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Chisholm loses in Appeal Court

Council staff found (again) not to have acted maliciously

Adrian Chisholm has lost his “Sludgegate” Appeal Court case against Auckland City Council alleging malicious intent in a plan to dump sewage on Waiheke golfcourse land next to a tourism project Mr Chisholm was establishing.

Mr Chisholm alleged the council pressed ahead with the golfcourse dumping plan in January 1998 to sabotage his project. The council subsequently chose another site to dump the waste from septic tanks on the island, while Mr Chisholm’s project failed to proceed because, he claimed, investor support fell away as a result of the council action.

He lost his case before Justice Robert Chambers in the Auckland High Court, and lost on all counts in the Appeal Court judgment delivered on Friday by Justice Tipping.

Mr Chisholm took 3 claims to appeal — misfeasance in public office, negligence and breach of the Bill of Rights Act.

The key issue in the whole case, and particularly the misfeasance allegation, was an allegation that council utility planning group manager Mike McQuillan had told a 9 January 1998 meeting with the council’s lawyers that, “if nothing else, he was going to dump a truckload of sludge” (or a statement along those lines) on the golfcourse site.

Justice Chambers found that Mr McQuillan probably said something like this, but that it was most likely a throwaway line, not meant seriously.

The Appeal Court accepted Justice Chambers’ reasoning on alleged malice, on the basis of the High Court trial transcript. But Justice Tipping added that neither of the council staff who were allegedly motivated by malice was cross-examined on the basis that their conduct or decisions were so motivated.

The Appeal Court agreed with Justice Chambers that section 27 of the Bill of Rights had nothing whatever to do with Mr Chisholm’s allegations.

Mr Chisholm, now working at a Queensland resort, sued the council for $6.8 million. His latest dismissal has cost him $5000 in costs payable to the council, plus the costs of getting its lawyers to the hearing.

Earlier stories: Judge demolishes Chisholm’s Waiheke malice case
Chisholm has another chance to get crucial document before court
Absurd allegations about project that was never going to happen, lawyer tells Chisholm
Sludgegate: How to detect malice
“Sludgegate” case focus is on form
Waiheke “Sludgegate case opens in High Court
Chisholm’s Waiheke case nears court

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Judge demolishes Chisholm’s Waiheke malice case

Other factors “probably insuperable” anyway, judge says

Justice Robert Chambers comprehensively demolished the allegations by property developer Adrian Chisholm against Auckland City Council staff in a High Court judgment delivered on 19 December.

But in doing so the judge has left the credibility of his ruling in question through a curious & unnecessary choice of words at crucial points.

Mr Chisholm acquired 40ha beside the Waiheke Island golfcourse in 1996 to develop a resort, to be financed by an Auckland dentist, Rod Dawson.

When Auckland City Council decided to use golfcourse land to dump septic tank sludge (septage) in early January 1998, Mr Chisholm protested, was arrested for trespass, won an interim Environment Court order preventing the dumping of sludge there, and went on to allege malice by the council & various individuals at the council in pursuing the golfcourse disposal option.

Chisholm sued for $3 million, gets nothing

He sued for $3 million. Meanwhile, he sold the site, abandoning the project, and now works as a hotel group operations manager.

He is preparing an appeal against Justice Chambers’ judgment. The issue of costs still has to be decided.

Undocumented malice is hard to prove, even more so in a case where the judge — in his ruling — demonstrates a willingness to accept the official line as gospel.

So Mr Chisholm faced an uphill struggle in winning a High Court case which would be the basis for recovery of the expense of starting an unfinished development.

All four grounds rejected

Justice Chambers rejected all four grounds of the court case –misfeasance in public office, negligence, breach of the Bill of Rights Act, and breach of the Fair Trading Act.

Four other factors conspired against Mr Chisholm’s chances of success — his inability to finance fulltime legal representation & case preparation, his demeanour, the incomplete status of the resort resource consent process, and questions over financial backing.

This combination of factors seems to have ruined Mr Chisholm’s chances of succeeding in developing a resort, in the judge’s eyes, though the way the judge has presented some of the later consent/financial positions may not represent a reasonable view.

Justice Chambers was unable to find malice, perhaps not surprisingly given a handful of lines sprinkled through the judgment.

“of course”

The first of these is in the sixth paragraph of the judgment, relating the council’s reaction after Environment Court judge Shona Kenderdine issued the interim enforcement order stopping work towards septage disposal on the golfcourse site. “The council, of course, immediately obeyed the order and all preparatory work ceased.”

You can stop physical work on a site, you can appear to be totally obedient, but under the surface there may be conversations, unpublicised/undisclosed proposals for defeating such an order. People do those things — it’s entirely normal — which makes the judge’s use of the words “of course” most surprising. And the council went on to appeal the Kenderdine ruling. You don’t do that without considering your options, including how to continue doing what you want to do by another route.

Had the judge left those two words out, he would have given his later views more credibility as those of an open mind. By inserting them he made me feel that at every turn he was going to start with an assumption that those in authority would always behave entirely properly.

These people might have done so, but insertion of the words “of course” demonstrates that willingness to accept the official line as gospel.

