Ace Developments Ltd v Attorney-General
[2016] NZHC 2467
•17 October 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2015-485-000933 [2016] NZHC 2467
BETWEEN ACE DEVELOPMENTS LIMITED
Appellant
AND
HER MAJESTYʼS ATTORNEY- GENERAL
Respondent
Hearing: 21 September 2016 Appearances:
G Jones and M T Henderson for Appellant
P H Higbee and N C Anderson for RespondentJudgment:
17 October 2016
JUDGMENT OF GENDALL J
Introduction
[1] The appellant, Ace Developments Limited (ADL) appeals to this Court a compensation decision in respect of land it previously owned in Moorhouse Avenue, Christchurch (and formerly leased for a motor vehicle yard) compulsorily acquired by the Crown for the purposes of the proposed Metro Sports Facility in that city. The compensation decision was made under the provisions of the Canterbury Earthquake Recovery Act 2011 (the CER Act).
[2] The land in question had vested in the Crown on 14 August 2014 and the compensation decision which is the subject of the substantive appeal in this proceeding was made on 29 October 2015. The compensation decision was one made in terms of the CER Act by the Associate Minister for Canterbury Earthquake Recovery following recommendation from a Compensation Panel which heard
extensive submissions on the issue. It determined that ADL was entitled to
ACE DEVELOPMENTS LIMITED v ATTORNEY-GENERAL [2016] NZHC 2467 [17 October 2016]
compensation of $3,378,899.10 plus interest. The CER Act contains a right of appeal to this Court which must be brought in accordance with the High Court Rules.
Application for leave to adduce further evidence
[3] The present application before this Court is an application by ADL for leave to adduce further evidence for the appeal. It is brought pursuant to r 20.16 of the High Court Rules.
[4] From ADL’s application itself, the further evidence it seeks leave to adduce is
particularly:
(a) Evidence as to the sums being invested and likely return on such investment by other business people acquiring land in the vicinity of Moorhouse Avenue, Christchurch, for development as motor vehicle dealerships.
(b) Expert evidence comparing the economics of the appellant’s proposal to relocate its business to another site in Moorhouse Avenue against the economics of the investments of the other business people making or proposing similar projects.
[5] The grounds stated by ADL in its application on which the order is sought are:
(a) The appellant claims compensation for the cost of acquiring and developing substitute premises on or near Moorhouse Avenue to enable it to relocate its business.
(b)One of the grounds upon which the Associate Minister disallowed that part of the claim was that no reasonable businessperson using their own money would embark on a project such as that proposed by the appellant.
(c) To enable this Court to properly and justly determine the appeal it needs to have evidence upon which it can determine whether the appellant’s proposed project is reasonable.
(d)It was not possible for the appellant to obtain that evidence for the hearing before the decision maker because there were no powers available to compel production of that evidence.
(e) There is insufficient evidence on the record relating to the reasonableness of the appellant’s proposal to enable the Court to properly and justly determine that essential issue.
(f) Such further evidence is necessary to enable the just determination of the appeal.
(g)Such circumstances amount to special reasons for hearing the evidence.
[6] The respondent, the Attorney-General, opposes the application for leave. His Notice of Opposition filed 5 February 2016 sets out the specific basis of opposition as follows:
(a) The evidence the appellant seeks leave to adduce is not relevant to the determination of the appeal. The compensation determination was made under the CER Act. The CER Act does not provide for compensation of the type to which the proposed evidence relates (the purchase and development of a replication property).
(b) There are no special reasons for hearing the evidence:
(i)There was evidence before the Compensation Panel and the Associate Minister as to the reasonableness of the appellant’s proposed course of action. The proposed evidence is not new or fresh. The application is an attempt to better the evidence that was before the decision-maker.
