HILL COUNTRY CORPORATION LTD V HASTINGS DISTRICT COUNCIL HC NAP CIV-2010-441-222

HILL COUNTRY CORPORATION LTD V HASTINGS DISTRICT COUNCIL HC NAP CIV-2010-441-222 17 December 2010IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY CIV-2010-441-222IN THE MATTER OF the Resource Management Act 1991 AND IN THE MATTER OF an appeal under s 299 of the Act BETWEEN HILL COUNTRY CORPORATION LTD Appellant AND HASTINGS DISTRICT COUNCIL Respondent Hearing: 24 November 2010 Appearances: M E J Macfarlane and L J Blomfield for Appellant M Casey QC and J M von Dadelszen for Respondent Judgment: 17 December 2010JUDGMENT OF BREWER JThis judgment was delivered by me on 17 December 2010 at 2:30 pm pursuant to Rule 11.5 High Court Rules. Registrar/Deputy Registrar_________________________________________________________________________________ SOLICITORS Sainsbury Logan & Williams (Napier) for Appellant Bannister & von Dadelszen (Hastings) for Respondent COUNSEL Matthew Casey QCIntroduction[1] The applicant seeks leave to appeal to the Court of Appeal the judgment of Hugh Williams J in this matter delivered on 17 September 2010. 1[2] The applicant is aggrieved by a decision of the respondent to charge it additional costs of $287,000 for processing a private plan change request. [3] The applicant first challenged the decision by way of objection under s 357B of the Resource Management Act 1991 (the Act). The objection was disallowed by an independent commissioner in September 2009. [4] The applicant next challenged the respondent's decision before the Environment Court. That Court dismissed the applicant's appeal in a reserved decision delivered on 26 March 2010. 2[5] The applicant then appealed to this Court pursuant to s 299 of the Act. It was again unsuccessful. It now seeks to make its argument to the Court of Appeal.Appeal principles[6] Section 308 of the Act provides that in cases such as this s 144 of the Summary Proceedings Act 1957 (the SPA) applies as if the decision of this Court had been made under s 107 of that Act. [7] Section 144(2) of the SPA provides:114 Appeal to the Court of Appeal... (2) A party desiring to appeal to the Court of Appeal under this section shall, within 21 days after the determination of the High Court, or within such further time as that Court may allow, give notice of his application for leave to appeal in such manner as may be directed by1 Hill Country Corporation Limited v Hastings District Council [2010] NZRMA 539 (HC), Hugh Williams J.2 Hill Country Corporation Limited v Hastings District Council [2010] NZRMA 331.the rules of that Court, and the High Court may grant leave accordingly if in the opinion of that Court the question of law involved in the appeal is one which, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision. ...[8] The task of the Court in considering whether it should grant leave under this provision is therefore restricted to a consideration of whether a question of law exists which is of sufficient significance that it ought to be submitted to the Court of Appeal for decision. In other words, s 144(2) does not confer a right of general appeal. The leading case on this point is R v Slater.3 This was a case where a decision made by a District Court Judge in a road traffic case had been upheld by the High Court, leave to appeal to the Court of Appeal under s 144(2) was refused, and application for special leave was then made direct to the Court of Appeal pursuant to s 144(3) of the SPA. [9] The Court of Appeal held:4... Under subs (3) this Court can grant "special leave" for an appeal to be heard by this Court if it is of the opinion that the question of law which is involved in the appeal is one which, by reason of its general or public importance or for any other reason, ought to be submitted to the Court for decision. Thus, there must be: (i) a question of law; (ii) the question must be one which, by reason of its general and public importance or for any other reason, ought to be submitted to the Court of Appeal; and (iii) the Court must be of the opinion that it ought to be so submitted. It is probably neither necessary nor desirable, however, to break the requirements of the subsection down in this way. Such an analysis merely serves to highlight the essential elements which must be present before leave to appeal can be granted. It is sufficient to pose the statutory question: is there a question of law which, by reason of its general or public importance or for any other reason, ought to be submitted to this Court for decision.[10] The Court went on to consider the residual discretion and held that although that discretion extends to a right to refuse to grant special leave even though there is a question of law involved and that question is one of general or public importance, it does not give a discretion to grant leave if no question of law arises in the appeal: 53 R v Slater [1997] 1 NZLR 211 (CA).4 Ibid, at 214-215.5 Ibid, at 215.Section 144 was not intended to provide a second tier of appeal from decisions of the District Court in proceedings under the Summary Proceedings Act. Parliament intended such proceedings to be brought to finality with the defendant having an appeal to the High Court other than when the conditions it has specified in subss (2) and (3) are met and leave to appeal is granted. Neither the determination of what comprises a question of law, nor the question whether that point of law raises a question of general or public importance, are to be diluted.