NORTH EASTERN INVESTMENTS LTD v AUCKLAND TRANSPORT [2017] NZHC 2355

NORTH EASTERN INVESTMENTS LTD v AUCKLAND TRANSPORT [2017] NZHC 2355 [27 September 2017]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KOTI MATUA O AOTEAROATAMAKI MAKAURAU ROHECIV-2017-404-829[2017] NZHC 2355UNDER the Resource Management Act 1991IN THE MATTER of an appeal pursuant to s 299 of the ActBETWEEN NORTH EASTERN INVESTMENTSLIMITED AND HERITAGE LANDLIMITEDAppellantsAND AUCKLAND TRANSPORTRespondentHearing: 5 September 2017Appearances: M Casey QC and A Davidson for the AppellantsG Lanning and K Schmidt for the RespondentJudgment: 27 September 2017JUDGMENT OF GORDON JThis judgment was delivered by meon 27 September 2017 at 3.30 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors: Cooper Rapley Law, Palmerston NorthSimpson Grierson, AucklandCounsel: M Casey QC, AucklandThe appeal[1] North Eastern Investments Limited and Heritage Land Limited (together NEIL) appeal against the amount of an order for costs made in its favour in the Environment Court (the costs decision).1[2] On 29 April 2016, the Environment Court issued a decision confirming a Notice of Requirement (NOR) by Auckland Transport in a modified form for a road(the Medallion Drive extension) through NEIL's land (the interim decision).2 The Court subsequently ordered Auckland Transport to pay costs of $155,000 to NEIL.[3] NEIL seeks to increase the award. It says the ground on which the Court assessed the quantum was limited to the matter of the designation footprint and did not take into account other factors, including those on which the Court had based its decision to award costs in the first place. It submits that these factors in combination were such that indemnity or near-indemnity costs were warranted.[4] Auckland Transport opposes.Background – other related proceedings[5] Before I refer to the Environment Court's decisions in this case I brieflysummarise other related proceedings which provide relevant background.[6] The interim decision of the Environment Court in this proceeding records:[2] Since around 2003, NEIL has been seeking to progress intensive residential and other development on this land, approximately 7.8 hectares in area, between Fairview Avenue and Oteha Valley Road. Over the ensuing decade a number of issues have arisen, leading to several hearings in the Environment Court and the current proceedings. There have been ongoing issues with obtaining resource consents for the project, with the resource consent for land use declined at the first instance hearing and an appeal lodged seeking that decision be overturned.[7] In 2008 the North Shore City Council notified Plan Change 32 (PC32) which proposed the rezoning of land to the north of the NEIL land for more intensive1 North Eastern Investments Ltd v Auckland Transport [2017] NZEnvC 047 [Costs decision].2 North Eastern Investments Ltd v Auckland Transport [2016] NZEnvC 073 [Interim decision].residential development. That would require improved road access to that area from Oteha Valley Road.[8] The NEIL land was not part of PC32 but the Council's intention was that theroad access needed to service the PC32 area would be created by connecting Fairview Avenue with Oteha Valley Road along a new road (the Medallion Drive extension) through the NEIL land.[9] PC32 proposed a 'trigger rule' under which the rezoning in PC32 would takeeffect once the Medallion Drive extension was completed. But the Council did not make any move to designate the corridor or acquire the land from NEIL.[10] NEIL, by its agent Thurlow Consulting Engineers & Surveyors Ltd, successfully opposed the trigger rule3 and obtained costs against the Council.4Thurlow appealed the quantum of the costs to this Court.5[11] NEIL's plans for the development referred to in [6] above provided for a vacant corridor to accommodate the Medallion Drive extension. The proposal for two areas, one along part of the Oteha Valley Road frontage and the second to the north/north-east of the Medallion Drive extension was under appeal to the Environment Court at the time of the hearing in the Environment Court in this proceeding but was resolved soon after.6 Resource consent for development on the remaining area of land to the south/south-west of the Medallion Drive extension corridor was refused by the Council and the appeal was declined.7The notice of requirement[12] The NOR was issued by Auckland Transport, a requiring authority, on 2 November 2012.8 It sought to designate the Medallion Drive extension corridorthrough NEIL's land. However, the NOR covered a larger area than the MedallionDrive extension corridor indicated in the District Plan and allowed for by NEIL in its3 Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council [2012] NZEnvC 082.4 Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council [2012] NZEnvC 097.5 Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council [2013] NZHC 2468.6 North Eastern Investments Ltd v Auckland Council [2016] NZEnvC 139.7 North Eastern Investments Ltd v Auckland Council [2012] NZEnvC 266.8 See s 168(2) of the Resource Management Act 1991.development plans. The designation footprint cut across components of the NEIL development.[13] One of the effects of a designation is that:9[N]o person may, without the prior written consent of [the] requiring authority, do anything in relation to the land that would prevent or hinder a public work or project or work to which the designation relates[14] NEIL sought such consent under s 177 of the Resource Management Act 1991 (RMA). This was given but not until the hearing of the appeal in 2016.Criteria for consideration of a NOR[15] The Council, as the territorial authority considers the NOR and makes a recommendation to the requiring authority.10 The requiring authority then determines whether to accept the recommendation. Section 171(1) of the RMA provides:171 Recommendation by territorial authority(1) When considering a requirement and any submissions received, a territorial authority must, subject to Part 2, consider the effects on the environment of allowing the requirement, having particular regard to—(a) any relevant provisions of—(i) a national policy statement:(ii) a New Zealand coastal policy statement:(iii) a regional policy statement or proposed regional policy statement:(iv) a plan or proposed plan; and(b) whether adequate consideration has been given to alternative sites, routes, or methods of undertaking the work if—(i) the requiring authority does not have an interest in the land sufficient for undertaking the work; or9 Section 176(1)(b) of the Resource Management Act.10 Section 171 of the Resource Management Act.(ii) it is likely that the work will have a significant adverse effect on the environment; and(c) whether the work and designation are reasonably necessary for achieving the objectives of the requiring authority for which the designation is sought; and(d) any other matter the territorial authority considers reasonably necessary in order to make a recommendation on the requirement.The interim decision[16] The hearing before the Environment Court was in two parts over 10 days in January and February 2016. Section 174(4) of the RMA empowers the Court on appeal to cancel, confirm, confirm and modify a requirement and/or impose conditions. In doing so the Court must have regard to the matters in s 171(1).[17] NEIL opposed the NOR on the basis that an existing road (Fairview Avenue) could be upgraded with only minimal impact on its land. NEIL also opposed the extent, design and operation of the proposed Medallion Drive extension.[18] The Environment Court noted that the primary issues in the case were:11(a) Should a requirement under s 171 of the Act, for a route through the NEIL site, be confirmed?