Costly consequences: recent cases take a strict approach to costs

Recent Environment Court decisions have seen significant costs awards that may be viewed as warning shots to parties who do not adequately consult with Māori or frustrate court process. The level of costs awarded suggests the Court is prepared to take a firmer stance where conduct falls short.

Connor-Kingi v Whangārei District Council – cultural oversight comes at a cost

The Court in Connor-Kingi v Whangārei District Council [2024] NZEnvC 351 quashed a resource consent for a 93-lot subdivision, citing failures in both process and substance to protect a site of cultural significance.

The Court held that the Council’s 2018 residential rezoning of the land, without meaningful consultation with tangata whenua, undermined its obligations under ss 6(e), 7(a), and 8 of the RMA and breached its own District Plan. Despite the land’s residential zoning, the Court found this could not override tangata whenua’s relationship with the site, which included historic heritage, wāhi tapu, and sacred trees over 200 years old. The Court emphasised that it is iwi and hapū, not planners, who determine what constitutes wāhi tapu.

The case was described by the Court as one of the clearest examples of development being plainly inappropriate due to the presence of sites of significance to Māori.

In the subsequent costs decision, [2025] NZEnvC 169, the Court awarded:

• $42,600 to Ms Connor-Kingi and Protect Onoke Inc, which represented around 50% of their legal costs (after adjusting for the Whangārei District Council’s share which was agreed between the parties), court fees, disbursements, as well as a nominal $6,000 for cultural evidence.

• $6,400 to Northland Regional Council, covering full witness costs and just under 30% of its legal costs, for having to participate due to the developer’s (Onoke Heights Ltd’s) position on the regional consent.

  
  

McCallum Bros Ltd v Auckland Council – procedural missteps prove expensive

In McCallum Bros Ltd v Auckland Council, the Court awarded $450,000 in costs to one of the appellants, Manuhiri Kaitiaki Charitable Trust (MKCT) following a complex dispute over sand extraction from the Mangawhai-Pākiri coast. McCallum Bros withdrew its inshore and midshore applications after errors in expert evidence. However, it continued with the offshore appeal and made a last-minute, application to strike out MKCT.

The Court found that McCallum Bros' conduct, including late changes in position, poor communication of data, and ignoring earlier concerns raised in the original decision, imposed unnecessary costs on other parties. It awarded MKCT $450,000 (about 55-66% of claimed costs) and awarded $50,000 to a self-represented individual s 274 party, Mr Clapshaw (50% of expert costs).

McCallum Bros appealed the costs decision to the High Court, which found that the Environment Court had erred by making such a substantial award without MKCT providing supporting invoices of their incurred costs. The matter was sent back for reconsideration.

The Environment Court, having reviewed the invoices provided by MCKT, reaffirmed the award. Even though the invoices lacked detail and preciseness, the Court considered the claim was reasonable and generally supported. The Court adopted what it described as a “conservative outcome”, suggesting that, had the invoices been more detailed, a higher award could potentially have been justified.

Overall, the Court concluded that the conduct of McCallum Bros, including baseless arguments and abuse of court process, the scale and complexity of the case, and MKCT’s role as mana whenua, justified the award.

Of note, the Court stated that, that in future, a party may be able to establish a claim for actual/full reimbursement (referred to as indemnity costs) where comprehensive and itemised invoices are provided. Courts may order indemnity costs, instead of costs on a scale basis, where a party has behaved badly or unreasonably.

Concluding comments: a clear message on consultation and conduct

Costs in the Environment Court are a discretionary exercise – unlike some other courts where costs are automatically awarded to the successful party. Where costs are awarded, courts are ordinarily willing to award costs in the range of one quarter to one third of actual expenses.

However, these cases indicate the Environment Court’s willingness to go further, imposing significant costs where it considers the conduct of a party justifies it.

These cases serve as a reminder that the risks of litigation are not confined to the substantive decision, and that cost exposure may be significant in some cases.