $307,213. These costs exclude those associated with witnesses whose evidence was not challenged by the Council. 12
It advances four grounds in support of its costs application:
(a) MainPower is eligible for a costs award as a successful party to the proceedings;
(b) MainPower was put to significant costs in these proceedings as a result of the Council's failure to settle when settlement should reasonably be expected;
(c) MainPower has been put to costs in these proceedings as a result of the Council unnecessarily lengthening the duration of the hearing. These costs should have been avoided;
(d) it is reasonable to make an award of costs that will contribute toward the actual costs incurred by MainPower. 13
While the court decided the appeal and the application for consent directly referred to it, MainPower submits that for the purpose of the costs application, the direct referral is irrelevant as “there are no costs attributable to the Direct Referral that would not have been incurred in relation to the Appeal”. 14
MainPower submits that the amendments made to the original application were “not significant in scale to the application under appeal, but were applied for in order to minimise the effects of the application subject to the appeal”. 15 Following further mediation the Council, and two other parties, agreed on a revised layout which, subject to conditions, was said to be a consentable outcome. The fact two parties withdrew from the appeal proceedings, MainPower submits, was a clear indication that a settlement could have been reasonably expected from the Council. 16
Evidence filed by the Council from Ms Briggs, Dr van Meeuwn-Dijkgraff and Dr Lloyd was contrary to the agreements reached at mediation and an abuse of the court's processes. Further, MainPower states that the Council should have called evidence on conditions where agreement had not been reached or to...
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