(b) If the assessment of alternatives had not been an adequate consideration of alternatives (including Fairview Avenue), should the designation nevertheless be confirmed?[19] The Court recorded the objectives of the designation as follows:[27] The objectives of the NOR are: to facilitate future growth in the residential areas north of Oteha Valley Road; to increase capacity of the transport links between Oteha/Pinehill and Fairview Heights/Northcross;11 Interim decision, above n 2, at [3]. to provide a link which optimises the efficiency of existing intersections at SH1, Medallion Drive and Rising Parade with future traffic growth; to provide a link which addresses the existing safety issues for traffic accessing Oteha Valley Road from Fairview Avenue; and to improve walking and cycling connections between Medallion Drive and Fairview Avenue across Oteha Valley Road.[20] The roading corridor consisted of the road itself (8.4 m wide); a 3 m combined cycleway and footpath on one side of the road; a 1.8 m footpath on the other side of the road; a verge of 0.8 m on each side of the road; and a berm of 3 m on each side of the road. These features combined to give a total width of 20.8 m. At the intersection of the Medallion Drive extension with Oteha Valley Road the proposed designation included a third lane of 3.9 m for the benefit of turning vehicles, extending the width of the roading corridor to 24.7 m at that point.[21] However, the proposed designation extended well beyond the roading corridor. This additional width was attributed, at least in part, to the vertical alignment of the Medallion Drive extension. In layman's terms, there was asignificant difference between the proposed level of the roading corridor and the original ground level. As a result, the width of the designation was increased to accommodate the inclusion of slopes on each side of the roading corridor. The additional width was also said to be required for construction purposes.[22] The effect of the broader designation sought by Auckland Transport was that it prevented or constrained large building platforms on the NEIL site that encroached on the designation outside the roading corridor.[23] The Environment Court decision records:[64] The NEIL case was that the consideration of alternatives had been cursory and not adequate, and also that it involved pre-determination of the Medallion extension as the preferred option. Mr Casey extensively cross- examined Auckland Transport witnesses in respect of the contract for setting project objectives and identifying and evaluating alternatives and their effects, the work done on the alternatives prior to the issue of the NOR andthe work done since that time. Mr Casey also focussed on and questioned the decision-making process within Auckland Transport. [24] The Court accepted that there were shortcomings in the evaluation of alternatives in a number of respects, in particular:12(a) The selection and application of factors in the option evaluation framework and analysis;(b) The scoring system; and(c) The weighting of factors in the option evaluation analysis.[25] As a result of these failures and other assumptions by Auckland Transport, the Environment Court held:[78] We conclude that there was a failure to fairly consider NEIL'sposition, including a failure to properly consult prior to proceeding with the NOR ... Given that the designation was to be placed over NEIL's land, thiswas most unsatisfactory.[79] We accept that there were also some shortcomings with theapproach taken to the evaluation of alternatives within Auckland Transport.[26] The Environment Court identified further failures of Auckland Transport with regard to the consideration of alternatives. These findings provide necessary context for the costs decision and I set them out in full:The approach alternatives[80] Furthermore, our consideration of the report to the Auckland Transport dVac Committee (the Auckland Transport Committee that apparently made the decision on the NOR), demonstrates:(a) that the adequacy of the Fairview Avenue alternative option was not considered in any detail in that report, including whether the costings were similar or lower than the Medallion Drive extension;(b) it was asserted that consultation with landowners had occurred when this was patently not correct;12 At [75].(c) the NOR traffic modelling was undertaken on the basis that there were no access roads or connections to it, notwithstanding that it was shown as a local or local arterial road;(d) the Auckland Transport dVac Committee was not advised that there was a major development planned for the NEIL site, nor the details of that plan, nor the fact that the parties had largely reached agreement in respect of the other two land use consents – even though it was clear that the purpose for the haste with which the notification took place was due to the upcoming Court hearing on a NEIL land use consent.[81] We have concluded that there was inadequate written background information provided to the Committee at this stage. Nor are we satisfied that the committee, or the person actually making the decision, Mr Sean Baker, had the full information relating to the development potential of this site, and the potential for signalisation of the Fairview Avenue intersection.[82] An assumption appears to have been made that Fairview Avenue, being some 120 m closer to the motorway than Medallion Drive, would create greater traffic impacts. At that time, however, no modelling had been undertaken to support this assumption.[83] The question is whether these shortcomings meant there was inadequate consideration of alternatives, and in particular on the upgrading of Fairview Avenue.Can adequacy be considered over a period of time?[84] Subsequent to the lodging of the appeal, further work was done on the Fairview Avenue option (now called Option 3B) and evaluating the differences between this option and the Medallion Drive extension option.[85] Prior to the hearing, Auckland Transport undertook a re-design of the Fairview Avenue option for what we were told was a needed comparison oflike with like. Mr Casey was critical of the basis for this work, portraying it as a ploy to increase the relative costs and downplay the benefits of the Fairview Avenue option.[86] As this Court has said on many occasions, the process under the RMA can be an iterative one. Circumstances change, and in the three years since the decision on the NOR was made by Auckland Transport considerable additional modelling and information has become available. This has been used to evaluate many of the issues not addressed by Auckland Transport at the time of notification of the NOR.[27] The Court also criticised the failure by Auckland Transport to progress resolution of the dispute in the period leading up to the appeal, particularly in relation to issues surrounding the vertical alignment of the road:Failure to progress resolution[106] It is important, in the context of this decision to note that assertions (as had been made earlier at the PC32 hearing) were made before this Court that there are now funds available to enable land purchase; however as at the date of the hearing of this matter no offer to purchase the land had been made.[115] This lack of progress had led to significant frustration by Environment Commissioner Oliver appointed to undertake the various mediations, and led to Commissioner Oliver for the Environment Court noting her displeasure at Auckland Transport's refusal to supply reviseddesign [sic] that would take into account the relative levels of the two properties.