A prominent Queenstown tourism business was directed to pay $320,000 in a costs decision released just prior to Christmas. In 2010, Kawarau Jet Services Holdings Ltd and related company Clearwater Pursuits Ltd (the appellants) unsuccessfully appealed against a Queenstown Lakes District Council decision to grant consent to a new commercial jet boat operator, Queenstown Water Taxis Ltd (the applicant). The Court confirmed the consent, and reserved costs. The applicant and the Council subsequently filed applications for an award of 100% and 75% of their costs, respectively.

Costs arguments

The applicant and the Council contended that the appellants were trade competitors. They argued that it was the hope of protecting a commercial advantage, not a genuine interest in public safety, that motivated the appeal. The applicant cited the appellants’ lack of co-operation and the position adopted by many of their expert witnesses as factors increasing the length and expense of the hearing process.

The appellants acknowledged that they were trade competitors, but insisted their concern for public safety on the Kawarau River was genuine. While they acknowledged that the Court had been critical of their legal representatives and expert witnesses, they pointed out that their legal representatives had been replaced prior to the final hearing. The appellants argued that it would be wrong to penalise them (via an exacerbated costs award) for their previous counsel’s case management or witnesses’ lack of expertise.

The Environment Court’s decision

The Court found that the Council’s application was appropriately pitched at 75% of costs incurred. It directed the appellants to cover 75% of the applicant’s and Council’s costs (with the exception of the fees associated with one expert witness, which the appellants were required to indemnify in full). This amounted to $187,500 payable to the applicant and a further $133,000 to the Council.

The Court gave a strongly-worded critique of the appellants’ approach to the proceedings. It stated that their case was “filled with drama in a multitude of ways”, having been “advanced in a highly inappropriate manner, involving endeavours to frustrate the applicant’s case at every turn rather than engaging in practices encouraged by modern courts”. The appellants were criticised for extending the hearing by taking “virtually every possible point”, and giving “evidence that lacked accuracy and credibility”. The Court also criticised the appellants for failing to engage with the applicant on issues which were determined to have been reasonably capable of early settlement.

Ultimately, the Court expressed a view that the appellants’ interest was motivated by trade competition. Despite the 2009 RMA Amendments not being applicable in this case, the Court found that the appellants’ behaviour was in breach of principles found in pre-2009 case law, imposing a duty on trade competitors to act responsibly.

The Court also emphasised that expert witnesses must write their own evidence, and present it in an accurate, credible, and non-partisan way. The Court stressed the importance of adequately briefing expert witnesses about the duties placed on them by the Court’s Practice Note, enabling them to construct their evidence in accordance with it. The Court used the appellants’ failure to do so as an example of why parties are rightly liable for the “shortcomings” of their witnesses. The Court also found that it was appropriate to attribute responsibility for the misconduct of the appellants’ previous counsel to the appellants, noting that “[i]f there were to be no costs consequences on parties for such failings, the duties would frankly prove almost unenforceable”.

This decision is notable for the unusually high quantum of costs awarded. It also serves as a warning for parties to manage their case in a manner that doesn’t expose them to a significant cost award. It demonstrates, too, that the Courts will refuse to allow trade competitors to use thinly veiled arguments of public interest to protect or advance their commercial advantage.

Resource consent has now been granted for Mighty River Power’s Turitea wind farm, near Palmerston North.

The Board of Inquiry constituted to consider the application for resource consents and designations by Contact Energy Limited and Contact Wind Limited for the proposed Hauauru ma Raki (HMR) wind farm has issued its final decision. The Board, as indicated in its draft decision, determined to grant all resource consents and to confirm all notices of requirement for designations.

The Board of Inquiry considering Contact Energy’s 504 Megawatt Hauāuru mā raki wind farm has released its draft decision approving the applications for resource consent and notices of requirement. The draft decision approves all 168 turbines sought, as well as the transmission line connection to the National Grid.

Further to our February 2010 edition of FRESH, which discussed the Environment Court’s 2009 interim decision with regard to Crest Energy’s proposed Kaipara Harbour tidal power station, the Environment Court has now released its final decision and agreed conditions of consent.

The Board of Inquiry determining Mighty River Power’s Turitea wind farm application recently released its draft report and decision. The draft decision is to grant consent to the proposal, based on a reduced number of turbines to that sought by the applicant.