A truckload of sludge

Justice Chambers further demonstrated that picture in his outline of events at a meeting on 16 March 1998 to discuss council options on emergency septage disposal.

One witness for Mr Chisholm, John Herald (a council employee at the time of the meeting), quoted council utility planning group manager Mike McQuillan as saying that, “if nothing else, he was going to dump a truckload of sludge” (or a statement along those lines) on the golfcourse site.

For Chisholm counsel Chris LaHatte, that statement indicated malicious intent. A witness Mr LaHatte called couldn’t recall the “truckload” statement, while a lineup of defence witnesses unsurprisingly couldn’t recall it either.

Integral moments/decisions/statements in the collapse of New Zealand business at the end of the 80s weren’t recalled in anything remotely like a satisfactory fashion by a series of the country’s most prominent bankers & businessmen when they stood in the High Court witness box.

Mr McQuillan gave evidence that he wouldn’t have said that “because Judge Kenderdine’s decision was still in place and that prevented the deposit of sludge on the golfcourse.”

Lawyers trusted “implicitly”

Justice Chambers said he trusted “implicitly” the evidence of two Simpson Grierson law firm partners, Geoff Cone & David Kirkpatrick, solicitors for the council who were at the meeting and couldn’t recall such a statement. “They were in all aspects of their evidence careful, measured, and, in my view, thoroughly reliable.”

Finding otherwise about senior partners from one of the biggest firms who are solicitors for the country’s biggest council would be like calling God a non-believer. At the resumed hearing in June especially to hear evidence about this meeting, Mr Kirkpatrick seemed to me to be offhand, not just saying “I don’t have any particular recollection from it [the meeting]” and that he “can’t recollect any particular person’s comments,” but determined not to take his mind back. It reminded me of the bankers & businessmen in court a decade earlier.

It’s equally possible that Mr Kirkpatrick could dismiss from his mind anything outside the business of his direct attention, though various asides might be made in the same room.

Justice Chambers concluded Mr McQuillan did say “something along the lines suggested by Mr Herald.” His answer to the failure of all but Mr Herald to recall it was that “Mr McQuillan’s sentence was a throwaway line, perhaps said partly for amusement… not a serious contribution to the debate and not perceived to be.”

A throwaway line

Elaborating, Justice Chambers said: “It was a throwaway line, perhaps expressing Mr McQuillan’s frustration that the golfcourse site had caused such a lot of problems to the council one way or another. I do not consider that the fact that this sentence was probably said indicates that Mr McQuillan had maliciously made the decisions which Mr Chisholm now challenges.”

An alternative view of a throwaway line is that it is meant to stick, but not be part of the record. Officially nobody will remember it, but you know what the person who made the remark is thinking. But for Justice Chambers to even consider such an alternative, he wouldn’t have been able to write “of course” in his sixth paragraph.

The council clammed up on this meeting, claiming legal privilege and fighting release of details through various court appeals. As Mr LaHatte observed, such strenuous objection is hard to believe for a meeting of no consequence.

In the background

The judge has not gone into the whys & wherefores of the Chisholm allegation that Mr McQuillan conspired to manufacture an emergency. In the background is a belief that some islanders don’t want any development, and having an unsatisfactory capacity to cope with sewage could slow development. Additionally, if dumping/threatening to dump sewage next door effects the departure of a developer, those islanders would be very happy.

To consider such beliefs, translated into deliberate actions & statements by council staff, is a task which can’t easily rely on a few misplaced words. Justice Chambers found Mr McQuillan played no part in Mr Chisholm’s arrest, being on holiday at the time, but he was involved in deciding to pump out the public toilets before Anniversary Weekend, though the man who did the job thought it was unnecessary.

Emergencies & potential emergencies

Mr LaHatte construed the instruction to pump out as manufacturing an emergency. Judge Kenderdine had just ruled that the council couldn’t use emergency powers because the problem was a longstanding one. Although Mr LaHatte said Judge Kenderdine specifically stated there was no emergency, Justice Chambers found her ruling was against the use of emergency powers to deal with a longstanding problem.

Justice Chambers said there was potentially an emergency and added: “It is absurd to suggest that council officers at the highest level were trying to ‘manufacture’ one.”

The High Court judge has written “absurd” in the same way that he wrote “of course” — not on the basis of evidence or submission but from belief. He could easily have written that there was no/insufficient evidence to suggest it, which would have left the judgment reliant on the evidence before the court instead of on a personal belief.

He had already stated: “I have insufficient evidence to be able to determine whether or not the instruction was sensible.” Inexplicably, the judge added: “Nor is that really relevant to what I have to determine in this case.”

Assuming the instruction was not sensible would lend strength to the contrived-emergency argument, which would make the instruction highly relevant.

Justice Chambers went on to say: “There is no evidence that the decision to pump out the public toilets was in any way made to injure Mr Chisholm or his financial interests.”

The extra uphill factors

Having rejected Mr Chisholm’s allegations of malice, Justice Chambers dealt briefly with alternative causes of action, then with other factors which would have needed to be proved before any award could be given in Mr Chisholm’s favour. These extra factors are important enough in assessing a property development’s chances of success, without the added complexity of alleged malice.

