SUSTAINABLE OTAKIRI INC v WHAKATĀNE DISTRICT COUNCIL [2023] NZCA 32

SUSTAINABLE OTAKIRI INC v WHAKATĀNE DISTRICT COUNCIL [2023] NZCA 32 [24 February 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA49/2021[2023] NZCA 32BETWEEN SUSTAINABLE OTAKIRIINCORPORATEDAppellantAND WHAKATĀNE DISTRICT COUNCILFirst RespondentCRESWELL NZ LIMITEDSecond RespondentCourt: Cooper P and Goddard JCounsel: D M Salmon KC, D A C Bullock and E J Mills for ApplicantA M B Green for First RespondentS A Barker and A P Duncan for Second RespondentJudgment:(On the papers)24 February 2023 at 3.00 pmJUDGMENT OF THE COURTA The application for a stay of enforcement of the costs awards made in thisCourt and in the Environment Court is granted. The enforcement of thosecosts awards is stayed until the date on which Sustainable Otakiri Inc'sapplication for leave to appeal to the Supreme Court is determined.B There is no order as to costs.____________________________________________________________________REASONS OF THE COURT(Given by Goddard J)Introduction[1] On 2 December 2022 this Court dismissed four related appeals on questions oflaw under the Resource Management Act 1991, which arose out of a proposal byCreswell NZ Ltd (Creswell) to expand an existing spring water extraction and bottlingoperation near Ōtākiri in the Bay of Plenty.1 The applicant, Sustainable Otakiri Inc(Sustainable Otakiri), was the appellant in one of those appeals. The respondents toSustainable Otakiri's appeal were the Whakatāne District Council (the Council) andCreswell. An order was made requiring Sustainable Otakiri, the unsuccessfulappellant, to pay costs on the appeal to the Council and to Creswell.[2] Orders for costs against Sustainable Otakiri in favour of Creswell were alsomade in the Environment Court and in the High Court. Sustainable Otakiri has paidthe High Court costs, but not the costs awarded in this Court or in theEnvironment Court.[3] Sustainable Otakiri seeks an order staying the enforcement of the costs ordersmade in this Court and in the Environment Court (the costs awards).2 It says that ifenforcement of the costs awards are not stayed, Creswell will proceed with aliquidation application based on a statutory demand it has served for payment of thecosts awards. Sustainable Otakiri is not able to pay those costs, which totalapproximately $61,000. It says that if it is liquidated, it will be deprived of its abilityto proceed with its proposed appeal to the Supreme Court.[4] The application for a stay is finely balanced. But we have concluded that it isin the interests of justice for a stay to be granted by this Court for a short period whilethe Supreme Court considers Sustainable Otakiri's application for leave to appeal.If leave is declined, the stay will terminate and the costs orders will be enforceable.1 Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council [2022] NZCA 598 [Court of Appealjudgment].2 Court of Appeal judgment, above n 1, at [196]–[197]; and Te Rūnanga o Ngāti Awa v Bay of PlentyRegional Council [2019] NZEnvC 116 at [31] [Environment Court costs judgment].There will be no material prejudice to Creswell from this brief delay. If leave isgranted, the Supreme Court can determine whether a further stay should be granted,and (if so) on what terms.[5] Our reasons are set out briefly below.The stay application[6] The stay application is made in reliance on r 30 of the Supreme Court Rules2004. Sustainable Otakiri submits that if a stay is not granted it is likely to beliquidated, as it is not able to pay the costs awards. Its counsel are acting pro bono.If it is liquidated, the proposed appeal to the Supreme Court will be rendered nugatory.There is no realistic prospect that a liquidator would seek to proceed with the proposedappeal in circumstances where the cost of doing so would be significant, the financialbenefit to Sustainable Otakiri if the appeal were to succeed would be confined toreversal of the costs awards, and the reversal of the costs awards would prejudice thecreditor seeking liquidation. It says that there are good prospects that theSupreme Court will grant leave, given the issues of public and general significanceinvolved in the appeal including the interpretation of the relevant plan and therelevance of the water's end use.[7] The application is opposed by both respondents on the grounds that:(a) Sustainable Otakiri's appeal will not in fact be rendered nugatory unlessa stay is granted. A liquidator might decide to pursue the appeal in orderto reverse the costs orders. Even if that did not occur, theSupreme Court could substitute parties into the appeal, such asmembers of Sustainable Otakiri who were entitled to bring an appeal tothe Environment Court on the consent decisions in issue.(b) Te Rūnanga o Ngāti Awa (Ngāti Awa), another appellant in the relatedappeals before this Court, also is seeking leave to appeal to the SupremeCourt from this Court's decision. It seeks similar outcomes toSustainable Otakiri. Thus, even if enforcement of the costs awardsmade against Sustainable Otakiri renders it unable to proceed with itsproposed appeal, the Supreme Court may be able to consider the issuesit wishes to raise.(c) If a stay is granted, the respondents will suffer prejudice as theyhave been put to the cost of defending appeals before three courtsbut have only recouped costs awarded in the High Court. GivenSustainable Otakiri's evidence that it will struggle to raise furtherfunds, the respondents should not have to face a further possible appealwithout recovering the costs to which they are entitled.(d) Given the proposed appeal by Ngāti Awa, third parties would not bematerially affected were a stay not to be granted.(e) Sustainable Otakiri's appeal is not of sufficient public importance,given it represents the interests of its members, whose focus is on theamenity value of their properties.[8] Rule 30(2) of the Supreme Court Rules provides:(2) Pending the determination of the application or the appeal, the courtappealed from or the Supreme Court may, on application,—(a) order a stay of the proceeding in which the decision was givenor a stay of the execution of the decision; or(b) grant any interim relief.