Auckland City Council v Ports of Auckland Ltd

IN THE COURT OF APPEAL OF NEW ZEALAND

CA238/99

BETWEEN	AUCKLAND CITY COUNCIL
Appellant

AND	PORTS OF AUCKLAND LIMITED
Respondent

Hearing:	7 and 8 August 2000
Coram:	Richardson P Blanchard J McGrath J
Appearances:	D A Kirkpatrick and G D Palmer for Appellant J R F Fardell and A I C Denton for Respondent
Judgment:	7 September 2000

JUDGMENT OF THE COURT DELIVERED BY MCGRATH J

Table of Contents

Paragraph Number

Introduction ............................................................................... [1] to [3]
The rating legislation ............................................................... [4] to [8]
Legislative history ................................................................. [9] to [12]
Operation of the Downtown Wharves ................................. [13] to [26]
Scope of the wharf exemption ............................................. [27] to [35]
Conclusion on Downtown Wharves issue ........................... [36] to [42]
Westhaven Boatharbour........................................................ [43] to [44]
The Westhaven facilities ..................................................... [45] to [49]
The Order in Council ........................................................... [50] to [54]
The Commission’s 1992 determination .............................. [55] to [58]
Westhaven: judgment of Williams J ................................... [59] to [60]
Clause 102(3) - analysis ...................................................... [61] to [68]
Rateable property ................................................................ [69] to [71]
Floating facilities: part of the land? ..................................... [72] to [76]
Floating facilities: an interest in land? ................................ [77] to [82]
Westhaven and the wharf exemption .................................. [83] to [92]
Conclusion ....................................................................................... [93]

Introduction

It is a general principle of rating in New Zealand that all land within a district is rateable by its territorial local authority, unless it is deemed not to be rateable property or there is specific exemption from liability for rates. This appeal addresses two aspects of this principle in relation to facilities at the port of Auckland within the Waitemata Harbour. The first question concerns the scope of application to port land of the statutory exemption from rating liability known as the wharf exemption. The second concerns whether certain facilities in the waterspace at the port are within the district of Auckland city so as to be part of its rateable property.
The Auckland City Council brings this appeal against a judgment of Williams J in the High Court (M2020/97 Auckland, 31 August 1999). Williams J held that the wharf exemption covered an area at the Downtown Wharves of the port of Auckland wider than the quayside strip used for loading and unloading goods, and embarkation and disembarkation of passengers. On the second issue the High Court held that the floating facilities of the port’s Westhaven Marina were situated outside of the district of Auckland city and thus not part of its rateable property.
In the High Court, Ports of Auckland Limited (respondent in this Court) was plaintiff and the City Council defendant.

The rating legislation

As a territorial authority the appellant is empowered by s12 of the Rating Powers Act 1988 (“the Act”) to levy rates on “rateable property” within its district. By definition “rateable property” means “land deemed to be rateable property pursuant to this Act”. The general deeming provision of the Act is s3 which provides:
3. Rateable property generally - Except as otherwise provided in this Act, or in any other Act, all land, including land vested in the Crown, shall be deemed to be rateable property.

And “land” is defined in the Act to mean:

“Land” means all land, tenements, and hereditaments, whether corporeal or incorporeal, and all chattel or other interests therein, and all trees growing or standing thereon:

In ss4 and 5 of the Act exceptions are made to the general principle in the deeming provision by stipulating that certain Crown land, described in Part 1 of the First Schedule to the Act, is deemed not to be rateable property other than in stated circumstances. Section 6 of the Act likewise states exceptions to the principle in the deeming provision in relation to categories of land which are not Crown land. These are listed in Part II of the First Schedule. Sections 7 to 9 make further special provision in effect excepting land covered by ss4 to 6 from non‑rateable status in particular circumstances not of significance in this appeal.
This appeal is concerned with whether certain property owned by the appellant falls within a category of land excepted by s6 and Part II of the First Schedule to the Act to the general principle that all land is rateable property. The wharf exemption is expressed in clause 22 of Part II of the First Schedule as follows:
22.(1) Land occupied by a Harbour Board, port company, or other person, and used as a wharf, but excluding any such land used for administrative or other ancillary purposes.
(2) For the purposes of this clause the term “wharf” means any quay, pier, jetty, or other land or premises in, on, or from which passengers or goods are taken on board of or landed from vessels; but does not include any land not so used notwithstanding that it is within the limits of any wharf as defined in or pursuant to the Harbours Act 1950.

This clause is to be read in conjunction with the definition of “ancillary purposes” in an interpretation clause included in the First Schedule which provides:

Interpretation - In this Schedule the term “ancillary purposes”, in relation to any land, includes land used for parking, the storage of freight or machinery, maintenance, cleaning, freight consolidation, passenger waiting areas, and booking and ticket selling.

In the immediate context of clause 22, Part II of the First Schedule to the Act makes other provision for exempting from “rateable property” status land that is vested in or occupied by operators of public transportation facilities. The exemptions concerned affect roads, airport land, and railway land. Insofar as they may assist the interpretation of clause 22 they provide as follows:
21. Land vested in a territorial authority, regional or united council, or the Auckland Regional Authority which is formed and used as a road, access way, or service lane.
….
23.(1) Land vested in and occupied by any airport authority, being within the operational area of the aerodrome, and used solely or principally-
(a) For the landing, departure, or movement of aircraft; or
(b) For the loading or unloading of goods and passengers onto or
from aircraft-
but excluding any land used for administrative or other ancillary purposes in relation to such use.
24. (1) Land occupied by a railway operator that is-
(a) Used as part of the permanent way of the railway, being land upon which is sited any railway line together with such contiguous areas of land as are occupied incidentally thereto, and are not otherwise used; or
(b)Used, or upon which is sited any structure or premises used, solely or principally for the loading or unloading of goods or passengers on to or from any train situated on a railway line-
but excluding any land used for administrative or other ancillary purposes in relation to such use.
In Part I of the First Schedule clauses 6 and 7 provide exemptions from rates for Crown Land used for aerodrome and railway purposes in terms which are identical to those of clauses 23 and 24 of the Second Schedule. Clause 24 was inserted in 1990 (by s35 of the New Zealand Railways Corporation Restructuring Act 1990).

