Peter Mawhinney (formerly Kitewaho Bush Reserve Company Limited & Successors) v Auckland Council (formerly Waitakere City Council)
Background to costs application
The substantive proceedings at issue spanned some 13 years and involved 28 days of hearing time. The matter at issue was the development potential of land within the Dilworth catchment (known as the Dilworth Special Area) which is an area within the foothills environment of the Waitakere Ranges. An appeal was filed as far back as 1998 by Mr Mawhinney’s predecessor (Kitewaho Bush Reserve Company Limited, of which Mr Mawhinney was the sole shareholder and director).
The, then, Waitakere City Council originally sought to strike out the appeal; however, the strike out application was refused by the Court and instead Mr Mawhinney was given leave to refine his relief. The first substantive hearing took place in 2003, after which an interim decision was released by the Court. The interim decision required the parties to develop a structure plan for that part of the Waitakere Forest land within the Dilworth stream catchment. The Council developed a draft structure plan; however, it was rejected by Mr Mawhinney and the parties remained unable to reach agreement about the subdivision potential of the land. Further hearings were held in 2006, 2007 and 2010.
The Environment Court issued its final decision on the substantive matter, dismissing the appeal, in December 2010. While the Council filed an application for costs within the specified 10 working day period, its costs application was put on hold while an ultimately unsuccessful appeal to the High Court by Mr Mawhinney was advanced. The Council’s cost application was taken off hold in October 2011. In March 2012, Mr Mawhinney filed a counter costs claim against both the Council and the Waitakere Ranges Protection Society, a section 274 party to the proceedings.
Costs application against Mr Mawhinney
The Council sought a costs award of $427,139.00, comprising 33% of the total combined legal and expert costs the Council attributed to the Environment Court hearings. The Council acknowledged that costs are not routinely awarded in Schedule 1 proceedings but argued that this was not an inflexible rule and that this particular situation warranted a costs award.
The reasons given by the Council in support of the costs application were that Mr Mawhinney:
· provided no evidence;
· contravened a number of Court directions;
· did not provide a focussed case resulting in the Court and parties being unclear as to the relief being sought;
· failed to explore options for settlement; and
· showed “vacillating intransigence”.
Other factors involved were the hearing time required and that, if the costs were not met by Mr Mawhinney, they would fall on Auckland Council ratepayers.
Mr Mawhinney opposed the costs application on the basis that the costs were incurred in an unlawful attempt by the Council to impose regulations on the subject land and that the bulk of the Council’s costs were incurred unnecessarily and voluntarily by the Council. This included the production of a “flawed proposal” which, in Mr Mawhinney’s view, could have been avoided if it had been prepared in discussion with him.
In reaching his decision, the presiding Judge considered the Environment Court’s Practice Note which states that costs will normally lie where they fall in Schedule 1 proceedings; however, the Court retains discretion to decide whether or not a costs award may be appropriate in the circumstances of the case. The Judge considered the principles articulated in Development Finance Corporation of New Zealand Limited v Bielby  1 NZLR 587 and found that an award of costs against Mr Mawhinney was justified in this case. The Judge placed weight on Mr Mawhinney’s failure to call expert evidence, to comply with a number of Court directions (including preparing succinct and brief submissions) and his “insatiable appetite for RMA litigation” which had put the Council to unreasonable and excessive costs as the respondents in the case. The Judge awarded the full amount sought by the Council of $427,139.60.
Counterclaim against the Council and Waitakere Ranges Protection Society
Mr Mawhinney’s counterclaim for costs (totalling $63,000) was made against both the Auckland Council (as successor to Waitakere City and Auckland Regional Councils) and the Waitakere Ranges Protection Society, a section 274 party, on the basis that the proposal put forward by the Council after the interim decision was flawed.
In rejecting his claim, the Judge noted that Mr Mawhinney had submitted his costs application well out of time and that he had failed to provide evidence to support the quantum of the claim or a breakdown on how the amounts had been calculated. The Judge recorded that the subsequent proposals put forward by the Council were an attempt to assist in resolving the matter and were undertaken at the direction of the Court. In addition, the Judge noted that while an application for costs had been made against the Waitakere Ranges Protection Society, the application dealt solely with the conduct of the Councils (the former Waitakere City and Auckland Regional Councils) and provided no substantiated evidence for the claim against the Society.
This case illustrates that, while the Court may generally be reluctant to award costs in Schedule 1 proceedings, there is an expectation that parties who oppose settlement and fail to comply with court directions may still face significant costs awards.