BEFORE THE ENVIRONMENT COURT I MUA I TE KOOTI TAIAO 0 AOTEAROA

Court:

Hearing:

Date of Issue:

I ntrod uction

Decision No, [2018] NZEnvC '7 5'

IN THE MATTER of the Resource Management Act 1991

AND of an appeal under section 120 of the Act

BETWEEN SUSTAINABLE OTAKIRIINCORPORATED

(ENV-2018-AKL-000135)

AND

AND

Appellant

BAY OF PLENTY REGIONAL COUNCIL

WHAKATANE DISTRICT COUNCIL

Respondents

CRESSWELL NZ LIMITED

Applicant

Environment Judge D A Kirkpatrick sitting alone under s 279( 1)( c) of the Act

On the papers

16 April 2019

SECOND DECISION OF THE ENVIRONMENT COURT

ON APPLICATION FOR SECURITY FOR COSTS

[1] This decision follows on from the Court's earlier decision dated 17 October 2018. 1

That decision dismissed an application by Cresswell NZ Ltd (Cresswell) to strike out the

1 Sustainable Otakiri Inc v Bay of Plenty Regional Council & ors [2018] NZEnvC 207.

Otakiri appeals

2

appeal of Sustainable Otakiri Inc, and adjourned Creswell's application for security for

costs against Sustainable Otakiri. The decision records that it would be premature to

determine the latter application ahead of mediation. This was on the basis that the relative

merits of the parties' positions and the likely quantum of costs could be more fully

assessed after mediation, and also that determining the application for security for costs

might hamper the mediation process without much countervailing benefit.

[2] As it transpired, mediation did not resolve the issues between these parties.

Creswell renews its application and Sustainable Otakiri maintains its opposition. Creswell

has filed updated evidence in relation to the costs it anticipates it will incur. Both parties

have filed updated legal submissions.

Background

[3] The background to this appeal is set out in the earlier decision2 and need not be

fully repeated here.

[4] Briefly, this appeal relates to a proposal by Cresswell to expand the Otakiri Springs

water bottling plant. Two consent authority decisions relate to this proposal, being:

a) a decision by the Bay of Plenty Regional Council (BOPRC) to grant resource

consents to increase an existing groundwater take and to authorise related

earthworks and discharges (the regional consents); and

b) a decision by the Whakatane District Council (WOC) to change existing land use

consent conditions and to grant resource consents for certain earthworks (the

land use consents).

[5] The two decisions were made by commissioners on behalf of both BOPDC and

WDC and were delivered in the same decision report.

[6] Sustainable Otakiri appealed against both decisions, seeking cancellation of the

consents or amendment of the conditions of consent to address the issues raised on

appeal. Sustainable Otakiri withdrew that part of its appeal relating to the regional

consents in December 2018 and now seeks the cancellation of the land use consent but

2 Fn 1.

3

does not seek amended consent conditions.

[7] The regional consents are the subject of appeals by Te ROnanga 0 Ngati Awa

(ENV-2018-AKL-000133) and Ngati TOwharetoa (BOP) Settlement Trust (ENV-2018-

AKL-000134). These appeals are focussed on different issues to those raised by

Sustainable Otakiri, but all three appeals will be heard together given their intersection

with the applicant's proposal.

[8] The issues raised in Sustainable Otakiri's appeal that remain live include:

(i) the Court's jurisdiction to grant consent to the proposal under ss 104(3)(d)

and 127 RMA;

(ii) the definition and status of the activity under the District Plan and the

consistency of the proposal with the regional and district planning

instruments;

(iii) the proposal's effects on rural character and amenity arising from the

character, intensity and scale of the proposal, its visual effects, noise effects

during construction and operation and amenity effects relating to truck

movements, and related effects on the wellbeing of the community;

(iv) the proposal's effects on the loss of productive land (without contesting

Creswell's evidence about the viability of the land for kiwifruit production);

and

(v) the extent to which the District Plan identifies alternative locations and

zonings for the proposal.