[116] Commissioner Oliver's report on an expert conference held on2 October 2015 also records that all experts agreed that a technical design solution could be achieved, but there had been a failure by Auckland Transport ahead of the conference to undertake the relevant work to investigate the feasibility of raising the level of the proposed NOR between Oteha Valley Road and Fairview Avenue.[117] These matters are indicative of the background to the slow progress on the matters at issue between the parties, as amplified by Ms Amanda Coats, project manager for NEIL, in her evidence and cross-examination. We could go on but it is sufficient to now recognise that by the time of our hearing matters had moved on considerably, with a revised verticalalignment to accommodate NEIL's concerns about the level distancesbetween the road and their land development proposals to the east.[118] We note that Annexure D, which was produced by Mr Burris afterthe close of Auckland Transport's case, showed a new vertical alignmentraising the finished road level proposed NOR close to the existing ground levels, particularly between chainage 100 to 120. That Annexure, originally produced in November 2015, was an attachment to the evidence of Mr Robert Mason, civil engineer and a consultant for Auckland Transport, filed with his rebuttal.[119] Given that this was a core issue for potential resolution of this matter, it is surprising to us that Auckland Transport took no real effort until just prior to this hearing to move these issues forward. That is particularly so when Mr Lanning submitted, and several witnesses accepted, that the Medallion Drive extension is a small project for Auckland Transport.[28] In the result the Environment Court decided that these matters were not sufficient reasons to cancel the NOR, saying:[182] We recognise the shortcomings in the consideration of alternatives and particularly their potential adverse effects. In many cases this would be fatal to a designation of this sort. However in this case we note that the removal of the designation itself may have significant consequences inrespect of a re-design of the NEIL development already proposed. It may involve having to provide alternative connections to Oteha Valley Road given the current state of Fairview Avenue. In addition, the shortcomings of the analysis of the two alternatives were cured during the extensive work undertaken before the hearing and as a result of the material placed before the Court and the lengthy cross-examination and questioning.[187] For the reasons we have already stated, we conclude that greater certainty will be provided to the development of this area and to the Fairview Catchment generally by providing for a reduced designation roading corridor. This will have the advantage of enabling development not only of the NEIL land on the basis of its current application for consent, but also making direct provisions in meeting the terms of PC32 for development.[29] The Environment Court gave conditional confirmation of a modified NOR subject to various directions. Those directions set out a process by which:13(a) Auckland Transport was to produce an indicative plan of the modified designation and conditions;(b) NEIL was to respond as to whether it agreed with the plan and conditions or advise of any concerns and ways in which these might be addressed;(c) Auckland Transport was to respond to any issues raised by NEIL;(d) The Court was to make a final decision on the overall extent of land to be designated and noted it would convene a hearing if necessary.[30] Agreement could not be reached and the Court directed a mediation at which all but one of the conditions were agreed. The remaining condition was ultimately resolved and the conditions were confirmed by the Court in its final decision of 10 November 2016.14 In that decision the Court reserved costs and its directions for the filing of submissions included the following:1513 At [196].14 North Eastern Investments Ltd v Auckland Transport [2016] NZEnvC 216 (Final decision).15 At [13](d).(d) The application should include invoices or other proof of costs incurred, and identify costs relating to the NOR appeal hearing (after mediation concluded).The costs decision[31] NEIL sought an order for indemnity costs of $605,629.58, or a substantial proportion of that amount. The application was opposed by Auckland Transport. The Environment Court gave a decision on the papers on 31 March 2017 awarding costs of $155,000.16[32] The Court referred to its power to award costs which arises under s 285 of the RMA:285 Awarding costs(1) The Environment Court may order any party to proceedings before it to pay to any other party the costs and expenses (including witness expenses) incurred by the other party that the court considers reasonable.[33] The Court correctly stated that while the section does not impose any constraint upon the discretion to award costs, any discretion must of course be exercised in a principled way. The Court continued:[11] As is encapsulated in the Court's Practice Note 2014, there is no presumption, as there is in general civil litigation, that a successful party should be awarded costs. What the Court is required to do is to award costs, if at all, on a basis that appears fair and reasonable in the circumstances of the particular case and at a level that represents a reasonable contribution to the costs of the receiving party.[34] The Court correctly stated that the Practice Note is a guide rather than a prescription.[35] The Court noted that the Environment Court has declined to set a scale of costs considering what is reasonable in each case but said that awards tend to fall in three bands:1716 Costs decision, above n 1.17 At [15].(a) Standard costs, which generally fall within 25-33 per cent of costs actually incurred;(b) Higher than standard costs, where Bielby factors are present; and(c) Indemnity costs, which are awarded rarely and in exceptional circumstances.[36] The Bielby factors are set out in a decision of the High Court DFC New Zealand Ltd v Bielby.18 These factors are incorporated with some modification into the Environment Court's Practice Note 2014 as follows at cl 6.6(d):In considering whether to award costs, and the quantum of any award, the following factors are commonly referred to and given weight, if they are present in the particular case:(i) the arguments advanced by the party were without substance;(ii) the party has not met procedural requirements or directions;(iii) the party has conducted its case in a way that unnecessarily lengthened the hearing;(iv) the party has failed to explore reasonably available options for settlement; or(v) the party has taken a technical or unmeritorious point and failed.[37] Taking all of the above matters into account, the Court adopted a two stage approach to determining the issue of costs: first, whether there should be an award of costs; and if so, the appropriate quantum.[38] In terms of the first stage, namely whether there should be an award of costs, the principal reasons were set out in the following paragraphs:[32] We agree that there were shortcomings in the consideration of alternatives both by Auckland Transport itself and by its consultants, which we traversed extensively in our interim decision. Those shortcomings included inadequate written background information provided to the Auckland Transport Committee which made the decision on the NOR.[33] Notwithstanding Auckland Transport's submission on this cost [sic]application that there is no duty under the RMA for requiring authorities to18 DFC New Zealand Ltd v Bielby [1991] 1 NZLR 587 (HC).consult any person about notices of requirement (see s 36A), in our interimdecision we highlighted Auckland Transport's failure to properly consider NEIL's position as the directly affected landowner. That should haveinvolved more than the question of consultation.