[11] For the purposes of this application the Environment Court can be substituted for the District Court in the above passage. Likewise, the Resource Management Act can be substituted for the Summary Proceedings Act. [12] Accordingly, the decisions I have to make are limited to the factors set out above. The merits of the applicant's case are not for me to pronounce on.The grounds for the application[13] The applicant's grounds for leave to appeal are set out in its notice of application dated 7 October 2010:1 The judgment was wrong in law in its interpretation and application of section 36(4)(b)(i) Resource Management Act 1991 (RMA) and in its findings that the respondent's failure to comply with the statutory requirements of section 36(4) RMA was cured by subsequent hearings, upon the following points on appeal. 1.1 In respect of section 36(4)(b)(i) RMA: (i) Whether the High Court erred when it held as sound the Environment Court's finding that the appellant was the primary beneficiary of the respondent's actions to appoint external consultants to process the plan change in terms of section 36(4)(b)(i) RMA such that no apportionment for relative benefit was necessary (Judgment, [67] and [76]). 1.2 In respect of the finding that the respondent's failure to comply with statutory requirements was cured by subsequent hearings: (i) Whether a council's failure to comply with the statutory requirements of section 36(4) can be cured by the hearing of an objection under section 357B RMA and subsequent appeal to the Environment Court (Judgment, [53] and [78]).(ii) Whether the Environment Court's decision can cure the respondent's failure to comply with the statutory requirements of section 36(4) RMA when that court came to a conclusion which, on the evidence, it could not reasonably come; the High Court finding that the evidence of an officer of the respondent given before the Environment Court made it plain that he did not consider: (a) The reasonableness of the fees charged to council by the external consultants on receipt of their invoices; (b) Whether the respondent should be required to pay an additional charge because, on due consideration it fell within one or more of the criteria in section 36(4)(b)(i)(ii)(iii); or (c) Whether on the information available to him, any part of the charge should be remitted in the exercise of the respondent's discretion (he not being asked to do so in any event, the appellant expressly not applying for remission). (Judgment, [52] and [78]). Upon this point it will be argued that the Court cannot be confident that all the information relevant to a properly informed decision by this council was before it, before the Environment Court or the commissioner. It will be further argued that it is not appropriate for the only finding in this regard, which was made by the commissioner, to be sufficient to cure the council's failure to comply with the statutory requirements in circumstances where the council has not considered the reasonableness of the fees charged by the external consultants, the Environment Court did not make an express finding as to the reasonableness of those fees, and nor did the High Court (it not being called upon to do so). (iii) Whether any subsequent decision on an objection or appeal to the Environment Court can make a finding in respect of section 36(5) RMA when the respondent's objection and subsequent appeals related only to the application of the statutory criteria in section 36(4) RMA (no application having yet been made under section 36(5) RMA).The factual background 6[14] The applicant's private plan change request related to land at Ocean Beach. Development options for this land had been under active consideration for some years. The respondent, in May 2007, had been about to adopt a structure plan for the land (known as the 2007 Ocean Beach Structure Plan) when the applicant lodged its request. At that point the respondent put on hold its own proposals pending resolution of the appellant's request. [15] The respondent commissioned independent consultants to prepare reports for the hearing of submissions on the applicant's request. The applicant knew that and knew that the costs involved would be debited to it. [16] In October 2008 the applicant withdrew its plan change request.The applicant's case[17] The applicant contends that the respondent benefited also from the reports of the independent consultants. Therefore, it submits, Hugh Williams J was wrong at law to find that the respondent did not have to pay part of the costs itself. [18] The first part of its argument involves the interpretation and application of s 36(4)(b)(i) of the Act. Section 36 provides, relevantly: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—6 The description following is taken in summary form from [6] of Hugh Williams J's judgment.... (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. ... (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. ...First ground on which order is sought[19] The applicant submits that there is conflicting case law on how s 36(4)(b)(i) ought to be applied. It submits that the Environment Court and the High Court followed one line of authority7 and that the High Court applied that authority in a manner inconsistent with the wording of