NZ MUSHROOMS LTD V WAIKATO REGIONAL COUNCIL AND ORS HC HAM CIV 2007-419-1191

NZ MUSHROOMS LTD V WAIKATO REGIONAL COUNCIL AND ORS HC HAM CIV 2007-419-1191 7 February 2008IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY CIV 2007-419-1191BETWEEN NEW ZEALAND MUSHROOMS LIMITED Appellant AND WAIKATO REGIONAL COUNCIL First Respondent AND MATAMATA-PIAKO DISTRICT COUNCIL Second Respondent AND WAIKATO ENVIRONMENTAL PROTECTION SOCIETY INCORPORATED Third Respondent AND AR & JM GRAY Fourth Respondent Counsel: B Cowper for the appellant L Muldowney for the first respondent P Lang for the second respondent J Cuellar for the third and fourth respondents Judgment: 7 February 2008JUDGMENT OF STEVENS J (Costs)This judgment was delivered by me on Thursday, 7 February 2008 at 2pm pursuant to r 540(4) of the High Court Rules. Registrar/Deputy RegistrarSolicitors/Counsel: Cowper Campbell, PO Box 3399, Auckland L Muldowney, Tompkins Wake, PO Box 258, Hamilton P Cavanagh QC, PO Box 4338, Shortland Street, Auckland P Lang, Swarbrick Dixon, PO Box 19010, Hamilton J Cuellar, Fletcher Law, PO Box 29, Hamilton The Registrar, Environment Court, PO Box 5027, Lambton Quay, WellingtonIntroduction[1] This judgment deals with applications for costs by all respondents following the withdrawal of the appeal by the appellant. For the reasons which follow, the applications have succeeded, but not to the full extent claimed. [2] By memorandum dated 14 November 2007, the appellant withdrew the appeal which had been filed some three months earlier on 10 August 2007. By minute dated 15 November 2007, Winkelmann J referred to the discontinuance of the appeal and ordered that the appeal be struck out, but subject to any costs to be awarded. Winkelmann J added that:Any party wishing to seek costs on the discontinuance must file and serve a memoranda within 15 working days. Any reply to be filed and served within a further 15 working days.[3] Costs have been sought against the appellant on behalf of Waikato Regional Council (first respondent), Matamata-Piako District Council (second respondent) and on behalf of Waikato Environmental protection Society Incorporated and AR & JM Gray (third and fourth respondents). An award of costs for these parties is not opposed by the appellant, but the levels of costs sought is challenged in each case. [4] Counsel are thanked for their helpful memoranda. As no party requested to be heard in support, I propose to deal with costs on the papers.Costs claimed[5] The first respondent sought an award of the full amount of costs at the level incurred and argued that it should have "indemnity costs in respect of the fair and reasonable actual costs incurred by [it]". Counsel for the first respondent disclosed that actual costs in respect of the proceeding were $2,380. [6] The second respondent sought an order for costs in the sum of $1,504 on the basis that its actual costs amounted to that figure. Counsel referred to the fact that costs according to scale on a category 3B basis would significantly exceed the actualcosts of the second respondent, being in excess of $9,000. Incidentally, the second respondent required a waiver of the time limit for the serving of its application for costs. Such waiver was not opposed by the appellant and is granted. [7] The third and fourth respondents claimed $9,006 in costs on the basis that this was the sum determined by calculating costs on a 3B basis. Counsel for the third and fourth respondents did not disclose the actual costs which had been incurred by them in dealing with this appeal during the three month period that the appeal was on foot.Costs – principles[8] Under r 46 of the High Court Rules (the Rules) costs are at the discretion of the Court. Rule 46(1) provides that "all matters relating to the costs of and incidental to a proceeding or a step in a proceeding are at the discretion of the Court". [9] Counsel in their various memoranda referred to and relied upon some of the applicable principles as set out in the Rules, including those set out in r 47. Where relevant, the Rules relied upon will be referred to below.Nature of steps taken[10] I have reviewed the file and note that the main steps taken by the parties opposing the appeal have involved the filing of notices of intention to defend or notices of opposition. In each case these comprised a relatively short formal document, as would be anticipated in response to an application by the appellant for an order under s 303 of the Resource Management Act 1991. [11] Thereafter, the matter was the subject of a joint memorandum of counsel dated 12 September 2007 for a mention of the proceeding. This joint memorandum resulted in a minute of Wild J on the same date. Various administrative steps followed but none involved substantial attendances.[12] Subsequently, the appellant gave notice withdrawing the appeal on 10 November 2007.Discussion[13] Two of the parties, namely, the first and second respondents, have sought indemnity costs based on the actual amount of costs which each party incurred. The third and fourth respondents have sought costs according to scale on a 3B basis. As noted above, the third and fourth respondents did not disclose their actual costs. [14] With respect to the claims for costs by the first and second respondents, I do not consider that sufficient justification has been offered to enable the award of actual costs on an indemnity basis. The Rules make provision for indemnity costs in certain circumstances: see r 48C(1) and (4). But a high threshold must be passed before an order for indemnity costs is made. [15] When considering questions of costs generally, one of the applicable principles in r 47(b) of the Rules is that an award of costs should reflect the complexity and significance of the proceeding. To that principle, must be added a consideration of the nature and scope of the relevant step or steps which have been taken in the proceeding up to the point where it is discontinued. [16] Counsel for the appellant correctly submitted that under r 47(f) an award of costs should not exceed the costs incurred by the party claiming costs. Counsel for the appellant also submitted that, if the Court were not minded to grant indemnity costs then an award of two-thirds of actual costs would be appropriate, by an analogy with r 47(d). Plainly, r 47(d) is not directly applicable in that the Rule speaks of "two-thirds of the daily rate considered reasonable in relation to the proceeding or interlocutory application". The reference to "two-thirds" is not related to actual costs incurred by a party, but the analogy is appropriate. [17] Given that the costs awarded to any party should not exceed the actual costs incurred, the approach which I propose to follow in fixing costs is to consider the nature and scope of the steps which were involved and the tasks undertaken in theproceeding up to the time of withdrawal, what might be considered fair and reasonable costs in relation to the steps taken and the actual costs incurred by two of the opposing parties. In all the circumstances of this case, I do not consider that scale costs are an appropriate measure, particularly where the party claiming such costs has not disclosed the costs actually incurred. I observe that the actual costs of two of the parties were significantly lower than the scale costs claimed by the other parties.Result[18] In the light of these principles, I consider that costs should be awarded to the first respondent in the sum of $1,500. For the second respondent, the award of costs should be $1,000. For the third and fourth respondents an appropriate award is fixed at $1,500. All such sums will be payable by the appellant. _________________________ Stevens J