A recent Environment Court cost decision serves to highlight that resource consent application appeals which involve a challenge to the very clear objectives and policies of district and regional plans will not only be discouraged, but may also justify a higher than usual costs award if the consent application is refused.

Bunnings Limited v Hastings District Council [2012] NZEnvC 4 is a costs decision following an unsuccessful appeal by Bunnings against the refusal by the Council of an application for land use consent to construct a Bunnings Warehouse.  The proposal for a large scale retail / trade supply operation was a non-complying activity in the Plains Zone of the Hastings District Plan.  

The Environment Court's findings on appeal were largely in accordance with those made by the Council.   Consent was declined on the basis that the Court was not satisfied the adverse effects on the environment would be minor and also found that the proposal was contrary to the objectives and policies of the Plan.  In particular, the Court placed a great deal of weight on the importance of protection of the rural resource in the Plan, and held that the narrow approach of focussing on the soil structure of the site rather than the wider resource, was "fundamentally flawed".

Costs were reserved and the Council subsequently sought approximately 65% of its total costs incurred.  Bunnings opposed the application contending that an appropriate award would be approximately 20% of total costs for each.

The Council awarded the Council 50% of its costs which is well outside the Environment Court's comfort zone of 25-33% on the following basis:

  • The Council's decision was upheld in all respects, with the Judge going as far as to say that it was "not seriously challenged". 
  • The case advanced by Bunnings was without substance and was unmeritorious in that it took a narrow approach to the objectives and policies of the Plan.   
  • The appeal amounted to a direct challenge to very clear objectives and policies of the District Plan. 

The Court also rejected Bunnings' arguments that the legal and Council officer costs incurred by the Council were excessive:

  • The Court noted that it may award costs for Council officer participation in without prejudice discussions and mediation where it was reasonable but that "it is not usual to do so and there is a clear reticence on the Court's part about awarding such costs".
  • Bunnings argued that the Council's legal fees had been doubled due to the choice to instruct Queen's Counsel.  The Court held that the reasonableness of fees paid is not for the Court to determine.  Rather, the Court's focus should be on the proportion of those costs that is reasonable to expect another party to contribute. 

This decision is a reminder of the care that is required with Non Complying Activities, and the need for strategic decision making around the consenting strategy. The Court will be reluctant to grant consent when the proposal challenges the deliberate focus of the objectives and policies of a District Plan, and attempts by applicants to do so may well contribute to a higher than usual costs award being imposed.  If the objectives and policies in the District Plan are not suitable for your development, then other options such as a private plan change to amend the zoning are available.