HILL COUNTRY CORPORATION LIMITED AND ANOR HC NAP CIV 2010-441-000222

HILL COUNTRY CORPORATION LIMITED AND ANOR HC NAP CIV 2010-441-000222 17 September 2010IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY CIV 2010-441-000222UNDER The Resource Management Act 1991section 299 AND IN THE MATTER OF an appeal against a decision of the Environment Court at Napier dated 26 March 2010 ([2010] NZEnvC 88) HILL COUNTRY CORPORATION LIMITED Appellant AND HASTINGS DISTRICT COUNCIL Respondent Hearing: 7 July 2010 Counsel: M E J Macfarlane and L J Blomfield for Appellant M E Casey QC and J M Von Dadelszen for Respondent Judgment: 17 September 2010 at 2:30pmRESERVED JUDGMENT OF HUGH WILLIAMS JThis judgment was delivered by Hon. Justice Hugh Williams on17 September 2010 at 2:30pmpursuant to Rule 11.5 of the High Court Rules .. Registrar/Deputy RegistrarA. Hill Country's appeal is dismissed on all the points of law raised. B. Costs are to be dealt with in accordance with para [99].____________________________________________________________________INDEX ParagraphIssue [1] Statutory background [4] Background` [5] Legal Approach to Appeals [9] Blindly following policy and not evaluating the particular case? [11] (1) Decision under appeal [11] (2) Submissions [13] (3) Discussion and decision [36] Benefit of appointment of external consultants? [55] (1) Decision under appeal [55] (2) Submissions [57] (3) Discussion and decision [63] Benefit of peer review reports? [69] (1) Decision under appeal [69] (2) Submissions [71] (3) Discussion and decision [73] Whether the onus was on Hill Country to provide a criticism of the work done and the reasonableness of the charges? [80] (1) Decision under appeal [80] (2) Submissions [83] (3) Discussion and decision [85] Was the employment of the external consultants "occasioned" by Hill Country's plan change request? [87] (1) Decision under appeal [87] (2) Submissions [90] (3) Discussion and decision [94]Result [98] Costs [99] ___________________________________________________________________Issue[1] On 26 March 2010 1 the Environment Court delivered a reserved decision dismissing the appeal by the appellant, Hill Country Corporation Limited, against a decision by the respondent, Hastings District Council, to charge Hill Country additional costs of $287,000 for processing a private plan change request. [2] By the time the Environment Court dismissed Hill Country's appeal, the costs amounted to $287,339.89. [3] Hill Country appeals to this Court, asserting the Environment Court fell into legal error in a number of ways, including: a) The Court did not correctly apply ss 36(4)(b) of the Resource Management Act 1991 2 in holding the Council only needed to consider the factors in s 36(4) if an applicant "puts up a case for partial remission"; b) The Court erred in its application of the decision in Porpoise Bay Limited v Southland District Council;3c) The Court's conclusion was not one reasonably available on the evidence, both in application of the statutory criteria and in finding the District Council had not "blindly" followed its policy of charging all costs incurred; d) The Court did not apply the correct legal test to determine whether the benefit of the local authority's actions to which the charge related accrued to Hill Country in terms of s 36(4)(b)(ii) or in deciding whether the charges should be reduced to reflect the benefit to the1 Hill Country Corporation Limited v Hastings District Council [2010] NZRMA 331.2 All statutory references in this judgment are to the Resource Management Act 1991 unless specified otherwise.community of Hill Country's application; in holding Hill Country was subject to an onus to support the claim that some of the work done went beyond that necessary to process the plan change; and in determining whether the engagement of external consultants (and their charges) were "occasioned by the lodgement of the plan change request".Statutory background[4] Because the appeal, both to the Environment Court and to this Court, largely revolved around the application of s 36,4 it is helpful to set out the form of the section applicable to this matter:36 Administrative charges(1) A local authority may from time to time, subject to subsection (2), fix charges of all or any of the following kinds: (a) Charges payable by applicants for the preparation or change of a policy statement or plan, for the carrying out by the local authority of its functions in relation to such applications: ... (2) Charges may be fixed under subsection (1) only— ... (c) in accordance with subsection (4). (3) Where a charge fixed in accordance with subsection (1) is, in any particular case, inadequate to enable a local authority to recover its actual and reasonable costs in respect of the matter concerned, the local authority may require the person who is liable to pay the charge, to also pay an additional charge to the local authority. (3A) ...3 Porpoise Bay Limited v Southland District Council [2007] NZRMA 404.4 In the form in which it was phrased prior to the Resource Management Amendment Act 2009. Though that amended s 36 substantially, it was principally by extending the types of charges Councils can make and accordingly the comments on s 36 in this judgment may continue to apply notwithstanding the amendment.(4) When fixing charges referred to in this section, a local authority shall have regard to the following criteria: (a) The sole purpose of a charge is to recover the reasonable costs incurred by the local authority in respect of the activity to which the charge relates: (b) A particular person or persons should only be required to pay a charge— (i) To the extent that the benefit of the local authority's actions to which the charge relates is obtained by those persons as distinct from the community of the local authority as a whole; or (ii) Where the need for the local authority's actions to which the charge relates is occasioned by the actions of those persons; or - ... and the local authority may fix different charges for different costs it incurs in the performance of its various functions, powers, and duties under this Act— (c) In relation to different areas or different classes of applicant, consent holder, requiring authority, or heritage protection authority; or (d) Where any activity undertaken by the persons liable to pay any charge reduces the cost to the local authority of carrying out any of its functions, powers, and duties. (5) A local authority may, in any particular case and in its absolute discretion, remit the whole or any part of any charge of a kind referred to in this section which would otherwise be payable.Background[5] The Environment Court's introduction set the scene5 :After a hearing in September 2009 an independent commissioner appointed by the Hastings District Council disallowed an objection under s 357B of the RMA in respect of additional costs of some $287,0000 charged to Hill Country Corporation Limited (HCCL) by the Council. The charges related to the processing of a private plan change requested by HCCL in respect of land at Ocean Beach, south of Havelock North. The proposed plan change was known as Plan Change 45 (PC 45). This proceeding is an appeal against that decision.5 At [1] and [2].The total costs invoiced to HCCL were $291,839.89 9GST incl) and were incurred over a period from 22 May 2007 (when the PC 45 was lodged with the Council), to 17 October 2008 when HCCL advised the Council that it wished to withdraw the plan change request. By the time of the withdrawal the commissioned s42A Report had not been finalised (although it was close to completion). Of the costs invoiced to HCCL the fixed costs, which were paid at the time that plan change request was lodged, of $4500 and the costs incurred in summarising the submissions lodged following notification of PC 45 are not in dispute. Nor is there a dispute about costs associated with the requests for further information.[6] The Court then set out the following relevant background. 6Over a number of years there have been various proposals to develop land at Ocean Beach, which is a popular recreation beach for residents and visitors. Its sandy beach is about 8kms long and it has a reputation for being one of the region's best surf beaches. Other than a small bach settlement, a Council reserve and a surf club building at the southern end, the beach margins are largely undeveloped and are currently used for pastoral farming. There was a private plan change request lodged by another company in 1995 but that did not proceed. In 1999 that same company sought a rezoning of the land in the course of submissions on the then proposed District Plan. That suggestion was not adopted but in 1999 the Council adopted an Ocean Beach Structure Plan, but that did not result in any formal plan change process, largely due to the unresolved issues about a road access. The current issues can be traced to a Council resolution in December 2004 to prepare, consult upon, and notify a comprehensive Plan Change covering the beach locality. In 2005, the Council entered into an agreement with HCCL to conduct what was known as a charrette to be facilitated by consultants. The purpose of this was to provide a consultation process towards preparing a Plan Change. Its end result was a recommendation for a master planned village with provision for some 1000 dwelling units. The Council did not progress that outcome but moved to consider it against other options, which were contained in an Options paper released in 2006. The options were: a) Protection Option (ie no development); b) Status Quo Option (ie allowing subdivision to a 20ha minimum site size); c) An Intermediate Development Option; d) The Charrette Option. In December 2006 the Project Team commissioned by the Council recommended the development of an option between what had been known as the Intermediate option and the Charrette option. If developed to its full potential this would have resulted in a total residential lot yield of 469 lots. The Council did not accept that recommendation but moved towards a yet further possibility which might have yielded some 286 residential lots.6 At [3]-[11].Informal submissions were sought on this proposal in February 2007 and were heard in what is described as an informal hearing in May 2007. On 31 May 2007, the Council adopted what was known as the 2007 Ocean Beach Structure Plan. If developed to its full potential this would result in 376 residential lots. In February 2007 HCCL advised the Council that they were dissatisfied with the direction of the Council's Structure Plan process and that they intended to lodge a request for a private plan change. That was done on 21 May 2007, a few days before the Council adopted its Structure Plan, as already indicated. The Council subsequently resolved not to progress its Structure Plan through a plan change while the HCCL private plan change was being progressed. The private plan change request (which was PC 45) was to create an Ocean Beach Special Character Zone over some 950ha and 13 separate Certificates of Title. It was intended that PC 45 achieve its goal through creating a number of subzones for residential, village centre, commercial service, rural, rural equestrian and rural conservation areas. The overall residential yield resulting from this proposal was to be approximately 1000 dwelling units. The Council decided that it was appropriate to commission independent consultants to prepare s42A Reports for the hearing of submissions of PC 45. The Council's evidence indicated that this was by no means an unusual process ... It was explained to HCCL that the Council's own resources were not sufficient to process PC 45 within the time that HCCL was hoping for, that being significantly shorter than the four months provided for in the RMA. It was also, it needs to be said, clear to HCCL that the costs of this appointment would be debited to HCCL. The work was put out to tender and the consulting firm of MWH NZ Ltd was formally appointed in July 2007 and commenced work on PC 45 immediately. ... MWH was not asked to provide an overall fee estimate as part of the project proposal process, but it was asked by the Council to provide hourly charge rates for the personnel to be provided. The terms of engagement included the possibility that MWH could engage other personnel as sub-contractors, but the Council elected to engage such people directly, avoiding the on-charging to the applicant of MWH's standard overhead charges for sub-consultants. The total charges invoiced to the Council by MWH for the project was $196,831.61, GST incl. At a later stage (at the close of submissions but before the summary of submissions was completed) MWH was asked to provide a rough order of cost estimate for fees to take the matter to completion (ie post Council hearings). That was provided on 2 April 2008 (and to HCCL on 29 May 2008) and was $254,500.00 GST excl.