[9] Sustainable Otakiri has stated that the following issues are no longer pursued:

(i) lighting effects of the proposal;

(ii) landscape effects of the proposal beyond the scale and intensity of the

proposed facility;

(iii) health and safety effects of the proposal;

4

(iv) dust effects of the proposal ;

(v) contaminated soil-related effects of the proposal, including potential

exposure to and movement of contaminated soils;

(vi) effects pertaining to activities within 60 metres of the toe of the stopbank,

including effects on the stability of the stopbank and any other flood protection

matters;

(vii) traffic aspects of the proposal not related to the amenity effects of truck

movements, including matters relating to road and rail safety, road widening,

relocation of a water main and other services, the proximity of the proposed

shared path to the road, and traffic and road management; and

(viii) the positive effects of the proposal identified in the Council's decision except

to the extent it may be argued whether the proposal has positive effects in

terms of amenity and rural character.

[10] Creswell, according to the affidavit of its director Michael Gleissner sworn on 8

February 2019, now estimates that its likely overall costs of briefing and calling expert

witnesses will total $100,000 and its legal costs will be approximately $50,000. These

sums are based on its assessment of the witnesses it must call to answer Sustainable

Otakiri's appeal, including such matters as landscape and visual effects, noise and other

operational matters. It seeks an order that Sustainable Otakiri give security for costs in a

sum of between $37,500 - $49,500, based on 25-33% of the estimate of costs of

$150,000.

[11] The position remains that Sustainable Otakiri has provided no evidence of its ability

to meet Creswell 's costs should its appeal be unsuccessful. Creswell relies on the

evidence of Maureen Fraser, a member of Sustainable Otakiri, as stated at para 44 of

her affidavit sworn on 10 August 2018 and as referred to at [50] in the earlier decision,

that the society is not in a position to pay security in the amount sought by Creswell or a

lesser amount, and would have to undertake fundraising from its members. Creswell 's

fundamental submission is that Sustainable Otakriri should, in bringing its appeal , be

willing to bear financial responsibility for it.

[12] Sustainable Otakiri submits that no security should be ordered in light of the merits

5

of the issues remaining in dispute, reflecting the public interest in the proper assessment

and testing of resource consent proposals that involve the use of public domain resources

such as water. Counsel submits that while it is for Creswell to call the evidence it wishes,

the issues in this case now principally relate to planning and, possibly, landscape (to the

limited extent that an expert in landscape and visual matters can assist the Court in the

assessment of effects on rural character). On that basis, counsel submits that Creswell's

estimate of $150,000 is excessive. Counsel further submits that requiring security would

unfairly hinder the society in presenting its case as it wishes or at all, given its reliance

on fund-raising. Counsel submits that the direct effects on the members of the society do

not detract from the public interest in the issues raised.

[13] Counsel for Sustainable Otakiri submits that if the Court is minded to order security,

then an amount of $5,000 would be an appropriate figure.

[14] In reply, Creswell says that as the society has withdrawn that part of its appeal

relating to the regional consents, the significance of water as a public-domain resource

is no longer relevant and the appeal is more clearly one intended to protect private rights.

[15] Both sets of submissions enter into the substance of the legal issues and

associated evidence that will need to be considered at any substantive hearing to a

degree that goes somewhat further than I should go in addressing the interlocutory

application. The submissions serve to demonstrate that there is a substantive case to be

argued.

Relevant Law

[16] The relevant law is as set out in the earlier decision3 at [53] - [62] and need not

be repeated here as it appears that no issue is taken with it by either party.

[17] Reference is made by counsel for Creswell to the decision of the High Court in

Queenstown Community Strategic Assets Group Trustee Ltd v Queenstown Lakes

District Council & ors4 as an authority in relation to circumstances where an incorporated

society could levy its members to fund litigation. Reading that decision, I am not sure that

3 Fn 1.

4 Queenstown Community Strategic Assets Group Trustee Ltd v Queenstown Lakes District Council & ors HC Christchurch, CIV 2010-425-000396,21 March 2011, Fogarty J.

6

it is on all fours with the present case, given the learned judge's remarks about the

identities and wherewithal of the members of the plaintiff society. I note also that the

decision refers to another in Save Happy Val/ey Coalition Inc v Minister of Conservation

& ors5 where an application for security for costs by Solid Energy NZ Ltd against the

plaintiff was declined in light of the public interest in the appeal and the straightforward

nature of the proceeding.

