Guiding councils - getting it right with ADR practice

The Environment Court has provided some indications of the parameters of when costs may be awarded against councils on planning appeal matters.  The Appellant in Lara Holdings Ltd v Hamilton City Council ([2016] NZEnvC 162) sought costs against Hamilton City Council where a plan change appeal was resolved by consent. They were unsuccessful. 

Key points raised by the Court include:

  • they are “very rare” situations which arise when the actions of councils are “blameworthy” or when the criteria of the Environment Court Practice Note are met.
  • the Court noted that the criteria refer to a decision of council not being “upheld,” which indicates a merits decision, rather than a resolution by consent.
  • where parties have reached an agreement it is not possible to reach any evaluative view of the evidence.
  • it is relevant whether the restrictions imposed by the council decision impose “unusual restrictions” on the Appellants, and whether these were justified, as is the motivation of the Council in notifying the proposed plan in the form that it did.
  • the Court looked at the time involved in getting matters to a general agreement (six months) and the final agreement in the consent documents (about four months).  It saw that the Council was dealing with another Appellant on similar matters separately (which is not uncommon but is not encouraged by the Court because of the potential for delays). The Court concludes that the delay did not result in the actions of the Council being “blameworthy” as the delays in settling wording seem to be more the process of response, comment and feedback by the parties.
  • overall the Court was satisfied that the council was trying to resolve the appeals in an ordered way, across broad fronts and over multiple appeals.

The Court doesn’t decide if a single ground would have been enough to award costs, or quantum, but thought it would have been “most unlikely” that anything like the portion of costs involved ($22,000) would have been imposed – if awarded it would have been a “small percentage” of that sum. But none of the grounds were made out in this case. 

It is not common at all for the Court to grant costs on planning appeals. From this decision it appears to be even more unlikely that an Appellant will be successful on a planning appeal costs application if:

  • the original decision is reasonable;
  • Council undertakes resolution by mediation and negotiation in an ordered and timely fashion; and
  • the appeal is resolved by consent.