Waitakere Forest Land Trust v Forest Trust v Auckland Council
Decision No.  NZEnvC 179
IN THE ENVIRONMENT COURT
Environment Judge B P Dwyer
In the Matter of an application pursuant to s 311 of the Resource Management Act 1991
P Mawhinney for the Applicants
B Hart for the Waitakere Forest Trust Limited
K Quinn and V Evile for the Respondent
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
The issues were: whether security for costs should be ordered under s278 Resource Management Act 1991 (RMA) (Environment Court has powers of a District Court); whether there was reason to believe that the applicants would be unable to pay the Council's costs if they were unsuccessful; if so, whether the discretion to require security should be exercised.
Held: The EnvC's power to require provision of security for costs arose pursuant to s278 RMA which gave it the powers of a District Court. Rule 5.48(1)(b) District Courts Rules 2014 (DCR) (power to make order for security for costs) allowed an order for security for costs to be made if the Court was satisfied that there was a reason to believe that a plaintiff would be unable to pay the costs of the defendant if the plaintiff was unsuccessful. The power to require provision of security for costs was discretionary.
There were three preliminary points to be made. Rule 5.48 did not require the Court to find conclusively that the applicants would be unable to pay the Council's costs. It required the Court to find that there was reason to believe that they would not be able to do so. Secondly, the Rule did not establish an onus of proof either way. The approach taken in this case was on the basis of a broad inquiry, having regard to the information available regarding the applicants' financial situation. Thirdly (he matter to be determined under the rule was the applicants' ability to pay, not their willingness to do so.
The EnvC's power to award costs arose pursuant to s285 RMA (awarding costs), which authorised the EnvC to award such costs it thought were reasonable against any party to proceedings before it. Although there was no presumption that costs would be awarded to the Council should it succeed in the proceedings, there was a high degree of likelihood that would be the case, particularly having regard to the complicated nature of the proceedings, involving 87 separate declarations. Other proceedings brought by parties associated with the applicants relating to the Property had been subject to substantial cost awards.
The applicants' ownership of the property was intermingled with a number of other entities, including companies, trusts and individuals in a complex mix of financial arrangements involving unpaid debts, disputed debts, mortgages, priorities, bankruptcies, insolvencies and numerous Court proceedings. Absolutely determining the destination of proceeds of sale of the property in the event of any sale taking place would be extremely difficult. Even if the applicants received funds from the sale of the property, the Council's position would be one of unsecured creditor in respect of any costs owing. There was no certainty as to their ability to pay costs to the Council.
Looking at the applicants' situation in totality, there was reason to believe that the applicants would be unable to pay costs to the Council if they were unsuccessful.
In considering whether to exercise the discretion to order costs, particular attention had to be paid to the fourth principle as set out in . This was that the interests of both the plaintiff and the defendant should be considered. The Court should not allow the rule to be used oppressively to shut out a genuine claim by a plaintiff of limited means. On the other hand, an impecunious plaintiff could not be allowed to use its inability to pay costs as a means of putting unfair pressure upon a defendant. The principles of public participation in RMA proceedings and equal access to justice were matters of particular concern to the Court.
However, there was no element of oppression in the request in this case. The Council was faced with an application of substantial complexity involving 87 declarations brought by the applicants. Nearly all aspects of the declarations were contested by the Council, which had provided comprehensive reasons for doing so. It had already had to devote considerable resources to these proceedings and it would be forced to continue doing so if the proceedings remained alive. The factor of complexity alone, brought about by the manner in which the applicants had brought these proceedings, made it inevitable that the Council should seek security for costs which it might incur.
The costs were confined to the costs of the Council's inhouse legal staff. Assuming that the Council continued to use its inhouse staff, this operate in favour of the applicants because there was potential for an increase of costs is outside counsel were used.
There was nothing in s285 RMA which precluded the EnvC from making an award of costs for inhouse counsel or other Council staff. Section 285 allows the Court to make an award of such costs as it considered reasonable. Although the Court commonly took a cautious approach to the award of inhouse costs, whether or not it was reasonable to do so was a matter to be determined by the Court in any given case.
There were real questions as to both merits and bona fides of the proceedings. Some of the matters raised had been the subject of detailed consideration previously by both the EnvC and the HC in appeals There was a real prospect that application of the doctrines of res judicata or issue estoppel would apply. The Court was far from satisfied that the applicants had reasonable prospects of success and in many instances an initial examination suggested their prospects were low.
Applying the remaining factors from Bell-Booth, in light of the applicants' inability to pay the sum of $7000 sought as security, making an order in that amount could prevent them from proceeding with this application. However, that finding had to be viewed in the light that the Council had restrained its request to a very low figure. Its original figure of $25,000 would be reasonable in light of the complexity of these proceedings;
The Applicants were to provide security for costs in the sum of $7000.
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.
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).
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
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.
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.
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.
On 1 July 2009 the Council granted subdivision consent to...
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