(ii)The doubts as to the reasonableness of the appellant’s proposed course of action (on the evidence provided) were put before the appellant’s advocate both at the meeting of 26 June
2015 and in the Compensation Panel’s draft report of
25 August 2015.
(iii)The appellant made supplementary submissions after receiving the draft report, but chose not to provide any additional evidence on the issue of reasonableness.
(iv)Instead, the appellant chose to argue that the reasonableness of the proposal was irrelevant. The appellant cannot chose to recast its case on appeal. It must live with the strategy it chose to adopt before the Associate Minister.
(c) There is no evidence to support the appellant’s contention that it was not possible to obtain the proposed evidence because there were no powers available to compel production of that evidence. The hearsay statement at paragraph [6] of the affidavit of Lawrence John Hill sworn on 21 January 2016 does not support that contention.
(d)It would have been possible to obtain the expert evidence now sought to be adduced prior to the decision being made.
(e) If the proposed evidence is allowed to be adduced on appeal, the considerable process that has been undertaken would be turned into nothing more than a “dummy run”.
Background facts
[7] ADL owned the land and improvements at 115-117 Moorhouse Avenue, Christchurch, up to and following the Christchurch sequence of earthquakes which began in September 2010. ADL says that the property was a long established car yard and that since 2010 it had leased it to a third party, Orix Car Sales Limited. The land was taken by the Crown by proclamation under s 55 of the CER Act, as I have noted, for the proposed Metro Sports Facility, one of the anchor projects in Christchurch announced in the Christchurch Central Recovery Plan. The proclamation was published in the New Zealand Gazette on 31 July 2014.
[8] In about April 2015 ADL lodged a claim for compensation for the taking of its land. It calculated this compensation at a figure of $8,135,029 which it said was payable under the CER Act.
[9] In accordance with the process the Minister for Canterbury Earthquake Recovery (the Minister) established to consider and determine compensation claims like the present one, ADL’s claim was heard by a Compensation Panel (the Panel) on
26 June 2015. The Panel then reported to the Associate Minister for Canterbury
Earthquake Recovery (the Associate Minister) on 6 October 2015.
[10] On 29 October 2015 the Associate Minister issued her decision in which she determined ADL was entitled to compensation of $3,378,899.10 plus interest. This had followed what was a quite detailed process, including substantial submissions being advanced to the Panel and the Associate Minister on behalf of ADL.
[11] ADL then appealed to this Court against the compensation decision pursuant to s 69(1)(a) of the CER Act. This appeal is to be considered by way of rehearing in terms of r 20.18 High Court Rules.
[12] A key difference between the parties on the appeal (an appeal which is yet to be substantively argued before this Court) is that ADL says the compensation sum determined by the Minister did not constitute the “full compensation” to which it was entitled. This is because it did not compensate the cost to ADL of acquiring and developing an alternative and equivalent property to enable it to continue with what it claimed was its business of leasing property to high-end car dealerships. Thus, as I understand it, ADL will contend that it should be compensated for the cost of purchasing and developing a replica substitute property for the land taken, in addition to payment of the market value of the compulsorily acquired land.
[13] In its present leave application, ADL seeks to adduce evidence from other Christchurch business people developing motor vehicle dealerships, together with what it says is other expert evidence, to compare the economics of ADL’s own relocation proposal with the economics of other similar projects recently undertaken. It is ADL’s argument that this new evidence will assist the Court to assess the
reasonableness of the additional compensation ADL seeks for the possible purchase and development of a replica substitute property.
[14] In other words, ADL says that at the appeal hearing it intends to argue that it ought to be sufficiently compensated here to allow it to acquire and develop an equivalent property to that which it has lost, that is a commercial property on Moorhouse Avenue, Christchurch, suitable for what it says is the continuation of its business of “leasing premises to high-end car dealerships”. ADL says the amount required to acquire and develop an equivalent alternative property to that which has been compulsorily acquired is a figure in the region of $8 million and not the
$3.3 million (approximate) compensation it has received. This, ADL argues, will provide the “full compensation” to which it says it is entitled here. And, this argument it says is advanced on the basis of the principles laid down by the Privy Council in Director of Buildings and Lands v Shun Fung Ironworks Limited.1
[15] In response to ADL’s arguments on the substantive appeal, as I understand it, the Attorney-General maintains there is no basis for the increased payment sought by ADL here under the CER Act, and this is in any event regardless of what might be seen as the reasonableness or otherwise of ADL’s proposal.
