NEW ZEALAND MOTOR CARAVAN ASSOCIATION INCORPORATED v QUEENSTOWN LAKES DISTRICT COUNCIL [2022] NZHC 425

NEW ZEALAND MOTOR CARAVAN ASSOCIATION INCORPORATED v QUEENSTOWN LAKESDISTRICT COUNCIL [2022] NZHC 425 [10 March 2022]IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYI TE KŌTI MATUA O AOTEAROAWAIHŌPAI ROHECIV-2021-425-18[2022] NZHC 425UNDER the Judicial Review Procedure Act 2016IN THE MATTER of an application for review of a decision toadopt the Freedom Camping Bylaw 2019BETWEEN NEW ZEALAND MOTOR CARAVANASSOCIATION INCORPORATEDApplicantAND QUEENSTOWN LAKES DISTRICTCOUNCILRespondentAppearances: P J Page for Applicant (respondent on costs)A H Balme and J K Stringer for Respondent (applicant for costs)Judgment: 10 March 2022(Determined on the papers)JUDGMENT OF OSBORNE J(costs)This judgment was delivered by me on 10 March 2022 at 4.00 pm pursuant to Rule 11.5of the High Court RulesRegistrar/Deputy RegistrarDate:[1] The respondent, Queenstown Lakes District Council (QLDC), seeks the costsand disbursements of this proceeding after the applicant, New Zealand Motor CaravanAssociation Inc (the Association), discontinued this judicial review proceeding.[2] The parties accepted that the costs and disbursements of the proceeding, ifamended, should be fixed on a 2B1 basis.[3] The issue for determination in this judgment is whether there should be anorder that such costs be paid and paid now. An alternative, suggested by theAssociation, would be that the incidence of costs be reserved to be determined in afresh proceeding which the Association may file.Costs — the principles[4] All matters relating to costs are at the discretion of the Court.2[5] Rule 15.23 High Court Rules 2016, a particular costs rule for discontinuedproceedings, provides:15.23 CostsUnless the defendant otherwise agrees or the court otherwise orders, a plaintiffwho discontinues a proceeding against a defendant must pay costs to thedefendant of and incidental to the proceeding up to and including thediscontinuance.[6] Principles relevant to r 15.23 have been established in a number of leadingcases.3 The commentary in McGechan on Procedure accurately summarises theprinciples which emerge from the case law.4(a) The r 15.23 presumption obviates any requirement for the defendantto demonstrate that the plaintiff acted unreasonably in commencingand then discontinuing the proceeding. The defendant has theadvantage of the presumption even where there has not been suchunreasonableness.1 High Court Rules 2016, Category 2 under r 14.3(1) and band B under r 14.5(2).2 High Court Rules, r 14.1.3 Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973; FMCustodians Ltd v Pati [2012] NZHC 1902 at [10]–[12]; and Opus International Consultants Ltd vColac Bay Vision Ltd [2015] NZHC 1782, [2015] NZCCLR 19 at [20]–[24].4 Andrew Beck and others (eds) McGechan on Procedure (online ed, Thomson Reuters) at[HR15.23.01].(b) Although the r 15.23 presumption is designed to give a certain andpredictable outcome upon discontinuance, it may be displaced if thecourt finds there are circumstances which make it just and equitablethat it should not apply.(c) Although the court is not limited in the factors it may take into accountwhen considering whether the presumption is displaced, generally:(i) The court will not consider the merits of the respective cases,unless they are so obvious that they should influence the costsoutcome.(ii) The court will consider the reasonableness of the stance ofboth parties up to the point of discontinuance: whether it wasreasonable for the plaintiff to bring and continue theproceeding; and for the defendant to oppose the proceeding.The plaintiff will not be able to avoid the presumption byshowing that at one point it had reasonable grounds forbelieving it would be successful in the proceeding.(iii) The reason for discontinuing may be relevant, for example achange of circumstances rendering the proceedingunnecessary. However, it must be clear that the plaintiff wouldhave succeeded had the circumstances (in this case newlegislation) not changed: The Star Trust v Hamilton CityCouncil.5The discontinued proceeding[7] The Association attacked a decision of QLDC made in December 2019 (thedecision) by which QLDC adopted a bylaw (the 2019 bylaw) purportedly pursuant tothe Freedom Camping Act 2011 (the Act). By the Association's statement of claim, itasserted four causes of action (ultra vires, repugnancy, failure to consider relevantmatters and consideration of irrelevant matters).[8] In its particularised grounds, the Association alleged numerous failures anderrors, including a failure to undertake site assessments. In that regard, the Associationmade repeated reference to threshold requirements under s 11(2) of the Act, which itasserted QLDC had failed to comply with.[9] Subsequently, in December 2021, in New Zealand Motor Caravan AssociationInc v Marlborough District Council (the Marlborough District Council case), the High5 The Star Trust v Hamilton City Council [2016] NZHC 821 at [10].Court upheld the Association's application for review of a freedom camping bylawadopted by the Marlborough District Council in 2020.6 Amongst other findings, theCourt was not satisfied that the Marlborough District Council considered all areas ofthe district as required under s 11(2) of the Act.7 The Court considered the appropriaterelief was to set aside of the decision leading to the adoption of the 2020 bylaw.8[10] In the course of the case management of this proceeding, counsel for theAssociation referred to the Marlborough District Council case as awaiting a hearing,the outcome of which might provide relevant guidance on freedom camping bylaws.