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.
The issues were: whether s36 RMA and s285(5) RMA (presumptions regarding costs) were relevant to the costs applications; what was the role of the council on a direct referral; and, whether the council had unnecessarily lengthened the proceeding by calling evidence and not reaching a settlement when it could reasonably have been expected to do so.
Held: Section 285 RMA conferred a broad discretion on the EC to award costs considered reasonable in the circumstances. There were also a number of recognised principles including: there was no general principle that costs should follow the event; the Court's usual practice was not to order the primary decision-maker to pay costs unless it had neglected a duty; costs could be awarded where a party had been put to unnecessary expense and, in general, a contribution of between 25% and 33% was within the Court's comfort zone. The commonly recognized principles that applied to costs applications at the conclusion of an appeal were of little assistance as they did not concern direct referrals and the requirements under s285(5).
The modified application for resource consent had been directly referred to the EC. Quite properly, all parties had presented evidence relevant to the modified proposal. Major changes had been made to the proposed wind farm and the EC did not have jurisdiction to consider the modified proposal under the notice of appeal. Mainpower had elected to have the second land use consent referred directly to the EC for determination. Had the council determined the application it could have recovered its actual and reasonable costs under s36 RMA, therefore s285(5) RMA applied.
Section 285(5) RMA made it clear the EC had to have regard to the fact the proceedings were at first instance when deciding on the order of costs. The statutory presumption in s285 RMA did not apply in relation to this application for costs, nor did s36 RMA apply when determining costs on a direct referral arising under s87F RMA.
On a direct referral, a consent authority had a duty to assist the court by providing evidence on the subject matter. There had been no agreement on the conditions of consent. Therefore it had been proper for the council to lead evidence. The modified proposal had been considered in the context of a first-hearing, and as such it had been necessary for the court to determine the merits of the application for direct referral. If the council had not proposed to call evidence, then it was likely the Court would have issued a direction that it do so.
The modification to the wind farm had caused the council to change its position from defending its decision to decline it, to neither supporting nor opposing the application. The modification went to the merits of the proposal. The proposal had several matters of national importance and it was necessary for the council to call evidence for its change in position. The council could not have relied on its planning witness to give evidence outside of her expertise on matters addressed by others in the s87F RMA reports. In calling evidence, the council had not unnecessarily lengthened the duration of the hearing.
Mainpower was not eligible for costs as a successful party because the proceeding included a land use consent directly referred to the court that had been substantially modified from the original proposal. The council had a duty to assist the Court. Therefore it was not reasonably expected that it should have settled. The councils' costs incurred on the direct referral proceeding had been for the private benefit of Mainpower and should be paid for by Mainpower.
It was difficult to distinguish the issues raised by the appeal from those raised by the direct referral, given the nature and scope of amendments made to the original wind farm proposal. Taking into consideration that it was a first instance hearing and the council's role in these proceedings, an award of 50% of its actual costs incurred after the filing of the s87F RMA reports was reasonable. The councils' application for costs was granted and Mainpower was order to pay the council $136,394. Mainpower's application for costs was declined.
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...
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