What timely legal advice could have avoided

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What timely legal advice could have avoided

What timely legal advice could have avoided

Thursday 20 June, 2019

The benefit of timely (and early) legal advice on council notification decisions in contentious resource consent applications has been highlighted in the recent High Court decision in Royal Forest and Bird Protection Society of New Zealand Inc v Northland Regional Council & Resin and Wax Ltd [2019] NZHC 449 [15 March 2019] (Resin & Wax Decision).

One potential, but not common, outcome of judicial review proceedings in the High Court is the award of costs to the party who applied for and then discontinued judicial review, leaving a responding council to contribute to that party's costs even though the council had admitted errors in its decision-making process and therefore signalled it would abide by the Court’s decision (and otherwise take little active part in the process). This was the outcome in the Resin & Wax Decision.

Northland Regional Council (‘Council’) decided not to notify an application and then granted consents to Resin & Wax to mine kauri resin in “the second-most environmentally important wetland in Northland”. A month later Forest & Bird learned of Council’s decision and obtained information about the consents. Forest & Bird then advised Council that it considered there were errors in Council’s decision making process and would challenge its process through judicial review if Council did not admit its errors. Forest & Bird also asked Resin & Wax to surrender its resource consents. Council disputed Forest & Bird’s view of its decision making process. After nearly five months of unsuccessful discussions, Forest & Bird applied to the High Court to judicially review Council’s decisions. Within six weeks of the commencement of judicial review proceedings, Council admitted it had applied the wrong statutory test in its notification decision and accordingly advised it would not defend its original decisions not to notify Resin & Wax’s application and grant it consents. Resin & Wax, learning of Council’s admission, surrendered its resource consents. Forest & Bird discontinued its application for judicial review, leaving the Court to decide its application for costs.

The usual presumption in High Court proceedings is that the party who discontinues their proceeding (in this case Forest & Bird) must pay costs to the other parties responding to that proceeding (Council and Resin & Wax). Forest & Bird therefore had to first persuade the Court to put this presumption aside in order to then seek an order from the Court requiring Council and Resin & Wax to pay its costs.

The Court held that it was appropriate in this case to displace the presumption and order the Council and Resin & Wax to pay Forest & Bird’s costs for a number of reasons:

Forest & Bird’s decision to apply for judicial review was reasonable given the matters it raised regarding Council’s errors in its notification decision were of legitimate public importance;
Forest & Bird notified Council and Resin & Wax a number of times that it intended to apply for judicial review, giving those parties a corresponding number of opportunities to find a solution before the proceedings commenced;
Forest & Bird discontinued the proceeding at the appropriate time following Council’s admission of its error and Resin & Wax’s surrender of consents;
Forest & Bird ultimately succeeded in achieving the underlying objective of its judicial review proceedings (the surrender of the consents), meaning it was vindicated in its concerns regarding Council’s decision making process;
Council reconsidered its earlier rejection of Forest & Bird’s view only after judicial review proceedings had commenced; and
Council’s application of the incorrect statutory test in its notification assessment and decision was a “fundamental error that is likely to have been identified in the course of the proceeding or during the hearing, making the Council's resistance of Forest and Bird's challenge ultimately untenable.”

On this basis, the Court decided that it was just and equitable to displace the usual presumption and instead award costs to Forest & Bird even though as the applicant for judicial review it had discontinued its application.

We regularly help our local government clients in their notification assessments and decisions which the Resin and Wax Decision shows can be a wise investment, ultimately saving our clients significantly greater costs later.

For assistance with questions relating to this article, please contact Theresa Le Bas.