[39] However, the Court then said:[34] Having said this, our interim decision concludes that the hearing process cured these shortcomings (through an iterative process as is commonplace in our jurisdiction), as well as bringing new evidence forward that Medallion Drive was the better alternative.[40] The Court then referred back to shortcomings in Auckland Transport'sapproach as follows:[36] While NEIL's bottom line was that it did not want the designationand so whether there was any prospect of resolving matters in contention is amoot point, Auckland Transport's approach did not assist in at least attempting to identify and progress ways in which such issues could be resolved. In our interim decision we referred to: Commissioner Oliver's report on an expert conference held on2 October 2015. This records that all experts agreed that a technical design solution could be achieved to manage the interface betweenthe proposed new road and NEIL's land. However, there had been afailure by Auckland Transport ahead of that expert conference to undertake the relevant work to investigate the feasibility of raising the level of the proposed road to better interface with the NEIL land. (Paragraph 116 of the interim decision with paragraph 118 indicating that was not done until November 2015); Given that the relative levels between the road and NEIL's proposed development were a core issue we say that "it is surprising to us thatAuckland Transport took no real effort until just prior to this hearingto move these issues forward". Also the extension "could havefacilitated the opening up of a substantial area of the FairviewCatchment, including the NEIL site, for development". We alsoidentified the potential for agreement on narrowing of the roadcorridor to facilitate the construction of the buildings on NEIL'sland.[37] We conclude there was a failure by Auckland Transport to address the designation footprint issue. This is a factor to be considered in the assessment of the costs award.[41] The Court then turned to the points raised in NEIL's claim for indemnitycosts. It declined to go into what NEIL described as "insidious aspects of Auckland Transport's conduct" beyond what was stated in its interim decision. In relation toother points made by NEIL in support of indemnity costs, the Court then said:[39] As is clear from our conclusions on key considerations under s 171 that the modified designation will achieve the purpose of the RMA, the modified NOR is justified. A core issue for the Court is why Auckland Transport did not address the designation footprint size to avoid the buildings proposed by NEIL as part of the Land Use consent appeal being resolved contemporaneously.[40] NEIL advanced its position that there was evidence of its wish to settle, particularly with respect to acquisition issues. In response, Auckland Transport has challenged this assertion and the relevance of acquisition issues in the consideration of a costs application for an NOR. NEIL in turn has responded that Auckland Transport did not make any concessions such as altering levels, amending boundary lines or redesigning the road to accommodate the proposed NEIL development, or to give s 71 Public Works Act approval until the hearing. Auckland Transport replied that NEIL had made no mention of the fact that resource consents for land use for the proposed development of the NEIL land were granted on 29 July 2016, after which time there was a greater level of certainty enabling Auckland Transport to give its requiring authority approval to the proposed NEIL buildings.[41] NEIL claimed to be the successful party insofar as virtually every matter before the Court was determined in its favour. NEIL claimed that the reason the Court upheld the NOR was because of the public interest, not by reason of any merits residing with the respondent. We do not agree with this claim. NEIL opposed the NOR and the proposed road in total throughout the proceedings, and also later after the Court had issued its interim decision confirming the NOR subject to conditions.[42] In opposition to an award for indemnity costs Auckland Transport relied on cl 6.6(c) of the Practice Note which provides:If the decision appealed against would have imposed an unusual restrictionupon the appellant's rights, and the restriction is not upheld, costs may beawarded against the respondent Council. On other appeals, the Court will not normally award costs against the public body whose decision is the subject of the appeal unless it has failed to perform its duties property or has acted unreasonably.[43] Auckland Transport submitted, in reliance on the above clause, that as it was the public body whose decision was the subject of the appeal, it had not failed to perform its duties properly nor acted unreasonably.[44] The Court in response, and to conclude the section on whether costs should be awarded, said:[44] However, we find that Auckland Transport's approach did not assistin at least attempting to identify and progress ways in which issues related to the design and construction of the proposed road, its relationship withpossible future development of the NEIL land, and the extent of the designation and conditions on it, could be resolved. While that was not a focus of the first instance hearing, it should have been recognised by Auckland Transport that these were issues that the Court would needAuckland Transport to address even if it did not accept NEIL's argumentsthat there was an alternative to the proposed road which was the subject of the NOR.[45] Taken in the round, we find that the shortcomings we have identified in Auckland Transport's approach supports [sic] a costs award to NEIL. Wehave accordingly concluded that Auckland Transport were blameworthy. The failures we have identified include the failure to address the designation footprint to avoid the intended buildings.[45] Before addressing quantum, the Court next considered whether any of the costs claimed by NEIL should be excluded from consideration. It disallowed costs in two categories. The first was the costs of all attendances incurred by NEIL prior to 19 June 2015, being the date of the pre-hearing conference, on the basis that these costs would have largely related to mediation. In doing so the Court referred to theCourt's Practice Note 2014, which directs that costs incurred in Court-assisted mediation cannot be claimed.[46] The Court also disallowed the part of NEIL's claim relating to the costs of MrMaassen, one of three counsel who appeared for NEIL, on the basis that MrMaassen's attendance at the hearing was in his capacity as counsel for NEIL on theland use resource consent matter.[47] This then gave a starting point of $508,000 as opposed to the claim for $605,629.58.[48] The Court finally addressed the issue of quantum in a short section of the decision which I set out in full:Quantum recoverable[54] We considered an approach based on the percentage reduction in the area of the designation achieved as a result of the hearing, but concluded thatthere was no sustainable basis for reducing the legal and experts' costs bysuch a percentage. In addition, such an approach would not take into consideration the associated conditions and concessions which derived from the hearing.[55] We consider that unnecessary time and expense was caused to NEIL by Auckland Transport in its continued adherence to the designation outer footprint, in light of the significant impact this would have on the NEIL land.