[7] Then, after setting out the relevant portions of s 36, the Court continued: 7We shall consider the various parts of the section as we examine the issues raised by the parties, but it can be noted at this point that s36(3) applies7 At [12].when the charges levied under s36(1) are inadequate to enable a local authority to recover its actual and reasonable costs There is, therefore, no presumption in the section that all, or any portion of, the costs of processing resource consent applications are to be absorbed by the Council as part of its general overheads. Rather, the section makes specific provision for a full user pays regime, subject to the criteria and discretion contained in subsections (3), (4) and (5). We accept the point made by Mr Macfarlane that the decision in Black v Southland RC (C95/2002) is authority for the view that the power to raise an additional charge is dependent upon meeting the criteria in subsection (4)(b). We deal with both of those criteria, while noting that the subsection is disjunctive, and a Council strictly need meet only one of them.[8] After noting the passage in the Council's annual schedule of fees that "any costs incurred through the engagement of external expertise will be charged to the applicant at cost", the Court then moved to serial consideration of the issues raised by Hill Country, though noting many criticisms overlapped or blurred into one another. Although not following the Court's numerical order, because Hill Country's submissions confronted only six of the Court's 22 paragraphs dealing with legal issues, it is convenient to deal with the issues in the order in which they were argued by Mr Macfarlane, leading counsel for Hill Country.Legal Approach to Appeals[9] However, before dealing with the individual grounds of appeal, it is convenient to reiterate the applicable principles on appeal on questions of law from the Environment Court set out in Countdown Properties (Northland) Limited v Dunedin City Council. 8 This Court only interferes with decisions of the Environment Court if it considers the Court applied a wrong legal test; came to a conclusion without evidence, or one to which, on the evidence, it could not reasonably come; took into account matters extraneous to the decision or failed to take relevant matters into account; with the Environment Court given some latitude in reaching findings of fact within its area of expertise.8 Countdown Properties (Northland) Limited v Dunedin City Council [1994] NZRMA 145 at 153.[10] Then, in dealing with appeals on questions of law from the Employment Court, the Supreme Court said in Bryson v Three Foot Six Limited 9 where the following appears:[25] An appeal cannot however be said to be on a question of law where the fact-finding Court has merely applied law which it has correctly understood to the facts of an individual case. It is for the Court to weigh the relevant facts in the light of the applicable law. Provided that the Court has not overlooked any relevant matter or taken account of some matter which is irrelevant to the proper application of the law, the conclusion is a matter for the fact-finding Court, unless it is clearly insupportable. [26] An ultimate conclusion of a fact-finding body can sometimes be so insupportable – so clearly untenable – as to amount to an error of law; proper application of the law requires a different answer. That will be the position only in the rare case in which there has been, in the well-known words of Lord Radcliffe in Edwards v Bairstow, a state of affairs "in which there is no evidence to support the determination" or "one in which the evidence is inconsistent with and contradictory of the determination" or "one in which the true and only reasonable conclusion contradicts the determination". 10Lord Radcliffe preferred the last of these three phrases but he said that each propounded the same test. ... [27] It must be emphasised that an intending appellant seeking to assert that there was no evidence to support a finding of the Employment Court or that, to use Lord Radcliffe's preferred phrase, "the true and only reasonable conclusion contradicts the determination,"11 faces a very high hurdle. It is important that appellate Judges keep this firmly in mind. Lord Donaldson MR has pointed out in Piggott Brothers & Co Ltd v Jackson the danger that an appellate Court can very easily persuade itself that, as it would certainly not have reached the same conclusion, the tribunal which did so was certainly wrong:12It does not matter whether, with whatever degree of certainty, the appellate Court considers that it would have reached a different conclusion. What matters is whether the decision under appeal was a permissible option. To answer that question in the negative in the context of employment law, the appeal tribunal will almost always have to be able to identify a finding of fact which was unsupported by any evidence or a clear self-misdirection in law by the industrial tribunal. If it cannot do this, it should re-examine with the greatest care its preliminary conclusion that the decision under appeal was not a permissible option. [28] It should also be understood that an error concerning a particular fact which is only one element in an overall factual finding, where there is9 Bryson v Three Foot Six Limited [2005] 3 NZLR 721, 733-734, paras [25]-[28].10 Edwards v Bairstow [1956] AC 14, 36. Lord Radcliffe was adopting dicta of Lord President Normand in Inland Revenue v Fraser (1942) SC 493, 497 and Lord Cooper in Inland Revenue Commissioners v Toll Property Co Ltd (1952) SC 387, 393.11 At [36].12 Piggott Brothers & Co Limited v Jackson [1992] 1CR 85, 92.support for that overall finding in other portions of the evidence, cannot be said to give rise to a finding on "no evidence." It could nonetheless lead or contribute to an outcome which is insupportable.Blindly following policy and not evaluating the particular case? (1) Decision under Appeal[11] Four of the questions of law raised on the appeal were assertions that Council, in imposing the costs on Hill Country, blindly followed Council policy and did not evaluate the issues in the case raised by Hill Country's proposal. More particularly, the Environment Court was argued to have fallen into error of law in its decision13 in deciding whether Council was required to consider and apply s 36 – sub-sections (4) and (5) in particular – at or before the time at which it required payment by sending invoices and when the Court held the Council only needed to consider the factors in s 36(4) if an applicant "puts up a case for partial remission"; whether the Court's decision was correct in accordance with Porpoise Bay; and whether the Court came to a conclusion to which, on the evidence, it could not reasonably come. [12] Paragraphs [30] and [31] read:[30] HCCL contend that the Council, largely if not exclusively acting through Mr McKay, 14 decided at the outset that it would recover all costs incurred in processing PC 45, and never turned its mind to the possibility that some of the costs might not be reasonably related to the work actually required; that some remission might be appropriate, or any variant or combination of those possibilities. Mr McKay certainly acknowledges that he saw the processing work as being solely brought about by the lodging of the plan change request and never saw any reason to consider remission under s36(5) because he saw no benefit (in the relevant sense) accruing to anyone other than the applicant. He had, he said, made it clear throughout that the Council would pass on all actual and reasonable charges, a course to which HCCL raised no objection, and HCCL never raised with him the possibility of some remission. [31] The views of the Court about Councils blindly following policy and ignoring the substantive law have been clearly enough stated in cases such asBarton v Wellington Regional Council [2004] NZRMA 337. But we accept Mr Casey's submission that that is not what happened here. The Council13 Paras [30] and [31].14 Council's Team Leader Environmental Policy.had, as it was entitled to do, a policy of recovering the full actual and reasonable costs of processing. So long as it did not lose sight of the requirement to apply the criteria in s36(4), and the discretion contained in s36(5), it is within its rights to follow that policy. Our view might have been different if, for instance, HCCL had, at an appropriate time, put up a case for partial remission but the Council had refused to consider it because it was determined to make full recovery, no matter what. In that respect we accept and agree with the views of the Court expressed in the decision of Porpoise Bay Ltd v Southland District Council [2007] NZRMA 404.(2) Submissions[13] In the Environment Court, Hill Country argued there was no evidence to show the Council gave consideration to the reasonableness of charging 100 per cent of external costs at the time invoices were rendered and simply blindly applied its policy. Mr Macfarlane drew attention to a passage in Mr McKay's cross- examination that Council had a policy of 100 per cent user pays in respect of private plan changes and resource consents. Asked whether he gave consideration to anything other than 100 per cent cost recovery, Mr McKay said:"It is the Council policy and it is also said in the schedule of fees and charges, that is the basis upon which the Council charged for private plan changes and resource consents".[14] Asked whether he made any "reasonableness assessment", Mr McKay said:"The invoicing has been done in accordance with a policy of 100% cost recovery There was no decision to be made, it is following that policy."