Legal principles
[16] Rule 20.16 High Court Rules applies to the present application for leave to adduce further evidence. This rule provides:
20.16 Further evidence
(1) Without leave, a party to an appeal may adduce further evidence on a question of fact if the evidence is necessary to determine an interlocutory application that relates to the appeal.
(2) In all other cases a party to an appeal may adduce further evidence only with the leave of the Court.
(3) The Court may grant leave only if there are special reasons for hearing the evidence. An example of a special reason is that the evidence relates to matters that have arisen after the
1 Director of Buildings and Lands v Shun Fung Ironworks Limited [1995] 2 AC 111.
date of the decision appealed against and that are or may be relevant to the determination of the appeal.
(4) Further evidence under this rule must be given by affidavit, unless the Court otherwise directs.
[17] As background explanation to this rule, McGechan on Procedure at para
HR20.16.01 states:2
HR20.16.01 Further evidence on appeal
In general, an appeal proceeds on the evidence which was presented to the decision-maker, and the parties do not have an opportunity to bolster their case with new evidence on appeal. Apart from evidence in interlocutory applications relating to the appeal, new evidence can only be adduced with the leave of the Court.
The rule provides that leave may only be granted if there are “special reasons”. It is well established that, apart from updating evidence concerning matters which have occurred since the hearing, the power to grant leave is sparingly exercised...
[18] It is clear that, although the Court has discretion to grant leave, this discretion is one to be exercised sparingly with the presumption being that appeals will be heard on the record as it existed before the initial decision-maker.3 Constraints on the admission of further evidence on appeal are reasonably strict, as Fogarty J alluded to in Dean Selak Carrying Company Ltd v Lonergan when he said: 4
There have been a number of discussions of what are “special reasons” in the authorities. The general test is the new evidence must be cogent and likely to be material and could not reasonably have been discovered at an earlier stage.
[19] On this, the Court of Appeal in Telecom Corporation of New Zealand Ltd v Commerce Commission also clearly disapproved of any notion that an appeal should be regarded as a new trial with the previous hearing simply acting as a “dummy run”. 5
[20] It is important too on appeals such as this that the Court is alert to the possible danger of allowing new evidence that is little more than an improvement on
2 McGechan on Procedure (online looseleaf ed, Thomson Reuters), at [HR 20.16.01]
3 See Culverden Retirement Village Ltd v McLuckie HC Auckland CIV-2007-404-750, 18
September 2007, Andrews J, at [16].
4 Dean Selak Carrying Company Ltd v Lonergan [2015] NZHC 2230 at [27].
5 Telecom Corporation of New Zealand Ltd v Commerce Commission [1991] 2 NZLR 555.
the evidence before the first instance decision-maker.6 There is an obligation on litigants to put their best case forward at first instance and they must live with any litigation strategy they choose to adopt initially. On appeal the authorities are clear that parties are not entitled to re-cast their case by adducing new evidence.7 Against this, however, are situations where further evidence will be permitted on appeal, for example, because it had not previously been available to an appellant, it is material and ought to be before the Court for a proper consideration of the appeal.
Discussion and my decision
[21] In my view the present application can be promptly disposed of. Essentially this is on the basis of the second ground of opposition noted at para [6](b) above that no special reasons exist here for hearing the evidence. But in addition the initial ground advanced for the respondent here noted at para [6](a) above (as to the relevance of this new evidence in light of the compensation decision made under the CER Act), in my view, also should be briefly addressed. I turn now to address these aspects and the general submissions advanced by counsel for ADL and the Attorney- General.