[56] We were repeatedly advised Auckland Transport had no objection in principle to NEIL constructing buildings on the outer edges of the footprint. However the reality is Auckland Transport refused to give permission for this until its design had been finalised, which could have been years given the designation sought[57] In addition, the delays and avoidance of re-design to enable construction within the outer footprint were repeated and concerning. The Court had previously assumed the NEIL Land Use consent had been agreed, and was anticipating a consent memorandum in 2012. It was essential to the proposed development that the NOR enabled buildings to be constructed within the outer edges of the designation. It transpired that this issue was not resolved until July 2016, some four years later.[58] The concern at mediation as to the road design and footprint was reflected in a mediation Minute, and the intent was clear a considerable time before the hearing. The failure to directly address this issue at the hearing (as a core issue) is of considerable concern to the Court. If Auckland Transport had properly addressed this issue, rather than saying it would be considered when final design was addressed, this hearing may have been avoided.[59] Given NEIL's primary position seeking removal of the designation,they too failed to focus on this core issue. Accordingly we can only compensate a proportion of costs sought.[60] We have concluded that the need for the Medallion Drive extension was clear. Equally, we have concluded the extent of the designation footprint should have been addressed years earlier. If this had been the focus of the NEIL case, we would have awarded a sum nearer the $508,000 starting point assessed by the Court.[61] The failure to properly focus the appeal meant that, before and during the hearing, counsel, court and the experts dealt with a variety of other issues.Outcome[62] There can be no mathematical precision to an award where it is justified. Recognising these facts, we conclude a payment of $155,000 adequately recognises the aspects of the case justifying an award while allowing for the need for the road and the role of Auckland Transport in addressing that need. We recognise that the actual quantum is within the range identified in Bunnings, but conclude this is an outcome of a principled approach rather than a prescriptive rule.Appeal on a question of law[49] Under s 299 of the RMA an appeal from a decision of the Environment Court may only be brought on a question of law. Section 299(1) provides:299 Appeal to High Court on question of law(1) A party to a proceeding before the Environment Court under this Act or any other enactment may appeal on a question of law to the High Court against any decision, report, or recommendation of the Environment Court made in the proceeding.[50] The nature of a question of law was considered by the Supreme Court inBryson v Three Foot Six Ltd in the context of a similar provision in the Employment Relations Act 2000 as follows:19[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 isinconsistent with and contradictory of the determination" or "one in which the true and only reasonable conclusion contradicts the determination". [51] In the context of appeals under s 299, this Court has said that the Environment Court may have made an error of law if it:20(a) applied a wrong legal test; or(b) came to a conclusion without evidence or one to which, on evidence, it could not reasonably have come; or19 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721.20 Countdown Properties (Northlands Ltd) v Dunedin City Council [1994] NZRMA 145 (HC) at 153.(c) took into account matters which it should not have taken into account; or(d) failed to take into account matters which it should have taken into account.[52] In relation to the discretionary exercise of power to award costs, inCommerce Commission v Southern Cross Medical Care Society the Court of Appeal said:21[12] ... reasons must be shown for interfering with the exercise of a discretion as to costs. As this Court has repeatedly said, costs decisions are influenced by a myriad of details that are difficult to replicate on appeal. The award of costs is quintessentially discretionary. Review and appeal Courts are correspondingly reluctant to interfere: Lewis v Cotton [2001] 2 NZLR 21, 35 (CA). That is not to say that an appellate Court should decline to intervene if it can be shown that there was an error of principle or that the award was plainly wrong.[53] Mr Casey QC, for NEIL, submitted that while the Environment Court was right to hold that NEIL should be awarded costs, it fell into error in its approach to the assessment of quantum. NEIL asks that the quantum of costs be referred back to the Environment Court for reconsideration based on this Court's directions orfindings in respect of the errors of law.[54] The questions of law as set out in the Notice of Appeal are as follows:(a) Did the Environment Court fail to exercise its discretion under s 285 of the RMA to award costs in a reasoned and principled manner?(b) Did the Environment Court fail to have regard to matters relevant to the assessment of quantum of costs including:(i) by confining its consideration of quantum to the issue of the designation footprint;21 Commerce Commission v Southern Cross Medical Care Society [2004] 1 NZLR 491 (CA). See also Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council, above n 5, at [26].(ii) by having no regard to the several other failings and shortcomings on the part of Auckland Transport as found in its substantive decision dated 29 April 2016;(iii) by having no regard to the ongoing failings by Auckland Transport following that decision in the resolution of conditions;(iv) by having no regard to the costs incurred by NEIL in having their experts address those matters?(c) Are the principles applicable to costs in proceedings under the Public Works Act 1981 (PWA) relevant and should they be considered in costs matters relating to notices of requirement under the RMA?(d) Was the Court correct to disallow costs from the date of filing the appeal until after the mediation, including the costs of preparing for and attending Court-assisted mediation?(e) Should the Environment Court separately consider the expert witness fees and other expenses incurred by a party seeking costs and follow (or take into account) the practice in civil cases of allowing those expenses (subject to the amounts being reasonable)?(f) Having regard to the facts and circumstances found by the Environment Court in its substantive decision and the events that followed, was the quantum of costs plainly wrong?[55] I address each of these points in turn.Did the Court fail to exercise its discretion in a reasoned and principled manner?[56] The first question of law set out in the Notice of Appeal asks this Court to determine whether the Environment Court failed to exercise its discretion under s285 in a reasoned and principled manner. This question, as it is framed in the Notice of Appeal, constitutes a generalised challenge to the decision of the Environment Court. It does not raise a question of law that can be considered by this Court on appeal.[57] In his submissions, however, Mr Casey identified a more specific objection to the approach taken by the Environment Court. Mr Casey submitted that the Court did not explain why, having regard to the many findings critical of AucklandTransport, its award of costs was only within the 'comfort' or usual award of costs. This point raises a question of law, namely whether the Environment Court gave sufficient reasons for its decision on the amount to be ordered as costs.