The judge found the council owed the resort company no duty of care to not compromise the private resort interests before preparing to deposit septage or deciding to dump it. He found a claim under the Bill of Rights Act both obscure and misconceived, and he rejected a cause of action laid under the Fair Trading Act, saying the council was “simply exercising regulatory functions”.

Perhaps most importantly in the whole case, Justice Chambers found the plaintiffs’ resource consent applications “had been adequately insulated from the sludge dispute. There is no evidence to support any inference that the independent commissioners who would have determined the resource consent applications would have been affected by the sludge dispute. There is also no evidence that council input into the resource consent applications would have been affected by the sludge dispute.”

Access & new funding chances

More difficult to determine were Mr Chisholm’s chances in getting a slice of reserve land for access in return for expanding & improving the public golfcourse, which would be available to both the public & resort users and would have needed consent from the Conservation Minister.

The judge said Mr Dawson’s refusal of further funding seemed the sole cause of the resort company’s not continuing to pursue consents –and for that, the judge felt Mr Chisholm’s “highly coloured” accounts of events were largely to blame: “Had Mr Chisholm pursued this matter calmly & reasonably, it may well be that Mr Dawson would not have pulled the plug.”

Justice Chambers said Mr Chisholm’s evidence didn’t explain why he made no attempt to get Mr Dawson back in the fold — or find another financier — after the council said in April 1998 it wasn’t continuing with the golfcourse site for septage disposal, was withdrawing its appeal against the Kenderdine decision & withdrawing its consent applications.

The judge made no final rulings on these points but said: “I merely mention these matters to indicate that, even had the plaintiffs leapt the first hurdle on any of the causes of action, they would have faced considerable difficulties, probably insuperable difficulties, further down the track.”

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Chisholm fights legal process

“Sludgegate” trial decision waits while legal air is cleared

Adrian Chisholm is a long way, still, from winning his “Sludgegate” fight with Auckland City Council over his allegation that the council deliberately dumped sewage across the fence from his proposed Waiheke Island resort 3½ years ago, effectively beginning the end for the project.

But he’s been doing rather well in the meantime at turning the judicial system upside down.

Mr Chisholm isn’t very good at giving in. According to the system as it stands, that’s what he was supposed to do after one High Court judge, Hugh Williams, decided not to grant him leave to appeal to the Court of Appeal against a decision of another High Court judge, David Morris, who had dismissed Mr Chisholm’s application to review a judgment of Master Faire.

At the heart of these procedural wranglings was a document which Mr Chisholm believed was central to his case against the city council because it would show the malicious intent of council staff. That case was proceeding before Justice Robert Chambers in another courtroom, where the judge had decided not to view the document but to send it off for a ruling by a master on whether it should be permitted as evidence.

Rogue counsel

Through counsel David Heaney, the city council claimed solicitor/client privilege. From my view of the trial and the document at the end of last year, such a privilege claim seemed absurd. Mr Heaney was a rogue lawyer, giving evidence from the bar, issuing orders to Mr Chisholm as a witness, bullying to prevent Mr Chisholm from giving evidence instead of asking questions in a way which would effect that aim.

And the meeting from which the central document arose seemed more of a discussion on the use of underhand means, in which lawyers were equal discussion participants, than one in which they were supplying professional advice, although that might have occurred in passing.

Mr Chisholm eventually wrote to the Chief Justice, Dame Sian Elias, in March to see why he couldn’t appeal the High Court review decision, and got back a reply which set Gary Judd QC off on a path to establish whether the High Court rules were, on this issue, illegal.

Appeal Court finds procedural issue serious

Last Wednesday, three Appeal Court judges adjourned the hearing of Mr Judd’s question for a full bench hearing and asked for the Attorney-general to represent the public interest because it was an important issue.

That hearing will deal with three issues. The other two are the fraud exception to solicitor/client privilege, and the procedure where the trial judge sent the disputed document elsewhere for a decision on its permissibility, which the Appeal Court concluded was unusual.

Mr Chisholm hopes the Appeal Court will set a fixture within a month. Meanwhile Justice Chambers hasn’t released a decision in the Chisholm-ACC trial — and presumably won’t, now, until the air above him is cleared, though in a criminal trial a prompt decision is normal and could reasonably have been expected early in the new year.

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Chisholm has another chance to get crucial document before court

Procedural opening as Waiheke “Sludgegate” trial ruling awaited

Adrian Chisholm (left)’s long battle against Auckland City Council for wrecking his proposed Waiheke Island resort’s development chances took another turn yesterday, when the Chief Justice, Sian Elias, said a procedural avenue was still open to him to get a crucial document into his court case.

The chief justice has told Mr Chisholm he can still appeal the High Court’s refusal of leave to appeal to the Court of Appeal over a document which was not allowed in evidence during last year’s High Court trial before Justice Robert Chambers.

Mr Chisholm regarded the document as being critical to proving his allegations of deliberate misfeasance by the council. The council’s legal advisors claimed solicitor/client privilege over the document.

In a separate High Court action, Justice Hugh Williams refused Mr Chisholm leave to go to the Appeal Court to get the document into the trial record, and to be able to examine witnesses on it.