A No special reasons exist here to grant leave to adduce this evidence
[22] ADL in its present application contends that accurate evidence from Oakwood Properties Limited (another landlord of car yards/ car dealerships), is relevant and required here but it was not available to the appellant at first instance. The appellant refers to an affidavit deposed by its then legal counsel, Mr Lawrence Hill, that prior to consideration of this matter by the Panel, the appellant’s legal team did approach both Oakwood Properties Limited and another landlord company, Cockram Motor Group Limited, requesting information for its compensation claim, but no information was provided however. According to Mr Hill’s affidavit:
I understand that the appellant’s legal team approached both Oakwood Properties Limited and Cockram Motor Group requesting that they provide information relating to their projects so that this information could be put before the Panel as evidence of the reasonableness of the appellant’s proposal; however, as I understand it, no such information was forthcoming.
6 See Telecom Corporation of New Zealand Ltd v Commerce Commission (N.5.).
7 See White v Spence [2014] NZCA 298 at [19].
[23] Furthermore, ADL goes on to contend this evidence could not be required as CERA did not have power to compel evidence. This was because “neither the Panel nor the Minister had the power to summons witnesses or order production of documents”. Therefore, it is said that it simply fell to Mr Hill at the time, as legal adviser of ADL, to gather whatever information he could about the Oakwood Properties Limited and Cockram Motor Group Limited projects from publicly available sources such as media reports, valuation rolls, and his own analysis.
[24] However, as the Crown has pointed out, the position relying upon the affidavit of Mr Hill lacks certainty and relevance to the current proceeding. There is no evidence before the Court as to who was approached at Oakwood Properties Limited or Cockram Motor Group Limited. There is also no evidence before me as to how they were contacted or when, or what their response was, or whether indeed they were the only possible parties who could have given the evidence ADL now claims that it needs to put before the Court.
[25] In addition, throughout the hearing before the CERA panel, and discussions before the Associate Minister, ADL’s representative Mr Hill chose to argue that the evidence now sought was in fact irrelevant. During the CERA hearing, the Compensation Panel inquired as to whether a reasonable company in the business of owning land would expend over $6.5 million to acquire a property which would have a value of a little over $2.5 million. From the transcript at the meeting, Mr Hill argued:
… The point I was trying to correct you on is that it doesn’t matter what value it is at the end of that equation, the equation is whether a person would spend that money to re-establish themselves elsewhere…
[26] Furthermore, in the draft report of CERA to the Minister, the Panel noted that:
… at the hearing Mr Hill sought to avoid discussion on the disparity between the land compensation and the relocation basis and to argue it was irrelevant. He instead argued that because three firms were moving to Moorhouse Avenue it was what a reasonable businessman would do. Particular reliance was placed on the intention of Oakwood Properties to construct new premises for Blackwell Motors, which is a Holden dealer, apparently at a cost per square metre 50% higher than that proposed to be publicly available, no evidence of these figures was provided. It emerged however that
Oakwood had an ownership interest in Blackwell whereas Ace would have to find a tenant. In addition there was no information as to the final value of the Blackwell premises in relation to their cost. Mr Hill considered this to be irrelevant. We disagree.
[27] Doubts as to the reasonableness of ADL’s proposed course of action were put to Mr Hill by the Panel at the 26 June 2015 meeting, which took half a day. The Associate Minister was in attendance throughout. In addition to his representations on behalf of ADL at that meeting, Mr Hill provided three sets of supplementary submissions after the meeting. As I understand the position, no further evidence of the reasonableness of ADL’s proposed course of action was provided, nor was any mention made at the time of any difficulty in getting further information.
[28] Questions over the reasonableness of ADL’s proposed course of action were also contained in the Panel’s 6 August 2015 draft report:
Although we were given figures which were said to be publicly available, no evidence of these figures was provided…In addition there was no information as to the final value of the Blackwell premises in relation to their cost. Mr Hill considered this to be irrelevant. We disagree.