[58] This point was considered by Heath J in Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council. In that case, the Environment Court awarded costs against the respondent of $30,000. Thurlow had sought costs of more than $250,000. On appeal, Thurlow submitted that the costs judgment had failed to explain how the amount of costs was fixed. Heath J held:22[37] Generally, speaking, it will be necessary for reasons to be given to explain why a particular approach has been taken, if it were to depart from"normal" practice. For example, in dealing with costs following an appeal tothe Court of Appeal in civil proceedings, the Supreme Court, in Manukau Golf Club Inc v Shoye Venture Ltd, held that it was necessary for reasons to be given when there is a departure from the normal approach. For the Court, Chambers J said:[16] We wish to make clear a court does not have to give reasons for costs orders where it is simply applying the fundamental principle that costs follow the event and the costs awarded are within the normal range applicable to that court. So here, had the Court of Appeal awarded costs in the Club's favour on a standard appealbasis, no further explanation would have been required. It is only when something out of the ordinary is being done that some explanation, which may be brief should be given.(footnote omitted)[59] The Judge went on:2322 Thurlow Consulting Engineers & Surveyors Ltd v Auckland Council, above n 5 (footnotes omitted).23 Footnotes omitted.[39] In this case, Judge Harland endeavoured to articulate the Court'sreasons, both for holding that costs were payable and the amount in which they should be ordered. What is in issue is whether those reasons were adequate, having regard to the departure from the Practice Note (stating no order for costs will usually be made on an appeal against a plan change), departure from the range of costs identified in Bunnings and the amount of costs claim, in excess of $250,000.[40] Once it is accepted that this was a case in which costs should be ordered (a conclusion that I am not prepared to reconsider as no question of law arises), the question becomes whether in awarding $30,000 the Court articulated adequately its reasons for reaching that conclusion; in particular for reducing the amount payable below that ostensibly accepted by the Court as its norm. I refer to the range of 25% to 33% of costs actually incurred, to which Judge Dwyer referred in Bunnings.[43] Judge Harland explained adequately why she was departing from the usual position that costs would not be ordered on an appeal against a plan change. She did not, however, explain why the costs (which, on a global basis, included those incurred by lawyers and experts) were fixed at about 11% of the actual costs incurred, when the range to which Bunnings refers is 25% to 30%. Although the Judge gave some reasons that supported a reduction of the actual costs to reflect what was reasonable in the circumstances, what was absent was an explanation of why she considered such a high discount was required. With respect, the reasons given do not support a reduction of the amount involved.[60] There is a clear point of difference between the facts in Thurlow and those of the present case. The appellant in Thurlow received costs of $30,000 amounting to less than 12 per cent of the total costs claimed. This award of costs fell well outsidethe "comfort band" necessitating, in the view of Heath J, some further explanation.In the present case, NEIL received costs of $155,000 amounting to between 25 per cent and 31 per cent of the total costs claimed,24 well within the "comfort band".[61] Notwithstanding that fact, Mr Casey submitted that the Environment Court in this case was required to give more extensive reasons in support of its decision not to award increased or indemnity costs. If that submission were accepted, it would extend the requirement for reasons beyond that established by the Supreme Court inManukau Golf Club Inc v Shoye Venture Ltd, effectively requiring the court of first24 The exact percentage (here rounded to the nearest whole number) depends on the figure from which the percentage is calculated. NEIL claimed costs of $605,000 which leads to the figure of 25%. The Environment Court disallowed $97,000 of the costs claimed by NEIL which leads to the figure of 31%.instance to give reasons for costs orders in every case. For that reason, I am inclinedto reject Mr Casey's submission on this point.[62] In any event, however, I am satisfied that the reasons given by the Environment Court for its decision were sufficient. In determining whether to award costs, the Environment Court considered a range of factors including:(a) Shortcomings in the consideration of alternatives by Auckland Transport and its consultants;(b) The failure of Auckland Transport to properly consider NEIL'sposition as the directly affected landowner;(c) The failure of Auckland Transport to identify and progress the resolution of issues relating to the designation footprint, including the failure to address the issue of the vertical alignment until a very late stage;(d) The refusal by Auckland Transport to permit construction of buildings on the outer edges of the footprint until the design of the Medallion Drive extension was finalised, which could have been several years;(e) The fact that the deficiencies in the consideration of alternatives were able to be cured in the course of the hearing;(f) New evidence produced during the proceeding which showed that Medallion Drive was the better alternative; and(g) NEIL's continued opposition to the Medallion Drive extension, maintained even in the face of this new evidence.[63] The Environment Court held:2525 Costs decision, above n 1.[45] Taken in the round, we find that the shortcomings we have identifiedin Auckland Transport's approach supports [sic] a costs award to NEIL. We have accordingly concluded that Auckland Transport were blameworthy. The failures we have identified include the failure to address the designation footprint to avoid the intended buildings.[62] There can be no mathematical precision to an award where it is justified. Recognising these facts, we conclude a payment of $155,000adequately recognises the aspects of the case justifying an award while allowing for the need for the road and the role of Auckland Transport in addressing that need. We recognise that the actual quantum is within the range identified in Bunnings, but conclude this is an outcome of a principled approach rather than a prescriptive rule.(emphasis added)[64] The reasons given by the Environment Court in its decision are comprehensive and are consistent with the quantum of costs awarded.[65] The answer to the first (reframed) question of law is that the Environment Court gave sufficient reasons for its decision on the amount to be ordered as costs.Did the Court fail to take relevant matters into account in assessing the quantum?[66] NEIL submits that the Environment Court failed to have regard to four matters relevant to the assessment of quantum.[67] First, NEIL says, the Environment Court erred by confining its consideration of quantum to the issue of the designation footprint. I reject that submission for the reasons set out at [62] to [63] above. It is clear from the text of the decision that the Environment Court took a range of factors into account, not only when considering whether an award of costs should be made but also in considering the quantum of theaward. These considerations are encapsulated in the conclusion that "a payment of$155,000 adequately recognises the aspects of the case justifying an award while allowing for the need for the road and the role of Auckland Transport in addressingthat need."2626 Costs decision, above n 1, at [62].