However, Act MP Owen Jennings tabled the document in Parliament. Mr Chisholm then wrote to the new position of Judicial Complaints lay observer, headed by Sir John Robertson, who passed it on to the chief justice.

Mr Chisholm alleged the council established a sewerage dump — unnecessarily and without going through proper processes — on a public reserve next to his resort site, and this led to the project being canned.

The High Court trial ended on 19 December, but Justice Chambers still hasn’t produced a decision — an unusually long delay for a ruling in a criminal trial. Mr Chisholm hopes the judge will delay longer to enable him to get the document into court, though that would require success for Mr Chisholm in his appeal over the leave application, followed by an appeal over the document itself.

Courtroom stories:
Chisholm alleges anti-development at heart of sludge case
Judge ponders relevance of post-event malice
Absurd allegations about project that was never going to happen, lawyer tells Chisholm

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Absurd allegations about project that was never going to happen, lawyer tells Chisholm

Toe-to-toe as developer fends off statements from the bar

The way the cross-examination in the Chisholm Sludgegate case runs, grunts in response would suffice, fuller explanations are not wanted.

It’s a curious use of the law, frequently used wrongly in this High Court trial.

Property developer Adrian Chisholm (left) wanted to develop an eco-tourism resort beside the nine-hole Waiheke Island golf course, using some of his land to enlarge the course to 18 holes which would remain a public course.

In the first few days of January 1998, as his applications for the project’s resource consents were close to decision, he learned the Auckland City Council, as the local body in control of the island, had decided to dump septic tank waste and sludge from commercial businesses on the golf course land, across the fence from the proposed resort.

Within months, Mr Chisholm’s investors had turned sour on the project. The land was subsequently sold. Mr Chisholm alleges misfeasance by the council for concocting a sewage emergency, wrongly deciding to use the golfcourse site when others were available, all of which proved highly detrimental to his project. And he has named nine people as maliciously contriving to defeat his project through the sewage emergency dump decision. He has claimed losses of earnings, expenses and profit totalling $5 million.

Malice claim ridiculed, project feasibility doubted

In cross-examination today (I wasn’t present for the whole of it), counsel for the city council, David Heaney, focused on two issues, the absurdity of Mr Chisholm’s allegations of malice by a large number of otherwise upright citizens going about their jobs, and the difficulty Mr Chisholm would still have faced in getting project up.

For Mr Heaney, the job was to tick off the yes/no answers and move on. For Mr Chisholm, as is so often the case with witnesses, the job was to explain himself more fully.

Often that means a rambling expanse of meaningless words. In Mr Chisholm’s case the words were not rambling, not meaningless, he knew his dates and times precisely, mostly knew precisely who was present and what was said, but he was cut back.

Cross-examination?

Frequently Mr Heaney would tell Mr Chisholm the rest of his answer wasn’t wanted, and the judge, Justice Robert Chambers, often agreed. Qualification of an answer is allowed, as the judge explained, but Justice Chambers mostly found Mr Chisholm’s expanded answers were not qualifications.

That typically leaves a witness frustrated, as it left Mr Chisholm on many occasions. But there were many occasions when Mr Chisholm did fit in a longer response, and for a time it was toe-to-toe between the two protagonists. You could see the venom crossing the courtroom, both directions.

Now for an example of the impropriety in cross-examination. Mr Heaney was asking Mr Chisholm about a feasibility study for the project.

Mr Heaney: “Did you engage Ernst & Young to complete the assignment?”

Mr Chisholm: “Not at all. But I will qualify that.”

Mr Heaney: “No, you don’t need a qualification.”

Judge: “What is the qualification?”

Mr Chisholm: “The investors had argued that until we got it approved…”

Mr Heaney: “It’s hearsay, that’s why I didn’t want…”

Mr Chisholm, after some discussion all round, resumed: “No, but until we had the resource consent and knew what we had and what we were allowed to do, there was a decision by the investors not to do that work or some other consulting work.”

Judge: “The answer was simply ‘No,’ and that’s not a misleading answer.”

A sideline view

I can see from Mr Chisholm’s answer that he was saying the feasibility was not canned but deferred until a more sensible moment, that the consultants had not been dismissed but would return to do the work. Except, when the project fell over, that didn’t happen.

If the longer answer is as I suspect, then ‘No’ is a misleading answer. The other aspect to this piece of cross-examination is that the cross-examining counsel was allowed to interrupt an answer with what I sense was an entirely incorrect assumption of ‘hearsay’.

Hearsay is second-hand or beyond. Mr Chisholm was in contact directly with his investors, not through intermediaries as a big corporation might be. So a decision of the investors could be communicated directly to him, and that is hardly hearsay. But we don’t know, because of the cut-off, and too little opportunity allowed to show documentary evidence.

As I say, this is an example of cross-examination going astray, although in a running battle the line between what should or should not be admitted can be blurred.

But on numerous occasions Mr Heaney proposed a point — not a question — and Mr Chisholm argued back, only to be stopped by Mr Heaney with statements such as “I’ll ask the questions” when Mr Chisholm had been challenging an assertion, or “That’ll be a matter for his Honour.”