Legislative history

The origins of the statutory exemption from rates of land used as a wharf go back to the principle of rating that no rate can be imposed in respect of property occupied for public purposes required and created by the government. (See Ryde on Rating 13ed (1976) p264.) In New Zealand the first statutory provision made for exemption from liability for local body rating of wharves was in s341 of the Municipal Corporations Act 1886 which exempted “…wharves, river protection, and harbour works under the control and management of any Harbour Board.” This exemption was taken forward to the Rating Act 1908 and then to the Rating Act 1925, in both of which it appears in para (k) of the definition of “Rateable Property” in s2 of those statutes.
In the Rating Act 1967 the exemption was expressed to cover “Land vested in a Harbour Board on which are situated any harbour works within the meaning of the Harbours Act 1950”. There were exceptions it is unnecessary to list. (Section 5 and Clause 21 First Schedule, Rating Act 1967).
In the Harbours Act 1950 the term “Harbour works” was given a defined meaning as follows:
“Harbour works” includes generally any works for the improvement, protection, management, or utilisation of a harbour; and in particular, but without limiting the general import of the term, includes any basin, graving dock, slip, dock, pier, quay, wharf, jetty, bridge, viaduct, breakwater, embankment or dam, or any reclamation of land from the sea, navigable lake or river, or any excavation, deepening, dredging, or widening of any channel, basin, or other part of a harbour, whether complete or incomplete, in the sea, or in, on, or near the shore of the sea, or of any creek, bay, or arm thereof, or of any navigable river flowing thereinto, and all buildings thereon, and plant and machinery used in connection with any harbour works; and also includes the acquisition of land that may be required for the purposes of section 142A of this Act and the erection and disposal of dwelling-houses pursuant to that section:

And importantly for the present case “wharf” was defined as follows:

“Wharf” includes all wharves, quays, piers, jetties, land, and premises in, on, or from which passengers or goods may be taken on board of or landed from vessels.

It is plain that the drafter of the 1988 Act resorted to this definition for the marginally different phrase: “from which passengers or goods are taken on board of or landed from vessels” which is included as part of the definition of wharf in clause 22(2) of the Part II of the First Schedule to the Act.

Operation of the Downtown Wharves

The Downtown Wharves in the Port at Auckland lie alongside the Waitemata Harbour to the north of the Auckland central business district. From east to west the Downtown Wharves are: Fergusson Container Terminal, Freyberg Wharf, Jellicoe Wharf, Bledisloe Container Terminal, Marsden Wharf, Captain Cook Wharf and Queens Wharf. They are owned and operated by the respondent which is a port company under the Port Companies Act 1988.
A theme running through the statement of facts agreed by the parties, in relation to the issues in this part of the appeal, is the impact on port operations generally of containerisation and modern shipping methods. In the present context the significance for the Downtown Wharves has been that each vessel now spends in port only the minimum time necessary to load and unload before moving on to its next destination. International shipping operators require modern ports to have all their cargo ready in the wharf awaiting the arrival of a vessel, the timing of which can only be anticipated within a twelve hour range. Container vessels will spend an average of fourteen hours in port and conventional vessels an average of three to four days.
Furthermore, containerised vessels process greater volumes of cargo than conventional shipping. In consequence there have been changes in the economics and technology of container cargo handling by ports. These have affected the operation of the Downtown Wharves by the respondent. The image of a ship berthing and trains or trucks carrying cargo to be loaded pulling up alongside the ship is out of date. The need for greater volumes to be processed in more limited timeframes has required increasingly large areas of back‑up land within the Downtown Wharves. As this part of the appeal is largely concerned with the rating status of these areas a description of the operation of each of the wharves concerned is necessary.
Since 1969 the Fergusson Container Terminal has been developed, in stages, as a facility specifically designed for container handling. It is used for the import and export of large covered containers. Containerised cargo for export is brought to the Fergusson Container Terminal by road and rail. Straddle carriers collect containers from trucks on arrival, moving them to cargo stacking locations in one of the container bays or next to a refrigeration unit. Similarly, containerised cargo arrives for export at the rail grid, and is unloaded onto cargo stacking areas at the grid. Within hours it is moved to the cargo stacking areas on the wharves. Containers will be received from seven days until twelve hours prior to estimated arrival and will remain at their designated location for, on average, between two and a half and four days before the vessel arrives. The actual time export cargo spends in the stack area in part depends on the number of containers being exported in a vessel and the packing preferences of the particular exporter.
On arrival of the vessel containers are moved, again by straddle carrier, to the footpoint of the portainer crane which loads them on to the vessel. The same process operates in reverse for imports. However the length of time that unloaded containers spend in the stacking area depends on when Ministry of Agriculture and Customs Department clearances are obtained. Demurrage will be charged if the cargo remains in the area beyond a designated collection time. Dwell time for imported cargo in the rail grid cargo stacking areas is usually less than an hour.
Fergusson Container terminal has 610 metres of quay. Its back‑up areas include 20·2 hectares of general operating area, 2·8 hectares used for stacking refrigerated containers, 1·96 hectares of depot and 0·3 hectares of container wash area.
Freyberg Wharf is predominantly used for export of containers, fruit, vegetables, dairy and general cargo. Its loading facilities are suited to conventional vessels. Trucks carrying containers for export are unloaded onto the loading area. Covered containers are stacked in the container bays and uncovered containers moved to the cargo shed. They are held for between two and five days. On arrival of the vessel containers are brought to the wharf alongside and are loaded into the vessel by ships’ cranes. Dairy Board products arrive on pallet by rail and are stacked in the cargo shed pending the vessel’s arrival.
Freyberg Wharf is used also for motor‑vehicle imports. Vehicles are unloaded from vessels onto the wharf where they are retained there pending customs and agriculture clearances. They are then picked up from where they are parked by vehicle transporters. Time on the wharf ranges between 2 and 3 days. There are 426 metres of berthage on each side of Freyberg Wharf, 5·9 hectares of operating area and 8361 square metres of covered storage. There are forty refrigerated container points adjacent to berths.
Jellicoe Wharf is used for export of non‑containerised goods by conventional vessels, particularly to the Pacific Islands. It is also used for import cargo, particularly motor vehicles. The process of moving goods through Jellicoe Wharf is similar to that at Freyberg Wharf. Goods are in the cargo shed for between two and four days. Jellicoe Wharf has 335 metres of berthage on each side. It has 8·2 hectares of operating area and a general cargo shed.
Bledisloe Container Terminal, like Fergusson, operates a road exchange container terminal. It has three wharves. The one at Bledisloe West operates in the same manner as described in relation to Fergusson Wharf. It has 260 metre quay length, with 2·8 hectares of back‑up area.
There are two wharves at Bledisloe East, the primary use of which is for importation of motor vehicles. Bledisloe East has a roll on roll off facility which unloads vehicles into a shed designed for that use. One of the wharves has 137 metres quay length with two roll on roll off facilities. It is 8·23 metres wide and has a back‑up area of 4·8 hectares. The other wharf at Bledisloe East shares the same equipment and operational areas. It has 224 metres quay length. Vehicles remain at Bledisloe for as long as at Freyberg pending obtaining of their clearances.
Marsden and Captain Cook Wharves were built towards the end of the 19th century. They are restricted in the weight of cargo they can bear and for that reason are mainly used for motor vehicle imports. Both have uncovered cargo areas and Captain Cook also has 3 cargo sheds. On both wharves imported motor vehicles are processed as described in relation to Freyberg Wharf. On Captain Cook Wharf the cargo sheds hold the same type of goods for the same periods as those at Freyberg. Marsden has 398 metres of berth length on each side and 1 hectare of operating area. Captain Cook has 478 metres of berth length with two berths and 2·2 hectares of operating area.
Queens Wharf is of the same age and has the same cargo weight limitations as Marsden and Captain Cook Wharves. It is mainly used for car and fruit imports and is a back‑up cruise ship berth. Car imports follow the same process and vehicles remain on the wharf for the same times while they obtain their clearance. Imported fruit arrives in palletised cartons. It is cool‑stored for periods of three to five days before onward despatch.
A rail exchange operates in the rail grid area as already described. It comprises four railway lines, 450 metres long, on 3·7 hectares of land together with stacking areas where arriving containerised cargo is initially unloaded.