We agree that it is reasonable for a car sales business to relocate to
Moorhouse Avenue but not reasonable to do it at any cost.
[29] Indeed, in response to the Panel’s draft report, ADL submitted:
… the Panel considers it relevant to ascertain the final value Oakwood Properties Limited may obtain by investing in a similar venture on Moorhouse Avenue…
The Panel is reminded that it is not a Court’s role (nor the role of the Minister) to superimpose upon the claimant its view as to what a reasonable businessman may do. The role of a court (and the role of the Minister) is to consider if, on an objective basis, a course of action is open to a reasonable businessman given the light of evidence available. If the course of action is not indeed open to that reasonable businessman, then a court nor the Minister should not, indeed must not, interfere with that action.
[30] Mr Hill’s response and ADL’s reply to the draft recommendation clearly demonstrate that ADL chose not to provide any additional evidence on the issue of reasonableness, evidence which as I understand it in the main existed at the time, but rather to argue that the reasonableness of the proposal was irrelevant. ADL cannot now choose to recast its case on appeal to change strategy or simply to endeavour to
improve the evidence before the original decision-maker. It must live with the strategy it chose to adopt before the Associate Minister.
[31] Lastly, adducing further evidence may well exclude the decision maker from being involved in a final decision, and that cannot be right. As Associate Judge Osborne in this Court held on an earlier occasion, “the determination of compensation is a matter which Parliament has entrusted to the Minister.”8 If further evidence of this kind were to be allowed in, this decision might well be quite different from the decision given by the Minister/Associate Minister made on the
basis of the different evidence before her. And, this would necessarily allow the Crown to call its own expert evidence, with the attendant delays that would involve, because the totality of evidence would be very different from that the Associate Minister had before her. It is difficult to escape the conclusion that on this appeal, ADL is now simply trying to change its strategy. ADL did not say at the time matters were before the Panel and the Associate Minister it was having difficulty getting this evidence. Nor did it ask for further time to await completion of other reports. Instead, ADL’s lawyer and advocate, Mr Hill, said issues raised by the Panel as to the absence of evidence of this type were irrelevant. And he simply maintained at the time that the evidence was not available.
[32] I conclude therefore that there are no special reasons here for the granting of leave to adduce the evidence in question. This conclusion is enough to dispose of the present leave application, which must be dismissed. But, for the sake of completeness, I will now briefly turn to make one or two comments about the second ground of opposition advanced by the Attorney-General before me that, in any event, this new evidence is not relevant to the determination of the appeal.
B The proposed evidence is not material to the appeal
[33] Before me, Ms Higbee, Counsel for the Crown, advanced the argument that the further evidence ADL seeks to have admitted is not material to the appeal, and
adducing this evidence would not prove or disprove anything that is of consequence
8 Minister of Canterbury Earthquake Recovery v Ace Developments Ltd [2015] NZAR 964 (HC)
at [164].
to the determination of the appeal. Instead, she said, this would only delay and prolong the hearing of the appeal and increase costs to the parties.
[34] Sections 60(a) and 62 of the CER Act provide for the payment of compensation for the compulsory acquisition of land by the Crown. Under s 61 of the CER Act, the definition of “compensation” excludes, except as provided by the CER Act, “economic or consequential loss”.
[35] The CER Act does not define “consequential loss”. McGregor on Damages9
provides a definition of “consequential loss”:
The normal loss is that loss which every claimant in a like situation will suffer. The consequential loss is that loss which is related to the circumstances of the particular claimant.
[36] In passing, at this point I note that at one level, it might be argued that ADL’s business is and has been one as a landlord simply leasing commercial properties generally for an investment return. Any particular businesses carried on from those leased properties were generally undertaken by other unrelated parties. Notwithstanding this, the evidence ADL seeks to adduce here relates to its claim for the costs of:
acquiring and developing an alternative and equivalent property to enable [ADL] to continue with its business of leasing property to high-end car dealerships.
