Waitakere Forest Land Trust v Forest Trust v Auckland Council

• Jurisdiction: New Zealand
• Judge: B P Dwyer
• Judgment Date: 09 October 2015
• Neutral Citation: [2015] NZEnvC 179
• Court: Environment Court
• Docket Number: ENV-2015-AKL-000088
• Date: 09 October 2015

In the Matter of an application pursuant to s 311 of the Resource Management Act 1991

BETWEEN

Waitakere Forest Land Trust and Forest Trust

Appellants

and

Auckland Council

Respondent

Decision No. [2015] NZEnvC 179

Court:

Environment Judge B P Dwyer

ENV-2015-AKL-000088

IN THE ENVIRONMENT COURT

Application by the respondent for security for costs — the applicants had sought 87 declarations in relation to a subdivision and development proposals for a property — the respondent sought security for costs of $7,000 for costs related to the respondent's inhouse counsel — case was of considerable complexity — ownership and financing of the property was complicated so that it was not clear if there was any equity available for paying costs — consideration of principle for awarding security for costs — whether security for costs should be ordered under s278 Resource Management Act 1991 (“RMA”) (Environment Court has powers of a District Court) for inhouse counsel costs — whether there was reason to believe that the Applicants would be unable to pay the Council's costs if they were unsuccessful in the proceedings, if yes, whether the discretion to require security should be exercised

Appearances:

P Mawhinney for the Applicants

B Hart for the Waitakere Forest Trust Limited

K Quinn and V Evile for the Respondent

ORAL JUDGMENT OF THE ENVIRONMENT COURT

1 This is my decision in respect of the application made by the Respondent in these proceedings, the Auckland Council (the Council), seeking security for costs against the trustees of the Waitakere Forest Land Trust and the Forest Trust (the Applicants). As with any oral decision, I reserve the right to amend the written record to correct any minor errors, misquotations or misdescriptions which do not affect the rationale for or the outcome of this decision.

2 On 9 July 2015 the Applicants filed an application pursuant to s 311 Resource Management Act 1991 (RMA) for a declaration as provided for in s 310 RMA. The application in fact sought 87 separately defined declarations which were broadly grouped into 10 separate parts or topics. The Council was the Respondent in the proceedings which (in summary) related to subdivision and development proposals for a property owned by the Applicants situated at 131–149 Anzac Valley Road, Waitakere (the Property).

3 More particularly, the matter in question was contended failures on the part of the Council and its predecessor Waitakere City Council in processing resource consent applications (primarily subdivision applications) made by the Applicants and their predecessors. 1

4 I do not propose in this decision to fully describe the history of interaction between the Council and the Applicants relating to the Property. That history is well-known to the participants in this process. I will provide only a brief summary for the sake of context.

5 According to a chronology provided by Mr Mawhinney in the fourth affidavit (dated 21 September 2015) which he filed in these proceedings, formal dealings between the parties relating to the Property commenced on 21 February 2006 when the Applicants requested a certificate of compliance relating to access, a request which has been pursued up until the present time and remains uncompleted in the Council's system.

6 Most significantly for these proceedings, on 7 April 2008 the Applicants filed applications for subdivision consents (Council reference numbers are SUB–2008–570 and SUB–2008–571) seeking subdivision of the Property into a number of allotments. These applications remain in the Council's system uncompleted up until the present time.

7 On 1 July 2009 the Council granted subdivision consent to a predecessor in title of the Property and on 17 April 2012 the Applicants applied for a change and cancellation of conditions of the July 2009 consent. That application remains in the Council's system uncompleted up until the present time.

8 In the intervening years all of the applications which I have identified have been the subject of various procedures under RMA relevant to the processing of resource consent applications. Additionally, various aspects of the applications and the manner in which they have been processed have been the subject of consideration in this Court, the High Court and the Court of Appeal. A count of Mr Mawhinney's chronology identifies 11 decisions of various Courts pertaining to these matters although I am not sure whether that is the full count or not.