Scope of the wharf exemption

To qualify for the wharf exemption under clause 22 the land in question must, first, be occupied by a Harbour Board, port company or other person. Here the occupation meeting this requirement is that of the respondent port company. Secondly, the land must be “used as a wharf” within the meaning given “wharf” by clause 22(2); but, thirdly, any land so “used as a wharf” will not qualify for exemption if used for “administrative or ancillary purposes”, as defined in the interpretation clause of the First Schedule.
The initial inquiry, on this branch of the appeal, accordingly concerns which area, within the limits of land occupied by the respondent, is “used as a wharf”. This is governed by the requirement that the land be “a quay, pier, jetty or other land or premises in on or from which passengers or goods are taken on board of or landed from vessels…”. Mr Kirkpatrick, for the appellant, argued for a meaning that would confine the area used as a wharf to the strip of quay in the immediate vicinity of berthed vessels. This, he said, was the area actually used in the process of picking up or dropping down goods or passengers. His argument focussed on the words: “…other land or premises in, on, or from which passengers or goods are taken on board of or landed from vessels”. He submitted that this phrase was specific in its focus and pointed to the areas where goods being loaded last touched, and goods being unloaded first touched the wharf. Areas within harbour limits outside of those were not “used as a wharf.” Mr Fardell for the respondent submitted that the phrase had no such specific focus. The words required no more than that goods or passengers were loaded or unloaded from an area for it to be used as a wharf. He pointed out that the words expressing the meaning of “wharf” in clause 22(2) were taken directly from the definition of “wharf” in s2 of the Harbours Act 1950. In that context “wharf” did not have a restricted meaning. In the High Court Williams J upheld that respondent’s interpretation.

In interpreting clause 22 we start with the natural and ordinary meaning of the words used to define “wharf” for purposes of the clause. On that basis, in our view, the words “in, on, or from which passengers or goods are taken on board of or landed from vessels”, in qualifying “land or other premises”, do not carry any necessary connotation of the spot of first or last touching of the land. They do no more than require, in the case of movement of goods, that loading or unloading took place from the land or other premises concerned. However the language of clause 22 must be read in its context. This includes the surrounding provisions set out above exempting from rates land vested in or occupied by others who also have responsibility for public transportation facilities. These exemptions cover land used as roads (clause 21), aerodrome land (clause 23) and railway land (clause 24). There are also equivalent provisions in Part I of the First Schedule for Crown land used for aerodromes and railways (clauses 6 and 7).
It was argued by Mr Kirkpatrick in relation to clauses 23 and 24 that a contrast should be drawn between the phrase “used solely or principally for the loading or unloading of goods or passengers,” and the words used in clause 22(2) “in on or from which passengers or goods are taken on board”. In that context, he said, the latter expression was intended to have a different and more specific meaning. However we do not consider this contrast assists the appellant. The drafter has in clause 22 merely resorted to the words used in the definition of “wharf” in the Harbours Act 1950, bringing them forward with only minimal change (“are taken” has replaced “may be taken” on board). The drafter of the equivalent exemption in the 1967 Act had drawn directly on the Harbours Act definition of “wharf” (cf clause 21(b) and (c) Rating Act 1967). The drafter of the 1988 Act simply repeated that approach albeit resorting directly to the words of the definition of “wharf” in the Harbours Act. Given this legislative history we conclude no significance should be attached to the use of the different expression “loading and unloading” in clauses 23 and 24 of Part II of the First Schedule nor for that matter in clauses 6 and 7 of Part I. The drafter did regard the chosen meaning of “wharf” as potentially narrower in scope than the Harbours Act meaning, as is indicated by addition of the exclusionary words at the conclusion of clause 22(2). However this was probably to reinforce the exclusion of land used for administrative and other ancillary purposes. Such land would have been within the definition of “wharf” under the Harbours Act. It would also have been exempt land under the Rating Act 1967 which was defined, subject to exceptions, in terms of the broad expression “Harbour works”. (S5 and First Schedule, clause 21).
The next inquiry is into what area is excluded by “used for administrative and “other ancillary purposes” in clause 22(1) bearing in mind the First Schedule’s definition of “ancillary purposes”. The First Schedule’s interpretation clause provides:
Interpretation - In this Schedule the term “Ancillary purposes” in relation to any land includes land used for parking, the storage of freight or machinery, maintenance, cleaning, freight consolidation, passenger waiting areas and booking and ticket selling.
Commencing again with the natural and ordinary meaning of the words used, the exclusion in clause 22(1) of “any such land…” indicates that land used for “administrative or other ancillary purposes” would normally be included in the phrase: “used as a wharf”. This in turn supports the view that the phrase covers a wider area than the strip of quay alongside where vessels berth. The word “other” links the nature of use for “ancillary purposes” to that for administrative purposes, further suggesting ancillary purposes are also of a supportive nature incidental to a different principal activity in use of a wharf. This is confirmed by the uses expressly included as ancillary purposes in the First Schedule’s interpretation clause. Parking, storage of freight and machinery, maintenance, cleaning, and, in relation to passengers, booking and ticket selling are all activities that are incidental to the principal operational activities on a wharf of loading and unloading cargo, and, embarking and disembarking passengers. Freight consolidation in this context refers to making up a unit of transportation, such as a container, rather than a process of marshalling the units for loading onto vessels. Passenger waiting areas for ships are not normally marshalling areas in the sense that gate lounges for airports are and a specific prescription may have been thought desirable to clarify their status.
This interpretation is reinforced by the context of the surrounding clauses exempting land used for other public transportation purposes. Clause 23 in particular prescribes the exempt area as being within the operational area of the aerodrome and emphasises that aspect throughout its terms. The same characteristics are reflected in clause 24 in relation to railway land. Similarly clause 21 which exempts land used as a road, accessway or service land fits this pattern as the entire areas are inherently subject to operational use.
The outcome is also in our view consistent with the indication in the Parliamentary debates of an overall legislative purpose of treating all transport sector land on an equal basis and, in contrast to the previous statute’s terms, confining the exemption from rates to the operational areas of the transport system (see the speeches of the Minister of Local Government, Hon Dr Bassett M.P., at the introduction of the Bill, (10 November 1987) 483 NZPD 941; and the Acting Minister, Hon Jonathon Hunt M.P., at the second reading (7 June 1988 481 NZPD 4163-4164). We have found no assistance in clarifying the meaning of the words used in clause 22 in the changes made to the Rating Powers Bill which became the Act in the course of its passage through the House of Representatives.
In summary, and in agreement with Williams J, we hold that clause 22 exempts from rates the areas of quay, pier, jetty or other land or premises used for the operational aspects of loading and unloading goods, and of embarking and disembarking passengers. Whether particular areas are so used is a question of fact. Clause 22 does not confine them to the strip of quay alongside berthed vessels. Use, however, for administrative purposes or those merely incidental to and supportive of operational use is excluded, even if it takes place within wharf limits.