[68] Second, NEIL says, the Environment Court erred by having no regard to other failings and shortcomings on the part of Auckland Transport, as found in its substantive decision dated 29 April 2016. Again, I reject that submission for the reasons set out at [62] to [63] above. In particular, I note the statements of the Environment Court that:[30] We have carefully reviewed our interim decision to assist us in the evaluation of whether there should be an award of costs and if so what an appropriate award might be.[32] We agree that there were shortcomings in the consideration of alternatives both by Auckland Transport and by its consultants, which we traversed extensively in our interim decision. Those shortcomings includedinadequate written background information provided to the Auckland Transport Committee which made the decision on the NOR.(emphasis added)[69] The Environment Court is not required to re-list every individual failing of Auckland Transport in its costs decision. It is sufficient if the Court demonstrates that it has turned its mind to these matters. I am satisfied that it has done so.[70] NEIL then says that the Environment Court failed to have regard to the ongoing failings by Auckland Transport following the interim decision and to the costs incurred by NEIL in having their experts address those matters. This ground of appeal fails.[71] The Environment Court clearly did have regard to those costs. The interim decision was dated 29 April 2016, while the final decision confirming the modified designation was issued by the Court on 10 November 2016. The invoices submitted by NEIL in support of its application for costs included invoices dated up until 15 November 2016. These invoices were incorporated into the final amount of $508,000 which the Environment Court considered was the cost of the appeal. The Environment Court was clearly aware of the additional costs incurred by NEIL following the interim decision.[72] The answer to the second question of law is that the Environment Court did have regard to the relevant matters, as identified by NEIL.Was the Court required to apply the relevant principles under the Public Works Act 1981?[73] NEIL submits that the Environment Court wrongly declined to apply or take into account principles applicable to awards of costs in comparable proceedings under the PWA.[74] The Environment Court in its costs decision held:27[26] NEIL submitted that there is a further consideration when dealing with NORs/designations as these involve the exercise of what has beendescribed as a 'draconian power', imposing significant constraints on the right of a property owner to use and enjoy their property, and proposed that principles under the Public Works Act 1981 should be applied to the costs application.[27] Auckland Transport opposed this on the basis that it is unsafe to rely on case law under a different statute, especially given the well-established principles that have been developed under the RMA in relation to costs.[28] We accept Auckland Transport's submission and decline to apply theprinciples of the Public Works Act in our consideration of NEIL's costapplication.[29] We note the Environment Court has previously declined to consider Public Works Act principles in s 285 RMA costs applications in Gavin H Wallace Limited v Auckland Council.[75] Mr Casey submitted that the failure to apply PWA principles to thedetermination of costs was an error of law. Mr Casey's submission was that thepower under the RMA to issue and confirm NORs is analogous to powers under the PWA, because in each case the legislation empowers a state agency to exercise coercive powers over private land. Therefore, Mr Casey said, the principles which apply to the determination of costs on appeals under the PWA should be applied by the Environment Court when determining costs on an appeal against an NOR. Mr Casey submitted that this approach would be consistent with the purpose of s 171(1)(b) and (c) of the RMA and with the role of the Environment Court in overseeing the coercive powers of state agencies in relation to private land.[76] The difficulty which Mr Casey faces in respect of this submission is that s 285 of the RMA gives the Court a broad discretionary power to order that any party27 Costs decision, above n 1 (footnote omitted).pay to any other party "the costs and expenses (including witness expenses) incurred by the other party". The only qualification is that the amount must be reasonable.[77] In Tairua Marine Ltd v Waikato Regional Council, Asher J in an appeal against a costs order referred to the broad discretion as follows:28[54] I conclude that the amounts awarded by the Environment Court were not manifestly excessive. I do not address the issue of whether they wereconsistent with the Court's usual practice and principles, as the Environment Court has not set out to create any "usual practice and principles" andcorrectly and quite explicitly approached the matter on a discretionary case by case basis.[55] It could be said that the entirely discretionary approach of the Environment Court leads to uncertainty and makes the financial outcomes of litigation impossible to predict. However, that is the nature of the absolute and broad discretion set out in s 285. To attempt to set out a set of principles or rules could create precedents which in the face of later experience were regretted.[56] I find that the approach of the Environment Court was not in error, and the awards not manifestly excessive.[78] In Port Otago Ltd v East Otago Taiapure Management Committee Lang J considered the principles regarding the nature of the discretion as follows:29[10] There has been some debate in the authorities as to whether, given the very wide terms of the discretion granted to the Court, the discretion is unfettered. Generally speaking, however, the Environment Court and this Court have both taken the view that the discretion needs to be exercised on a principled basis. It is also clear from the authorities that no hard and fast principles have been established regarding the exercise of the discretion.[11] In particular, the Environment Court has not established a general principle that costs should be awarded to the successful party. This is likely to be because, in this area of the law, absolutes are seldom realistically achievable. In many cases, all parties will be partly successful and partly unsuccessful. This represents the nature of the issues that the Environment Court is likely to encounter.[12] The Environment Court has taken the view that it will be appropriate to award costs when it is just to do so. It has, however, developed principles relating to circumstances in which it will be prepared to make significant awards of costs. Generally speaking, however, the Court has determined what will be a just outcome on case specific principles. That appears, with respect, to be an entirely appropriate approach.28 Tairua Marine Ltd v Waikato Regional Council [2006] NZRMA 485 (HC).29 Port Otago Ltd v East Otago Taiapure Management Committee [2013] NZHC 2795 (footnotes omitted).[79] I agree with these statements of principle. Parliament has chosen to grant the Environment Court a wide discretion to determine costs in proceedings under the RMA. There is no basis for this Court to fetter that discretion by requiring the Environment Court to apply principles that have been developed under an entirely separate piece of legislation in its decisions under s 285 of the RMA.[80] The answer to the third question of law is that the Environment Court is not required to consider PWA principles relating to costs in proceedings under the RMA.Did the Court err in disallowing costs incurred prior to 19 June 2015?