[18] Ultimately many of the decisions in the High Court are, with respect and with

regard to their outcomes, of marginal assistance in this Court, given the policy in the High

Court that costs follow the event (and the associated schedule to the High Court Rules

by which costs are calculated) and the absence of such a policy (or any comparable

schedule) in this Court.

[19] More detailed consideration of the issues can be found in Highgate on Broadway

Ltd v Oevine. 6 That decision also concludes with an assessment of quantum based

squarely on the schedule of costs in the High Court Rules. More pertinently for this

jurisdiction, as well as the passage about access to justice7 which was quoted at [61] in

my earlier decision, that decision sets outS a range of inquiries to assist in considering

whether an order for security should be made against an impecunious plaintiff. The

format of these considerations as questions may better assist in analysis of the issues

before the Court than the statements of principles set out in other cases: 9

Inquiries tending in favour of the making of an order:

a) Is the plaintiff a nominal one?

b) Is there evidence of the plaintiff disposing of assets to avoid meeting an adverse

costs order?

c) Is the plaintiff's substantive claim prima facie unmeritorious?

5 Save Happy Valley Coalition Inc v Minister of Conservation & ors HC Wellington, CIV-2006-485-1634, 18 September 2006, Clifford J.

6 Highgate on Broadway Ltd v Devine [2012] NZHC 2288; [2013] NZAR 1017. 7 Fn 6 at [23](b).

S Fn 6 at [22]- [24].

9 E.g., Bell-Booth Group Ltd v Attorney-General (1986) 1 PRNZ 457 (HC).

7

d) Does the plaintiff have access to third party funding?

e) Would the denial of security for costs in the circumstances of this litigation be

oppressive to the reasonable interests of the defendant and parties other than the

plaintiff?

Inquiries tending against the making of an order:

f) Is it reasonably probable that impecuniosity was caused by the defendant?

g) Would ordering security deprive the plaintiff of the capacity to advance a prima

facie meritorious claim?

h) Has the applicant delayed unduly in applying for security?

General inquiries which can tend either way:

i) Is the conduct of either party relevant?

j) Are there any other relevant considerations?

k) How should the respective interests of the parties best be balanced?

Evaluation

[20] I consider that this application particularly engages the following considerations

identified in the caselaw on security for costs and the list of inquiries quoted above:

a) Would ordering security deprive the appellant of the capacity to advance a

prima facie meritorious claim?

b) Is the appellant a nominal one?

c) How should the respective interests of the parties best be balanced?

[21] I consider that a sum in the vicinity of $50,000 is likely to amount to a bar to an

appellant of this kind continuing with its appeal. There is an imbalance between apparent

resources of the applicant and the appellant that requires some allowance to be made

8

so that the scales of justice hang more evenly and that access to justice is not

unreasonably restricted or denied. The appellant has more to its case, as advanced in

the submissions of counsel, than simply unhappiness with the original decision and so

the merits ought to be tested.

[22] Having said that, the appellant is an incorporated society, standing nominally for

its members who were the original submitters on the application. It is important that in

exercising access to justice, those bringing a case accept responsibility for the

consequences of doing so. I also do not consider that the issues in this appeal are so

demonstrably matters of public interest that no security at all should be required, or that

security should be as little as $5,000 (or about $275 per member). While the maintenance

and enhancement of the amenity values of the environment in this location is a matter to

which I must have particular regard, the issues on appeal appear at this stage to be more

personal to the members of the society than of general benefit to the public or the

environment generally.

[23] Ultimately, considering these things comes to an assessment of degree,

balancing the interests of the parties. I n the circumstances and for the foregoing reasons,

I determine that Sustainable Otakiri Incorporated must pay security for costs for Creswell

NZ Ltd in the sum of $13,500, either by paying that sum into Court or by giving security

for that sum to the satisfaction of the Registrar.

[24] I order that the payment into court or giving of satisfactory security must be done

by 10 May 2019.

[25] There is no order as to costs on this application .

D A Kirkpatrick Environment Judge