Conclusions on Downtown Wharves issue

Application of clause 22(1) of the First Schedule to the facts accordingly requires consideration of which parts of the appellant port company’s cargo receiving and despatching processes comprise use for the purpose of loading and unloading of goods and embarkation and disembarkation of passengers, in contrast with use for administrative and other incidental supporting processes. The statement of facts agreed by the parties has in our view established that loading and unloading cargo in the modern wharf is an integrated process. Loading commences when containers or pallets have been moved to stacking areas awaiting arrival of vessels. Unloading is complete when the cargo taken from vessels has reached stacking areas and is awaiting clearance. In other words use of the land within the harbour limits for taking on board or landing goods includes those areas in which the marshalling of cargo for export takes place, in the sense of holding the cargo ready to be taken on board. At this point the essential operational activity of the wharf commences and concludes. By way of example, in the case of Ferguson Wharf the areas concerned include the locations in the container bays and next to the refrigeration units to which straddle carriers have moved containers from the grid road exchange parks to which trucks are directed on arrival. We have not overlooked that containers may spend up to seven days in the bays before being moved to the vessel but that period simply reflects the need for the marshalling of cargo for container ships to be completed in advance of their arrival for reasons already discussed. Such operational activity in our opinion forms an integral part of the process of taking on board cargo from the port land. It is separate and distinct from the processes of storage of freight (which can and generally will take place off‑site) or of arrival of the goods at the port. Arrival ends when goods are taken from the trucks. The roads and lanes through which containers are moved from the road and rail grid exchange to stack areas are not used for taking on board cargo, other than where they are also used to take cargo from stacking areas to the vessel’s side. Operational activity for loading commences and for unloading concludes when cargo reaches the stack areas. It follows that, contrary to the respondent’s submission in its cross-appeal, we hold that truck transit areas, road exchange booths and truck registration areas are also not exempt from rating.
This approach generally can be applied to export of containers and indeed palletised cargo by conventional and multi‑purpose vessels, where containers are moved to wharf container bays or a cargo shed from the area into which they are unloaded at arrival. Such cargo is also moved, when the vessel arrives, to the wharf edge and loaded by ships cranes into the vessel. Conventional vessels spend longer in port and load more slowly but that does not in our opinion alter the nature of the marshalling activity which takes place and which forms part of the loading and unloading process.
Similarly the operations of the Rail Grid fit the pattern. On arrival containerised cargo is unloaded onto stacking areas at the grid from which it is quickly moved to stacking areas at the wharves. At this point the loading process commences. It follows that the area used as a rail grid, including where cargo is stacked when unloaded at first instance, is not part of the area
The process operates in reverse for imports where the time spent in the stacking area depends on how long it takes for the consignee to secure Agriculture and Customs clearances. It is a necessary part of the unloading process which concludes when the cargo is collected.
In relation to motor‑vehicles, they are unloaded from vessels onto the wharf but must be retained at that location within the Customs controlled area until clearance is obtained. This area is not used for the ancillary purpose of parking and is, rather, the point where unloading operations conclude. Vehicle transporters load the vehicles directly from where they are parked on the wharf.
Analogies can be drawn in relation to passenger embarkation and disembarkation. For ports, the function of passenger waiting areas cannot be directly equated to marshalling and often the areas will include those gathering to farewell (or welcome) passengers. A contrast can here be drawn with gate lounges for passengers at airports. Although the Act excludes the passenger waiting areas from those ‘used as a wharf’ that cannot be seen as a contradiction of the marshalling principle which in our view has equal application to areas for embarkation and disembarkation of passengers.
These conclusions are in essence those reached by Williams J, as reflected in the sealed judgment of the High Court. It appears to us that these orders need be disturbed only to the extent that connecting roads within the port leading to stacking areas from the road exchange areas are rateable property. In case the parties consider further adjustments are necessary to give effect to this Court’s judgment, or to clarify matters on which leave was reserved by Williams J, we reserve leave to the parties to apply as to the terms of the formal judgment on the Downtown Wharves question should that be necessary.

Westhaven Boatharbour

Westhaven Boatharbour is an area of land and water at St Mary’s Bay, Auckland. This part of the appeal concerns whether its waterspace is within Auckland City and, if so, whether its facilities are rateable property not the subject of statutory exemption. There are four sections of Westhaven waterspace:- Westhaven Marina provides berthage and associated amenities in the nature of a marina for pleasure boats. Westhaven East provides work berths, charter boat berths and cleaning grids. Western Reclamation includes piers and jetties leased by the respondent for commercial purposes. The Commercial Channel area is used by vessels for access to and from each of the other three areas of Westhaven. No issues arise in the appeal concerning the Commercial Channel.
The first question on this branch of the appeal is the extent to which the facilities in the waterspace at Westhaven, which are of course situated below the Mean High Water Mark, are within the district of Auckland City. Depending on the answer, two further questions may arise, first as to whether the facilities are rateable property under the Rating Powers Act 1988 and secondly as to whether certain floating facilities such as those at the Westhaven Marina are piers or jetties used as a wharf, such as to be entitled to the wharf exemption for rating.

The Westhaven facilities

At Westhaven Marina berthage is provided on marina berths, pile moorings and swing moorings. In general berthage is not provided for commercial vessels. The arguments of counsel centred on the 1420 marina berths. Some of these berths have a finger at right angles to the central pier, in which case the boat berths alongside the finger. Otherwise they berth bow or stern to the pier between parallel lines secured to rings on the pier at one end and to a pile at the other. The pier is a floating pontoon attached by rings to locating piles which are driven into the seabed. The pier moves vertically with the tide but not horizontally. Bridges provide foot access to the pontoons. They are hinged to the ground at the landward end and rest unattached on the pontoon at the other, which of course moves up and down with the tide. Various services are provided to the pontoons including power, water supply and lighting. Most marine pile and swing moorings or berths are subject to long‑term licences to users.
Other piers at the marina are loading piers used by pile and swing mooring licensees and the public or, as with Pier J, used for mooring of boats that are for sale. There is no general right of public access to marina piers or pontoons which have entry gates that can be locked.
At Westhaven East Pier Y is a fixed pier providing work berths which is supported by piles driven directly into the seabed. It has two pontoons running off to the sides which are connected by hinged bridges of the type that are at the marina. The construction of Pier Z is similar to that of the piers at Westhaven Marina. There are also 14 tidal cleaning grids and an area of land and waterspace let to the Royal New Zealand Yacht Squadron.
The Western Reclamation area is largely leased for commercial purposes usually with rights given under a licence over adjacent areas of seabed and waterspace. There are various facilities owned in the area by the appellant or its lessees which need not be further particularised in this judgment.
The focus of this aspect of the appeal was on the facilities at the marina and in particular the pontoon jetties. The hinged bridges are attached to the land but only rest on the pontoons which float on water lies outside the general boundary fixed by the 1989 Order in Council, being the Mean High Water Mark. The first question is whether Westhaven’s floating facilities are brought within the City’s boundary by the 1992 Amending Order in Council.

