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Mawhinney v Waitakere City Council HC Auckland CIV 1999-404-001850 [2007] NZHC 1877 (20 June 2007)

High Court of New Zealand

Mawhinney v Waitakere City Council HC Auckland CIV 1999-404-001850 [2007] NZHC 1877 (20 June 2007)

Last Updated: 25 September 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV 1999-404-001850}

BETWEEN P W MAWHINNEY Plaintiff

AND WAITAKERE CITY COUNCIL Defendant

Hearing: On Papers

Judgment: 20 June 2007

_{COSTS JUDGMENT OF FOGARTY J}

The proceedings

[1] On 14 September last these proceedings were struck out. They were then formulated in a 4th amended statement of claim. The subject matter of the litigation was land, and part of land formerly known as Waitakere Forest. Some of the land has been subdivided and sold. It is in the foothills near the more heavily bush clad areas of the Waitakere Ranges. Subdivision of the land has raised issues as to stormwater run off. The plaintiff had a number of issues with the Council over

various subdivisions of the land. A number of them were a challenge to the Council having evoked s 91 of the Resource Management Act 1991 (RMA) as a reason for not processing some of the land use applications. The Waitakere City Council wanted the applications before it to be considered in conjunction with applications that it thought should be made to the Auckland Regional Council (ARA) for stormwater discharge. Section 91 allows applications before a consent authority to

_{be deferred on the grounds that other resource consent under the Act will also be}

MAWHINNEY V WAITAKERE CITY COUNCIL HC AK CIV 1999-404-001850 20 June 2007

required. However, Mr Mawhinney and his associates did not make stormwater discharge applications to the ARA.

[2] Mr Mawhinney had various other contentions of error independently of s 91, including the Waitakere Council separating land use consent from subdivision consent in one of the subdivision consents and arguing that the Council had no choice but to consent to two other subdivision consents as they were deemed controlled activities.

[3] On this factual foundation the plaintiff then pleaded three causes of action:

1. Breach of statutory duty

2. Negligence

3. Misfeasance

The latter cause of action alleged deliberate misconduct against a number of officers of the Council.

[4] The damages claimed were in the order of $10 million in addition to remedies of mandamus and certiorari.

[5] Between August 1999 down to August 2006 the Council expended $177,486 disputing the claim.

[6] The statement of claim as examined on the application for strike out ran to over 60 pages. It was full of factual detail. It was difficult to analyse. It ignored or otherwise obscured a significant previous litigation history in which the use by the Council of the power in s 91 had been upheld by the Environment Court in Waitakere Forestry Park Ltd v Waitakere City Council [1997] NZEnvC 35; [1997] NZRMA 231 and by the High Court, on appeal, in Waitakere City Council v Kitewhao Bush Reserve Co Ltd [2005] 1 NZLR 208. It may be noted that the High Court decision was after these proceedings were commenced but before the most recent statement of claim, which is dated 31 March 2006.

[7] Any experienced public law practitioner would know that the chances of a plaintiff obtaining damages, in the face of defeats before the Environment and High Courts, by alleging misfeasance, are almost certainly doomed to failure. Nonetheless, the solicitors for the Council justified the effort put into the case for two reasons:

(a) The quantum of damages and interest sought was significant and represented a substantial contingent liability to the ratepayer.

(b) The allegation of misfeasance of public office was of a very serious nature.

[8] Overall it submitted that its costs incurred in defending the claim had to be proportionate to the serious claims made against its officers and elected members.

[9] The respondent solicitor’s duties were made more complex by the fact that Mr Mawhinney pursued this litigation without the benefit of solicitors or counsel. The original statement of claim filed was 34 pages. The first amended statement of claim stretched to 164 pages and the most recent pleading was 64 pages. His submissions at strikeout were 41 pages long together with an 18 page commentary on the respondent’s chronology of events. Prior to the strikeout hearing he filed an affidavit that together with exhibits comprised 486 pages. There were other affidavits filed by Mr Mawhinney in the course of the interlocutory arguments.

The applications by the defendant in relation to costs

[10] In its first set of submissions the successful defendant Council applied for an order for costs against the plaintiff as at 90% of its actual costs. The plaintiff filed no submissions. The Court issued a minute on 13 March noting the memorandum seeking 90% costs does not address recent authorities which indicate the reference to actual costs is inappropriate. It noted that this first application for costs seemed to rely on the decision of Mansfield Drycleaners and launders Ltd v Quinny’s Drycleaning (Dentice Drycleaners Upper Hutt) Ltd [2002] NZCA 277; (2002) 16 PRNZ 662.

[11] The defendant then filed a further memorandum dated 30 April. In these submissions it variously sought:

i. Indemnity costs of $177,486

ii. Alternatively 90% of actual costs justified under r 46(i) on the basis this is an unusual or exceptional case where departure from the scale is appropriate.

iii. Alternatively an uplift from scale.