9 In general terms, the purpose of the Applicants in seeking the declarations now before this Court could be described as an attempt to compel the Council to complete processing the various applications still before it in accordance with interpretations of RMA advanced by Mr Mawhinney on their behalf.

10 On 31 July 2015 the Council filed a notice of reply opposing the application for declarations. Three broad grounds of opposition were identified. In summary, they were:

• • Firstly, that a number of the declarations sought have no utility, are trite, self-explanatory or academic, or that there is no real issue requiring a declaration;

• • Secondly, that a number of the applications requested relate to matters that have already been determined by the Environment Court or High Court so that the principles of estoppel and res judicata apply;

• • Thirdly, that a number of the declarations sought are not the proper subject of a declaration or seek to pre-empt decisions within the functions of the Council.

11 On 21 August 2015 the Council filed an application for orders striking out most of the declarations sought by the Applicants and seeking security for costs. It is that latter matter which I am to determine in this decision.

12 The Court's power to require provision of security for costs arises pursuant to s 278(1) RMA, which provides that the Environment Court has the same powers as a District Court. Rule 5.48(l)(b) District Courts Rules 2014 allows an order for security for costs to be made if…the court is satisfied…(b) that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the plaintiffs proceeding. I observe that in these proceedings the word Applicants should be substituted for plaintiff and the Council for the defendant.

13 If the threshold in r 5.48(l)(b) is met, then r.5.48(2) provides that… the court may, if it thinks fit in all the circumstances, order the giving of security for costs.

14 It should be noted that the power to require provision of security for costs is discretionary and need not be exercised, even if the Court is satisfied that the threshold may otherwise have been met.

15 I propose undertaking my considerations in this case in accordance with the two — step process identified by counsel which reflects the provisions of the Rules. Firstly, I will consider whether or not there is reason to believe that the Applicants will be unable to pay the Council's costs if they are unsuccessful in these proceedings. Secondly, if I find that to be the case, I will consider whether or not to exercise my discretion to require security.

16 In commencing that first consideration I make three initial observations:

• • Firstly, that r 5.48 does not require the Court to find conclusively that the Applicants will be unable to pay the Council's costs. What it requires the Court to find is that there is reason to believe that they will not be able to do so;

• • Secondly, the Rule does not establish an onus of proof either way. I have approached my considerations on the basis of a broad inquiry, having regard to the information available regarding the Applicants' financial situation. That information has been provided by both the Applicants and the Council;

• • Thirdly (as contended by Mr Mawhinney) the matter to be determined under the Rule is the Applicants' ability to pay, not their willingness to do so.

17 I now consider the Applicants' ability to meet payment of any costs to the Council which might arise out of these proceedings in light of those general comments. I observe that the Court's power to award costs arises pursuant to s 285 RMA, which authorises the Court to award such costs as it thinks reasonable against any party to proceedings before it. Although there is no presumption that costs will be awarded to the Council should it succeed in these proceedings, there is a high degree of likelihood that will be the case, particularly having regard to the complicated nature of these proceedings involving 87 separate declarations. I observe that other proceedings brought by parties associated with these Applicants relating to the Property have been subject to substantial cost awards.

18 In this instance the Council had initially sought security for costs in the sum of $25,000. During the course of the hearing Ms Quinn advised the Court that the amount of security sought was reduced to $7000. Mr Mawhinney informed the Court that the Applicants did not have funds available which would enable them to make a payment of that amount and that their ability to pay depended on their being able to obtain funds from the sale of the Property.

19 In paragraph 3.23 of his submissions on threshold, Mr Mawhinney undertook a series of calculations as to the amount which the Applicants might obtain on a forced sale of the Property. His calculations were based on the current Government valuation of $5,445,000. There are currently three mortgages registered against the title to the Property.:

• • There is a first mortgage to a company called Nags Head Horse Hotel Limited. In his paragraph 3.17, Mr Mawhinney had calculated there as being $735,000 owing on this mortgage;

• • There is a second mortgage to the Applicants (who are also the registered proprietors of the Property) securing $200,000;

• • There is a third mortgage to 66 Auckland Limited and P W Mawhinney,...