The Order in Council

In the course of its reorganisation of local government in New Zealand in 1989 the Local Government Commission made a determination constituting local authorities in the Auckland region. This was implemented by the Local Government (Auckland Region) Reorganisation Order 1989, made on 9 June1989. Clause 102 of the 1989 Order in Council originally simply provided that the area comprising the Auckland City’s district was that delineated on S.O. Plan No.63496 deposited with the Chief Surveyor of the North Auckland Land District. The seaward boundary of the City shown on that plan followed the Mean High Water Mark.
In 1991 the appellant, in order to resolve differences with the respondent and other owners of certain properties adjoining the Waitemata Harbour which straddled the boundary of the Mean High Water Mark, sought clarification or amendment by the Commission of its 1989 determination as to the seaward boundary of the city. The Commission received submissions concerning three disputed issues. Of those two are relevant to this appeal. One concerned whether certain floating jetties in the Westhaven Marina were within the city boundary and the second whether two buildings, owned by the Auckland Sea Rescue Trust and the Kohimaramara Yacht Club, which were partly on land within the city but also partly projected seaward of the Mean High Water Mark, were to be treated as within the City’s district.
The outcome of the Commission’s consideration of the matter was a determination which was implemented when the Executive Council made the Local Government (Auckland Region) Reorganisation Amendment Order (No.2) 1992 on 20 July 1992. In amending clause 102 of the 1989 Order the 1992 Order provided as follows:
2. Constitution of Auckland City - Clause 102 of the principal order is hereby amended by inserting the following subclauses:
“(2) For the avoidance of doubt, it is hereby declared that the boundary of the Auckland City follows the seaward edge of those wharves depicted on S.O. Plan No. 63510, deposited with the Chief Surveyor of the North Auckland Land District.
“(3) Notwithstanding anything in this clause or clause 105 of this order, the Auckland City shall include all land and/or structures which are now or may be in the future adjacent to the seaward boundary of Auckland City, with access to streets or properties within the city”.
The 1992 amending order was incorrectly expressed as having been made pursuant to s37ZZVB of the Local Government Act 1974. That section number had been stipulated in the final form of the Bill but in the assented Act the authorising provision became s37ZZZO. Subject to its terms, it empowered the Commission to issue a determination amending a reorganisation scheme under the Act providing:
37ZZZO. Power to Amend Reorganisation Schemes
Where, in the case of any reorganisation scheme…. given effect to by Order in Council, the Commission is satisfied either--
(a) That some further or other provision is necessary to enable or better enable the intention of the scheme to be put into effect; or
(b) That some provision of the scheme is no longer relevant or appropriate to the intention of the scheme,--
the Commission may issue a determination amending the scheme, and every such determination shall be given effect to by Order in Council in the same manner as a reorganisation scheme.

In relation to the implementation of reorganisation schemes s37ZZZJ of the Act provides:

37ZZZJ. Implementation of Reorganisation Schemes Subject to this Act, effect shall be given by Order in Council to every reorganisation scheme.

We do not read this provision as requiring the Executive Council to make an Order. However it is clear that Parliament had in mind that if it did so the Executive Council was limited in its power to depart from the terms of a Commission determination. That is indicated by s37ZZZK of the Act which relevantly provides:

37ZZZK. Provisions Relating to Orders in Council Giving Effect to Reorganisation Schemes--

(3) Where the reorganisation scheme does not specifically provide for a matter that the Secretary considers to be necessary, desirable, or incidental as a consequence of the scheme, the Secretary shall consult with the Commission or any local authority affected about the inclusion of the matter in the Order in Council, and the matter may be included in the Order in Council if considered appropriate by the Governor‑General in Council.

We have outlined the provisions governing the making of Orders in Council in relation to the 1992 amending order because it was Mr Kirkpatrick’s contention that only if an ambiguity were identified should the amending order be interpreted in the context of the Commission’s determination and associated reasons. However, in our view it is the scheme of the legislation that the Commission’s determinations, including amending determinations, are to be given effect by Orders in Council with limited scope for departure. In those circumstances the Commission’s determination and reasons for it are part of the context in which words of the Order in Council should be read and understood. Of course it is the words of the Order in Council which must be interpreted, but where the context in which Parliament contemplated the Order would be made can clarify the meaning intended, it should be allowed to do so. It would not be appropriate however to treat correspondence between the parties and the Commission prior to or since the determination and Order as providing such contextual assistance.

The Commission’s 1992 determination

On 23 April 1992 the Commission issued its reasoned determination clarifying and amending the terms of the Final Reorganisation Scheme given effect by the 1989 Order. The determination addressed differences between the appellant and respondent in these proceedings over the city’s boundary in relation to three groups of properties. The first concerned the Auckland Wharves and is not relevant to this appeal. The second concerned Westhaven Marina. The third concerned properties with buildings straddling the Mean High Water Mark and in particular the Auckland Marine Rescue Centre Trust.
In relation to the Westhaven Marina the 1992 determination indicates that the question concerned whether it could be described as an inlet and was accordingly within the following notation on the S.O. Plan 63512: - “All seaward boundaries follow MHWM but cross the mouths of all rivers, streams, inlets and estuaries unless shown otherwise.”
In its reasons accompanying the 1992 determination, the Commission simply said that the land beneath the floating jetties was not intended by the Commission to be included within the boundary of Auckland City as, in its view, was clearly shown on the plan. It implicitly rejected the contention that Westhaven’s waterspaces were an inlet. There was no need for further action by way of clarification or amendment to the terms of the reorganisation scheme.
In relation to a dispute with the Auckland Marine Rescue Centre Trust, an amendment to the scheme did eventuate. Here the Council officers’ concern had been that the Auckland Marine Rescue Centre’s building was erected on land partly above and partly below mean high water mark. Because such buildings were serviced by the Council it was argued “the occupiers of the land and/or structures should be required to pay appropriate rates”. That would be achieved by including the protruding buildings on the properties within the boundaries of Auckland City whether they were erected at the time of the issue of the 1989 reorganisation scheme or thereafter. The determination indicates that at a meeting attended by representatives of the appellant and the respondent the City Surveyor proposed that the City should include buildings presently or in the future constructed adjacent to the city boundary and the Waitemata Harbour. The respondent was in agreement with the approach. The determination indicated it had been the Commission’s intention to include such land and/or structures within the city’s boundaries but accepted that further provision was necessary to enable that intention of the Final Reorganisation Scheme to be put into effect. Its determination was that the Final Reorganisation Scheme should be amended by adding to clause 102 the two subclauses concerned. As previously indicated, these were included without change in the 1992 Order implementing the amendment.