[15] Though acknowledging the general enabling power in s36(1) and the power to recover additional charges in the circumstances set out in s 36(3), Mr Macfarlane submitted the s 36(3) power was subject to s 36(4).15[16] Despite expressing uncertainty as to which proposition from Porpoise Baythe Environment Court adopted in para [31], Mr Macfarlane submitted it was likely the Court was following the observations in para [25], p 411. [17] In Porpoise Bay, the company unsuccessfully applied to subdivide and then appealed to the Environment Court, but the matter was resolved at mediation.15 Wellington Regional Council v Aifric Developments Ltd [1996] NZRMA 380, 383.Having been paid only a small deposit before processing the subdivisional application, the Council then sought to recover the full costs of processing the application, but none of the costs of the appeal or mediation, claiming to be entitled so to do under its schedule of fees and charges as being actual and reasonable expenditure. Porpoise Bay objected, and after its objection was dismissed, appealed to the Environment Court, but before the hearing the Council substituted the costs of the time of the staff member who would have chaired the pre-hearing meeting and the hearings charge for the costs incurred in appointing commissioners for the pre- hearing. When the reasonableness of those fees was acknowledged, the issue then became whether Council could recover part of the fees charged by its solicitor. [18] Against that changing background, it is unsurprising the Environment Court had to decide what charges were appropriate as fixed charges under s 36(1)(b) and what were additional costs under s 36(3), as well as deal with the Court's power to review charges fixed under s 36(4) if purported to be levied in accordance with s 36(1), and whether a delegated Council officer could set those charges without having power to consider remission under s 36(5). [19] Adopting the purposive approach to statutory interpretation under the Interpretation Act 1999, the Court first concluded:[18] We have concluded that the words "fix "and "fixing" in this section are used in two different senses. In subs (1) the meaning is clearly to determine and set out a table of charges, while in subs (4), which applies to charges under subss (1) and (3), the word "fix" means to determine the costs in a particular case, having regard to the various paragraphs set out in that subsection. With this meaning no conflict between the various provisions arises and the section is given meaning and operation as a whole. [19] We conclude that in applying, in a particular case, charges set out in subs (1), the local authority must still turn its mind to the question of what costs were reasonably (Emphasis added) incurred, and whether the need for the local authority's actions to which the charge relates was occasioned by the actions of those persons. A local authority in setting charges in a particular case must consider subs (4) criteria such as whether a particular person meets the criteria of subs (4)(b)(i), (ii) and (iii). Such matters cannot be determined when the schedule of charges is fixed but only when the charge for the particular person (and case) is fixed. Similarly, in terms of its powers to remit charges under subs (5), while absolute discretion is given, it must be consciously exercised having regard to the criteria in subs (4). For example, the matter cannot be dealt with simply by the application of a policy not to remit.[20] We note that subs (3), which enables a local authority to require an additional charge, only applies to charges fixed under subs (1): Wellington Regional Council v Aifric Developments Ltd. Further, it applies in circumstances where that charge under s 36(1) is insufficient to enable the authority to recover its actual and reasonable costs. In other words charges cannot be made under subs (3) for services for which there is no valid fixed fee under subs (1). ... [22] We conclude that in fixing charges for processing a resource consent under s 36(4) a consent authority should go through the following processes: (a) decide what costs can be recovered as fixed costs pursuant to s 36(1); (b) decide whether these are inadequate to cover its actual and reasonable costs, and what its additional actual and reasonable costs are; (c) in each particular case consider the criteria set out in s 36(4)(a) and (b)(i) and (ii); and (d) resolve how to exercise its discretion (s 36(5)) to remit any charges payable under s 36[20] Under the sub-heading "Did the Council Properly Exercise Its Discretion" – a passage on which Mr Macfarlane relied – the Court held:[25] The invoice sent by the council to Porpoise Bay was, as we have already stated, accompanied by a letter dated 16 September 2005. It is under the signature of Mr Aaron Leith, the resource management planner who processed the application. Amongst other things Mr Leith wrote: I advise that at staff level, Council staff have no authority to waive such processing costs, and accordingly we are now seeking to recover such costs. That cannot be the proper exercise of a discretion under s 36(5), nor does it give any clear evidence of regard to the criteria in s 36(4)(b)(i) and (ii). We conclude that if a local authority is to delegate to any officer(s) or committee power to fix charges, it must give a genuine discretion, and must make provision for the criteria in subs (4). Otherwise it must exercise the discretion in each case itself. We note the comments of the Court in Barton v Wellington Regional Council:16That public bodies, and their officials, can still regard "policy" as the Holy Writ of decision making, rather than the law, is troubling. The council has power to make charges for the sole purpose of recovering the reasonable costs incurred16 Barton v Wellington Regional Council [2004] NZRMA 337 at para [18].by it – see s 36(4)(a). What is reasonable is not decreed by some blanket policy. In short, the powers and discretions of s 36(1) – (5) come as a package. The council cannot exercise its power to charge a particular person without considering the criteria of s 36(4) whether the charges are under s 36(1) or (3). Furthermore, there appears to be no proper reason for the power of remission under s 36(5) to be separately exercised to the discretions under s 36(4). In the absence of any special procedure in the Act or adopted by the council, we consider that this power under s 36(5) must be available at the time the charges are considered and made payable by a particular person. We note use of the words "particular case" in s 36(5), reflecting "particular person" in s 36(4). [26] In this case the hearing by the council's resource management committee on Friday 11 November and the issuing of a decision a week later clearly involve the exercise of a discretion and involve having regard to the matters set out in subsections (4) and (5), so that any deficiencies in consideration prior to this are arguably cured. However, the scheme of the section requires the matters set out in subss (4) and (5) to be attended to when the individual charge is first fixed, not simply on receipt of an objection. [27] We should also note that it could be argued that the council did not make a valid charge under s 36 in its letter of 16 September 2005, and that this was not cured by the later objection hearing by the council. If the council must consider s 36(4) and (5) in any particular case and/or for any particular person when setting the charges, then there is no evidence that the delegated officer considered such issues. On the contrary, the delegated officer specifically noted that he had no discretion when he said: Council staff have no authority to waive such processing costs . . . We conclude that this must relate to discretions under both s 36(4) and (5). Thus the question arises, has the local authority utilised s 36 to fix charges for this particular person? Section 36(1) and (2) provide no power to charge a particular person. This can only be done under s 36(3), (4) and (5). [28] We have concluded that this failure was cured by the council consideration in November 2005. At that time the council exercised a discretion, but it clearly did not – and unless its practice has changed, does not – do so at an appropriately early stage in fixing charges under s 36(4).[21] Mr Macfarlane submitted it was unclear which aspect of the example given by the Court – a case made for partial remission, or Council's refusal to consider it – was in the Court's mind. He said that, here, because Hill Country made no application for partial remission, that was only relevant to Council's decision whether to exercise the s 36(5) discretion, and was not a pre-condition to the application of s 36(4). He contended that before making a decision to remit charges otherwise payable under s 36(5), a Council must first set or fix those charges, havingregard to the criteria in s 36(4) and only those criteria, citing Whangarei District Council v Northland Regional Council.17[22] In that case it was held that a direction to have regard to certain criteria excluded reference to other criteria, by contrast with the phrase "in its absolute discretion" in s 36(5). Authority required, Mr Macfarlane submitted, that after the charge payable had first been fixed under s 36(4), the Council should consider whether to remit any part of that charge irrespective of whether an application for remission had been made. Section 36(5) does not require application. But because Council would normally have insufficient information to exercise the s 36(5) discretion at that point, an application for remission is usually made after Council has fixed the charges payable under s 36(4) and advised the applicant by sending an invoice for the amount due. If the reasons for which a discount is sought go beyond the criteria in s 36(4), the proper course is for the applicant to seek partial remission, or object to the charges as Hill Country did. Porpoise Bay, he contended, was wrong in saying there was "no proper reason" for the power of remission under s 36(5) to be separately exercised to the discretions under s 36(4). A refusal to consider a case for partial remission because Council was determined to make full recovery was no different in principle to Council's failure to turn its mind to the criteria in s 36(4) or the discretion contained in s 36(5) because of the policy of 100 per cent cost recovery. [23] He submitted the steps set out in Porpoise Bay for fixing charges under s 36(4) 18 were correct, but it was clear from Mr McKay's evidence that he did not follow that process, nor think he had to, because of the 100 per cent cost recovery policy where external consultants were engaged. That was no different in principle, he submitted, from the Environment Court's comments in Barton v Wellington Regional Council19 where the costs claimed included a hearing which did not17 Whangarei District Council v Northland Regional Council H C Whangarei CP16/95, 8 August 1996, Baragwanath J. Partly reported as [1996] NZRMA 445 at 470.18 Para [22] (supra).19 Barton v Wellington Regional Council [2004] NZRMA 337 at 343-344.proceed before commissioners, one of whom was directed to be Maori. The Court held:[18] First (and this is not really an issue about the "difference") in common with the first application the estimated cost of the second was partly based on it being heard by three commissioners, one of whom was to be Maori. There were no "Maori" issues – here the planning report identified the real issue as the engineering one. When asked why then it was necessary to have a Maori commissioner, Mr Blakemore said simply that it was council "policy" to do so. The same answer applied to the question of why there needed to be three commissioners at all, or even two for that matter. We find that an extraordinary response. It is now 31 years since the Judicature Amendment Act 1972 was passed, bringing with it the "modern" era of administrative law in this country. That public bodies, and their officials, can still regard "policy" as the Holy Writ of decision making, rather than the law, is troubling. The council has power to make charges for the sole purpose of recovering the reasonable costs incurred by it – see s 36(4)(a). What is reasonable is not decreed by some blanket policy. What is reasonable is to be assessed by making a genuine and intelligent decision about what resources are required to deal with the issue at hand. In some cases two, or three commissioners might fairly be regarded as appropriate. In some cases a Maori commissioner might be appropriate to give informed guidance on relevant cultural issues. Only one real issue had to be resolved here – the engineering issue. So far as we can see, a sole commissioner with engineering experience could have more than adequately dealt with that. What is important is that no thought at all was given to the point, rather a "policy" was blindly applied. We cannot regard the resulting cost as "reasonable".