[9] The principles that apply to stay applications under r 30 of the Supreme CourtRules are similar to the well-established principles that apply when a stay is soughtunder r 12 of the Court of Appeal (Civil) Rules 2005. The Court considering such anapplication must balance the successful litigant's rights to the fruits of a judgment andthe need to preserve the parties' original positions in case the appeal is successful.Relevant factors include:3(a) whether the appeal may be rendered nugatory by the lack of a stay;3 Kiwi Internet Marketing Ltd v Trent [2017] NZCA 174 at [7].(b) the bona fides of the applicant as to the prosecution of the appeal;(c) whether the successful party will be injuriously affected by the stay;(d) the effect on third parties;(e) the novelty and importance of the questions involved;(f) the public interest in the proceeding; and(g) the overall balance of convenience.[10] The likelihood of the Supreme Court granting leave to appeal may also be arelevant factor.4Analysis[11] We proceed on the basis that any stay that might be granted by this Courtshould not extend beyond the date on which the Supreme Court determinesSustainable Otakiri's application for leave to appeal. If leave is declined, the stayshould terminate. Conversely, if leave is granted the Supreme Court can considerwhether to grant a further stay, and if so, on what terms. That Court will be betterplaced to do so at that time, having regard to the factors that led it to grant leave.Any stay granted by this Court is likely to be operative for a few months at most.[12] We accept that it is likely that if a stay is not granted, Sustainable Otakiri'sproposed appeal is unlikely to proceed even if leave is granted. A liquidator would beunlikely to proceed with the appeal in circumstances where that would be unlikely toproduce a financial benefit for the entity in liquidation that would be commensuratewith the costs of pursuing the appeal.[13] Sustainable Otakiri's proposed appeal relates to the resource consents grantedby the Council. The appeal by Ngāti Awa relates to the resource consents granted bythe Bay of Plenty Regional Council, a respondent in the related appeals before this4 At [8].Court. There is some overlap in the issues. But there are issues raised bySustainable Otakiri's appeal that would not be addressed if it is not represented in anyfurther appeal. We do not accept the respondents' submission that even ifSustainable Otakiri's appeal is not pursued, the issues it wishes to raise could beconsidered by the Supreme Court in the context of the proposed appeal by Ngāti Awa.[14] It is possible that the Supreme Court could, if it grants leave, make orderssubstituting members of Sustainable Otakiri as appellants. But it would not beappropriate for us to speculate about whether the Supreme Court would make such anorder. Rather, it makes sense for the position to be preserved to enable that Court todecide whether to make any orders of that kind.[15] We therefore accept Sustainable Otakiri's submission that if a stay is notgranted, there is a real prospect that its proposed appeal would be rendered nugatory.[16] The fact that an appeal will be rendered nugatory is not determinative.5 But inthe present case, a stay of the costs awards for a few months until the leave applicationis determined will not cause any material prejudice to the respondents. If leave isdeclined, then Creswell will be able to proceed to liquidate Sustainable Otakiri andrecover any funds that may be available for unsecured creditors, if it still wishes to doso. The prejudice to the respondents will be confined to a short delay in obtaining anypayment towards the costs awards that may be achievable through that course ofaction. The respondents will be in the same position if leave is granted, unless theSupreme Court decides to grant a further stay. In either scenario, the prejudiceattributable to a short stay granted by this Court will not be material.[17] The prejudice identified by the respondents in their opposition to a stay —failure to recover the costs awards in the courts below — is not prejudice attributableto a stay pending the Supreme Court's leave decision. The focus is on the incrementalprejudice attributable to a stay: as explained above, that is confined to a short delay intaking enforcement action. Given the financial position of Sustainable Otakiri, it maybe questioned whether the respondents could expect any net financial benefit from5 Cousins v Heslop [2007] NZCA 377, (2007) 18 PRNZ 677 at [10].seeking liquidation of that entity. The prospect that liquidation will result in the costsawards being paid seems slender, even absent a stay.[18] We considered the possibility of granting a stay on terms requiring security tobe provided for the costs awards. The difficulty is that this would not merely preservethe respondents' position: it would improve their position, in circumstances whereSustainable Otakiri cannot itself pay the costs awards now. That goes beyond whatcould reasonably be required as a condition of granting a brief stay of enforcement ofthe costs awards.[19] In summary, the interests of justice favour the grant of a stay of enforcementof the costs awards made in this Court and in the Environment Court pending theSupreme Court's leave decision.[20] Sustainable Otakiri did not seek costs on its application for a stay. We agreethat it is appropriate for the costs of this application to lie where they fall, havingregard to the nature of the application and the very limited relief obtained.Result[21] The application for a stay of enforcement of the costs awards made in thisCourt and in the Environment Court is granted. The enforcement of those costs awardsis stayed until the date on which Sustainable Otakiri Inc's application for leave toappeal to the Supreme Court is determined.[22] There is no order as to costs.Solicitors:LeeSalmonLong, Auckland for ApplicantBrookfields Lawyers, Auckland for First RespondentBuddle Findlay, Wellington for Second Respondent