Westhaven: judgment of Williams J

Williams J held the 1992 order confirmed that the facilities at Westhaven below mean high water mark were not within the city boundary. That was the purpose and effect of clause 102(2). Clause 102(3) was not addressed to the Westhaven situation at all. His reasoning hinged on what he inferred was the Commission’s subjective intention ascertained from the reasons given and correspondence of the parties involved. However he went on to consider the meaning of the relevant words of clause 102(3):
“all land and/or structures which are….adjacent to the seaward boundary of Auckland City, with access to streets or properties within the city.”
The Judge held that the facilities below mean high water mark were “land” as defined in the Act being either fixtures (and thus part of the seabed land) or incorporeal hereditements within the definition of land. This brought them within “land” in clause 102(3). They were also “structures” in terms of that clause. The facilities were also sufficiently connected with land on the seaward boundary to be “adjacent” to it. However he did not consider access to city streets or properties was sufficient to meet that requirement other than in respect of Western Reclamation. On its terms therefore clause 102(3) did not apply to Westhaven Marina or Westhaven East. It could however apply to Western Reclamation.

Clause 102(3) - analysis

The appellant’s argument on appeal addresses the Judge’s interpretation of clause 102 of the 1989 Order as amended. Mr Kirkpatrick focussed first on the floating pontoons at Westhaven Marina, Westhaven East and at the Westhaven Reclamation, and secondly on fixed piers and/or grids at those locations. All of these facilities, he argued, were brought within the city’s district by clause 102(3).
For reasons already stated we take a different view from the Judge on the way in which the 1992 Order in Council is to be interpreted. It is not a question of inquiry into the Commission’s subjective intent but of ascertaining the meaning of the words of the Order in the context of the 1992 reasoned amending determination. The context indicates that the Commission was satisfied its 1989 reorganisation determination, as implemented, had not brought land or facilities beneath Westhaven within the boundary because they were below the mean high water mark line. The context of the amendment to the determination made by clause 102(3) is that it was concerned with what were variously described in the determination as “properties abutting the city boundary” and “buildings and/or structures…adjacent to the city boundary with access onto streets or properties with the City”. The particular instances brought to its attention by Council officers were those of the Auckland Marine Rescue Centre, and the Kohimaramara Yacht Club, which had buildings or land partly above and partly below the mean high water mark which were not plotted on the boundary survey plan. Nothing in this context indicates that in using the language it did in clause 102(3), and in particular referring to “all land and/or structures”, it was the Commission’s intention to include facilities such as the floating pontoons at the Marina. The words of clause 102(3) must be applied to the Westhaven situation in this context.
Turning to apply clause 102(3) to the facilities at Westhaven, we start with “land and/or structures”. We are satisfied that, in the context of a determination of boundaries going beyond the mean high water mark, “land” in the Order in Council should not be read more broadly than to cover the bare physical land. Clause 102(3) will have particular reference to future reclaimed land below the mean high water mark boundary bringing it within city limits. On that basis it does not in our view cover improvements to the land. Nor does it include the sea-bed.
“Structure”, as the High Court recognised, is a word with a range of meanings. It takes its precise meaning from the context. We were referred to a number of statutory definitions of the term, dictionary meanings and cases where the term is discussed. Apart from indicating it can have a wide or narrow meaning we have not found the statutory definitions helpful. Of the dictionary meanings of “structure” that which is most apt in the context of the Commission’s discussion is “a thing which is built or constructed, a building, an edifice.” In R v Rose [1965] QWN 42 at 43 Gibbs J said “the most natural and ordinary meaning” of structure is a building “but the word is capable of having the wider meaning of anything constructed out of material parts”. The Commission was principally concerned with buildings that straddled the mean high water mark boundary. It is our view that in the context the term “structure” means a thing built or constructed to remain permanently in one place on land within the city’s seaward boundary even if it was also partly situated outside that boundary. Applying that interpretation, we hold that under clause 102(3) fixed piers, jetties, grids and slipways are “structures” but that the floating jetties and pontoons of the Westhaven Waterspace areas are not. Nor in our view are the piles which retain them in place, as they should not in this context be regarded as separate from the pontoons of which they are an integral part. The fixed piers and grids at those locations are structures.
Given our conclusion that the floating facilities are neither “land” nor “structures” it is not strictly necessary to consider the other aspects of clause 102(3). For completeness however we continue our analysis of the subclause. Had it been necessary to decide the point we note that we would have held that the floating jetties and pontoons are “adjacent to” the city boundary in that the word “adjacent” in clause 102(3) is satisfied by the degree of proximity of those facilities which are situated close to but do not touch or cross the boundary line. As Williams J put it, they are “sufficiently connected” with land or structures on the land within the city boundary.
Williams J also held that Westhaven Marina and Westhaven East did not have “access to streets or properties within the city” because they did not have direct access to city services. He reached this conclusion reasoning that the access requirement reflected the discussion in the determination of the desirable reciprocity between services and liability to rates. Properties adjacent to the city boundary should only be rateable if they had access on to streets or other properties within the city. The implication was that then they would be directly entitled to city services.
Certainly the properties of the Auckland Sea Rescue Trust and the Kohimaramara Yacht Club, which the Commission knew would be instances of the application of clause 102(3), were structures having direct access to city services but that context overall does not suggest that the meaning of “access” under the subclause requires such an immediate or direct connotation. Here the parties agreed that:
There is a means of access from each of the piers, jetties etc in the Westhaven Marina, Westhaven East and Western Reclamation areas to land within the district of the Auckland City Council. (Agreed Statement of Facts: para 5.4)

The words used in clause 102(3), in our view, are apt to cover such access, which would include for example that to the land surrounding the marina which, being above the mean high water mark, was within Auckland City. There was access from the marina facilities to that land, which is controlled by the respondent, and through it to streets in the city. The context, and in particular the concern over reciprocity of rateability with access to city services, does not warrant a restrictive interpretation of the words used in the order.

Accordingly, in terms of clause 102(1) the floating facilities at Westhaven are situated outside the mean high water mark boundary line. We uphold the respondent’s contention, advanced in support of its cross-appeal, that in terms of clause 102(3) such facilities are neither “land” nor “structures”. It follows that such facilities are situated outside the district of Auckland city.

