The Club Body Corporate v Queenstown Lakes District Council

• Jurisdiction: New Zealand
• Judge: J R Jackson
• Judgment Date: 03 August 2016
• Neutral Citation: [2016] NZEnvC 143
• Court: Environment Court
• Docket Number: (ENV-2015-CHC-109)
• Date: 03 August 2016

In The Matter of the Resource Management Act 1991

And of an appeal under section 120 of the Act

BETWEEN

The Club Body Corporate

Appellant

and

Queenstown Lakes District Council

Respondent

and

James Lloyd Developments Limited

Applicant

Decision No. [2016] NZEnvC 143

Court

Environment Judge J R Jackson

(ENV-2015-CHC-109)

BEFORE THE ENVIRONMENT COURT

Application for alleged post–mediation costs by the appellant — the appellant had concerns about the height of a unit (Unit 5) — during mediation the applicant's architect said that Unit 5's height could not be reduced — it was agreed that the appellant's architect would develop plans showing how the height reduction could be achieved — the applicant rejected these because of their design, additional costs, complexity and risk to construction — however the applicant's architect subsequently redesigned Unit 5 to comply with the District Plan — the appellant sought costs for the expenses incurred between the period after mediation and the agreement to the applicant's architect's amended plans, saying it had been forced to incur added costs by the applicant's refusal to accept that Unit 5 could be redesigned — Environment Court Practice Note 2014 stated that costs incurred in court — assisted mediation were not awarded by the Court — whether the period post the mediation leading up to the agreement fell within the court assisted mediation process — whether the appellant had incurred unnecessary expenses as a direct consequence of the applicant's assertion that the height of Unit 5 could not be reduced — whether the directive language in the Practice Note overrode any discretion that might otherwise exist.

• A: Under section 285 of the Resource Management Act 1991, there is no order as to costs.

COSTS DECISION

REASONS

Introduction

1 The Club Body Corporate lodged an appeal against a decision of the Queenstown Lakes District Council granting consent 1 to James Lloyd Developments Limited to construct five residential units with associated access, parking, landscaping and eaiihworks at a site on Marries Lane, Frankton Road, Queenstown 2.

2 The Club Body Corporate (“the appellant”) is responsible for the Oaks Club Resort located at 171–183 Frankton Road, adjoining the development proposed by James Lloyd Developments Limited (“the applicant”). The appellant had concerns about the height of Unit 5, the setback from the common boundary and conditions relating to traffic management on Marries Lane arising from construction activity.

3 The parties attended an Environment Court facilitated mediation on 9 March 2016 and after fmiher negotiations the parties came to an agreement. The parties agreed to amend the conditions so that Unit 5 would comply with the 7 metre height limit applicable to the site, the boundary setbacks would be adjusted and condition 8 (concerning construction traffic) would also be amended.

4 The court issued a consent order on 16 May 2016 and, at the appellant's request, costs were reserved and a timetable for any submissions was set. The appellant has lodged an application for costs against the applicant, dated 26 May 2016. The applicant has lodged a memorandum by way of reply, dated 9 June 2016, also making a counter application for the costs of responding to the appellant. The appellant has responded to that application in a memorandum dated 17 June 2016.

Application for costs

5 The appellant seeks an award of $1,612.05, being 33% of the costs incurred 3. The appellant only seeks costs for the expenses incun˙ed between the period after

mediation on 9 March 2016 and the agreement to the applicant's architect's amended plans on 21 April 2016 4 (“the relevant period”)

6 The primary costs during the relevant period concern the preparation and review of the plans developed by the appellant's architect Mr Wyatt in response to the applicant's position at mediation, legal considerations on the same topic and correspondence to and from the applicant and other parties to the appeal. The costs are comprised of:

Legal fees	$1,782.27
Planning fees	$1,234.00
Architect's fees	$1,868.75
Total	$4,885.02

7 The parties had comi facilitated mediation on 9 March 2016. The contentious issue identified and discussed during mediation related to the appellant's concerns with the height and proximity of Unit 5 to the appellant's development. The applicant's architect was of the opinion that the height reduction to Unit 5 could not be achieved.

