United Seadown Inc. and Another v Timaru District Council
| Jurisdiction | New Zealand |
| Court | Environment Court |
| Judge | J R Jackson |
| Judgment Date | 20 December 2010 |
| Neutral Citation | [2010] NZEnvC 429 |
| Date | 20 December 2010 |
In the Matter of the Resource Management Act 1991
In the Matter of appeals under section 120 of the Act
[2010] NZEnvC 429
Environment Judge J R Jackson
BEFORE THE ENVIRONMENT COURT
Application for indemnity costs. The District Council granted a consent to establish and operate a quarry. The appellant lodged an appeal against the consent, which was adjourned until a resource consent or certificate of compliance was obtained by the quarry owner from a Regional Council, and then applied out of time for costs with regard to the application for adjournment, seeking an indemnity award from the other two parties, for the incurring of unnecessary costs as a consequence of the other parties' actions — whether the Court should use its discretion under s285 Resource Management Act 1991 to award indemnity costs.
United Seadown Incorporated (“USI”) lodged an appeal 1 against a decision of the Timaru District Council (“the TDC”) granting consent to Rooney Holdings Limited (“RHL”) to establish and operate an aggregate quarry bounded by Seadown, Waipopo and Blackler Road, near Timaru. RHL has lodged its own appeal with regard to some of the conditions imposed by the TDC 2.
USI applied to the court, under section 91 of the Resource Management Act 1991 (“the Act” or “the RMA”), for an order that both appeals be adjourned until RHL had applied for consents from the Canterbury Regional Council, which it alleged were required for the proposed quarry under the Proposed Natural Resources Regional Plan (“PNRRP”).
The court considered the application on the papers and on 14 September 2010 issued its decision 3 adjourning the appeals until a resource consent or certificate of compliance was obtained from the Canterbury Regional Council under Rule WQL40 of the PNRRP. Any application for costs was to be lodged within 15 working days of the date of the decision and any reply within a further 15 working days.
On 7 October 2010 the Registrar received an application for costs by USI against RHL and the TDC. The TDC and RHL have each lodged a response, both received on 29 October 2010.
USI has applied for costs against RHL and the TDC with regard to the application for adjournment. It seeks an indemnity award of $14, 792; a division of 80% to RHL and 20% to the TDC is proposed as appropriate in the circumstances. The breakdown of costs is as follows:
| (a) Legal fees | $11,032 |
| (b) Groundwater scientist | $ 3,760 |
It is submitted by USI that an award of indemnity costs is justified and appropriate because:
As a consequence, unnecessary costs were incurred by USI.
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• The application was inaccurate or misleading and an abuse of process;
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• The arguments adopted by RHL were without merit;
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• RHL failed to present evidence on the critical issue of groundwater and nor did it make proper concessions; and
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• RHL adopted a piecemeal approach.
Referring to Tasman District Council v Askew, 4 USI says there are two key factors when determining whether an indemnity or near indemnity award should be made in the context of a misleading application:
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(1) Was the application misleading and if so, was this deliberate or intentional?
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(2) Was any party forced to take action as a consequence?
With regard to the first question, USI argues that there is no evidence to support the assertion by RHL in the application for resource consent that average groundwater was five metres below the ground level. RHL's position is contradicted by Mr Steffen's evidence and no basis for the assertion had ever been provided. It is submitted that RHL was aware the application was misleading and lodged it nonetheless. RHL sought planning and legal advice regarding the preparation of the application which leads to a strong implication that it knew of the records and chose to lodge an application which ignored them.
If the court does not accept that the application was deliberately misleading then USI suggest an award of near indemnity costs, amounting to 90% of the amount incurred, would be appropriate.
As for the second question, groundwater quality is a critical concern for USI. It has had to spend a considerable amount of its resource on a procedural issue to ensure that groundwater issues are properly considered. The inaccuracy in alleged groundwater levels was brought to the attention of RHL and the TDC early in the proceedings. However, despite this the Council did not exercise its power under section 91 and RHL proceeded with the application.
The substance of RHL's argument was that it would comply with Rule WQL40 by not intercepting groundwater. In order to ensure it did not intercept groundwater RHL proposed to excavate an area of 200-300m 2 to determine current groundwater level. It is submitted that this approach will not ensure compliance with Rule WQL40 because it relates to groundwater levels at a point in time. This is not the test in the Rule, which is the highest groundwater level which can reasonably be expected to occur at the site based on relevant groundwater data. Further, the method of determining groundwater levels, since it requires excavating into groundwater, itself requires resource consent.
USI's application to adjourn the proceedings was supported by the evidence of Mr Steffens, a groundwater scientist. RHL did not call any expert evidence on groundwater. It is submitted that the making of an unsupported assertion in an application and then not presenting evidence to support that assertion supports an indemnity award.
USI submits that RHL has taken a piecemeal approach rather than the proper course which would have been for RHL to prepare a comprehensive application for the full suite of necessary planning permission including land use consents from both the TDC and land use consents, diversion and discharge consents from the Regional Council. USI refers to Kircher v Marlborough District Council 5 where the piecemeal approach taken by a party was seen as a relevant factor in a costs application.
As a preliminary point, it is submitted that the issue of costs ought to be deferred until after the substantive decision has been dealt with. The Canterbury Museum 6 case is distinguished from the current situation as RHL says this is not an instance of the preliminary issue being clear cut in the sense that compensation is deserved, instead the issues are more finely balanced. RHL says that the costs application seems to be directed towards the substance of the resource consent application and so the issue of costs should be deferred until after the substantive hearing. There is no evidence on groundwater quality before the court and this also is a matter for the substantive hearing. It is submitted there is no basis for claiming that RHL requires consent from the Regional Council and that all of these issues ought to await the determination of the court as part of the substantive hearing and so the question of costs should be deferred.
If the court decides to deal with the application for costs at this stage of the proceeding then it is submitted that costs should lie where they fall. RHL is particularly troubled by the implication that RHL or its advisors has deliberately misled the court and the allegation is utterly rejected. RHL has always maintained that it would undertake activities in such a way that would not intercept groundwater and that position remains unchanged.
As for the suggestion of a piecemeal approach taken by RHL, Kircher 7 is distinguished from the present facts and RHL argues there is nothing inherently wrong with the approach it has taken. Finally, counsel for RHL looked at each of the Bielby 8 factors and submitted that none of the situations which may favour a costs award apply here.
It is submitted on behalf of the TDC that the nature of USI's submissions as to costs militate towards a deferral until the substantive appeals have been heard, since the submissions contain far reaching allegations which do not relate to the procedural application itself but to the resource consent process in its entirety. However, should the court wish to consider the question of costs at this point, the TDC opposes an order for costs against it. If the court is minded to make an award it is submitted that...
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