Just doing their job? Records say not, says Chisholm

Mr Heaney tried to put down the allegations of malice by referring to “officers, just doing their job”.

Mr Chisholm: “The record shows otherwise, your own discovery [of documents] shows otherwise.”

Mr Heaney: “You don’t think you’re getting a bit paranoid about all of this, do you Mr Chisholm?”

Mr Chisholm: “The events speak for themselves.”

Mr Heaney: “Isn’t the reality of all of this Mr Chisholm, that what you thought was going to be an easy track to get through resource consent, became something harder?”

Mr Chisholm: “I never envisaged an easy project.”

Mr Heaney: “Because there were always going to be people on Waiheke Island, be it members of the community board or members of the public, who were going to object to what you were proposing.”

Mr Chisholm: “And there’s a mechanism for dealing with those objections, called the Resource Management Act.”

I’ll badger you with this one until you give in…

Towards the end of the morning session, Mr Heaney tried to convince Mr Chisholm that he wanted to create another Millbrook, the Arrowtown resort which has a high-class golfcourse designed by Bob Charles.

Mr Chisholm carefully explained that his resort was to have features seen at several resorts — Millbrook, Puka Lodge, Hotel du Vin.

Mr Heaney: “Of the standard of Millbrook?”

Mr Chisholm: “No. We’re talking of earthy villas set in a vineyard. How could that possibly be Millbrook?”

When Mr Heaney said Mr Chisholm was going to get Bob Charles to design the course, Mr Chisholm said consultants Boffa Miskell had suggested he be the consultant in terms of layout. “On city land, we could only recommend to the city what the layout should be… I don’t think it would ever get to a Millbrook, being a public course owned by the city.”

Who was going to pay for upgrades, roading?

While Mr Chisholm played down the greatness of his proposed resort — perhaps surprisingly, for someone seeking $5 million — Mr Heaney set about casting doubt on the likelihood of the project ever proceeding, with or without sludge next door.

Mr Heaney: “There was never any agreement for the city council to pay for development of the golfcourse, was there?”

Mr Chisholm: “Not at that point, no.”

Mr Heaney: “Not ever, Mr Chisholm.” With no intention of a question in sight, that became a statement from the bar. The judge allowed it.

Mr Heaney continued: “The city council never agreed with you, Mr Chisholm, to extend funds to develop the golfcourse.” Again, a statement from the bar.

Mr Chisholm: “No.”

The possibility of access through the golfcourse was discussed, with Mr Chisholm saying his company would have paid for the roading and put the power lines underground at the same time. There were also two other access options, he said.

Conspiracy bogy

Mr Heaney: “You think the community board’s got its hands on the access issue… It’s all part of the conspiracy issue, isn’t it, Mr Chisholm?”

Mr Chisholm: “The events speak for themselves. That will be for the judge to decide if it’s a conspiracy. I’m just putting in a timeline and the documents.”

Mr Heaney: “Oh, no, Mr Chisholm, you’re doing more than that. You’re saying otherwise upstanding citizens are maliciously conspiring against you… And as it happens, you didn’t get access to the golfcourse land, did you?”

Mr Chisholm: “No.”

Mr Heaney: “The community board considered your application, didn’t make a decision on it. It went back and advised there would need to be an application under the Reserves Act or the Public Works Act.’

Mr Chisholm: “Yes.”

Mr Heaney: “And in fact, Mr Chisholm you never made such an application.”

Mr Chisholm: “I can’t answer that. That was for my consultants.”

Mr Heaney: “You didn’t have the money locked up at any stage to do the development.”

Mr Chisholm: “We didn’t need the money. We needed the resource consents and the money would look after itself.”

The hearing continues in the High Court at Auckland.

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Sludgegate: How to detect malice

Judge ponders relevance of post-event malice

Once things went bad for Waiheke Island developer Adrian Chisholm (right), everything went bad.

His dream of an eco-tourism resort project was mired in the sewage the council decided should be dumped on the adjoining golfcourse, and at every turn he saw malice.

In the High Court last week, and again today, Justice Robert Chambers asked if he could take any notice of malice allegedly shown after the crucial decision was made to select the golfcourse as the emergency sewage dump.

It was that decision just after Christmas 1997 that was central to investors pulling out of the resort project, which subsequently foundered. Mr Chisholm is claiming about $5 million from the Auckland City Council as a result, for loss of profit, earnings and expenses.

Evidence allowed on 11 new malice topics

After submissions, Justice Chambers allowed Mr Chisholm to give evidence on 11 topics not in his last statement of claim, including an occasion when he was abused, another when he was told rotten fruit would be thrown at him for his development views, reference to a complainant about sewerage charges who was told by a council officer to call Mr Chisholm, slow payment by the council resulting in bailiffs being called to pay a court-ordered sum, and the investigation of Mr Chisholm by a council-hired private investigator.

The judge suspected “somebody within the council’s finance department” was more likely to have been at fault for the nonpayment of court costs, and that the council’s legal department was more likely to have been involved in calling in the private investigator.