8 A mediation agreement was reached where the appellant's architect would develop plans that demonstrated that the height reduction could be achieved. The plans were rejected by the applicant as being unacceptable due to the design, additional costs, complexity and risk to construction. 5

9 The applicant then redesigned Unit 5 which resulted in plans complying with the District Plan height provisions despite the applicant's architect initially asserting that this could not be achieved. Meanwhile the appellant had incurred considerable expense having its own architect prove a reduction could be achieved 6.

10 The Environment Court's Practice Note 2014 states (relevantly) that costs incmTed in comi-assisted mediation are not awarded by the court and cannot be

claimed 7. However, the appellant says that the costs it seeks were not incurred during the court-assisted mediation. Instead the relevant period begins after mediation had concluded (IO March 2016) and concludes when the parties reached agreement on the applicant's amended plans 8. It is also noted that, while the Environment Court Practice Note 2014 provides guidance, the introductory paragraph states that it is not a set of inflexible rules. It is submitted that on this occasion there is good reason to depart from the strict application of the guidance in the Practice Note in light of the reasonableness and justification for an award of costs in favour of the appellants 9

11 The appellant submits that the courts, in determining whether to make an award, have often considered whether there was any unnecessary expenses incurred by one party due to the actions of another 10. As a direct consequence of the applicant's assertion at mediation that the height of Unit 5 could not be reduced to the District Plan height limit, the appellant had to engage expe1i advice and the legal and planning costs associated with that. Had the applicant produced plans consistent with the height limit at the start this would have avoided the unnecessary expense incmTed by the appellant 11.

12 Finally the appellant submits that the standard of reasonableness is the overarching principle used by the court to make an award for costs and this standard's inherent objective of achieving a just outcome means that costs ought to be awarded in this case 12.

The reply

13 The applicant opposes the application for costs and seeks a contribution of

$1,000.00 towards its legal costs in preparing a response to the costs application which it says should never have been made 13.

14 The applicant says that it never claimed a fully compliant unit could not be built on the Unit 5 site, but rather that its preferred design could not be brought within the maximum height limit specified in the District Plan. 14

15 The appellant has argued that as the costs were incmTed after the mediation session they are not costs incurred during court-assisted mediation. However, mediation is a process, says the applicant, it is not a one-off event. More often than not that process involves more than the actual court-assisted mediation 15. By way of suppoti, the Practice Note states, subject to any fu1iher input sought by a Judge from the parties, mediation shall be concluded upon execution of a final agreement, upon finalising of detailed documentation left to be completed after the mediation or on agreement no resolution is possible. 16

16 It was the applicant's understanding that the appellant would provide inf01mation to its architect so he could review the plans for Unit 5 in order to examine the veracity of the applicant's claim that a height reduction could not be achieved for the applicant's preferred design of Unit 5. The applicant says that the provision of further information falls within the ambit of mediation as provided for in the Practice Note 17, where it is stated that in appropriate cases the mediator may set a timeline to ensure that fmiher steps, such as the provision of further information, are completed in a timely and sequential way. It is clear that the provision of further information forms pmi of the mediation since it is the mediator who sets the timetable 18.

17 The applicant points out that the appellant had the opportunity to have its architect attend the mediation but it chose not to do so. This is partly why the pmiies agreed that the information could be provided to give the appellant the opportunity to consult its architect.

18 The applicant says that on this occasion mediation was concluded once the amended plans for Unit 5 were finalised and the consent memorandum was filed. 19 It is submitted that when the relevant provisions of the Practice Note are applied the appellant's claim for costs cannot be successful as they were incurred during comi-assisted mediation 20.

19 The Practice Note states that costs incmTed in comi-assisted mediation are not awarded...