[11] From November 2020, QLDC indicated to the Association that the 2019 bylawwould likely be replaced through a 2021 bylaw review (but without a firm indicationas to the likelihood of the 2019 bylaw being revoked). The 2021 bylaw review wassubsequently conducted, culminating in a QLDC decision in December 2021 to revokethe 2019 bylaw and replace it with a new (2021) bylaw.[12] In the meantime this proceeding was scheduled for a hearing in February 2022and the completion of evidence was directed. QLDC filed its extensive evidence inSeptember 2021.[13] By October 2021, the Association had to come to the view that it would befutile to proceed with the February 2022 hearing if the 2019 bylaw were revoked andreplaced by a new bylaw, which seemed likely to be considered at a QLDC meetingin December 2021 (as it transpired was the case).[14] The Court declined to vacate the fixture, leaving the Association to decidewhether to discontinue the proceeding once QLDC's December 2021 decision wasknown. The Court subsequently, once QLDC's December 2021 decision was made,refused the Association leave to amend its statement of claim in this proceeding (so asto encompass the new 2021 bylaw), leaving the Association to commence a freshreview proceeding if it wished to do so.6 New Zealand Motor Caravan Association Inc v Marlborough District Council [2021] NZHC3157.7 At [190].8 At [204].[15] To date no proceeding has been commenced in relation to the 2021 bylaw.Discussion[16] The event that most significantly affects the appropriate costs outcome in thiscase is the 16 December 2021 replacement of QLDC's 2019 bylaw by the 2021 bylaw.[17] Counsel for QLDC place substantial reliance on the general rule that the Court,in considering costs on a discontinuance, does not consider the merits of the respectivecases (unless they are so obvious that they should influence the costs outcome).9 Here,the extent of issues raised in the Association's statement of claim means it is notpossible to comprehensively test the merits of the discontinued proceeding. But thereare two particular matters which properly inform the decision on costs and guide theassessment of what is just and equitable.[18] First, this proceeding was rendered nugatory as a byproduct of QLDC'sdecision to pursue and pass a replacement bylaw.10 That occurred on 16 December2021 when QLDC made its 2021 bylaw decision, nine months after the Associationcommenced this proceeding in March 2021.[19] Secondly, even in the absence of a substantive consideration of theAssociation's application, it is clear the process adopted by QLDC in its preparationof a replacement bylaw was designed in part to address the need for site assessmentsto inform a bylaw. This was one of the very matters (by reference to s 11(2) of theAct) identified by the Association in its statement of claim and subsequentlyrecognised in the Marlborough District Council case as a statutory requirement (thatis, as evidence the Council had turned its mind to and satisfied the requirements unders 11(2)). It can be said, at the very least, the failure to carry out site assessments inrelation to the 2019 bylaw was a very strong ground of review.[20] On this basis, I am satisfied it would be just and equitable to depart from thedefault rule under r 15.23 High Court Rules.9 FM Custodians Ltd v Pati, above n 3, at [11].10 See Olive Francis Retirement Home Ltd v Director-General of Health HC Auckland CIV-2005-404-1367, 13 July 2005 at [17].[21] For QLDC, it was submitted that the Court should nevertheless take intoaccount the fact the Association decided to maintain its challenge to the 2019 bylawdespite knowing since November 2020 that the bylaw "would likely be replaced". Asa result of that decision, QLDC was required to prepare a substantial volume ofevidence that will no longer be relevant in any fresh litigation in relation to the newbylaw, beyond providing mere background.[22] For the Association, Mr Page emphasised that the outcome of QLDC's bylawreview remained fluid throughout 2021. Indeed, in the Agenda Report for the 16December 2021 QLDC meeting, two of the four identified options involved retainingthe challenged 2019 bylaw unchanged.[23] The Association's members were affected by (and required to strictly observe)the requirements of the 2019 bylaw while it remained in force. That would havecontinued to be the case through into 2022 had QLDC decided in December 2021 toretain the 2019 bylaw.[24] In these circumstances, it does not count against the Association in a costscontext that it insisted on a case management of this proceeding that would have hadthe proceeding ready for its allocated hearing date of 21 February 2022 (had the 2019bylaw remained in force).[25] It would be unjust to require the Association to pay QLDC's costs anddisbursements.Order[26] There is no order as to the costs and disbursements of this proceeding.Osborne JSolicitors:Gallaway Cook Allan, DunedinWynn Williams, Christchurch