[12] It further complicated its stance by seeking additional time for case management conferences and several interlocutory steps as follows:

• Interlocutory application to strike out dated 25/5/00;

• Preparation for hearing and strikeout application 14/2/01 Step 14;

• Preparation for interlocutory hearing 08/06/ Step 46.

[13] Finally, the plaintiff filed submissions, These were in reply to the defendant’s submissions of 3 April. These plaintiff’s submissions submitted that the current law as to calculation of increase as to allowance and calculation of increase costs is not to be found in Mansfield but in Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606; and Holdfast NZ Limited v Selleys Pty Ltd (2005) 17 PRNZ

897. In that respect I can agree immediately. It is plain that Glaister and Holdfast were decided by Courts fully aware of Mansfield. Holdfast is the latest decision. The correct perspective to these three Court of Appeal decisions is to read them on a policy continuum where the method used to apply the scale and to depart from it has been progressively delineated.

[14] Accordingly, the correct approach is that set out in detail in the judgment in Holdfast by Chambers J from paragraphs [43] to [48]. Essentially those steps require an applicant for costs to:

1. First categorise the proceedings as Category 1, 2 or 3 [43].

2. Work out a reasonable time for each step in the proceeding [44].

3. As part of this exercise the party can apply for extra time for a particular step under r 48C(3)(a).

4. Then, and only then, the applicant must step back, look at the amount of costs it would recover following the process to this point and then argue for additional costs if it considers it can rely on r 48C(3)(b). See [45]. Chambers J in Holdfast warns that the Court is not likely to go above 50%. However, he acknowledges that there may be circumstances where a higher award would be justified. See [48].

[15] I have wrestled with the various positions taken by the defendant Council. However, the problem is that at no stage, even down to its latest submissions in reply to those of the plaintiff, has it followed the steps in the order prescribed in Holdfast.

[16] Conscious as I am that a lot of time has been passing on the subject of costs, and recognising that I am hampered by counsel for the defendant not following the steps set out in Holdfast from the outset, I make some determinations and call for a recalculation of the claim for costs.

Indemnity costs

[17] At no time has the defendant made out a case for indemnity costs.

1. It appears to have been thrown in as an option in the further memorandum dated 30 April, but without any supporting reasons.

2. In the face of Holdfast it is very unlikely that the Court will allow an across the board recovery of 90% of actual costs.

3. The case is classified as Category 2. In this case, although the case has considerable factual complexity, it is complexity that can be dissected by counsel with skill and experience considered average in the High Court. Cases do not go to Category 3 because of the importance of the client or the amount of damages claimed.

[18] As noted already, the defendant has sought timeband C for all case management conferences and for several interlocutory steps relating to strikeout. Whether the timebands should be Table B or Table C depends on consideration of each step. This is a tedious exercise, but it is what the rules require. For the plaintiff, Mr McCartney submitted there is no evidence to support the submission for Band C for all case management conferences. Evidence is not required. To a degree the allocation of time under Band B or Band C can be broadbrush. Band C is approved for all case management conferences.

[19] Mr McCartney acknowledged it might be arguable that Band C should be applied for the preparation of the August 2000 strikeout application but noted the time allowance for that step is the same whether under B or C. He acknowledged in that respect there was a case for an uplift in scale but it should not exceed 50%. He did not make any particular submission in respect of the interlocutory strikeout application dated 25 May. In respect of both those applications the defendant sought to uplift the allowed time of two days to four. That is double the time. It is sufficient at this stage to recognise that Band C is appropriate for all the case management conferences and for those attendances on the applications for strikeout referred to above.

Further analysis

[20] The above directions and findings are as far as I can take the matter at the present time. On the basis that the issues have been partly resolved I call on counsel for the defendant to follow Holdfast and re-submit a claim with leave to argue in those issues not already settled. This excludes seeking indemnity costs, and 90% of actual costs. There may be other steps in the proceedings where the defendant will argue for Band C rather than Band B, or for costs exceeding Band C. This is, to a

degree, an indulgence as the defendant has had an opportunity to do this earlier on and has taken it in respect of some steps.

[21] An opportunity is still left to the defendant to then stand back from all of those calculations and seek an order under r 48C(3)(b) seeking more. Counsel should be guided by paragraph [48] of Holdfast.

[22] Finally, the defendant may renew its application in respect of disbursements. The plaintiff has made no comment so far.

[23] The further submissions of the defendant should be filed by 16 July. Submissions in reply by the plaintiff should be filed by 30 July. Limited reply to those submissions, by the defendant, should be filed by 13 August.

Fogarty J

Solicitors:

W A McCartney, Auckland, for Plaintiff

Kensington Swan, Auckland, for Defendant

cc: P W Mawhinney