[24] Mr Casey QC, senior counsel for the Council, structured his submissions rather differently. He stressed, in opening, that this was a case wholly focused on s 36(3) as, in large measure, the charges invoiced to Hill Country were those of consultants external to the Council and this, he submitted, meant Hill Country's submissions over-detailed what was, in essence, a factual decision "dressed up" as errors of law. [25] He made the point that s 36(4)(b)(i) and s 36(4)(b)(ii) are disjunctively phrased, a factor he submitted that was not recognised by Hill Country which regarded it as necessary for both to be met. The Environment Court noted the disjunctive phrasing and Hill Country had not appealed that aspect of the judgment. [26] Council's actions were the taking of administrative steps in response to Hill Country's plan change request, and the engagement of external consultants went only to reasonableness of the charges that resulted. He disputed Hill Country'sassertion that Council had to apply its mind to the s 36(4) criteria each time an invoice was sent. That, he submitted, was incorrect since the matter remained within Council's jurisdiction until the end of the process. [27] Hill Country's suggestion that Council need only consider the factors in s 36(4) if the applicant put up a case for partial remission was an incorrect reading of the Court's decision. It upheld Council's argument that it was entitled to recover its actual costs and had not blindly followed inflexible policy, pointing to the evidence as to efforts taken to ensure the s 36(4) criteria were complied with when Hill Country accepted s 36(5) was inapplicable. [28] He stressed the respondent's position that the costs charged were those actually incurred in carrying out statutory functions related to Hill Country's plan change request. The resultant costs were reasonable in relation to employment of external consultants and the time and amounts charged, particularly having regard to such a large proposal where, Mr Casey submitted, there were no benefits to the community of the district. Focusing particularly on the terminology of s 36, he submitted it was "capable of plain interpretation and ought not to be subjected to the (at times) convoluted analysis found in some of the decisions" of the Environment Court. The criteria for recovering additional costs were simply that they be reasonable in amount, incurred in respect of the activity to which they related, and the benefit of Council's actions were either obtained by the person charged rather than the community, or the need for Council action was occasioned by the actions of the person charged. [29] This case was covered by s 36(4)(b)(ii) and accordingly counsel did not have to demonstrate whether there were benefits to Hill Country, relying on Redvale Lime Company Limited v Auckland Regional Council, 20 an appeal concerning the charging of additional charges under s 36(3). What was in issue there was a proportion of the hearing costs of a Resource Management application and whether that amounted to a "benefit". The Environment Court held:2120 Redvale Lime Company Limited v Auckland Regional Council Environment Court No. A.132/2005, 10 August 2005.21 At [10]-[12].[10] The argument that the community as a whole derived a benefit from the Council's actions is supported by the submission that the ability of objectors to present evidence to the Council is of itself a benefit and, given that the objectors occupied 19/30ths of the hearing time, Redvale Lime should be excused payment of that portion of the costs of hearing. It is undoubtedly true that the RMA encourages public participation in the decision-making processes of Councils. Implicit in that is the Legislature's view that such participation is a public good, in the sense that it may better inform decision-makers and thus enhance the RMA's purpose of sustainable management of resources. That is a matter of general principle, but it is not to say that the public good derived from having that decision-making structure is the same thing as a benefit of the local authority's actions to which the charge relates the local authority's actions in processing any individual consent application is a specific application of the structure from which (generally) only the applicant for the resource consent can derive a definable benefit. [11] Redvale Lime's argument in that regard seems to be a variant of an issue dealt with by the High Court in Wellington Regional Council v Aifric Developments Ltd [1996] NZRMA 380. There, the then Planning Tribunal had held that further charges levied under s36(3) in respect of a hearing before Commissioners could not be supported because hearings were normally part of a local authority's democratic process. On appeal, the High Court dealt with the point rather tersely: The Tribunal appeared to take the view the hearing formed part of the appellant's normal functions and therefore its costs were not recoverable. The respondent does not support that reasoning. We can see no basis for it. Just so here. The participatory process, including the ability of objectors to give evidence, is aimed at furthering the purpose of the RMA. If that process is of itself regarded as abenefitobtained by the community for the local authority as a whole then no full cost recovery could ever be made for a resource consent hearing under (4)(b)(i). It must be, we think, that benefit as used in 4(b)(i) means a definable and tangible benefit, rather than the general public good that comes from having a process in which the public may participate to better inform decision-making. [12] It might be, as Mr Burns points out, that in particular instances a tangible and definable benefit to the community of the local authority could arise from the processing of a resource consent application. There could be outcomes such a land being set aside for reserves and the like. In those cases it could be fairly said that the community as a whole derived a benefit as an incident of processing the application, and an appropriate adjustment in costs made. It may not be possible, as Baragwanath J noted in Whangarei District Council v Northland Regional Council [1996] NZRMA 445, to be meticulous or refined in the setting of the actual figures, but some broadly rational assessment can be made.[30] As to the power of waiver and the discretion to waive under s 36(5), Mr Casey submitted Hill Country accepted that discretion was not a pre-requisite to the charging of the Council's costs and would not be exercised unless called for by the party charged.[31] Here, Council, acting through Mr McKay, needed only to be satisfied the charges were reasonable in amount, were incurred in processing Hill Country's plan change request, and were occasioned by that request. Council had complied on this occasion, particularly when Hill Country was advised at the outset that external consultants would be retained and had not challenged that method of dealing with its request. That was wholly different from the issue in cases like Barton or policy that excluded the discretion in s 36(5) as in Porpoise Bay. [32] Mr Casey noted Porpoise Bay dealt both with fixed charges under s 36(1) and additional costs under s 36(3), with the present appeal relating only to the latter. [33] Having held 22 the power to reject an appeal against administrative charges related only to s 36(3) additional charges and not fees levied under s 36(1), the subsequent discussion was in the context of distinguishing between charges fixed in advance under s 36(1) and those fixed subsequently under s 36(3). He submitted the decision that matters requiring consideration under ss 36(4) and (5) should be considered "when the individual charge is first fixed", not simply on receipt of an objection, could not be an absolute requirement, especially in a major matter where interim invoices had been requested. Mr Casey submitted the s 36(4)(a) criteria of recovery of reasonable costs in respect of the activity covered by the charge was addressed by the Environment Court and its upholding that the costs related to the plan change request and were reasonable in amount was unchallengeable on appeal. He said there was no suggestion in the present case that Council should have exercised its s 36(5) discretion in the absence of a case put by Hill Country for remission. Any failure by Mr McKay to consider the s 36(4) matters when interim invoices were sent was "cured" by the determination under the objection process under s 357B. [34] Mr Casey then extensively dealt with the statutory plan change process, particularly the report for which s 42A provides and tied his analysis of that process to the factual circumstances of this matter. It does not appear necessary to consider the detail of those submissions beyond noting that the main November 2007 work22 At [16].involving both Council officers and consultants was not contested by Hill Country in amount ($52,776), nor was the charge ($23,624.50) for collating and summarising the numerous submissions concerning the proposed change. Hill Country then asked for the hearing timetable to be abbreviated. That led to a hearing date for October 2008 before Independent Commissioners rather than the hearing in early 2009 that would otherwise have resulted. But in August and September Hill Country indicated a wish to defer the hearing, and on 17 October 2008 formally withdrew the plan change request. The s 42A report was at an advanced stage at that point. [35] Mr Casey's submissions also detailed the breakdown in the amount charged of $91,839.89, all of which, other than a $4500 initial fixed fee, remained unpaid, despite Hill Country not contesting $76,400. Mr Casey detailed the evidentiary trail leading up to the rendering of the various invoices and Hill Country's objection to each. In smaller projects consideration of s 36(4) factors and, if necessary, the exercise of the s 36(5) discretion take place at the conclusion of the process, but in this case, at Hill Country's request, having regard to the size of the project, interim invoices were requested and issued. No assessment could be made at the interim invoice stage as to the benefits under s 36(4)(b)(i) or as to the factors impinging on the exercise of the discretion under s 36(5). At the end, Mr Casey submitted, the amount charged to Hill Country for Council time and costs was about $31,000, with MWH and its in-house experts charging about $197,000, and other consultants charging about $63,000.