From the jury box, used by the press for this hearing, the judge’s allowance sounded like a naïve whitewash. But with the presumption of innocence as a known basis in trials, the judge has understandably called for a high level of proof from Mr Chisholm and his lawyer, Chris LaHatte.

As Justice Chambers saw it, “the only relevance all this later stuff can show is… They [the nine council people named by Mr Chisholm] hold these views now and therefore they are likely to have held them back then. Malice is in the minds of people and you have named your people. It may be the council gets landed with the liability or motives for action of its officers, executives.”

In the bowels of a large organisation…

Mr LaHatte named one council officer involved in the sludge decision who was later involved in the private investigation decision, but said it was often difficult when one faced a large corporation to identify decisions founded on malice.

Justice Chambers: “My point is, it’s highly unlikely that these nine people were involved [in all the post-sludge decision actions].”

After identifying the one officer allegedly involved at both times, Mr LaHatte responded: “You can’t identify who would have been responsible by the documents, or who would have been responsible for payment of those costs because it hasn’t been identified in discovery [of documents held by the council].

“I can say that is something that happened and invite your Honour to draw the inference… of ill-feeling.”

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“Sludgegate” case focus is on form

Judge flails rulebook at Chisholm and his new lawyer

Adrian Chisholm’s “Sludgegate” case in the High Court was, until he got to deliver his briefs of evidence this afternoon, more about the rules of the game than about his claims of malicious conduct, misfeasance, the council destroying his proposed eco-tourism resort on Waiheke Island by dumping sewage over the fence.

It is an unusual case. Mr Chisholm has fought a highly public battle against Auckland City Council since the sewage dumping was suggested in January 1998. He has camped overnight outside the mayor’s office on the 15th floor of the council building, he has been into 37 court cases, he has had to chase the council to pay court-ordered costs, and he has gone broke because of his losses in not developing the resort and for the costs in relentlessly pursuing a public body.

He has done most of the preparation for his High Court claim himself, wandered the courtrooms to see how things are done, put together documents, outlines and finally gathered briefs of evidence.

Over time his legal representation has changed. For most of this year he was represented by a firm well versed in dealing with the murkier affairs of commerce such as the Winebox tax-dodge affair, and the horse and film partnerships (also tax-based) — Russell McVeagh McKenzie Bartleet.

Russell McVeagh represented him when Justice John Hansen considered timetable issues for the trial on 14 September. Reduced to a legal aid-supported case, Mr Chisholm hired lawyer Chris LaHatte from November 1 to take up the cudgels.

Judge lashes out at timetable breaches

When the case opened on Monday, Justice Robert Chambers criticised the plaintiffs (Mr Chisholm and his companies, Waiheke Island Country Club Ltd and Gulf Properties Ltd) for failing to comply with orders on the provision of documents, briefs of evidence, numbering of pages in a common bundle of documents, and failing to get papers to the judge and defence counsel by the appointed times.

Mr LaHatte’s answers have been on the one theme: he had little time, did the best he could to marshal Mr Chisholm’s case in a more coherent manner, didn’t get it all done, sorry, but if Mr Chisholm had been left to his own devices it would have been more of a muddle.

In court today, Justice Chambers used the orders of another judge, addressed to another counsel, and his own earlier dealings with other counsel as he recorded his minute freeing a subpoenaed islander from the witness box.

In short, according to Justice Hansen’s requirements, Mr Chisholm was to supply four more briefs of evidence within the fortnight to 28 September. “If briefs were not filed within that period, he ruled that the witnesses may not be relied on at trial,” Justice Chambers said.

Lecture on pedantry and compliance

“It is clear that that direction has also not been complied with. Timetables are not mere pedantry and mere case management as Mr LaHatte submitted.

“The exchange of evidence is intended to ensure that justice be done. Justice requires that each party knows the guts of the claim the other side is advancing. It is particularly important in cases such as the present, where the pleadings have been notoriously inadequate in terms of the rules.

“Even now the statement of claim, the sixth amended statement of claim, is not the plaintiff’s final word.”

The Equiticorp statutory managers would not have got far with Justice Chambers — they filed lots of documents during the proceedings, including a hefty revised statement of claim. It has been accepted practice in the High Court that if refinement makes the claim easier to follow, then it will most likely be allowed, whereas apparently frivolous alterations, or major alterations that radically change the nature of the pleadings, will be rejected.

Or perhaps those statutory managers would have got on okay, because they were represented by senior counsel who would not easily be browbeaten (Justice and Law Commission president David Baragwanath in charge, Chief Justice Sian Elias one of his assistants — both were then merely QCs).

Try this for evenness

Justice Chambers showed his different handling of people with different strengths in his first case this week, the application by Arrigato Investments for leave to appeal against his judgment rejecting a subdivision proposal at Pakiri.

A local, Taumata B chairman Greg McDonald, turned up halfway through Environment Court proceedings claiming notification of the development proposal had been inadequate all along. When it came to the application for leave, Mr McDonald said he had again not been notified.

None of his protests have stopped the courts from continuing with the business before them. During the Arrigato hearing, Justice Chambers fairly squashed the submissions of Mr McDonald and his counsel, Russell Lawn. When it came to notice of the application for leave, Arrigato counsel Richard Brabant thought all parties had been served then told the court, after checking, Mr McDonald appeared not to have been served.

