In the recent decision of Porirua City Council v Ellis [2017] NZHC 784, the High Court upheld the Environment Court's decision on appeal in relation to the fixing of additional changes under section 36 of the RMA. The Environment Court's decision reduced the costs payable for the processing of the appellant's resource consent charged by the Council by $27,891.89 (approximately 35%). This was only the second time that the issue of setting additional changes under section 36 of the RMA has been considered by the High Court.

The High Court followed the established legal steps for fixing additional charges under section 36(4) of the RMA, as confirmed by the High Court previously in Hill Country Corp Ltd v Hastings District Council [2010] NZRMA 539. The Council alleged that the Environment Court had relied on irrelevant considerations, made factual positive finding which were not available on the evidence, and failed to properly consider and apply the statutory power of Councils to recover their actual and reasonable costs, which was not accepted by the High Court.

The High Court emphasised that the key to fixing changes under section 36(4) was that they amount to reasonable costs incurred in processing - not only actual costs. This included consideration of the following matters (in the circumstances of that case):

  • The reasonableness of applying a professional planners hourly charge out rate, rather than a lesser rate for tasks of an administrative nature (even where the charge out rate was set by the Council's Fees Schedule).
  • The time spent on writing the section 42A report, including the analysis of submissions and conducting site visits, which the Court considered in this case was too high.
  • The cost of Council's external experts costs (which was too high) with comparative reference to the costs of the applicant's experts.
  • The Commissioner's costs, considering the length of the hearing (two and a half days), which were too high and unreasonable.
  • Whether the Council has reviewed the charges and considered whether on the whole they are reasonable or whether some portion of the charge should be remitted under section 36(5).
  • The level of costs was not commensurate with the scale and effects of the proposal.The Court considered that "The Council must ensure that the costs are reasonable and reflect a commensurate fee for the size and extent of the benefit obtained by the applicant".
  • Communication with the applicant could be relevant. The Court considered that it would have been fair for the Council to have alerted and kept the applicant up to date at major steps in the resource consent process as to the actual costs as well as providing an estimate of future costs.

All of these factors might be relevant for a Council to consider when fixing additional charges, depending on the facts of the case, with the key emphasis being that the Council's charges must be reasonable in the context of each case.