[37] Thus it is clear that ADL seeks compensation for loss associated with what are claims related to the particular type of tenants it said it seeks. There is a reasonable argument, in my view, that such loss is not normal or direct but, rather, is consequential loss and in the circumstances ADL insists prevail here, it is a loss particular to ADL. As such it cannot be claimed as proper compensation under the CER Act.
[38] And, as I understand the position, ADL’s argument in response is to the effect that such costs are properly able to be compensated pursuant to s 66 of the Public
9 McGregor on Damages (19th Ed) 2014 Sweet & Maxwell London at 3-0008.
Works Act 1981, which refers to compensation payments for “any disturbance to [an owner’s] land”.
[39] On this aspect, ADL relies on s 64(3) of the CER Act which states:
(3) For compensation for the compulsory acquisition of land, the Minister must determine compensation having regard to its current market value as determined by a valuation carried out by the registered valuer; and so far as practicable, the Minister must determine compensation in accordance with the relevant provisions of Part 5 of the Public Works Act 1981.
(Section 66 is included in Part 5 of the Public Works Act 1981)
[40] This requirement to determine compensation so far as practicable “in accordance with the relevant provisions of Part 5 of the Public Works Act 1981”, must import relevant principles for the calculation of compensation. However, this incorporation, in my view, is not sufficient to oust what is the statutory definition of “compensation” applicable in this case. A statutory definition is displaced only where there are strong indications to the contrary in the context – see Statute Law in
New Zealand.10 Necessarily, so far as Part 5 of the Public Works Act 1981 provides
for compensation of a type which is specifically excluded under the “compensation”
definition in the CER Act, those Public Works Act provisions arguably are irrelevant.
[41] But, in any event, as I see the position, a reasonable argument does exist here that in any event s 66 of the Public Works Act 1981 does not in fact provide for the type of compensation ADL is seeking (which is the cost of acquiring and developing a substitute property for leasing to commercial tenants, in addition to the market value of its compulsorily acquired property).
[42] In this regard, s 66 Public Works Act 1981 specifically provides:
66 Disturbance payments
(1) Subject to subsection (2), the owner of any land taken or acquired under this Act for a public work shall be entitled to recover compensation for any disturbance to his land and in particular to recover, where appropriate,—
10 Statute Law in New Zealand, Burrows & Carter (5th Ed) 2015 Lexis Nexus Wellington, pages
439-440.
(a) all reasonable costs incurred by him in moving from the land taken or acquired to other land acquired by him in substitution for the land taken or acquired, including—
(i) [Repealed]
(ii) the reasonable valuation and legal fees or costs incurred in respect of the land taken or acquired:
(iii) the reasonable valuation and legal fees or costs incurred in respect of the land acquired in substitution, but not exceeding the reasonable valuation and legal fees or costs which would be incurred in respect of land with a market value equal to the land taken or acquired:
(iv) the actual and reasonable costs incurred by him in transporting his goods and chattels and those of his family from the land taken or acquired to the land acquired in substitution, but not exceeding the reasonable costs of such transport by road over a distance of 80 kilometres, or such greater distance as is necessary to reach the nearest land that reasonably could have been acquired in substitution:
(b) an allowance for any improvements not readily removable from the land taken or acquired which are of particular use to a disabled owner or any disabled member of an owner's family and which are not reflected in the market value of the land.
(2) No person shall be entitled to compensation under this section unless—
(a) he was not a willing party to the taking or acquisition; or
(b) he was a willing party to the taking or acquisition principally because the land had been notified.
[43] Although, primarily, compensation under the Public Works Act 1981 is based on the market value of the land acquired, it is also payable for certain types of losses caused by that acquisition which are not directly based on the value of the land – see s 62(1)(b)(i) Public Works Act 1981.