Rateable property

Because we have concluded the floating facilities at Westhaven are situated outside of the city it is strictly unnecessary for us to address whether they are in rateable property. A territorial authority, unsurprisingly, is empowered by s12 of the Rating Powers Act 1988 to levy rates only on rateable property within its district. Nevertheless the issue having been argued before us we go on to consider whether the marina facilities, if within the boundary of a territorial authority, are rateable property. By s3 of the Act “all land” is deemed to be rateable property except as is otherwise provided by statute. “Land” is defined for the purposes of the Act as follows:
“land” means all land, tenements, and hereditaments, whether corporeal or incorporeal, and all chattels or other interests therein, and all trees growing or standing thereon:
Williams J held that the pontoons, piles and floating facilities at Westhaven were “land” within this definition. First he reasoned they were fixtures annexed to the land and thus being part of it. Alternatively the respondent’s rights were an interest in land of a kind falling within the extended language of the definition and in particular being an incorporeal hereditament in the respondent’s possession.
The respondent cross‑appealed against the High Court findings. It accepted that the fixed piers, jetties, locating piles, cleaning grids, slipways and travel lifts were fixtures, but not the floating pontoons and dock which it submitted had retained their identity as chattels. Such were not “land” in terms of the definition. Nor were they an interest in the nature of an incorporeal hereditament. The issue on appeal accordingly is, first, whether the floating facilities are fixtures and thus part of “land” under the Act; and, secondly, in the alternative, whether they are interests in land of the respondent such as an incorporeal hereditament within the definition’s extending words.

Floating facilities: part of the land?

Traditionally the test for whether a chattel has become part of the realty of the land it is situated on is expressed as being whether it is a “fixture”. In the recent House of Lords decision in Elitestone Ltd v Morris & Anor [1997] 1 WLR 687, 691 [1997] 2 All ER 513,518 the House moved away from this formulation of the test. The judgment of Lord Lloyd of Berwick expressed the test in a way which avoided use of the term “fixture”. Lord Lloyd noted that the legal meaning of that term often did not bear resemblance to its ordinary meaning and that this had the potential to lead to confusion in the application of the test. Instead he proposed a broader formulation namely whether the chattel could properly be said to have become part and parcel of the land. The two main indicators of this will be the degree of annexation and the object of annexation. His speech indicated that each case will depend on its particular facts and that a common sense approach, consistent with the broad test, must be taken in considering the indicators. Lord Clyde, in a concurring speech affirmed this move away from technical analysis and application of the term “fixture” in favour of a return to the original principles of this part of the law. The other members of the House of Lords who sat all agreed with both Lord Lloyd and Lord Clyde. This indeed is the way the classic statement of the test was expressed by Blackburn J in Holland v Hodgson (1872) LR 7 CP 328,334.
The present case provides an instance of the value of the Elitestone approach. It avoids the need to analyse whether a floating pontoon restrained by an embedded locating pile is a “fixture”. In our view it is appropriate to apply Elitestone in New Zealand to establish whether a chattel has become part of realty.
From this point the case requires the application of the principle to the facts. As no case was cited to us with facts comparable to the present it is necessary for us to consider the circumstances of the Westhaven facilities simply by reference to the degree of their annexation and the purpose of their annexation to the land. This will lead us to the conclusion of whether any or all of them have become part of the land.
Prior to their attachment by rings to the locating piles that are driven into the seabed, when brought to Westhaven the pontoon facilities, or their components, are plainly chattels. Once a pontoon is attached to the piles, however, in our opinion, it becomes an integral part of a composite jetty structure. That is because the pontoons are kept permanently in place by the rings, are unable to move horizontally and accordingly cannot become separate from the locating piles. That they move vertically with the tide reflects their purpose in the design of the whole jetty. In its composite form the jetty is a substantial structure and an enduring asset. The degree of annexation of the jetty structure, as a whole, is reflected in the fact that its piles are embedded in the seabed and its use is dependent on maintaining that degree of annexation. As to the object of annexation, again the chattel has been incorporated into the whole jetty structure, to give effect to and allow full enjoyment of the rights of occupation of waterspace at Westhaven which the respondent port company enjoys.
Applying the principle set out in the speeches of Lord Lloyd of Berwick and Lord Clyde in Elitestone, we are satisfied the degree and purpose of the annexation of the pontoon to the piles and the piles to the seabed plainly indicate the jetty structure and its components are part and parcel of the land on which it is situated. The floating jetties are therefore “land” in terms of the definition in the Act.

Floating facilities: an interest in land?

The alternative argument for the appellant was that the respondent’s rights in the floating facilities were “a tenement, or corporeal or incorporeal hereditament or some other interest in land” in terms of the definition in the Act.
The argument was founded on the decision of this Court in the judgment of the Court in Telecom Auckland Ltd v Auckland City Council [1999] 1 NZLR 426 in which it was held that the rights of a telecommunications network operator to install telephone lines under or above streets and telephone booths on streets were an interest in land of the kind covered by the definition. In particular, in delivering the judgment of the Court Blanchard J said at p440 (line 35):
The Telecommunications Act provides for ownership of the lines by the network operator when they are in the soil but, because their owner has an exclusive right to occupy the portion of the soil where they lie, that space is properly, and consistently with what was said in Valuer-General v Auckland Gas Co Ltd and by Dixon J in the first North Shore Gas case, also to be regarded as owned for the time being by the operator. (In the case of overhead wires capable of movement, the space must encompass the area of their movement which cannot in consequence be in shared occupation.) An exclusive right of occupation of this kind, even for a limited purpose, is more than an easement, because the owner of the rest of the soil is ousted (Metropolitan Railway v Fowler). And since an easement in modern times is classified as an incorporeal hereditament, even that more limited interest would be within the definition of “Land” in the Rating Powers Act.

In the present case the respondent’s rights in respect of the floating facilities at Westhaven derive in part from contract and in part from a statutory permit. The respondent has two lease agreements from the Auckland Harbour Board leasing to the respondent portions of the seabed in respect of areas including Westhaven for a term of 21 years from 1 October 1988 (ie until 30 September 2009). Although the portions of the seabed concerned are now owned by the Crown by virtue of s5 of the Foreshore and Seabed Revesting Act 1991, the leases continue to have effect under s5 of that Act.
Under s384A of the Resource Management Act 1991 the respondent also holds a permit giving it the right to occupy until 20 September 2026 the designated coastal marine area (which includes Westhaven) “to enable the company to manage and operate a port related commercial undertaking”. By s384A(1) its rights clearly include operation and management of those parts of the respondent’s undertaking at Westhaven. Under s384A(11) the meaning of “occupy” is that given in s12(4)(a) of the Act, which is “to the exclusion of other persons who do not have a right of occupation to the space”. The right of occupation under the permit itself is expressed in an “Advice Note to Grantee” to be “subject to any other rights of occupation existing in respect of other persons.”
In relation to the floating facilities at Westhaven the reality is that there is an exclusive occupation of the air space in which the jetty’s floating pontoons move with the tide. It understates the position, as did the respondent in support of its cross-appeal on this point, to say its right is no more than to a priority of use. There can be no shared occupation of that air space. The position can be likened to the area of movement of overhead telephone wires in Telecom Auckland (see para [78] above). The airspace through which the pontoons move is equally to be regarded as owned by the respondent during the term of currency of its s384A permit. And such rights are for the same reasons as in Telecom Auckland to be regarded as an incorporeal hereditament and an interest caught by the definition of “land” in the Act.
In summary the floating facilities, in our view, are part of the land in which their locating piles are embedded. If that is wrong they are interests in that land in the nature of incorporeal hereditaments. But while on either approach they are rateable property they are situated outside Auckland city. Only if they were brought within its boundaries would the appellant be empowered to levy rates on them.