(3) Discussion[36] Section 36 is, as has been said on occasions, couched in reasonably straight- forward language and is capable of purposive, practical interpretation. Its rationale is to give local authorities power to fix charges in the manner set out in s 36(2) for the range of activities listed in s 36(1) in which they may be required to engage and, should those fixed charges prove inadequate in the particular case for the local authority to recover its "actual and reasonable costs", then to recover the deficiency by imposition of an "additional charge".[37] But it is crucial in considering s 36 to recognise it has both prospective and retrospective facets. As the Environment Court noted in Porpoise Bay23, the section uses the words "fixed" and "fixing" in different senses. The power to "fix" charges under s 36(1) is the power to determine, in advance, a régime of charges for the various activities to which the sub-section applies or applications which may be made to the local authority. The "fixing" of charges under s 36(4) relates to charges under both sub-sections (1) and (3) and must relate to the particular case under consideration. That exercise is required to be conducted retrospectively when the local authority has concluded its actions in relation to one of the activities listed in s 36(1). 24[38] It is essential to recognise that where charges fixed prospectively prove retrospectively inadequate to enable recovery of the local authority's "actual and reasonable costs" in respect of the particular application, only then can the local authority require the person liable to pay an "additional charge". But both when the local authority is fixing s 36(1) charges and an appropriate "additional charge" under s 36(3), it is required by s 36(4) to have regard to the listed criteria. [39] It is also important to bear in mind, both for local authorities fixing charges for s36(1) activities in the manner set out in s 36(2) and in charging applicants additional charges under s 36(3), that the concept underlying each stage is that local authorities may only recover their "reasonable costs" for the activity – either those likely to be lodged or those lodged and processed. It is also important to recognise that s 36(4)(a) applies to both aspects of the charging process, s 36(4)(b) can only apply to applications made and processed, s 36(4)(c) can only apply to the prospective aspect of fixing charges, and s 36(4)(d) may apply to both, though more commonly to applications made and processed, particularly those for which an additional charge is assessed under s 36(4)(b)(i) and (ii).23 At [18].24 Or possibly invoice by invoice for a large project where interim consideration of the criteria can be undertaken.[40] It may be appropriate to comment that when local authorities are fixing charges for s 36(1) activities in accordance with s 36(2), they no doubt have regard to such matters as the historical cost to them of processing such applications. But, provided they make responsible assessments, decisions are unlikely to be successfully challenged. [41] Similarly, both in fixing charges under s 36(1) to recover the local authority's reasonable costs and in setting additional charges under both s 36(1)(3) and s 36(4) no painstakingly detailed assessment need be undertaken. What is required is a conscientious factually-based consideration of the issues and an assessment of the costs thereof. 25 As it was put in the Whangarei District, 26 it is dependent on "relatively subjective judgment exercised in good faith" or, as it was put inWhangarei: 27The Court will not interfere with a rational commercial judgment on such matters: it would be pedantic and unrealistic and therefore contrary to Parliament's intent to require [adoption of] a more refined approach. Meticulous analysis is not required; that is why scales of charges are permissible. But there must be some reasonable if broad basis for ascription of costs to a particular class of users.[42] That passage may also be applicable when s 36(4)(b)(i) and, to a lesser extent, (ii) are under consideration. [43] To those observations may be added, again in terms of Porpoise Bay 28, that to recover the costs of the specified activity in any particular case, the local authority first needs to decide whether its charge fixed under s 36(1) is sufficient to recover its "actual and reasonable costs" in terms of s 36(3) because the sole purpose of the charge is to recover the "reasonable costs" incurred by the local authority in s 36(4)(a). Though differently phrased, the two wordings are synonymous.25 Though not this case, the obligation to recover no more than "reasonable costs" would appear to mean that if a local authority fixes charges for the s 36(1) activities, receives such an application but does not expend as much as the charge it has fixed for instance by early withdrawal of the application the obligation to recover nothing more than the local authority's "reasonable costs" would appear to require a charge less than the charge fixed for that activity.26 At 471, citing Electricity Corporation New Zealand Limited v Waikato Catchment BoardHC Hamilton CP223/88, 6 July 1990, Anderson J.27 At 474.28 At [22].[44] If the reasonable costs incurred by the local authority prove inadequate to recover its actual costs, then it is empowered to levy an "additional charge" on the "person who is liable to pay the charge", with that person only being able to be required to pay the "additional charge" if they fall within the criteria in s 36(4)(b). It is important to recognise the section entitles a local authority only to recover its actual and reasonable costs in relation to the particular s 36(1) activity, initially by way of its fixed charge and then, if that proves inadequate in the particular case, by way of imposing an "additional charge". Over-recovery is barred. The "sole purpose" of recovering either fixed charges or additional charges is to "recover the reasonable costs incurred by the local authority" for that activity. Therefore a 100 per cent cost recovery policy only conforms with the statutory purpose if the costs sought to be recovered pursuant to such a policy are both actual and reasonable and incurred "in respect of the activity to which the charge relates". Pursuant to s 36(4)(a), those appear to be the only statutory criteria which permit the person liable to be required to pay "an additional charge". The only evaluation under that sub-section by the local authority is therefore whether the "additional charge" in question meets those two criteria. It is a provision limiting who can be charged and what they can be charged for the Council activity they have initiated. [45] It should be said, however, that Councils which adopt 100 per cent user pays cost recovery régimes, whether for fixed or additional charges, are not to be criticised on that account alone. Indeed, s 36 is plainly premised on enabling local authorities to do just that: to recover the whole of the costs incurred by them in respect of a s 36(1) activity but no more than they expend. What appears to have been the downfall of local authorities and to have attracted criticism in earlier cases is failure on the part of the local authorities to appreciate that recovery of 100 per cent of their actual and reasonable costs, whether by way of fixed or additional charges, comes encumbered with obligations to fix those charges prospectively under s 36(1)(2)(4)(a) in accordance with the criteria earlier set out and, in the case of an additional charge, comes encumbered with the necessity to comply with the s 36(4)(b) criteria and the obligation to exercise the discretion under s 36(5). A policy of a local authority to recover 100 per cent of its actual and reasonable costs is not the same as the application of such a policy without complying with s 36(4)(b) and (5).[46] Pursuant to s 36(4)(b), however, the person required to pay an "additional charge" may only be required so to do if that person's activities have satisfied one of the three disjunctive criteria in sub-clauses (i), (ii) or (iii). Mr Casey was right to emphasise the disjunctive nature of the statutory criteria. The emphasis in s 36(4)(b) – broadly put – is that a local authority can only charge a person under s 36 if they personally benefit from the activity more than the community benefits or it is they who have "occasioned" the activity leading to the charge. That plainly requires Councils or their delegated officers to consider whether an "additional charge" can be levied because one of the s 36(4)(b) criteria are met. However, a local authority policy of recovering 100 per cent of the cost of an activity again seems to conform with the statutory purpose if the qualifying criteria are satisfied and complete cost recovery, but no more, is justifiable and achieved. [47] Then, under s 36(5), the local authority has an absolute discretion in any particular case to remit the whole or part of any s 36(1) fixed charge or s 36(3) additional charge, but against the statutory intent that local authorities can recover their actual and reasonable costs of the particular activity, but no more, there plainly needs to be a reason for the whole or partial remission of those charges. [48] In statutory terms therefore, the steps in the s 36 process for a s 36(1) activity (following charges being previously fixed in accordance with sub-section (1)) are for a local authority or its delegated officers to consider each of the following steps (expanded from Porpoise Bay): a) What are its actual costs incurred in relation to the activity (including costs charged to it by external consultants)? b) Are those costs reasonable in relation to the activity, that is, do they meet the s 36(4)(a) threshold? c) Are those costs satisfied by the fixed charge? d) If not, what "additional charge" should be levied to recover the balance of the actual and reasonable costs?e) Can that person who initiated the activity be required to pay that charge because they satisfy one of the criteria in s 36(4)(b)? f) Is it a case where, in the exercise of the local authority's absolute discretion under s 36(5), either the whole or part of the fixed charge or the additional charge should be remitted? [49] In practical terms, it should at once be said that in interim invoice cases it may be preferable, but is likely to be unrealistic, that each of the above steps be accomplished with each invoice. But there is force in the submission that many of the considerations which might, for instance, justify entire or partial remission of a charge will not be known as the work and the invoicing process proceeds, or until after the last invoice has been sent and the person charged responds with factors to be taken into account as justifying remission. But as long as the above process is undertaken, or there is an opportunity for the whole of the process to be satisfactorily completed – perhaps by objection to the invoices under s 357B and adjudication under that section – it would seem the statutory criteria will be met. [50] It follows that Courts' criticisms of local authorities blindly following policy should relate not to policies of full cost recovery, but to decisions under that policy which fail to recognise and appropriately decide on the evaluative and discretionary steps outlined. 