s 36(4)(b)(i). [20] The written submissions filed by the applicant dated 12 November 2010 set out its case on this issue succinctly and clearly. Accordingly, I quote them as follows:15 The argument for Hill Country was that both Hill Country and HDC received a benefit from the appointment of external consultants to process the Plan Change. The benefit to Hill Country was that its proposal was being assessed by external consultants independent of HDC (and this was potentially important as HDC had adopted a structure plan which proposed a less intensive residential development for Ocean Beach than Plan Change 45). HDC also received a benefit from the appointment of external consultants because it could avoid allegations of conflict of interest that would arise if Plan Change 45 was processed by the Council, while also receiving independent reports on all of the issues that it would have to consider and address when progressing its structure plan for Ocean Beach. 16 In relation to the first of those two benefits, Hill Country relied onBlack v Southland Regional Council,8 an Environment Court decision which reduced the charges invoiced to the Blacks in recognition of a benefit to both the Blacks and the Council resulting from the appointment of an Independent Commissioner. 17 The Environment Court's finding on this issue is set out at [17] of its decision:9"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."18 The High Court considered Black (discussed above) and the decision of Redvale Lime Company Ltd v Auckland Regional Council. In the7 Based on Redvale Lime Co Ltd v Auckland Regional Council Env C Auckland A132/05, 10 August 2005, Judge Thompson.8 Black v Southland Regional Council Env C Christchurch C95/02, 2 August 2002.9 The applicant refers here to the Environment Court's decision in this case.latter case, the Environment Court (constituted differently from that which heard Black) held that "benefit as used in [section 36(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 informed decision-making." 19 Hugh Williams J rejected Hill Country's submission that the Environment Court had erred in its finding that Hill Country was the primary beneficiary of the respondent's actions to appoint external consultants to process the Plan Change, such that no apportionment for relative benefit was necessary. At [67] His Honour stated:"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 [the] 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'.20 The final sentence appears to suggest that a finding that the external consultants' costs charged to Hill Country related solely to its plan change proposal (the criteria in section 36(4)(a)) is somehow relevant to an assessment as to benefit in terms of section 36(4)(b)(i) RMA. 21 When fixing a charge under section 36(4), a consent authority must satisfy both section 36(4)(a) and one or more of the criteria listed in section 36(4)(b). Satisfaction of section 36(4)(a) should not have any bearing on the assessment as to relative benefit required by section 36(4)(b)(i). If His Honour's finding in [67] suggests otherwise (and this is not entirely clear), that is an error of law in the interpretation of section 36(4) RMA, and its application to the facts of this case. 22 Then, at [76] His Honour stated:"... 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), Redvale makes 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 asdifficult – 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."23 With respect, while Redvale is authority for the proposition that a benefit must be definable and tangible, it is not authority for the proposition set out in the final sentence of the paragraph quoted above ⎯ that before charging for an action, an authority must assess whether the benefit accruing to an applicant is definably and tangibly greater than those accruing to the local authority and its community. 24 The Judge's finding suggests that, provided an applicant receives the greatest benefit (i.e. a benefit greater than that accruing to the local authority and its community) it can properly be charged 100% of the costs associated with that activity. 25 The wording of section 36(4)(b)(i) lends itself to quite a different interpretation ⎯ that an applicant should only be required to pay a charge to which an activity relates to the extent that they benefit from that action. If the community or the local authority receives a benefit from that action, the applicant should not be required to pay that portion of the charge associated with that benefit to other parties.The respondent's case on applicant's first ground[21] The respondent submits that the first ground of proposed appeal is not on a question of law but is instead an assertion of incorrect factual findings by both the Environment Court and the High Court. 10[22] The respondent also submits that even if there was an error in respect of s 36(4)(b)(i) it is irrelevant as there is no appeal against the findings under s 36(4)(b)(ii) or against the finding that (i) and (ii) are disjunctive. [23] The respondent submits that because of the disjunctive "or" between sub paragraphs (i), (ii) and (iii) in s 36(4)(b), the only criteria that needed to be established by the Council, which relied on s 36(4)(b)(ii), were: (1) That the costs be reasonable (s 36(4)(b)(i)); and10 Submissions by counsel for the respondent, dated 19 November 2010, at [7.1].