With service not carried out in the statutory timeframe, Justice Chambers said Mr McDonald’s position would be that the original judgment must — not should — stand. However, the judge said, there was provision for him to grant an extension of time.

“By some means or other,” the persistent ordinary bloke turned up

In ruling how to proceed towards an appeal, Justice Chambers said: “By error it would seem that Arrigato’s application for leave to appeal was not served on Mr McDonald. By some means or other, however, Mr McDonald did find out about today’s hearing.”

The judge noted that both Mr McDonald and Mr Lawn had written to the court with submissions before the hearing. Then he made a ruling — adverse to Mr McDonald’s position, which is to prevent development — without being clear on his ground: “I am not absolutely clear whether the time limit on appeals requires service within the time specified.

“This would seem to be a classic case where leave should be granted to Arrigato to proceed out of time, given that Arrigato’s application for leave was filed within time and the Auckland Regional Council and Rodney District Council [appellant and supporting cast against the Environment Court’s decision] were served within time.

“Mr McDonald has not been prejudiced by that failure. He will from now on receive all documents filed and he will have a full opportunity to participate.”

2 years to get it right

The McDonald and LaHatte positions are similar: those without resources are not accorded adequate time to reflect, to work out their positions, to contest on a remotely equal footing.

It can be argued that Mr Chisholm has had nearly two years to put together his case, but that isn’t the way life works. At the beginning of that period he could not have known he had to present a High Court case, and during the intervening 23 months he has had to fight the council at every turn to get information, and to get proper performance.

Which perhaps explains why Liberterianz has stepped in to support him, with his case, with his website (click on External links/Miscellaneous/Adrian Chisholm’s Sludgegate) and with news releases from the hearing.

Mr LaHatte’s position has been made the more difficult because many of the witnesses Mr Chisholm requires to tell his story are reluctant and have been subpoenaed. The witness who was to give evidence today, Mrs Sylvia Hubbard, was approached on 12 November — on a Sunday morning as she was conducting a birthday party, only eight days before the hearing started, and not in accordance with Justice Hansen’s minute, as counsel for the city council, David Heaney, reminded the judge.

Council dismisses evidence as marginal

Mr Heaney found it remarkable that if this evidence was so important — it concerned a meeting on 4 December 1997 at which a solution to Waiheke’s sewage problems was discussed which did not involve using the land adjoining Mr Chisholm’s proposed development — that the plaintiffs had not got it tied down earlier.

In any case, Mr Heaney said, “I am calling two of the people at the meeting, which quite frankly I’ve never considered an issue at the trial.”

Mr Heaney said he was concerned that this evidence might mean he would have to call more witnesses, and that the whole hearing could become protracted “by marginal evidence.”

Justice Chambers outlined the plaintiffs’ history of default, including the failure to provide statements of evidence back in 1999, which resulted in his reprogramming the trial at the end of last year.

The judge went through what he clearly found a poor attempt at seeking support, found Mr LaHatte had not taken up the opportunity offered to lead evidence on the nature of the evidence Mrs Hubbard would be asked to give, concurred with the defence counsel’s view of that evidence’s worth, and sent Mrs Hubbard on her way.

Take this bit with salt…

When Mr LaHatte sought an early lunch adjournment (just before 12.30 instead of the usual 1pm), Justice Chambers agreed, but said that to save time the hearing would resume at 2pm instead of 2.15 — then took up the judge’s prerogative of arriving a trifle late, at 2.07.

In dismissing the Hubbard evidence, the judge said: “The evidence that Mr LaHatte hopes to get from Mrs Hubbard seems to me to be of marginal relevance in this case. It largely concerns an application for resource consent Mrs Hubbard apparently made on 6 January 1998.

“The point of the evidence, I am told, is to show that the council had an alternative site available to it for sludge-dumping, but elected not to use it.

“Mrs Hubbard is not required for that evidence, of marginal relevance though I presently sensed it to be. That evidence could have come in through a variety of other witnesses who the plaintiffs should have briefed, and for all I know have done so.

“Alternatively, the information is contained in council records. Mr LaHatte intends calling some council officers, I believe. He will also have the opportunity of cross-examining witnesses called for the defence.

“I refuse leave to the plaintiffs to call Mrs Hubbard. I see no good ground for over-ruling Justice Hansen’s ruling. Mrs Hubbard was approached too late, she was approached in an inappropriate manner, her evidence is of marginal relevance… insofar as it is relevant is available through other witnesses to be called.”

Justice Chambers touched on a point which seems central to the whole case, in which Mr Chisholm alleges the council concocted an emergency so it could dump sewage next to his development, on an island where anti-development views are strong, and that this 4 December meeting which Mrs Hubbard attended was part of the decision-making process..

That point is, that the council had an alternative site but elected not to use it. If that is so, it seems to bear strongly on Mr Chisholm’s primary contention, and to leave this evidence to come from defence and reluctant council-only sources — with whom Mr LaHatte may strike the same no-brief difficulty — seems to defy logic, no matter how poorly the plaintiff has conducted its preparation.