100 per cent cost recovery processes are justifiable only if they represent policy decisions by local authorities to recover their actual and reasonable costs of processing s 36(1) listed activities. 100 per cent cost recovery policies which do not seek to recover the local authority's actual and reasonable costs for receiving and processing such activities prospectively or for recovering local authorities' actual and reasonable costs to make up the difference between the fixed costs and the additional charge and involve no consideration of the s 36(4)(b) criteria could never be justified because they are not rooted in the statutory criterion that only actual and reasonable costs are recoverable from persons to whom s 36(4)(b) applies.[51] What then of the decision in this case (bearing in mind it can often seem unfair to stigmatise action taken when the way in which that action should be taken is retrospectively altered by subsequent Court decision)? [52] Mr McKay was candid that Council's policy was, by its schedule of fees and charges for the activities listed in s 36(1), to recover 100 per cent of its costs. Importantly, however, he accepted that at no stage of the invoicing process did he consider reasonableness. because external consultants had been engaged, their invoices were "actual" and he did not turn his mind to whether they or Council's own invoices in relation to Hill Country's application were reasonable. Because of Council's 100 per cent cost recovery policy, "there was no decision to be made". True, the question was not whether the costs charged were reasonable as far as Hill Country was concerned - the statutory régime enables local authorities to recover their reasonable costs - but here Mr McKay's evidence makes plain that he did not consider the reasonableness of the fees charged to Council by the external consultants on receipt of their invoices. Nor did he give consideration to whether Hill County should be required to pay an additional charge because on due consideration it fell within one or more of the disjunctive criteria in s 36(4)(b)(i)(ii)(iii). Neither did he consider whether, on the information available to him, any part of the additional charge should be remitted in the exercise of Council's discretion. [53] That would ordinarily lead to the matter being remitted to Council to comply with the statutory requirements were it not for the fact that, here, Hill Country's objection under s 357B was considered and rejected by an Independent Hearing Commissioner on 1 October 2009. The Commissioner found the costs were actual and reasonable, "reasonable because they were of benefit to the requestor as distinct from the community" and "reasonable because they were occasioned by the requestor". This appeal is a challenge to the Environment Court's dismissal of Hill Country's appeal from the Commissioner's decision. In those circumstances, while Mr McKay may not have complied strictly with the s 36 statutory requirements in the manner already described, there can be no doubt that any deficiencies in that regard were cured by the full s 357B hearing before the Commissioner and the reasoned decision of the Environment Court on appeal from that adjudication.[54] This Court is of the view no error of law has been made out for this Court to intervene for the reasons already given. All four of Hill Country's grounds of appeal considered in this section of the judgment are accordingly dismissed.Benefit of appointment of external consultants? (1) Decision under Appeal[55] Hill Country next alleges the Environment Court fell into error in not applying the correct legal test to determine whether the benefit of the Council's actions to which the charges related accrued to Hill Country in terms of s 36(4)(b)(ii). [56] Hill Country's assertion focused on para [17] of the Environment Court's decision, which reads:HCCL argues that the Council received a benefit from the appointment of MWH, in that it was able to avoid allegations that it could not itself objectively assess and report on the HCCL proposal, because of the conflict between that scheme and the Council's own Structure Plan. There is some truth in that, but the primary beneficiary on that score was surely HCCL, which was able to be assured that independent consultants were appraising its proposal. Such benefit as accrued to the Council was entirely incidental to that.(2) Submissions[57] Evidentially, Mr Macfarlane pointed to the fact that some ten days after Plan Change 45 was lodged with Council, it adopted a document described as the 2007 Ocean Beach Structure Plan which proposed a less intensive residential development for Ocean Beach than Plan Change 45. Accordingly, for Hill Country, it was argued there was a benefit to the Council in appointing external consultants to avoid allegations of a conflict of interest. He argued that the Environment Court's finding that Hill Country was the "primary beneficiary" glossed the words of s 36(4)(b)(i), not least because the Court found some benefit accrued to the Council. To that extent Hill Country could not be required to pay that part of the charge: anapportionment must be undertaken as the Environment Court said in Black v Southland Regional Council.29[58] Black concerned a dispute between land owners and Council over a stop- bank, proceedings in relation to which went through preliminary steps but did not go to a hearing. The parties agreed Mr and Mrs Black would apply for a resource consent. That was refused by a commissioner but granted by the Environment Court on appeal. The matter for decision in the judgment related to Council making an additional charge for the cost of the commissioner's hearing, being part fixed charges and part additional charges. An objection was lodged and heard by an Independent Commissioner who determined the additional charges were payable by the Blacks and no grounds for waiver or remission were made out. That matter was appealed and was the subject of the judgment. Mr Macfarlane relied on the following passages in the judgment: 30[29] Mr Slowley for the Council accepts that in light of the history of the matter there was no alternative but to appoint the Commissioner. He accepts that it was important that the decision be seen to be unbiased. We would go further to say that the role of the Council in prosecuting the enforcement orders and declarations and the Councillors public debate of this issue was such that a Council committee could not undertake its duties under the Act without the possibility of, or accusation of, bias. [30] In essence, that analysis leads us to the conclusion that there must have been benefit to both the Blacks and the Council in the appointment of an Independent Commissioner. The benefit to the Council was in that it was necessary for them to be seen to be undertaking their obligations in terms of the Resource Management Act in dealing with the application in an unbiased manner. We have accepted that this could not have been achieved by dealing with the matter through a Council hearing. That position is reinforced by the earlier resolutions which indicate that the Council perceived some advantage not only in having the matter heard by an independent commissioner but also by having the matter dealt with by way of a notified resource consent application rather than by enforcement and declaration proceedings. [31] On the other hand, neither could the Blacks argue that the appointment of the Commissioner was entirely for the benefit of the Council. It was a matter of agreement between the Blacks and the Council. The Blacks agreed to file a resource consent application. [32] In dealing with the question of any benefit, we have concluded that benefit was obtained by both the Blacks and the Council.29 Black v Southland Regional Council EC A95/02, 2 August 2002.30 At p23 paras [29]-[32].[59] The upshot was that Mr and Mrs Black were ordered to bear only $6000 of the over $24,000 originally invoiced to them as additional charges in addition to the fixed charges 31 . [60] Based on Black, Mr Macfarlane argued that Hill Country should only be required to pay the costs of the external consultants to the extent that the benefit of the appointment of those consultants was obtained by the applicant. Any other benefit should have reduced the costs payable. [61] Mr Casey argued the Environment Court did not have to make any finding under s 36(4)(b)(i) and its finding was obiter dicta or at least amounted to a rejection of Hill Country's claim there was some benefit to the Council in being able to avoid the appearance of bias. That, he submitted, was not a benefit of the definable and tangible nature intended by the section (as held in Redvale) and did not reflect the fact that Hill Country applied for the plan change knowing Council had a less intensive development in prospect. He submitted Redvale was authority that benefit must be both definable and tangible and if there is a benefit to the community for its Council being seen as beyond reproach, that was not a benefit in terms of s 36(4)(b)(i). Black was an exceptional case, peculiar to its own circumstances, as was the appointment of the Maori Commissioner in Barton. [62] Mr Casey, noting Hill Country's claim that there was a benefit to the local community from what he called the "inchoate knowledge" acquired during the plan change process, did not identify any direct or tangible benefit or the way in which the benefit claim could be assessed. The source information that might have been added to the "library" of knowledge about Ocean Beach was that provided by Hill Country by its plan change request, something impliedly acknowledged by Hill Country as being impossible to assess.