(2) That the need for the actions to which they related was occasioned by the respondent (s 36(4)(b)(ii)). [24] Both those matters having been established (as matters of fact) the costs are properly recoverable from the applicant. The current application for leave does not seek to impugn the findings of the High Court or the Environment Court relating to either the reasonableness of the charges or to the finding that they were occasioned by the applicant's actions. [25] In relation to the applicant's submission that the Environment Court and the High Court followed the wrong line of authority, the respondent submits, succinctly:7.5 The appellant's submissions overstate the alleged differences between the Redvale and Black decisions. Unlike the demonstrable (and acknowledged) conflict between the decisions referred to inWymondley, the issue of whether the benefits should be 'definable and tangible' (as per Redvale) was simply not considered in Black.As Hugh Williams J noted, the Environment Court in Black did not discuss the earlier High Court judgment in Aifric. Conversely, the court in Redvale did so, and its reasoning that the benefits, to be considered in terms of s 36(4)(b)(i), should be definable and tangible has now been endorsed by this court. (Citations omitted)General and public importance?[26] The applicant submits that the difference between Black and Redvale is sufficiently sharp that the Court of Appeal should be asked to resolve it:29 An answer on the proper interpretation of section 36(4)(b)(i) has importance beyond the interests of the parties to these proceedings. It is potentially relevant to all applicants and all local authorities (not just HDC) charging for functions performed under section 36 of the RMA. On a day to day basis, section 36(4) affects all Councils and all applicants.[27] The respondent submits that there is no issue of public and general importance. The proposed point of appeal is relevant only to the circumstances of the present proceeding.Discussion[28] In my view, whether or not the applicant was the "primary beneficiary of the respondent's actions" 11 is an issue of fact, not law. [29] The proper interpretation of s 36(4)(b)(i) is an issue of law, but it is not in the context of this case one of general and public importance. I agree with counsel for the respondent that there is no conflicting line of decisions in the Environment Court that should be resolved beyond the decision of Hugh Williams J in this case. [30] Black was very fact specific. The benefit to the Council in that case came from compromising a longstanding dispute through an agreement to submit the issue to a Commissioner through the Resource Management consent process. The Council had agreed to pay part of the costs. [31] Further, the decision of the Environment Court in Black was not based on s 36(4)(b) but on an exercise of the discretion under s 357(7) to remit costs. [32] In Redvale, the argument before the Environment Court turned on whether access by the public to a Commissioner's hearing should count as a benefit to the community of the local authority as a whole for the purposes of s 36(4)(b)(i). It was in contradistinction to that sort of general, intangible benefit inherent in the Resource Management process that the Environment Court made its comments. [33] The two cases are not irreconcilable and Hugh Williams J's decision in this case does not raise any distinction which should be challenged on the facts in this case. [34] I agree also that s 36(4)(b)(i) and s 36(4)(b)(ii) are disjunctive. Either can be relied upon. It is hard to see what benefit could be gained by the applicant in going to the Court of Appeal in relation to s 36(4)(b)(i) alone.11 Applicant's grounds for leave to appeal, at [1.1](i), quoted at [13] herein.[35] Accordingly, I decline leave to appeal on this ground. I do not find that the ground raises a question of law which is of general and public importance and which ought to be submitted to the Court of Appeal for decision.Second ground on which order is sought[36] Whether or not the Council failed to comply with s 36(4) is a question of law. Whether the failure could be cured by the hearing of an objection under s 357B of the Act is also a question of law but one which turns almost entirely on the facts. [37] In this case it is a question of law which has been ruled on by both the Environment Court and this Court focusing on the particular facts of the case. [38] The applicant submits: 1249 A judgment from the Court of Appeal on whether a decision on an objection and/or subsequent appeal can cure a Council's failure to comply with its statutory obligations at first instance is potentially relevant to all objections and any subsequent appeals where the Council has not complied with its statutory obligations at first instance.[39] The applicant might, as a matter of general statement, be correct. But on the facts of this case I do not agree that it ought to be submitted to the Court of Appeal by reason of its general or public importance. This ground of appeal is declined.Conclusion[40] For the reasons given above, the applicant's application for leave to appeal to the Court of Appeal is declined. [41] Costs are awarded to the respondent on a 2B basis. ________________________________ Brewer J12 Submissions by counsel for the applicant, dated 12 November 2010, at [49].