[44] And, in this regard, as I have noted above, s 66 of the Public Works Act 1981 is headed “Disturbance Payments” and provides for what is described as compensation for “any disturbance to [the owner’s] land”.
[45] Section 66(1)(a) and (b) Public Works Act 1981 list examples of these disturbance payments as legal and valuation fees, removal costs for goods and chattels, and an allowance for any improvements not readily removable from the acquired land which are of particular use to a disabled owner, or any disabled member of an owner’s family, and which are not reflected in the market value of the land.
[46] In Gold Star Insurance Co Ltd v Minister for Land Information11 it was accepted that, while the examples in s 66 were not exhaustive, they provided a basis for interpreting that section. The claimant’s “holding costs” of interest payments, rates, maintenance, and resource consent extension fees, were held in that case not to be analogous to the examples provided in s 66. It is worth noting too that in Gold Star Insurance Judge Perkins considered the Privy Council decision in Director of Buildings and Lands v Shun Fung Ironworks Limited12 relied on by ADL in this case and observed at [35]:
We also have concerns that we have no way of ascertaining where the statutory provisions considered in the cited authorities, whether or not they deal with disturbance payments, fit within the overall statutory scheme for providing compensation in the jurisdiction from which they emanate.
[47] And, from the New Zealand Public Works Act Review Committee’s 1977 report entitled at the time Report of the Public Works Act Review Committee13 it is noted that the examples specified in s 66 were intended to set out the “main disturbance items which are compensatable” in order that owners of land would be better informed of their rights.
[48] As I understand the position, ADL here endeavours to rely on the decision in the Wellington City Corporation v Berger Paints NZ Ltd14 to assist its argument that the compensation it claims is properly payable as a “disturbance payment”. This decision, however, pre-dates the Public Works Act 1981, and in any event I am
satisfied that it does not assist ADL’s interpretation of s 66 in this case.
11 Gold Star Insurance Co Ltd v Minister for Land Information, LVP006/11, 13 March 2013, Judge Perkins, at [34]-[35].
12 Director of Buildings and Lands v Shun Fung Ironworks Limited [1995] 1 All ER 846.
13 Report of the Public Works Act Review Committee (Ministry of Works & Development, Wellington, 1977 at 5.
14 Wellington City Corporation v Berger Paints NZ Ltd [1975] 1 NZLR 184.
[49] In Wellington City Corporation v Berger Paints NZ Ltd15 the disturbance claim made was declined and the Court of Appeal emphasised that the alleged disturbance losses would have been accounted for in the difference between the (high) market value of the site compulsorily required, and the relative value of the substitution site then acquired by the claimant. (On this see the comments of McCarthy P at 191-192 and Haslam J at 208 of the decision.)
[50] Further, as I understand the position, there is no reported authority in New Zealand where s 66 has been specifically applied to provide the type of compensation sought in this case by ADL. Nevertheless, it is useful here to make one or two further comments concerning this claim advanced by ADL, and I will now do so.
[51] Critical words in s 66(1) for interpretation here revolve around the expression “all reasonable costs”, incurred in moving to other land acquired, in substitution. This is effectively “reasonable costs in moving” for disturbance of the Crown’s land acquisition. ADL submits that the list provided in s 66(1) with the word “including” must simply mean that it is non-exhaustive. That is accepted. ADL then refers to the Privy Council decision in The Director of Buildings and Lands v Shun Fung
Ironworks Ltd, an appeal from decisions of Hong Kong Courts, which held:16
The purpose of these provisions… is to provide fair compensation for a claimant whose land has been compulsorily taken from him. This is sometimes described as the principle of equivalence. No allowance is to be made because the resumption of acquisition was compulsory; and land is to be valued at the price it might be expected to realise if sold by a willing seller, not an unwilling seller. But subject to these qualifications, a claimant is entitled to be compensated fairly and fully for his loss. Conversely, and built into the concept of fair compensation, is the corollary that a claimant is not entitled to receive more than fair compensation a person is entitled to compensation for losses fairly attributable to the taking of his land, but no any greater amount. It is ultimately by this touchstone, with its two facets, that all claims for compensation succeed or fail.