(3) Discussion and Decision31 Para [49][63] It is not necessary to be an etymologist to conclude that, in using the ill- defined word "benefit" in s 36(4)(b)(i) – whether in its dictionary sense 32 or in its more strictly legal context 33 - Parliament did not ease the task of local authorities and Courts in deciding what was intended. It is therefore entirely understandable that inRedvale the Environment Court held that "benefit" in s 36(4)(b)(i) meant a "definable and tangible benefit rather than the general public good". [64] What is intended by s 36(4)(b)(i), however, is reasonably plain. As previously discussed, the thrust of s 36(4) is that persons should only be liable to be debited with fixed or additional charges under s 36(4)(b)(i), if they personally obtain a definable and tangible benefit out of the local authority's actions. Any more general benefit cannot be charged. [65] A more concrete example might be that where, as here, the Council is contemplating permitting sub-division in an environment such as this and by reason of Hill Country's plan change proposal the Council obtained geotechnical reports which benefited Hill Country to the extent it did not need to obtain such reports for its own proposal, then it might be said that the "benefit" of the Council's actions – the charge for the Council's geotechnical report – might be obtained by Hill Country rather than by Council's community and ratepayers. Avoidance of expenditure by the person who initiated the proposal could justifiably render them open to pay the charge for the cost to Council of such a report, which they would otherwise have had to meet themselves. [66] In this case, a general review of the evidence suggests there was no such avoidance of expenditure. Black, decided in 2002, held that avoidance of Council reaching a decision able to be impugned for bias brought benefits to both parties and an apportionment was undertaken. The avoidance of additional hearings and appeals was held to constitute a mutual benefit for the parties in the circumstances of that case. However, Aifric, decided in 1996, was not discussed in Black, no doubt because it was directed to a different point and one adopted in Redvale: absent some32 "Advantage, profit, good", Oxford English Dictionary, 2nd ed, Vol. 2, p 111.33 "A vague term": R v Pedersen, [1995] 2 NZLR 386, 392, per Hardie Boys J; Greenberg Stroud's Judicial Dictionary of Words and Phrases, 7 th ed, vol. 1, p.272-276."tangible and definable benefit to the community", processing an application, including its hearing, is not a "benefit" in terms of s 36(4)(b)(i). [67] Here, as found by the Environment Court, the appointment of external consultants, and thus the "additional charge" for their fees, was more similar to the situation in Black than that in Redvale and Aifric. The Environment Court may have more happily phrased its "primary beneficiary" finding directly in terms of the sub- section, but the finding is nonetheless sound. It is that, in relation to Hill Country's plan change proposal – stressing that qualification – the benefit to Hill Country of having its proposal independently and externally assessed, as it knew it would be, meant the evaluation process could not be impugned for bias on the part of Council – an allegation that would almost inevitably have otherwise been made - when it had initiated a somewhat similar and potentially conflicting proposal. Within the qualification that the external consultants' costs charged to Hill Country related solely to its plan change proposal, therefore it could not be said the Environment Court was wrong in law in saying that any benefit the Council may have obtained from those external consultants' reports in relation to its own proposal, or more generally, was "entirely incidental". [68] This ground of appeal fails.Benefit of peer review reports? (1) Decision under Appeal[69] The next error of law claimed by Hill Country is somewhat similar to the last. It asserts the Environment Court applied the wrong legal test in determining whether the charges should be reduced to reflect the benefit to the community of having detailed technical reports and information relevant to all future planning at Ocean Beach available to Council and in holding any public benefit was peripheral and incidental to the primary purpose of the information gathering exercise, namely the processing of the plan change proposal.[70] That claimed error is based on para [29] which, under the sub-heading that "Hill Country should only have to make a contribution to the overall cost", read:Secondly, it is said that the work done contributed to a library of knowledge and information about Ocean Beach and the planning issues it gives rise to. That, it is said, will be of advantage to the Council itself and to others who may access that information (and it is public information) in the future. Yet again, we accept that there is an element of truth in that. What is now on public record about this place is an accumulation of information gathered over the years, and will undoubtedly be of use in the future. That is equally so for every record kept about every piece of land within the boundaries of every territorial authority. Every piece of information recorded represents abenefit of greater or less value. That is an incident of the primary purpose of each information gathering and assessment exercise: - the progressing, or not, of the plan change or resource consent proposal which is the immediate cause of the work. The scheme of s 36 is, as mentioned at the outset, to provide a user pays, full cost recovery process, subject to the criteria and discretions contained in s 36. That there might be a peripheral public benefit arising from the work that is paid for does not change that. On the same note, it is not accurate to say that what the section requires or allows is for the applicant to make a reasonable contribution to the cost. This is not a costs application under s 285. For the reasons traversed what the applicant can be required to do, subject to s 36, is to indemnify the Council for the actual and reasonable costs incurred.(2) Submissions[71] Largely repeating his arguments before the Environment Court, Mr Macfarlane submitted that not only will Hill Country's roading, geotechnical and other reports and the solutions they propose be useful in resolving any future development of Ocean Beach, but Council will also benefit from having the identified limitations and problems in the external consultants' reports available to it in relation to any future sub-division. If the Environment Court's ruling, phrased as it was, is upheld, he submitted it is difficult to see how there could ever be a discount for benefit received. He made the point that s 36(4)(b)(i) does not distinguish between peripheral and more direct public benefits and if there is some benefit to others, even if peripheral or incidental to the primary purpose of processing the plan change, the sub-section requires payment by the applicant only to the extent that it benefits from the work to which the charge relates. That, he submitted, was particularly the case here where the District Council had an alternative development scenario in contemplation. The work done by external consultants processing HillCountry's plan change will, he submitted, avoid duplication in the event of the Council proceeding with its Ocean Beach proposal. [72] Mr Casey's submissions on this point were summarised earlier.(3) Discussion and decision[73] Although this point is very similar to the last matter discussed, it is also subtly dissimilar. Whereas the previous point focused on the benefits to the person initiating the s 36(1) activity, as distinct from the benefits to the local authority and its community, this point revolves around the reverse situation. [74] The Environment Court was undoubtedly correct in saying that every piece of information generated for, or obtained by, local authorities concerning every piece of land within their district is of benefit to the local authority in enlarging its information base or avoiding expenditure on future investigations or proposals concerning that piece of land. Some of that information will be ephemeral, some will become outmoded, some will be overtaken by changes in circumstance, but all could be regarded as likely to be of some benefit – however intangible to the local authority in contributing to its store of knowledge about the particular piece of land in question – and, sometimes, other land. [75] However, the evaluation process – deciding if there is defined and tangible benefit as opposed to "general public good" - will plainly be difficult. If, for example, a report furnished for a s 36(1) activity discloses a previously unknown faultline or slippage problem impacting on a proposed activity concerning the land, what is the benefit to the local authority if it later adopts limitations on the use of that land encompassing particular engineering requirements to avoid such problems? If a s 36(1) activity involves, say, a particular subdivisional or roading layout proposed by an applicant, what are the benefits to the local authority if a later subdivisional plan and roading layout amends or builds on that previously proposed as opposed to a completely new plan for such activities? If plans for a s 36(1) activity paid for by an applicant disclose hitherto unsuspected sites of significant archaeological value, even if appropriate protection measures are put in place by the local authority what isthe benefit to the local authority of the knowledge of the existence of such a site within its district? As the Environment Court said, almost all information gained by a local authority about its district could be construed as conferring a benefit of that nature on it. [76] That said, with respect it was not entirely helpful for the Environment Court to define the watershed in terms of whether the benefit of the information gained by the local authority is incidental or peripheral. Again, the section requires the applicant to make a "reasonable contribution" to the cost. As already mentioned, the "sole purpose" of charges levied for s 36(1) activities – both fixed and additional – is to enable local authorities to recover their "actual and reasonable costs" or the reasonable costs incurred by them and persons whose applications initiate s 36(1) activities are not to be charged the local authority's costs of processing those activities unless the criteria in s 36(4)(b) are met. In terms of s 36(4)(b)(i), Redvalemakes clear that the costs of obtaining a benefit cannot be charged for unless, in an evaluative exercise, a definable and tangible benefit of the s 36(1) activity accrues to the person whose actions generated that activity as opposed to the local authority and its community. That necessarily involves an assessment in each case – an evaluation which has been acknowledged as difficult - of the benefit generated by the s 36(1) activity and an acknowledgement that the person whose actions sparked that activity cannot be charged unless the benefits accruing to that person are definably and tangibly greater than those accruing to the local authority and its community. [77] Mr Macfarlane argued that there was a benefit to the community of having detailed roading, archeological, engineering, geological and consequent hazard information in the external consultants' reports. He submitted the evaluative exercise of balancing the benefits to the community against the benefits to Hill Country of that information was never undertaken by the Council and Mr McKay. Mr McKay simply initiated Council's 100 per cent cost recovery policy in respect of the information provided by the external consultants assessing Hill Country's plan change proposal without taking the next step of assessing whether a definable and tangible benefit accrued to the District Council from that exercise.