In the latest twist in a twice-failed bid by Thiel entity Second Star Ltd to get approval for the lodge, the court has ordered the company and council to pay $44,199 each towards the costs of staunch opponent the Longview Environmental Trust.
Judge Prudence Steven said the council failed to perform its duties to the public by "demonstrating a lack of neutrality on what was an unmeritorious appeal".
"It is not for the court to tell a council how to present its case," she said.
"However, in this instance the council adopted a position that failed to enforce its own district plan."
Second Star proposed the four-building, grass-roofed complex, designed to accommodate up to 30 guests, for a Damper Bay site about 7km from the Wānaka town centre.
It was turned down by a panel of independent council commissioners in 2022, and the trust was an interested party when the company unsuccessfully appealed that decision at an Environment Court hearing in March.
The Wānaka businessman behind the trust, John May, said the costs decision was "vindication" of its concerns about the council’s approach to the case.
"The council has invested heavily in the development of the district plan — especially in relation to protecting the district’s outstanding natural landscapes — yet at the first opportunity to apply the new plan, the council completely failed to do so."
The trust had no issue with the council reaching "principled settlements" with developers based on good evidence, but that had not been the case with the Damper Bay proposal, Mr May said.
The council had been exposed doing "backroom deals with influential developers", leaving other parties to do its job.
Mr May formed the trust 15 years ago to carry out ecological restoration work on his Roys Peninsula property, and to act as an environmental "watch dog".
In this week’s decision, Judge Steven repeated much of her scathing criticism of the council contained in the court’s appeal decision in May.
Then, she wrote the council breached a duty to be "fair and fully transparent" by holding meetings with Second Star without informing the parties opposing the appeal.
That was "troubling" given the council presented planning and landscape evidence openly supporting the applicant’s case, she said.
"The council took an active and supportive approach of the appellant’s position in court, and was hardly neutral."
An unattributed media statement by the council said it had assessed the Damper Bay proposal as "more appropriate and potentially consentable" after Second Star had made changes to it.
"As it was a case where two well-resourced neighbours, and other parties, were contesting a development proposal, QLDC adopted a pragmatic approach to a legal case in which it was required to participate.
"Whilst QLDC took a measured approach to these legal proceedings, including how much ratepayers’ money it spent on the case, it has noted the court’s view that it should have defended its original decision and its district plan more strongly."