[52] ADL goes on to submit that “full compensation” in light of the Privy
Council’s “principle of equivalence” should include the reasonable cost of acquiring and developing an alternative and equivalent property. And in the present case, ADL
15 Above n 14.
16 Director of Buildings and Lands v Shun Fung Iron Works Ltd, above n 1, at 125.
says in order to establish this cost, evidence of what other dealerships incurred is material to its claim.
[53] However, as I see the position, there is a reasonable argument that this evidence is not material here and irrelevant in light of the type of compensation that may be paid under the CER Act. In Burrows & Carter Statute Law in New Zealand the learned authors state:17
Noscitur a sociis (associated words rule)- It is imperative that a particular word whose meaning is under consideration be read in the context of the other words of the section in which it appears. Its exact shade of meaning may be coloured by those other words. As Stamp J has said (in Bourne v Norwich Crematorium Ltd [1967] 1 WLR 691 at 696):
English words derive colour from those which surround them. Sentences are not mere collections of words to be taken out of the sentence, defined separately by reference to the dictionary or decided cases, and the put back into the sentence with the meaning which you have assigned to them as separate words.
…
This simple associated words rule of context sometimes goes by a Latin
name, “nosictur a sociis”: “it is known by the company it keeps”…
[54] In the context of s 66(1)(a) of the Public Works Act 1981, the interpretation of the words “all reasonable costs” is coloured by the list of examples given in the list provided in s 66(1)(a)(ii) to (iv) noted at [42] above. Applying these principles, the cost claimed by ADL in this case, of acquiring and developing an alternative and equivalent property, put bluntly, “does not fit with the company its keeps”. It follows that any evidence sought to demonstrate the cost of other businesses in setting up and developing high-end car dealerships is also irrelevant to the question whether ADL is entitled to the reasonable cost of disturbance payments.
[55] And in any event, on ADL’s interpretation of the compensation provisions in the Public Works Act 1981, it is arguable that other provisions of that Act would be rendered obsolete. Section 65 of the Public Works Act 1981 specifically provides for compensation by way of the cost of “equivalent reinstatement in some other place”
where there is no general demand or market for the land for that purpose.
17 Burrows & Carter Statute Law in New Zealand (5th ed, Lexis Nexis, Wellington, 2009) at 253-
254.
[56] And, s 74 of the Public Works Act 1981 provides for an advance by way of loan to be made to, and repaid by, the owner of a compulsorily acquired land, where the land had previously been used for a farm, or a commercial or industrial undertaking. The advance is, “in addition to the compensation otherwise payable under this Act, such amount of money as the authority considers reasonable to assist [the landowner] to acquire other land reasonably equivalent to that so acquired”. It is clearly an advance by way of repayable loan. It is not compensation.
[57] If, as ADL before me submitted, s 66 of the Public Works Act 1981 enables compensation for the cost of purchasing and developing an equivalent property, both ss 65 and 74 would be obsolete.
[58] For all these reasons, I conclude therefore that the evidence ADL seeks to adduce is not material or relevant to determination of the appeal because it relates to compensation that is not available under the applicable statutory provisions here. It would also delay the hearing of the appeal while ADL prepares this evidence, including expert evidence, and then while the Crown prepares its evidence in response and it would prolong the hearing and increase costs to the parties.
Result
[59] For the reasons I have outlined at both [32] and [58] above, this leave application by ADL fails and is dismissed.
[60] As to costs, I see no reason why costs here should not follow the event in the usual way. Costs are therefore awarded to the respondent (as the successful party in opposing this application) against ADL on a category 2B basis together with disbursements as fixed by the Registrar.
...................................................
Gendall J
Solicitors:
Tavendale and Partners, Christchurch
Crown Law, Wellington
2
2
1