[78] Here again, the lack of express consideration by Council and Mr McKay of what was statutorily required may, were this the first consideration of that issue, have resulted in the appeal being allowed but, again, the issue has been thoroughly ventilated and adjudicated upon both by the Independent Hearing Commissioner and by the Environment Court and the conclusion reached was that Council's errors have been cured. Neither has been shown to have acted contrary to law in relation to this issue. [79] Hill Country's appeal on this ground is accordingly also dismissed.Whether the onus was on Hill Country to provide a criticism of the work done and the reasonableness of the charges? (1) Decision under Appeal[80] The next error of law for which Mr Macfarlane contended was that the Environment Court did not apply the correct legal test in holding Hill Country had an onus as objector to provide criticism of the work done and the quantum of the charges to support its claim that some of the work done by the external consultants went beyond what was necessary to process the plan change request and was not reasonable. [81] That suggested error of law focused principally on clause 22 of the judgment. In fact, for context, citation of more than para [22] is required. [82] Under the sub-heading "Hourly rates and quantum of charge", the Environment Court recorded Hill Country's criticism that the consultants' hourly rates were greater than qualified Council staff; questioned whether the work done was within the scope of peer review or was excessive having regard to information already available; and generally criticised the project management and the s 42A hearing report. After recording the contrasting views of the expert witnesses on a "gut, seat of the pants" assessment, the Environment Court went on: [21] A further related point is the complaint that some consultants went beyond a simple peer review of the existing material, or went beyond matters which did not strictly require consideration in deciding the plan change.Some of the work, HCCL says, was at a level more appropriate to a resource consent inquiry than a plan change and it was therefore not reasonable (in the s 36 sense) to charge for it. [22] We have to say that we do not find this line of criticism convincing. This was, on any view, a significant plan change in a very sensitive environment. A concern on the part of those engaged to give advice, that they should comprehensively understand the issues and get it right, is entirely understandable. Good project management and a robust s 42A report are essential parts of such an exercise. In the absence of some more precise and considered criticism of the work done and the quantum of the charges, we do not think it appropriate to pursue that line of inquiry and we focus instead on the issues raised within the terms of s 36.(2) Submissions[83] With what, he suggested, were examples of the independent consultants going beyond what was necessary, Mr Macfarlane submitted that it would have been open to the Environment Court not to accept the evidence of Hill Country's expert, but the way in which the Court dealt with this point fell well short of a finding that the work done was necessary to decide whether the plan change ought to be approved and the costs were reasonable. He suggested the Court's finding reversed the onus of proof 34 . [84] Mr Casey's submissions on this topic, too, have earlier been summarised.(3) Discussion and decision[85] On this topic the Court largely agrees with the respondent. Although the Environment Court did not deal in paras [21] and [22] with the necessity for the costs to be reasonable, such is implicit in those passages of the judgment and was explicit elsewhere. The last sentence of para [22] is essentially a finding by the Court that it did not accept Hill Country's expert criticism and because of that considered it was unnecessary for it to embark on a detailed evaluation of the points raised. The point was also decided against Hill Country by the Independent Hearing Commissioner.34 Wightman v Waipa District Council (1997) 3 ELRNZ 191.[86] This point of appeal accordingly also fails.Was the employment of the external consultants "occasioned" by Hill Country's plan change request? (1) Decision under Appeal[87] Hill Country's final ground of appeal focused on s 36(4)(b)(ii) and the use in that section of the participle "occasioned". [88] That word was defined in Redvale in the following passage: 35[14] As a start point, we take occasioned as meaning that it created a cause or reason to do something. We also note that the section does not speak of the Council's actions being solely occasioned by Redvale Lime's actions. We see no reason to attempt to add layers or shades of meaning to the plain words of the section. If the resource consent application was the reason the Council took certain actions, then it occasioned those actions. We do not see that approach as simplistic: - it simply applies the ordinary meaning of the words of the section. Nor, for the same reason, do we see why that interpretation is inappropriate. We certainly do agree that, as ... a hearing of any length or at any cost could not be properly chargeable under the section. But that would not be because it was not occasioned by the resource consent application in terms of (4)(b)(ii). It would be because it would not be a reasonable cost in terms of (3) and (4)(a).[89] The point revolves around paras [15] and [16] of the Court's decision, which read: [15] Section 36(4)(b)(ii) limits the requirement for a person to pay a charge to situations where the need for the local authority's actions to which the charge relates is occasioned by the actions of those persons; or .Mr Macfarlane argues that the engagement of MWH et al was occasioned, at least in part, by the Council's general policy to engage external consultants to deal with private plan change requests (so as to prevent the Council's Plan Policy development work from being taken over by plan change requests); by the Council's recent decision to adopt its own Structure Plan for Ocean Beach; and by the likelihood that the Council would make a submission on the HCCL request. [16] The New Zealand Oxford Dictionary gives us occasion as a reason, ground or justification an immediate but subordinate or incidental cause. That indicates that to be an occasion, an event need not be the sole cause of something else being done, so long as it is an operative cause. If we35 At [14].apply that here, there can be no argument but that the lodging of the plan change request, particularly on the basis that it be processed as a priority, was at least an effective cause, even if not the only cause, for the engagement of external consultants to process it. We cannot accept that ground of challenge as valid.(2) Submissions[90] Mr Macfarlane submitted that the primary reason for Council taking the view that private plan change requests be processed and reported on by independent consultants was to prevent Council's officers being inundated by such requests, in this case in combination with Hill Country's wish to have an earlier hearing and Council's own proposals for Ocean Beach (and the likelihood if – as eventuated – it would oppose Hill Country's plan change). [91] Mr Macfarlane said Hill Country contended that only one of the reasons for the employment of independent consultants derived from Hill Country's action – the desire for an accelerated hearing – with the others all stemming from the actions of Council. [92] He accepted it was true Council would not have engaged external consultants if Hill Country had not lodged its private plan change request, but said the way in which the Court dealt with the issue did not accord with s 36(4)(b)(ii). The test could alternatively be expressed, he submitted, as why was it necessary for Council to appoint external consultants to process Hill Country's plan change? The answer to that question was that Council's policy meant external consultants would have been engaged in any event. If the Court's interpretation of s 36(4)(b)(ii) was upheld, all charges by a local authority for any work undertaken in response to an application would always be recoverable in full, even if the application was only a partial cause of the work. That would render s 36(4)(b)(ii) and s 36(4)(b)(i) otiose. [93] Mr Casey made the point that Hill Country was aware from the outset that Council would be engaging external consultants at Hill Country's cost and raised no opposition. He said the whole of the work done by Council and its consultants was for the processing of Hill Country's private plan change request and, in the circumstances, it was reasonable for the Council so to do, partly because of its ownproposals and partly for reasons of time. Possible issues of bias needed to be avoided and, even if more of the work had been done "in-house", retention of external consultants for some aspects was inevitable. Indeed, when Hill Country withdrew the plan change request, it complained at length about what it saw as the District Council's inadequacies and predisposition against its proposal.(3) Discussion and decision[94] This is a point requiring little discussion. Redvale used one definition of "occasion" as creating a "cause or reason to do something". The Environment Court in this case used another definition, stressing that the word extended to a reason or an "immediate but subordinate or incidental cause". A fuller definition would read: 36"the occasion or cause of [something]; to give ground for, give rise to, cause, bring about, esp in an incidental or subsidiary manner".[95] The Court was right to note that s 36(4)(b)(ii) does not require demonstration of something being a sole cause, as long as it was an operative one. [96] No matter which definition of "occasion" is employed, there was ample material on which the Environment Court (and the Independent Hearing Commissioner) was justified in concluding that the lodging of Hill Country's plan change request was an effective or operative cause or reason, even if not the only one, for the Council acting by engaging external consultants to process it in a manner which avoided an almost inevitable assertion of bias and thus likely prolongation of the process by additional litigation and appeals. [97] Hill Country has failed to demonstrate that the Environment Court fell into error of law in this regard. This ground of appeal accordingly additionally fails.Result[98] Hill Country's appeal is dismissed on all the points of law raised.36 Oxford English Dictionary, 2 nd ed, vol. X, p. 676Costs[99] As to costs, if counsel are unable to agree pursuant to their obligation to seek agreement, the Council may file a memorandum within 35 days of delivery of this judgment and Hill Country may reply with a memorandum within 42 days (maximum 5 pages each), with the parties certifying in their memoranda, if they consider it appropriate, that the Court can determine all issues of costs without further hearing. (Any outstanding issues of costs can be resolved by any Judge). .................................................................HUGH WILLIAMS J.Solicitors: Sainsbury Logan & Williams, P O Box 41, Napier Bannister & von Dadelszen, P O Box 745, HastingsCopy for: M E Casey QC, P O Box 317 Auckland 1140.Case Officer: Melissa Mexted/Debbie Picone, High Court Napier.