[81] NEIL submits that the Environment Court wrongly disallowed any of the costs incurred by NEIL from when the appeal was filed in January 2014 until after the Court-assisted mediation in May 2015.[82] The Environment Court in its final decision noted:30[13] Costs are reserved, and the following timetable is set:(d) The application should include invoices or other proof of costs incurred, and identify costs relating to the NOR appeal hearing (after mediation concluded).[83] In its costs decision, the Environment Court then held:31[46] Auckland Transport has pointed out that the Court's final decision at [13(d)] directs that any application for costs "should include invoices orother proof of costs incurred, and identify costs relating to the NOR appealhearing (after mediation concluded)". It adds also that the Court's PracticeNote 2014 directs that costs incurred in Court-assisted mediation cannot be claimed.[47] Auckland Transport's position is that all costs incurred by NEIL in Court-assisted mediation cannot be claimed. It adds that the costs of all attendances by NEIL prior to the pre-hearing conference held on 19 June 2015 should not be recoverable as these would have largely related to mediation.30 Final decision, above n 14.31 Costs decision, above n 1.[52] We accept Auckland Transport's argument that all of NEIL's costsprior to 19 June 2015 should be excluded from the quantum of any award.[84] To the extent that NEIL challenges the finding of the Environment Court that costs incurred prior to 19 June 2015 are costs of Court-directed mediation, rather than costs of the appeal, I consider that this raises a question of fact rather than law and is not justiciable.[85] NEIL also seeks to challenge the general practice of the Environment Court, that costs relating to Court-directed mediation are not recoverable. In essence, NEIL asks this Court to make a finding that this practice is wrong in law. I accept this point raises a question of law. However, for the reasons set out in [76] to [79] above, this ground of appeal fails. It is not for this Court to impose a restriction of this nature upon the wide discretion that Parliament has seen fit to grant to the Environment Court in relation to costs.[86] The answer to the fourth question of law is that the Environment Court was entitled to disallow costs from the date of filing the appeal until after the mediation, including the costs of preparing for and attending Court-assisted mediation.Was the Court required to consider expert witness costs separately from legal fees?[87] NEIL submits that the Court failed to separately consider the expert witness expenses it incurred and to order reimbursement (or a substantial contribution towards) those expenses. Mr Casey noted in his submissions that the usual practice in civil proceedings is that expert witness fees are recoverable in full.[88] Civil proceedings in the District Court and High Court are governed by the District Court Rules 2014 and the High Court Rules 2016 respectively. In each case, r 14.12 provides that disbursements of a proceeding must be included in the costs awarded for a proceeding, provided that the disbursement is reasonable in itsamount.32 Expert witness costs are classified as disbursements33 and for that reason are typically recoverable in full by the successful party in civil proceedings.[89] The RMA, however, does not include any presumption that disbursements will be recoverable. Section 285(1) explicitly states:(1) The Environment Court may order any party to proceedings before it to pay to any other party the costs and expenses (including witness expenses) incurred by the other party that the court considers reasonable.(emphasis added)[90] It is clear from the wording of s 285(1) that the presumption under the High Court Rules and District Court Rules regarding recovery of expert witness costs does not apply in proceedings under the RMA. As previously stated, there is no justification for this Court to fetter the wide discretion granted to the Environment Court under s 285, including in relation to the costs of expert witnesses, by requiring the Court to adhere to a more prescriptive costs regime.[91] The answer to the fifth question of law is that the Environment Court is not required to consider the costs of expert witness fees and other expenses separately from legal fees when awarding costs.Was the decision of the Court plainly wrong?[92] Finally, NEIL submits that the award of costs in the "comfort" band wasmanifestly unreasonable.[93] In support of this point, Mr Casey submitted that the Court wrongly limited its consideration of quantum to the single issue of the designation footprint and that it unfairly penalised NEIL for raising and pursuing its opposition based on s32 The disbursement must also be of an approved or specified class; must be specific to the conduct of the proceeding; and must be reasonably necessary for the conduct of the proceeding: r 14.12(2) of the District Court Rules 2014 and the High Court Rules 2016.33 Progressive Enterprises Ltd v North Shore City Council (2005) 17 PRNZ 919 (HC) at [22] –[26].171(1)(b) and (c) considerations. Mr Casey relied particularly on the following passage from the costs decision:34[59] Given NEIL's primary position seeking removal of the designation,they too failed to focus on this core issue. Accordingly we can only compensate a proportion of costs sought.[60] We have concluded that the need for the Medallion Drive extension was clear. Equally, we have concluded the extent of the designation footprint should have been addressed years earlier. If this had been the focus of the NEIL case, we would have awarded a sum nearer the $508,000 starting point assessed by the Court.[61] The failure to properly focus the appeal meant that, before and during the hearing, counsel, court and the experts dealt with a variety of other issues.[94] For the reasons set out in this judgment, I do not accept that the Environment Court limited its consideration of quantum to the single issue of the designation footprint. It is clear that the Environment Court took a range of relevant factors into consideration. Nor do I consider that NEIL was unfairly penalised for raising and pursuing its opposition to the NOR.[95] In my view, the reality of the situation is this. NEIL opposed the NOR throughout the proceeding and sought orders cancelling the NOR in its entirety. It did not obtain its desired result. However, NEIL was partially successful: the Environment Court confirmed the designation in a modified form which addressedand mitigated some of NEIL's concerns. Notwithstanding the partial nature ofNEIL's success, and taking into account the numerous failings of AucklandTransport, the Environment Court determined to make an award of costs in favour of NEIL. Had NEIL confined its case to the extent of the designation footprint, it would have been entirely successful in its appeal and a significantly higher award of costs may well have been justified. That is the nature of an award for costs. It does not reflect in any way upon the legitimacy of the stance taken by NEIL in raising and pursuing its opposition to the NOR.[96] The answer to the sixth question of law is that the costs decision was not manifestly unreasonable.34 Costs decision, above n 1.Result[97] The appeal is dismissed.Costs[98] Auckland Transport is entitled to costs on a 2B basis. If agreement cannot be reached then Auckland Transport may file a memorandum in support of costs within 15 working days of receipt of this judgment. A memorandum in response may be filed within 10 working days thereafter.___________________________________Gordon J