In the afternoon, Mr Chisholm read his briefs of evidence. I’ll look at that in a separate story, to come.

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Waiheke “Sludgegate” case opens in High Court

Chisholm alleges anti-development at heart of sludge case
Waiheke Island resort developer Adrian Chisholm (left) claims his project was defeated by a desire among people in power on the island to hold back development.

But claims are one thing. Justice Robert Chambers made it very clear to counsel Chris LaHatte the documentation to back up claims of malicious conduct — against a long lineup of Auckland City Council staff, community board members and councillors — would need to be laid out in front of him.

In the opening of Mr Chisholm’s High Court case yesterday against the council, Justice Chambers stopped Mr LaHatte as he mentioned each name, demanding the backup documentation before Mr LaHatte could proceed.

Minutiae first

That in itself was an exercise of small frustration to Messrs LaHatte and Chisholm who had to delve through six files to find the correct document. All of which proved to the judge his point that, according to a minute at a preliminary hearing, Mr Chisholm’s supply of papers to the agreed bundle of documents was to have been numbered page by page, not just document by document as provided to the court.

The judge found that this failure to comply with an order would certainly mean the case would last longer than it ought to so, no matter which side won, Mr Chisholm could expect some penalty for it.

Mr LaHatte managed to slip in mention that in Mr Chisholm’s early-1998 attempts to stop the council from dumping sewage across the fence from his proposed resort, which was near to gaining resource consent, this individual plaintiff had had to get a district court distress warrant to enforce payment by the council of $4000 costs over an injunction.

The whole case is about an individual being steamrollered.

We did our best, says counsel

Mr LaHatte said Mr Chisholm’s defence was being funded by legal aid, but that this came through only at the start of this month. Try as he might, Mr LaHatte said he had not been able to get the documentation into the order required by the court — including documents to the defence — on time. But he did suggest that had the task been left with Mr Chisholm to muddle through on his own, the court would have faced a bigger battle with the clock.

None of this seemed to impress council counsel David Heaney, whose task was to spend the afternoon looking waspish about an opponent who hadn’t got the paperwork done properly — and thereby reinforcing the impression of county hall machine having absolutely no sympathy for the little man.

The case has been scheduled to run for three weeks, but the court’s own schedule ran awry from the start when, on what was to have been the first morning of this hearing, Justice Chambers was busy listening to the Arrigato application for leave to appeal against his Pakiri subdivision decision.

Tuesday’s opening session is to be devoted to applications to allow televising of the case.

Raw sewage a counter to eco-tourism

In the opening session yesterday, Mr LaHatte said the case was about decisions the council made in relation to Mr Chisholm’s proposed eco-tourism development. Mr Chisholm was in the final stages of a resource consent when he read in the newspaper that the council proposed using a public reserve and golfcourse next to his project to dump sludge pumped from septic tanks, and raw sewage from public toilets and commercial cafes and bars around the island.

“Some weeks after Mr Chisholm was forced to cancel the project, the council decided they would not proceed with dumping of sludge on the public reserve and golfcourse.

“Other developments later continued, but Mr Chisholm and his companies were unable to benefit from those proposals and accordingly suffered a very substantial loss.

“Because of the way in which the council handled his application and the sludge proposal, Mr Chisholm holds that the council is responsible for those losses.”

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Chisholm’s Waiheke case nears court

Uncertainty over legal aid in $6.8 million “Sludgegate” case

Frustrated Waiheke Island developer Adrian Chisholm is seeking support for his High Court case against Auckland City Council as a legal aid application drags on.

The Auckland regional legal aid unit sought extra information last Wednesday and was to have produced a decision by Friday, but this has been deferred until Monday.

Mr Chisholm’s High Court case against the council has been set down for three weeks, starting on 20 November.

Mr Chisholm’s case, and the publicity surrounding it, have been thoroughly documented on the website he set up to promote his campaign against what he alleges is bungling and corrupt bureaucracy. (Click on External links/Miscellaneous/Adrian Chisholm’s Sludgegate).

When Mr Chisholm began promoting his $25 million Waiheke Island Country Club early in 1997, his future was bright. He planned a 40ha resort which would have its own vineyard, 40 villas and involve extending the island’s golf course from nine to 18 holes.

Then, through the summer of 1997-98, that future fell apart. The owner of one of the properties which took sewage from the island’s septic tanks decided not to take any more. The city council, which includes Waiheke in its domain, decided to use the adjoining recreation reserve to dump sewage, and relied on emergency powers under the Resource Management Act to start work.

Mr Chisholm fought the claim that emergency powers could be used — more a case of not thinking ahead. He made suggestions on how to overcome the problem. Since then he has faced what he believes has been a concerted effort by council staff, if not councillors, to destroy him.

The High Court claim he lodged against the council in 1998 shows development costs of $15.15 million, gross sale proceeds of $20 million plus gst and a claim for loss of profit of $4.85 million.

Special damages and claims by the country club company and Mr Chisholm’s management company raised the total claim to $5.8 million, with another $1 million sought under the Bill of Rights Act as compensation for wrongful actions.

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