Westhaven and the wharf exemption

If the words of clause 22 of Part II of the First Schedule to the Rating Powers Act are given the meaning outlined in our discussion of the Downtown Wharves issues, at first impression they appear to cover activity at a marina. The pontoons are places “in, on, or from which passengers and goods are taken on board of or landed from vessels”. Their nature is covered by the terms “pier” and “jetty” as they are normally understood. Williams J accepted this but nevertheless held that there was a Parliamentary intention to restrict the wharf exemption from rates to commercial activities of a working wharf. This view, partly based on speeches during the course of Parliamentary debates, was reinforced by the inclusive definition of “ancillary purposes” in the interpretation section of the First Schedule. The character of excluded uses indicated to the judge’s mind that Parliament would not have intended use incidental to pleasure boating activities to be covered by the exemption.
We take the view this approach puts an unsustainable gloss on the ordinary meaning of the words used by Parliament in clause 22. As indicated above we accept that reference to Hansard assists the contextual interpretation of the wharf exemption provision by indicating that the purpose of the changes in 1988 was to restrict the exemption to land which in the public transportation system had an operational use rather than an incidental or supportive use. A further purpose was to rationalise the terms of the exemption treating all land in the transportation system on an equal basis (see especially the speeches of the Minister of Local Government at the introduction of the Bill (10 November 1987 NZPO 940) and the Acting Minister at the Second Reading (7 June 1988 NZPO 4163)). Nothing however suggests Parliament directly considered restricting application of the exemption to areas of commercial use. Nor does the language indicate that facilities used principally for berthage are to be excluded if they also have actual use which otherwise qualifies. In those circumstances to cut down the scope of the words Parliament chose would be a distortion rather than a clarification of the statutory language.
Because Williams J held that the wharf exemption did not apply at all it was not necessary for him to consider its application to the various facilities. We now undertake that exercise. It is agreed that the marina’s primary function is to provide berthage and associated amenities for pleasure boats. Movement of people to and from boats berthed at the facilities is accordingly a use of marina facilities for taking on board or landing passengers. It follows that generally facilities at Westhaven Marina will enjoy the wharf exemption if they are or become rateable property within the district of the appellant.That would include Pier J (in that its use for mooring of boats which are for sale is not inconsistent with its general use for the same purpose as other pontoons in the Marina). Events berths at the northern end of D, E and F piers are likewise covered. On the other hand, cleaning grid areas such as those in the southwest corner of the marina are used solely for boat cleaning. They do not have the cargo or passenger use required by the exemption and also fall squarely within the “ancillary purposes” definition.
In Westhaven East at Y Pier there are 18 marina style work berths. Their use by marina licensees is for dirty work unacceptable on the main marina, or by the general public for repairs and such like. This is not “use as a wharf” in terms of clause 22 in that those getting on and off the boats do not do so as passengers. Furthermore it is “maintenance” within the “ancillary purposes” definition. The exemption would accordingly not apply.
At Z Pier there are 28 charter boat berths, one of which is used as an office arranging their hire. The facility is used for operation of charter and harbour cruise vessels as well as their berthing which we infer is their primary use. Nevertheless the operations are in our opinion use as a wharf in that passenger movements on and off the vessels is an integral part.
There is a trailer boat launching ramp which we do not understand the respondent to contend is an area used as a wharf. Nor is there any contention that tidal cleaning grids or their access jetties have that use. Part of the Westhaven East area is leased to the Royal New Zealand Yacht Squadron and the New Zealand International Etchell’s Class Association Inc. The use of this area includes an onshore trailer boat parking area and a concrete landing deck with a launching crane. The respondent does not argue either are used as a wharf. There is however a floating pontoon used for access to boats launched from the landing deck. It is accessed by a hinged bridge leading to a pontoon housing a sewage pump‑out station which is joined to the main pontoon, by which we understand it is in two distinct parts. The part used for access to boats launched from the landing deck is a wharf because passengers are being taken on board and landed from it. The part housing the sewage pump‑out station is rather in the character of an ancillary purpose, in particular maintenance, and thus excluded from the exemption.
The West End Rowing Club pontoon in our view has a sufficient use in the nature of getting in and out of boats, in the course of the launching of boats, for the exemption to apply.
The respondent contends floating pontoons in the Western Reclamation generally are covered by the wharf exemption. In response the appellant argues the uses of the areas concerned are for purposes not covered by the exemption and the use of the pontoons takes its character accordingly. We have concluded there is greater merit in the appellant’s submission when the pontoon is used in support of what would be an ancillary purpose under the Act. The area described as “occupied by Vos and Brijs for use as a ship repair and maintenance facility” is in our view not used as a wharf and its use is one excluded under the definition of “ancillary purposes” in the First Schedule to the Act. The pontoon likewise is not used as a wharf, its function being incidental to the repair and maintenance use rather than for taking on board and landing of passengers. The same reasoning appears to apply to two other areas in one instance (although in one instance we cannot properly express a final view as the present owner is not before the court). The first such area is described as “occupied by Oram’s Marine, and…used for vessel repair and maintenance”. The second is that “now owned by Viaduct Harbour Holdings Ltd which is leased to Westhaven Properties Ltd for use as a boat sales and storage facility”. On the other hand, the floating pontoon owned by Europa/BP is used as a “floating fuelling facility” and in our opinion it follows that it is a jetty from which goods are taken on board. That is “use as a wharf” and that area is exempt.
There is a fixed pier occupied by Vos and Brijs which for reasons already discussed is used for ancillary purposes and is not exempt. The respondent’s cement wharf is used by vessels carrying cargoes of cement. The respondent contends it is used for loading and unloading cement cargoes. The appellant replies it is used for berthage only. If the respondent’s contention is factually sound an element of berthage use would not contradict a wharf use. Paragraph 11.52 of the Agreed Statement of Facts is not clear on this point. Overall the uses of the various piers, jetties and pontoons should be seen as inseparable.
Leave to apply will be reserved on any matter in relation to the wharf exemption in case the indications in this judgment are not sufficient for the parties to resolve the matter.

Conclusion

The result of the appeal is that the appellant has failed in its contention that the rating exemption for the Downtown Wharves is confined to the area of quayside strip where cargo or passengers are picked up or dropped off from vessels. The appellant has also failed in its contention that the facilities at Westhaven are within the boundaries of Auckland city. In consequence the appeal is dismissed. In the course of addressing the appeal we have dealt with the points raised by the respondent’s cross-appeal. The cross-appeal does not in those circumstances require separate determination. For that reason it also is dismissed. The outcome of the appeal is success for the respondent which is to have costs of $10,000 plus reasonable disbursements, including travel and accommodation costs of two counsel, to be fixed by the Registrar in the event of disagreement.

Solicitors

Simpson Grierson, Auckland, for Appellant
Russell McVeagh, Auckland, for Respondent

[2000] NZCA 190

7 September 2000